Hungary is blocking the allocation of another tranche of 500 million euros from the European Peace Fund, which finances the transfer of military equipment to Ukraine.
Hungary continues to be Ukraine’s main critic and opponent in the EU. Budapest continues to put spokes in the wheels of European aid to Ukraine and the Euro-Atlantic integration of our country, and this time it decided to block financial aid from the European Union to Ukraine in the amount of 500 million euros and pledges not to support further sanctions against Russia.
Hungarian ultimatum
Hungarian Foreign Minister Peter Szijjarto named three reasons that formed the basis of this decision:
– stoppage of work of Transcarpathian Hungarian schools;
– OTP Bank is among the Ukrainians on the list of international sponsors of the war; – Information that the President of Ukraine is allegedly considering the possibility of undermining the Druzhba oil pipeline.
It is clear that the first and third reasons are a common fake, but the second really touched Budapest.
“Until the Ukrainians remove the OTP from the list of international sponsors of war, Hungary obviously cannot participate in the decision about the European Peace and Sanctions Fund,” said Szijjártó.
The minister also criticized the sanctions for a long time and described EU politicians as suffering from “war psychosis”, which is why in many cases there is “no common sense” in decision-making.
The bank is a sponsor of terrorism
Last week, the National Agency for the Prevention of Corruption (NAPC) included the Hungarian OTP Bank in the list of international sponsors of war due to the position of the bank’s management to continue operating in the Russian Federation and the de facto recognition of called “DPR” / “LPR”.
“OTP Bank forms the basis of the international financial group OTP (OTP Group), which is one of the leaders in the financial services market of Central and Eastern Europe according to the Budapest Stock Exchange. OTP Bank has subsidiaries in Russia, Ukraine, Croatia , Slovenia, Slovakia, Montenegro and Romania.
OTP is one of the 50 largest banks in Russia, and among the market leaders in several areas. It serves more than 2.2 million customers and is present in more than 1,850 locations in the terrorist state, underscoring its importance to the Russian economy, which is fighting and trying to avoid Western sanctions.
NAPC added that the bank occupies 2nd place in the POS lending market (providing loans at the points of sale of goods) of the Russian Federation with a market share of 15.3%. OTP ranks eighth in Russia in the credit card market.
At the same time, Russian OTP Bank remains one of the leading banks in the Russian financial services market even after Russia’s invasion of Ukraine, NACP stressed.
So, according to OTP Group’s financial statements for 2021, the Russian bank’s net profit reached HUF 37.6 billion, or 7.6% of the group’s total revenue.
“According to the available information on financial results, the Russian OTP Bank received 113 million rubles in income in 2020 and paid a large amount to the budget of the aggressor country – almost 190 million rubles in income tax alone.
As it became known from the media, the bank also provides preferential terms for lending to the Russian military. Thus, it is noted that Russians called up for military service by mobilization or under a contract, as well as their families, can apply for deferment of payments on loans and borrowing. At the same time, banks refer to the law of the Russian Federation of October 7, 2022 No. 377-FZ, in fact recognizes the so-called Donetsk and Luhansk “people’s republics,” the NAPC said.
OTP Bank is the 24th company included in NAPC’s list of international war sponsors. The list is a powerful reputation tool because such companies are listed in the World-Check database, which monitors high-risk individuals and entities and is used worldwide to identify and manage financial, regulatory risks and reputation.
Obvious blackmail
This is not the first time Szijjarto has commented on the OTP situation. Initially, he said that due to Ukraine’s inclusion of the Hungarian OTP Bank in the list of war sponsors, it would be “very difficult” for Budapest to agree with the EU on new sanctions against Russia.
He said that the activity of the Hungarian bank complies with international standards and laws, and its inclusion in the list of sponsors of the war in Ukraine may also affect EU sanctions against Russia.
“I made it clear at the meeting of foreign ministers that it will be very difficult for us to start negotiations on the eleventh package of sanctions (against the Russian Federation – ed.) while the OTP is on this Ukrainian list. We request that the Ukrainians removed the OTP from the list,” emphasized Szijjarto.
The bank itself says that OTP Group will “drastically reduce” its presence in the Russian market in 2022: the market share will decrease to 0.17%; lending to legal entities is stopped; corporate loan portfolio reduced by 75%.
“OTP Group has repeatedly said that it is looking for opportunities to exit the market, with the participation of Rothschild consultants Martin Maurel, and the sale procedure is still legally blocked. – does not correspond to reality!”, – stated in the bank’s position.
Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.