Hungary borrowed 1 billion euros from three Chinese banks this spring, the largest loan ever received by Budapest.
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The loan, provided by the China Development Bank, the Export-Import Bank of China and the Hungarian branch of the Bank of China, was fully completed on April 19 and is to be repaid within three years, Politico reports.
It is noted that official Budapest itself did not announce the agreement. This was first reported recently by the Hungarian business publication Portfolio, and then the data appeared on the website of the Hungarian Public Debt Management Agency.
The loan agreement allows for funding for infrastructure and energy sector investments, including the United States. The agreement maintains the government debt-to-GDP ratio at 28.9 percent, the government agency told Portfolio after the publication first reported the agreement.
While Portfolio says the interest rate is floating, the Hungarian government has not disclosed any details regarding its size, repayment schedule or other details.
The significant borrowing comes as Budapest tightens its ties with Beijing, with Chinese companies such as electric carmaker BYD and tech giant Huawei currently investing around €16 billion in the country, according to Hungarian Foreign Minister Péter Szijjártó.
In May, Szijjártó also announced a number of joint infrastructure projects with China, including:
- high-speed rail to Budapest Airport;
- a freight railway line around the Hungarian capital;
- oil pipelines between Hungary and Serbia;
- nuclear cooperation.
It is noted that, given Hungary’s record high public debt of 140 billion euros (73.5% of GDP) and a budget deficit of 6.7% of GDP, Budapest is desperate for cash and is still waiting for billions of euros in EU funds.
The new Chinese loan is the largest share of government debt, second only to China Eximbank’s $917 million loan for the Budapest-Belgrade railway project, Politico notes.
Source: Politico
The EU did not enter into a dispute over Russian oil.
Source: Racurs
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.