Hungary has obtained a €1 billion loan, the largest ever obtained by Budapest, from three Chinese banks, according to data cited by several international media outlets, including the Politico website.
According to data released by the Hungarian government’s debt agency, 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 used by April 19 and is expected to be repaid within three years.
The loan was first reported by Hungarian business publication Portfolio on Thursday and later confirmed by the government agency.
“The loan agreement allows financing investments in infrastructure and the energy sector, among others. The transaction maintains the ratio of public debt to Gross Domestic Product (GDP) within the maximum limit of 28.9%,” the government agency told Portafolio, after the news was published.
In May, Hungarian Prime Minister Viktor Orbán and Chinese President Xi Jinping agreed to step up economic, energy and political cooperation, an important step toward strengthening Beijing’s influence in Central and Eastern Europe.
Xi and Orbán held talks in Budapest as part of the Chinese leader’s final stop on a five-day trip to Europe that also included visits to Serbia and France.
In December, Hungary announced that one of the world’s largest electric vehicle manufacturers, China’s BYD, would open its first European factory in the south of the country.
BYD confirms investment in Europe with factory in Hungary
Hungary is also home to several Chinese battery factories and hopes to become a global hub for lithium battery production.
At the same time, the country has been involved in a railway project as part of the diplomatic initiative “One Belt, One Road”, linking Hungary with the Chinese-controlled port of Piraeus in Greece as an entry point for Chinese goods to Central America, Europe and the East.
On the 8th, Xi Jinping met with Orbán in Beijing, as part of the “peace mission” for Ukraine, as it was called by Budapest, which currently holds the six-month presidency of the Council of the European Union (EU).
Xi Jinping calls on world powers to help Russia and Ukraine resume dialogue
Orbán’s recent international visits, in particular his meeting in Moscow with Russian President Vladimir Putin, have sparked criticism in Brussels, with the EU stressing that the Hungarian initiatives have taken place within the framework of bilateral relations and not within the European representation.
Source: Observadora
