Hungary: Details of $1.2 Billion Loan Agreement with China Revealed
A Hungarian independent news website specializing in investigative reporting recently disclosed some details regarding a loan of 1 billion euros (approximately $1.2 billion) that Prime Minister Viktor Orban of Hungary obtained from China in 2024. For a long time, Hungarian authorities have cited banking secrecy regulations as the reason for refusing media and opposition party requests for more transparency.
On May 1st, the Hungarian digital news website “444.hu” reported some of the details of Orban’s 2024 loan of 1 billion euros from China. In April 2024, Hungary secured this three-year loan from the China Development Bank, the Export-Import Bank of China, and the Hungarian branch of the Bank of China. The Hungarian Debt Management Agency (AKK) only disclosed the existence of this loan four months later.
Orban is preparing to step down, and Prime Minister-elect Peter Magyar will be inaugurated on May 9th. In last month’s election, Magyar defeated Orban and pledged to review the high-cost international agreements reached by the outgoing prime minister during his 16-year tenure.
The loan’s interest rate is based on the Euro Interbank Offered Rate (EURIBOR) plus a 1.5 percentage point margin, resulting in an annual rate of 3.916% within the current interest period.
This loan, one of the largest single national loans in Hungary’s history, is intended for infrastructure, energy, transportation, and other projects.
According to the AKK, the interest rate and premium of the loan are in line with market rates at the time of signing. Additionally, Hungary paid a one-time fee totaling 8 million euros at the time of signing the loan, which the AKK stated is also in line with international norms.
“444.hu” news website obtained these details only after Orban’s electoral defeat.
The United States think tank Atlantic Council has criticized Hungary for being excessively pro-China. Hungary was the first European country to sign a memorandum of understanding on cooperation with China’s Belt and Road Initiative and has become the largest investment destination for China in Central and Eastern Europe.
In an article last November, the think tank wrote, “In the diversity of EU member states’ policies towards China, Hungary’s position can be considered extreme. Under the leadership of Prime Minister Viktor Orban, Hungary has become China’s closest ally in the EU, with its foreign policy effectively aligned with Beijing’s international priorities, repeatedly hindering EU efforts to curb Chinese (CCP) influence.
“In the trade and investment sectors, Hungary welcomes significant Chinese investments, making it the largest recipient of Chinese foreign direct investment in recent years within the EU. In the technology sector, Budapest actively incorporates Huawei and ZTE participation in its telecommunications industry and collaborates with China on numerous Belt and Road Initiative projects, including some critical infrastructure projects.
“Since Russia’s invasion of Ukraine, Hungary has even deepened its cooperation with China (CCP) in the security domain—allowing Chinese (CCP) police to work in Hungary and tolerating the expanding influence of Chinese (CCP) intelligence agencies in Hungary.”