The Hungarian government has
received a €1 billion loan from Chinese commercial banks in a
deal to replace resources that are lacking due to the freezing
of European funds for rule of law violations and widespread
corruption. The deal was concluded last spring, kept secret, and
was initially disclosed by the online newspaper portfolio.hu,
which cites data on the website of the Public Debt Management
Center. The terms are unknown; the term is three years, shorter
than the five- and 10-year bonds that finance Hungary's state
debt. Hungary, under Viktor Orban's leadership, has grown closer
to China, which has become the largest foreign investor, with
battery and electric vehicle manufacturing plants. China also
builds railways in the country, and recently Chinese President
Xi was received with great honor by Orban. The budget deficit
this year has increased to 4.5 percent of GDP, so the European
Commission has initiated an excessive deficit procedure against
Hungary, along with six other member countries. State
indebtedness has reached 76 percent of GDP, highest in the
region, according to Nepszava newspaper. "The very expensive
Chinese loan only adds to the burden of the budget and overall
debt," the newspaper writes.
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