Hungary Quit Russian Bank as U.S. Sanctions ‘Ruined’ It, PM Orban Says as Relations Worsen News2america

BUDAPEST (Reuters) – Hungary abandoned a Budapest-based Russian bank this week because U.S. sanctions had “ruined” it, Prime Minister Viktor Orban said on Friday, adding that Hungary would comply with sanctions on Russia but continue to speak out against them.

The NATO leader with the closest ties to Russia told state radio the United States was an important ally of Hungary but there was a difference of views over the war in Ukraine.

The U.S. had “not given up on its plan to squeeze everyone into a war alliance”, a step Hungary — which is not supplying weapons to Ukraine — would resist, Orban said.

Orban’s government announced on Thursday it would quit the bank, IIB, which says it funds development projects in eastern Europe, and moved its headquarters to Budapest from Moscow in 2019.

Russia is its largest shareholder, while Hungary was second-largest and senior Hungarian officials had held roles there including board seats. Other Eastern European countries cut ties with IIB last year after Russia’s invasion of Ukraine.

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This week, the United States imposed new sanctions on the bank, including on three of its top officials, two Russians and Hungarian. Washington called on Hungary to cut ties with what it described as an “opaque Kremlin-controlled platform”.

Orban said Hungary would comply with sanctions against Russia, even though it did not support them.

“We have never agreed with sanctions but we don’t dispute others’ rights, including the United States, to impose sanctions,” he said.

“Since the (outbreak) of the war, it’s been clear that the bank’s (IIB) possibilities were narrowing … and now that the Americans have placed it under sanctions, they effectively ruined it.”

Hungary is a member of NATO and opposes Russia’s invasion of Ukraine, but nationalist premier Orban has cultivated close relations with Russia for years and has held back from criticising President Vladimir Putin.

Relations between Budapest and Washington have soured in the past months because of Hungary’s foot-dragging over the ratification of Sweden’s and Finland’s NATO accession. Finland joined the alliance this month, but Sweden’s membership bid is on hold pending approval from Hungary and Turkey.

While Orban has criticised sanctions on Russia, his government has not blocked EU measures.

On Thursday, the Guardian newspaper reported that a bipartisan group in the U.S. Congress was drafting further US sanctions that would target leading Hungarian political figures tied to the Orban government.

The Hungarian government spokesman has not replied to repeated emailed requests for comment.

(Reporting by Krisztina Than; Editing by Peter Graff)

Copyright 2023 Thomson Reuters.

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