One conflict solved, one created

HUNGARY - In Brief 16 Apr 2023 by Istvan Racz

---

As we pointed out in our latest report last week, Hungary has a number of bad conflicts with the western world in these days. Over the last few days, one of these was largely sorted out, but another one was just newly created. For the first one, Hungary has just decided to leave the International Investment Bank, the common bank of the late Comecon, a multilateral organisation of communist states in the Soviet world, as a shareholder. This immediately followed the US government's decision to place sanctions on IIB and its leading officials. Previously, Hungary was sharply criticised by the US and EU members for allowing IIB to move its headquarters to Budapest a few years ago. Since then, IIB has been frequently referred to in the western world as a Russian 'spy bank', on the grounds that its moving to Budapest facilitated the free movement of related Russian individuals within the EU, who might have, or might not have, a background in Russian intelligence services. Since the start of the war last year, IIB has been also mentioned as a possible means for Russia to get around western sanctions that blocked international financial transfers by the Russian government, companies and individuals. Lately, essentially all shareholders except Russia and Hungary, the governments of former communist states, have left the IIB. Explaining its decision, the Hungarian government said that following the new US sanctions, Hungary's presence in the IIB has 'lost its justification', as the bank will not be able to operate properly any longer. This may be easily true, but it should not be a problem for Hungary from the business point of view, as most people, including us, do not have the...