According to information from the Hungarian magazine Világgazdaság, yesterday after the American announcement, the government reviewed the situation of the International Investment Bank (NBB) and came to the conclusion that participation in the bank had become meaningless, therefore the government decided to recall its government delegates from the bank .

As is well known, on Wednesday afternoon the American ambassador David Pressman in Budapest announced that the United States had placed the Hungarian-based NBB and its three managers on the sanctions list. Two of them are Russian citizens, and one is Hungarian: Imre Laszlóczki, the bank's vice president.

The diplomat talked about the fact that the United States imposed sanctions on more than fifty institutions (including NBB) and individuals because, in their opinion, they "take the side of Russia." With the sanctions, they want to achieve that Russia has less access to the international financial systems. As he said, the USA does not agree with "Hungary hosting" the financial institution, whose senior officials have diplomatic privileges. According to him, this is a problem that must be solved. He also stated that he considers Hungary an important ally of the USA and wishes to maintain a constructive relationship with it.

According to information from Világgazdaság, the government examined the issues surrounding the NBB and came to the decision to no longer represent itself in the international financial institution. Founded in 1970, NBB was originally the bank of the CGST countries and lent to the companies of the member countries.

According to its current main activities, it supports small and medium-sized enterprises in the bank's member countries, as well as participates in the financing of socially significant infrastructure projects.

The NBB has been headquartered in Budapest since 2019. The precedent for this is that at the end of 2018, the member states unanimously supported the move at the meeting of the governing council. Back in October 2014, Hungary signed a memorandum of understanding on the planned renewal of its NBB membership, after the bank's activities were radically transformed in the early 2010s in line with modern international standards.

This is evidenced by the fact that NBB is an institution registered with the UN as a multilateral intergovernmental development bank, whose aim is to promote social and economic development, prosperity and economic cooperation in the member states. Within the framework of a new intergovernmental agreement, the Russian and Hungarian parties also reworked the documents governing the establishment and operation of the bank. According to the information at the time, the goals, operational strategy and lending mechanism of the newly founded bank coincided with the ideas developed for the development of the Hungarian national economy and were in line with the policy of opening up to the East. Currently, the largest owner of NBB is Russia with 45.44 percent, followed by Hungary with 25.27 percent. Cuba's share is 2.83 percent, Mongolia's 1.8 percent, and Vietnam's 1.26 percent. Until recently, the Czech Republic and Slovakia were also members of the international financial institution, Bulgaria and Romania are still members, however, according to the news that has come to light, the Bulgarians will terminate their shareholder membership as of August 15.

In any case, the reason for the membership of the countries in the region – including the presence of Hungary – is quite simple: the NBB played an indisputably important role in East-Central Europe. That is why Hungary was also a member. However, since the outbreak of the Russian-Ukrainian war, due to Western sanctions in response, NBB has been threatened with insolvency, and it was heard that it will be forced to restructure its bonds in May 2023 at the latest. Thus, there was no point in maintaining the Hungarian presence, reports Világgazdaság.

Source: Vasárnap.hu

Featured image: NBB headquarters in Budapest. Photo: MTI/László Róka