The Hungarian state has taken out a one billion euro loan from China without any announcement from the government, and the amount was already drawn down in April.
The move was first reported by Portfolio, a Hungarian media outlet, based on data of the Hungarian Public Debt Management Centre (Államadósság Kezelő Központ – ÁKK) published on its website.
The loan was taken out by the Hungarian state from the Development Bank of China, the Chinese Eximbank and the Hungarian branch of the Bank of China for a three-year term. The details of the loan are not known, except that the loan has a floating interest rate.There is no information on the repayment schedule nor on the exact amount the Hungarian state, which already had a debt of EUR 133 billion in February, will have to repay. The Chinese loan topped this with 0.6 per cent, which is the biggest outstanding debt of the Hungarian state, not including debenture bonds.
The government has recently sought to restructure its debts, looking to obtain loans domestically rather than from abroad by encouraging the population to buy state bonds. This is in stark contrast to the Chinese loan, which the government appears to have arranged quietly [because usually the government announces new debt immediately while in that case, the announcement for the new loan taken in April came at the end of July].
This loan is unrelated to the Chinese-funded Budapest-Belgrade railway, which experts estimate will take 979 years to pay for itself. To accomplish that project, the Hungarian state had borrowed another EUR 820 million at current exchange rates, also from China’s Eximbank.
It’s not clear what it is for
Portfolio points out that the government normally informs the public about these types of loans, but in this case it did not. “Thus, beyond the official justification in the ÁKK database, it is not clear exactly what the purpose of the loan was.”
There are plenty of potential items that could make the new loan necessary: the Hungarian state bought Budapest’s Liszt Ferenc International Airport for €3.1 billion, by the end of the first quarter, the state budget had already reached its deficit target for the entire year, and in June there was a further deficit of €108 billion recorded.
China hasn’t ‘forgiven’ something, it has exchanged some -not all- outstanding debt for political influence in some -not all- indebted countries, and -in addition to political influence- they have offered new loans at conditions that are much -much- worse than those offered by the IMF.
So if China doesn’t forgive the loans, they’re loan sharks doing debt-trap diplomacy, and if they do forgive the loans, they’re just doing it for political influence.
“During the cold war, the anticommunist ideological framework could transform any data about existing communist societies into hostile evidence.
If the Soviets refused to negotiate a point, they were intransigent and belligerent; if they appeared willing to make concessions, this was but a skillful ploy to put us off our guard.
By opposing arms limitations, they would have demonstrated their aggressive intent; but when in fact they supported most armament treaties, it was because they were mendacious and manipulative.
If the churches in the USSR were empty, this demonstrated that religion was suppressed; but if the churches were full, this meant the people were rejecting the regime’s atheistic ideology.
If the workers went on strike (as happened on infrequent occasions), this was evidence of their alienation from the collectivist system; if they didn’t go on strike, this was because they were intimidated and lacked freedom.
A scarcity of consumer goods demonstrated the failure of the economic system; an improvement in consumer supplies meant only that the leaders were attempting to placate a restive population and so maintain a firmer hold over them.
If communists in the United States played an important role struggling for the rights of workers, the poor, African-Americans, women, and others, this was only their guileful way of gathering support among disfranchised groups and gaining power for themselves. How one gained power by fighting for the rights of powerless groups was never explained.
What we are dealing with is a nonfalsifiable orthodoxy, so assiduously marketed by the ruling interests that it affected people across the entire political spectrum.”
@alcoholicorn, do yourself a favour and stay away from wherever you get this stuff.
