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20 Jul, 2023 05:21

EU member state sets condition for bloc’s military package for Kiev

Hungary will not approve financial aid for Ukraine unless it removes its bank from its “sponsors of war” list
EU member state sets condition for bloc’s military package for Kiev

Hungary will not approve a new €500 million ($559 million) tranche of EU military aid for Ukraine unless Kiev removes one of its banks from its “sponsors of war” list, Foreign Minister Peter Szijjarto told a press conference on Wednesday.

The Hungarian government has been blocking any further financing of arms shipments to Ukraine since Kiev put Hungary’s largest commercial bank OTP on what Budapest describes as a “list of shame.”

In May, the Ukrainian National Corruption Prevention Agency (NCPA) designated OTP as an “international sponsor of war” due to the preferential lending terms the bank was allegedly providing to the Russian military.

OTP, which is Central Europe’s largest independent lender, is also one of the 50 biggest banks in Russia, according to the NCPA. Its Ukrainian division has approximately $507 million in assets.

In 2021, OTP’s Russian and Ukrainian businesses accounted for 15.8% of its consolidated net profit, according to the lender’s data.

“Hungary will not support the European Union’s request for an additional €500 million from the so-called European Peace Facility (EPF) until Ukraine removes the executives of the bank and the bank itself from the list,” Szijjarto said, as quoted by M1 broadcaster.

The release of the financial aid package to Ukraine under the EPF requires unanimous approval by all 27 EU member states. Hungary blocked the EU’s military assistance tranche for Ukraine back in May, citing Kiev’s “increasingly hostile” attitude towards the country.

Budapest has repeatedly blasted Kiev for the “outrageous” and “unacceptable” move, warning that it would block not just the $559 million tranche, but any further military assistance as well.

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