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Hungary to Withdraw From IIB

Banking

Photo by Piotr Swat / Shutterstock.com

Hungary will exit the International Investment Bank (IIB) and recall its delegates from the lender, the Economic Development Ministry said on Thursday, according to a report by state news wire MTI.

On Wednesday, the IIB was included on a list of entities sanctioned by the United States because of its ties to Russia.

The ministry said the government discussed the situation and established that the bank's operation had become senseless as a result of the U.S. sanctions, while acknowledging the "important development role" it had played in the CEE region.

U.S. ambassador to Hungary David Pressman said at a press conference late Wednesday that the US had registered its concerns with the Hungarian government over risks posed by the IIB's presence in Budapest "on numerous occasions" since the bank moved its HQ from Moscow to the Hungarian capital in 2019, but those concerns were "dismissed".

"The presence of this opaque Kremlin platform in the heart of Hungary threatens the security and sovereignty of the Hungarian people, their European neighbors, and their NATO Allies," he said.

With a 25.27% stake in the IIB, Hungary is the second-biggest owner in the lender after Russia, which controls 45.44%. Cuba has a 2.83% stake in the IIB, Mongolia holds 1.8% and Vietnam 1.26%.

Bulgaria, the Czech Republic, Romania, and Slovakia ended their participation in the IIB after the start of the war in Ukraine.

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