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.
Weird how nobody says that about the IMF, and the IMF has literally ruined countries requiring they privatize public goods, restrict workers rights, and sell off resources when they couldn’t pay the loans. Meanwhile China has refinanced or forgiven debt when countries were unable to pay.
Nobody says that about the IMF?
Really, nobody?
It’s basically the first thing anyone ever learns when they hear about the IMF. You’re not that original.
And Xi is not there to hand out honey for free. He’s there because he wants that shit for himself.
If that was true, why would China forgive or refinance loans?
The chinese say it’s mutual development, and their actions are consistent with that.
Because they get a RoI from the door it opens to them in other countries. Give a loan and in exchange they allow you to build a port when they wouldn’t otherwise? Well the loan was just part of the cost!
@alcoholicorn@lemmy.ml
This is outright false. The IMF/World Bank system has been heavily criticized by an armada of experts (including many from the West, I would even say the majority of critics come from the Western hemisphere).
Again, this is outright false. It’s just a lie, simple as that.
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. Just last year, for example, a joint investigation by several research organizations -such as AidData and the Kiel Institute for the World Economy- found that China charges swap rates of 5% where the IMF charges only 2% in comparable situations.
The latest examples of China’s Belt and Road Initiative (BRI) and the economic and social disasters it entails for the countries and its people are likely Laos and Kenya. Former examples include Sri Lanka, Pakistan. You’ll find a lot more.
What you are doing is just throwing around the next piece of whataboutism by (intentionally?) ignoring the facts.
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.
The .ml tankie echo chamber is going to be hard to exit.
Really not a good look for you neoliberals right now. Throw downvotes all you want, when confronted with the truth of theory, liberals always fold and turn to attacks.
A lot of people say that about the IMF.
Costs double to comparable, requires Chinese companies to be contracted, does shoddy work. A little bit of good-press loan forgiving can’t make up for that.
https://beehaw.org/post/14811136
Hello Winnie Pooh. Please go away with your fake propaganda