Hungary and Viktor Orban are China's middleman for the €500 million loan granted to the new Macedonian government headed by Hristijan Mickoski, BGNES reported.
On paper, the funds come from Budapest. In fact, the money is part of the €1 billion lent to Hungary by a consortium of Chinese banks earlier this year, according to an investigation by Vsquare.
In September, Mickoski announced the loan agreement. VMRO-DPMNE assured then that it would not come from China, but would be granted "by an EU and NATO member state". It was later announced that it was Hungary.
The sum of EUR 500 million represents half of the EUR 1 billion that Mickoski promised to provide after his election victory on 8 May. The terms of the loan include an interest rate of 3.25%, a three-year grace period and a 12-year repayment period, which the prime minister described as "extremely favourable".
Diplomatic sources are clear that the two loans (the Chinese one for Hungary and the Hungarian one for North Macedonia) are linked. According to them, there was initially a possibility that the funds would be channelled through Serbia.
Where did the money actually come from?
In the spring, the Hungarian government secured and fully absorbed €1 billion from a consortium including the China Export-Import Bank and the Hungarian branch of the Bank of China.
The deal was kept secret until the end of July, when the local press reported on it on the basis of a regular update of the public debt figures. The terms of the three-year floating loan, including interest rates and repayment terms, were not disclosed. According to recent comments by government officials, Hungary has asked its Chinese partners to agree to make the terms public.
The loan secured by Budapest is the largest bank loan in the country's debt portfolio, not including bond issues, exceeding the $917 million provided for the joint Hungarian-Chinese project to expand and upgrade the Budapest-Belgrade railway. Hristijan Mickoski and his subordinate ministers favour precisely the Greece-North Macedonia-Serbia-Hungary transport links, part of Corridor 10, at the expense of Corridor 8 on the Burgas (Bulgaria) - Durrës (Albania) route. Moreover, the Macedonian Prime Minister asked for a transfer of funds from Corridor 8 to Corridor 10, but his idea was firmly rejected by the EU.
Orban's government announced that the funds from the new loan would be used to finance common infrastructure investments, including in transport infrastructure and energy, without going into details, but again no mention was made of providing part of the loan to a third country (North Macedonia).
According to Vsquare, Hungary had originally hoped to receive a much larger loan during Xi Jinping's visit to Budapest in May, as a replacement for the country's frozen European funds.
The EU blocked €6.3 billion in cohesion funds for Budapest over concerns about rule of law issues, corruption and a lack of reforms in the judiciary. In addition, around EUR 2.5 billion of reconstruction funds have been blocked because of the treatment of refugees, discrimination against the LGBT community and violations of academic freedom.
The Orbán government has failed to meet the conditions set by the European Commission to access EUR 6.3 billion from the Reconstruction and Sustainability Mechanism (RSM) and EUR 3.9 billion from the loan phase of the programme.
"Orbán's Fidesz and Mickoski's VMRO-DPMNE are allies. Hungary has for years been harbouring Mitkoski's political father, Nikola Gruevski, a former Macedonian prime minister and DPMNE leader sanctioned under the Magnitsky Act. Orban funds a media empire in northern Macedonia that spews powerful propaganda and hatred against Bulgaria. Hungary is also preparing to acquire the Macedonian telecommunications sector.
The question remains as to why the Hungarian Government has provided financial assistance to a foreign government at a time when it itself is facing huge financial difficulties. The Hungarian prime minister's office has not responded to the queries sent by Vsquare. Another question arises - how will Skopje repay the loan?
By the end of August, Hungary's budget deficit ballooned to 103% of the target set at the beginning of the year, or 73% after the deficit target was raised to 4.5%. According to analysts, more fiscal measures are needed to keep the budget deficit below this level, and possibly even tougher measures to bring it below 3% in line with the targets under the EU's excessive deficit procedure rules. | BGNES
