Russians owe billions and a Budapest palace to Hungary: will they return them?

The Russian-led International Investment Bank (IIB) received HUF 74 billion (EUR 200 million) from the Hungarian government as capital when Budapest joined the institution. Furthermore, it was given the Chain Bridge Palace to serve as headquarters. The 3,200 sqm palace is one of Budapest’s most expensive building located at the Zero Kilometre Stone. Its value is around HUF 6-7 billion (EUR 16.2 – 18.9 million). But will the Russians give the money and the palace back?

The government takes it lightly

Hungary decided to leave the International Investment Bank in April, following American threats and NATO pressure as well as the travel ban of the bank’s Hungarian vice-chairman, Imre Laszlóczki. Szabad Európa wrote that more sanctions can be introduced against multiple Hungarians thanks to a new US law.

After Hungary announced its decision, the bank said it would cease operations in Hungary. However, it owes a huge sum to Hungary, Blikk wrote. In addition, they have to leave the Budapest palace. IIB told the Hungarian tabloid that they aimed to establish contact with the government concerning the two issues but they have received no reply. The minister in charge said they have given a verbale notice to the bank.

Zoltán Vajda, a Socalists MP, asked Márton Nagy, Hungary’s Economic Development Minister, about the bank’s plan regarding the Chain Bridge Palace. Mr Nagy replied that “it belongs to them, and they can sell it to whomever they want”. The building is one of the most expensive in the capital at the Buda bridgehead of the illustrious Chain Bridge. Below you can see a photo:

The bank cannot sell the palace

The Hungarian state theoritically has the option to purchase the palace. Since IIB is in financial trouble, they may sell it back to Hungary. Mr Vajda said Fidesz politicians did not mention the Hungarian state’s purchase option. The economic development minister said the bank might sell the building to whomever they want, but that is untrue. Vajda hopes nobody will take it below the price.

Blikk asked the government whether Hungary has the chance to reobtain the invested capital from the bank (approximately 200 million euros). Furthermore, they also inquired whether the government intends to repurchase the palace. But they have not received answers. Vajda believes the administration should take the issue more seriously.

The IIB is leaving the Hungarian capital with the help of an international removal firm. The flags have already been removed from its facade. The replacement of the staff will be carried out soon. Concerning the Chain Bridge Palace, the bank said it was in their ownership, and the Directorate would make a decision later on.

They added there were no ongoing talks concerning any issues between the bank and the government because the administration did not establish contact with them. The USA and other Western powers have condemned the IIB and the Orbán cabinet’s decision to join the bank. Hungary granted immunity for the staff and many believe the bank helped Russian spies to work undercover.

Featured image: illustration