A simmering dispute between Ukraine and Hungary has spun into a full-blown diplomatic crisis, with Kyiv accusing Hungarian authorities of taking several Ukrainian bank employees “hostage”, along with tens of millions of euros they were transporting.
Ukraine has threatened to retaliate with sanctions aimed at Hungary, an EU member state, at the same time as Budapest doubles down on its decision to veto the release of a lifeline €90 billion EU loan to Kyiv.
Ukraine’s state savings bank Oschadbank reported seven of its employees travelling through Hungary in two cash transit vehicles had been “unjustifiably detained”, while moving cash and gold from Austria to Ukraine.
The development follows days of heightened tension between Budapest and Kyiv that has seen Ukrainian president Volodymyr Zelenskiy and Hungary’s far right leader Viktor Orban trade barbs.
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Orban has accused Zelenskiy of slow-walking repairs to a damaged pipeline running across Ukrainian territory, which brings cheap oil from Russia to Hungary and Slovakia.
The government in Kyiv said the Druzhba pipeline was damaged by Russian strikes at the start of this year and repairing Ukrainian energy infrastructure was a more pressing priority.
The diplomatic spat over the pipeline has seen Orban, who opposes sending aid to Kyiv, block a €90 billion EU loan, which Brussels officials say is needed to stop Ukraine from running out of money by the middle of this year.
The standoff over the loan is seen as an attempt by Orban to shore up domestic support in parliamentary elections next month, where the Hungarian populist is at real risk of being dislodged from power for the first time in 15 years.
In a statement, Oschadbank said its employees had been transporting €35 million, $40 million and nine kilograms of gold, in two cash transit vehicles.
“The cargo was registered in accordance with international transportation rules and current European customs procedures,” the Ukrainian public bank said.
Ukraine’s foreign minister Andrii Sybiha accused the Hungarian authorities of taking “seven Ukrainian citizens hostage” and “stealing money” belonging to the state bank. The minister demanded the immediate release of the seven Ukrainians.
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“We will not tolerate this state banditism,” he said in a further statement on social media.
“Everyone who is responsible for taking and holding our citizens hostage will be held accountable. We reserve the right to take appropriate action, including initiating sanctions and other restrictive measures,” he said.
Ukraine’s foreign ministry on Friday advised its citizens against travel to Hungary, citing safety concerns due to “the arbitrary actions of the Hungarian authorities”.
In a series of posts on social media, Orban claimed Zelenskiy has sided with the opposition to bring about a “pro-Ukraine government that sends Hungary’s money to Ukraine and cuts us off from cheap energy”.
National diplomats and senior EU officials had spent recent weeks attempting to diffuse the dispute, pressing Budapest and Kyiv to find some resolution, that would allow Orban to back down, save face and unblock the large loan.
A summit of the union’s 27 national leaders agreed to the EU jointly borrowing funds to finance a €90 billion loan to Ukraine at a summit in December.
Orban, alongside Slovakia’s populist prime minister Robert Fico and Czech Republic prime minister Andrej Babis, agreed to let the other 24 leaders move ahead with the loan plan, on the condition their three countries would not have to financially contribute.
Hungary’s threats to now veto the release of the funding has angered other capitals and senior figures in the European Commission, the EU’s executive that has been co-ordinating the union’s aid to Kyiv.
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