Hungary to begin drawing down Paks 2 EUR 10 billion Russia loan in December, says Lázár

November 24, 2016


At his weekly “government info” press conference today, the Minister Overseeing the Office of the Prime Minister, János Lázár, announced that the government had budgeted an additional HUF 53 billion (USD 183 million) for defending the southern border in 2016 on top of the HUF 153 billion (USD 550 million) expended to date, reports

Lázár said the HUF 53 billion is to be spent building roads and developing the infrastructure of the southern border and equipping the police stationed there.  He said that over the past two years the government had expended HUF 153 billion  defending this border, but this could easily increase to HUF 200 billion (USD 715 million).

He also announced that now the European Commission has dropped its objection to the contract Hungary awarded in 2014 to the Russian Atomic Energy Corporation to build two new reactors at the Paks atomic energy plant, Hungary would start drawing down the EUR 10 billion (USD 10.1 billion) Russian loan earmarked for this purpose next month, even though the EC is still examining whether the financial conditions of the Russian credit are lawful.  He added that if the government finds a more favorable source of financing it will repay the Russian credit, and that the search for the most favorable financial sources will begin after this (sic).

(Why not before drawing down the EUR 10 billion loan. Sorry, but very little Lázár says these days makes any sense.-ed.)

Lázár said 55 percent of the Russian loan had to be spent on public procurement but the rest needn’t be.  He said substantial construction would take place at Paks 2 in 2017 and 2018, and the legal procedure planned by Austria would not delay this.

Inexplicably, nobody attending the press conference thought to ask why it was necessary to call down a EUR 10 billion loan now if construction of the two nuclear reactors is not scheduled to begin until next year.

Many critics believe Paks 2 is merely an excuse to borrow EUR 10 billion from Russia, and that the government does not really intend to build the reactors.