Financial shield or lifeline? The money that Hungary is counting on, after the freezing of European funds
President Donald Trump welcomes Hungarian Prime Minister Viktor Orban to the West Wing of the White House on November 7, 2025. PHOTO: Daniel Torok / Avalon / Profimedia
Looking for alternatives to EU funding, Hungary is drawing up a framework agreement with Washington that may include cooperation in the field of swaps (commercial exchanges), loan facilities and bank credits for development or infrastructure financing, the Minister of Economy from Budapest said on Monday, according to Reuters.
Prime Minister Viktor Orban, who faces an election next year, met his longtime ally US President Donald Trump at the White House on Friday, securing a waiver from US sanctions over the use of Russian oil, a deal that strengthened the forint.
Orban also said that Hungary, whose economy has stagnated for the past three years amid high inflation following Russia's 2022 invasion of Ukraine, had negotiated a deal with Washington to protect its economy and public finances from external attacks.
The White House has yet to comment on the deal. Hungarian officials say it shows the country can find alternatives to funding from the European Union, which has suspended billions of euros amid a dispute over Orban's rule of law reforms, which critics of the Orban regime see as eroding democracy.
A “protective shield”
“This is a protective shield, which cannot be called a rescue package,” Economy Minister Marton Nagy said, according to index.hu news site. He said any comparison to Trump's aid to Argentina is wrong.
Nagy did not provide further details on the specifics of the swaps or loans that Hungary could access, but said that financial assistance from the EU is not politically realistic.
Hungary borrowed 1 billion euros from banks in China last year to finance infrastructure and energy projects, seeking alternative financing amid a freeze on European funds.
The opposition leader demands details from the central bank
Opposition leader Peter Magyar, ahead of Orban in most opinion polls and campaigning on a promise to unlock frozen EU funds if he wins the election, asked central bank governor Mihaly Varga to reveal details of the deal, which Magyar described as a “bailout”.
The Budapest central bank did not respond to Reuters' request for comment.
Orban's Minister of Construction and Transport, Janos Lazar, said the US financial shield meant Hungary could no longer be “blackmailed” by the EU.
“The position of the US government, its message is perfectly clear: if there will be no money from Brussels, there will be money from the US,” said Lazar, in an interview published on YouTube.
A spokesman for the European Commission declined to comment on the statements of the officials in Budapest.
The forint, at the highest level in the last year and a half
Economists at Hungary's MBH Bank said both the waiver of sanctions and the financial shield will support the forint, which hit its highest level in a year and a half against the euro on Monday.
“It is clear that, if necessary, the US government is prepared to provide stronger support to countries with which it has good political relations,” MBH economists said.
The deal with Washington also calls for Hungary to support the construction of up to 10 small modular nuclear reactors worth up to $20 billion, buy $600 million worth of US liquefied natural gas and $700 million in military equipment, according to State Department figures.
