During a meeting of foreign ministers in Brussels, Germany and Hungary argued over the role of a controversial Hungarian bank in Russia's conflict in Ukraine, according to four diplomats familiar with the exchange.

OTP bank has recently become a focal point for officials due to Hungary's refusal to sanction additional EU military aid for Ukraine until Kyiv removes OTP from a list of "war sponsors," it maintains.

Germany vs. Hungary

Diplomats assert that the dispute is delaying the implementation of new sanctions against Russia, as per Politico. When Hungarian Foreign Minister Péter Szijjártó reiterated Budapest's position during the closed-door meeting on Monday, German Foreign Minister Annalena Baerbock responded, according to diplomats who spoke on the condition of anonymity to characterize the exchange.

According to her citations, OTP recognizes the Russian-occupied territories of Luhansk and Donetsk in violation of international law and has extended credit lines to Russian soldiers. Hungary refuted the allegations, reiterating the bank's statement that called the reports "inaccurate" and argued that the bank's management "openly supports Ukraine."

Nonetheless, the exchange, characterized by one of the diplomats as "civilized and within the normal context of the discussion," occurred after other countries, such as Sweden and Estonia, had also exerted pressure on Hungary during the meeting.

They argued that the EU must swiftly impose additional anti-circumvention sanctions and increase its military aid to Ukraine. The dispute reflects the growing annoyance of other EU nations with Hungary, which has impeded numerous wartime efforts to sanction Russia and support Ukraine.

Several member states, including Sweden and Estonia, reportedly urged Hungary to stop delaying the EU's punitive measures against Russia, according to anonymous officials present at the event cited by the news outlet.

In response to Ukraine's allegations that OTP Bank is complicit in or supportive of Moscow's actions, Szijjarto reiterated Budapest's grievances, Big News Network reported. The German foreign minister joined in, alleging that the Hungarian bank recognized Lugansk and Donetsk as Russian territory and extended credit lines to Russian military personnel.

While Hungary and the other member states could not resolve their differences, the exchange was "civilized and within a normal discussion framework," according to one of the sources. Budapest will continue to block the allocation of EU funds to Ukraine until Kyiv abandons its "increasingly belligerent" stance toward Hungary, as stated by Hungary's top diplomat on Wednesday.

Consequently, a $544 million military aid package from the European Peace Facility is in limbo (EPF). Szijjarto added that the future of additional sanctions against Russia depends on whether Ukraine agrees to change course.

Among other complaints, the minister raised the issue of OTP Bank, the largest lender in Hungary, which was placed on the list of "international war sponsors" by Ukrainian authorities earlier this month.

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Russia-Ukraine War

Szijjarto asserted that the bank "violated no Ukrainian laws, no international laws, and no sanctions measures." The Ukrainian National Corruption Prevention Agency (NCPA) announced the action, alleging that the bank offered "preferential lending conditions to [members of] the Russian military," including deferred payments on loans.

OTP Bank issued a statement denying the allegations, claiming it "always adheres to Ukrainian and international legal standards in its operations."

Viktor Orbán, Hungary's prime minister, is persuaded that Ukraine cannot win the aggressive conflict Russia has launched against it.

According to the president of the Hungarian administration, everyone must be persuaded that a ceasefire is the sole viable solution. "After the armistice, peace negotiations should begin," said Orbán.

Per MSN, he also noted that Hungary's predicament in this conflict is unique because "Ukraine is not a distant country."

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