After frenzied speculation over recent days, predictions that the United States Government would introduce sanctions to pressure Hungary towards a more hostile stance towards Russia have come true. 

In a press conference on Wednesday afternoon, US Ambassador to Hungary David Pressman announced sanctions on the Budapest-based International Investment Bank and its top executives. First created in the Soviet era, the bank was resurrected by Russia in 2012. Its headquarters were relocated from Moscow to Budapest in 2019, and since then it has been referred to as a “spy bank” due to American fears that it provides cover for Russian espionage activity in Europe. 

Individual sanctions cover three senior figures at the bank: two Russians and one Hungarian. Pressman said the presence of the bank “threatens the security and sovereignty of the Hungarian people, its neighbours and Nato allies”. 

Hungary is the only EU and Nato member state to have stayed in the bank since Russia’s invasion of Ukraine began. Despite the bank’s small scale — the sums it handles were described as “peanuts” by a former Hungarian government official — it has assumed outsized significance in the country’s foreign policy, symbolising Viktor Orbán’s emphasis on openness to economic cooperation with the east.  

Fears that the bank facilitates spy activity are fuelled by allegations that its former chairman, who is included in the new sanctions, comes from a high-ranking Russian KGB family. But the sanctions also stem from a broader American impulse to pressure Hungary into ending cooperation with Moscow. Pressman cited US “concerns about the continued eagerness of Hungarian leaders to expand and deepen ties with the Russian Federation”, claiming cooperation funds Russia’s war machine. 

This isn’t the first time that the US has sanctioned Hungarians — the Obama administration previously targeted individuals in Hungary over alleged corruption. But it’s the first time sanctions have been used with the purpose of altering Hungary’s geopolitical stance. Hungary reluctantly endorsed EU sanctions on Russia, but the US wants to make Budapest’s decoupling from Moscow more complete. 

Faced with what it sees as an affront to its national sovereignty, the Hungarian Government has put its anti-American rhetoric into overdrive. Political Director Balázs Orbán decried pressure from “supposed allies”, while Chief of Staff Gergely Gulyás declared that “even under American pressure, we will not change our view that saving lives can only be achieved through a ceasefire and peace”.  

A new poster campaign supported by the American Embassy, drawing a parallel between the invasion of Ukraine and the Soviet crushing of the Hungarian Uprising of 1956 with the message “Russians go home”, has also been held up as an attempt by Washington to influence Hungarian policy. 

Ambassador Pressman has meanwhile become something of a hate figure for Orbán supporters: a gay human rights lawyer, he has repeatedly criticised Government policy while hosting leading anti-Orbán figures. In a State of the Nation address earlier this year, Orbán openly mocked Pressman, playing on his name to suggest that he was sent to “press” Hungary into certain political positions, before expressing hope that the next US ambassador won’t be called Puccini, a play on the Hungarian word for “putsch”. 

Language like this shows that the animosity between the US and Hungary is spiralling out of control. Both sides take a partisan view of one another’s politics – Orbán has repeatedly expressed support for both Donald Trump and his Republican rival Ron DeSantis  – and neither bothers anymore to make even a pretence of friendly interaction. But this round of sanctions marks a new low in the two countries’ relations.