Spain's public prosecutor has launched an investigation into the far-right Vox party over allegations of illegal political financing after reports emerged that the party had received millions of euros in loans from a Hungarian bank tied to Prime Minister Viktor Orban's government.

The probe focuses on a €9.2m loan from MBH Bank, a lender minority owned by Hungary's richest man, Lorinc Meszaros, the childhood friend of the prime minister. According to Spanish media reports, the funds were used to finance Vox's campaigns for the country's 2023 municipal and parliamentary elections.

The financing arrangement has raised concerns over potential breaches of Spain's political party funding laws, which prohibit foreign entities from bankrolling domestic parties.

Vox, led by Santiago Abascal, confirmed last September that it had borrowed the funds from MBH, claiming that Spanish financial institutions had refused to extend credit to the party. The allegations come as the party cements its ties with Hungary's ruling Fidesz, having joined Orbán's newly formed "Patriots for Europe" group in the European Parliament last July.

The Spanish Socialist Workers' Party (PSOE) filed a formal complaint in December, triggering the investigation. Vox spokesperson Pepa Millan dismissed the probe as a politically motivated attack by the governing socialists, alleging it was an attempt to distract from corruption scandals affecting PSOE.

The Spanish prosecutor's office is expected to examine whether Vox's loan arrangement violated Spain's strict campaign financing regulations. The party could face hefty fines or restrictions on future political funding if found guilty of misconduct.

While there is no evidence that the Hungarian government directly influenced the loan, critics argue that the financing deal reflects deeper political and financial entanglements between Orbán's government and Europe's far-right parties.

The case echoes a similar controversy involving Marine Le Pen's Rassemblement National, which in 2022 received an €11mn loan from another Meszaros-linked Hungarian bank (MKB, one of the predecessors of MHB Bank, formed through a three-way merger in 2023). The French radical party has since repaid the loan.

At a press conference in Brussels last year, Hungary's veteran leader dismissed suggestions of government involvement, saying that "whoever takes out a loan from a bank does so as a private transaction. Business is business."

The controversy comes amid broader scrutiny of Hungary's financial influence in European politics, as the Orbán government has repeatedly accused Brussels of interfering in national sovereignty while simultaneously deepening ties with like-minded populist movements across the continent.

Commentators point to the government's hypocrisy on the issue, as Hungary's controversial sovereignty protection law adopted in late 2023 by Fidesz lawmakers criminalizes receiving foreign funding for political purposes, among other things. 

The European Commission filed a lawsuit against Hungary in the European Court of Justice last year. Since then, the Czech Republic and Denmark have joined the case, and on February 18, the European Parliament's legal committee voted to support the lawsuit. The EU executive argued that the law violates multiple EU regulations and fundamental rights protected by the EU Charter of Fundamental Rights and runs counter to democratic values.