In a dramatic turn of events, a Hungarian consortium, Ganz-Mávag Europe, has officially threatened the Spanish government with legal action after its bid to acquire a Spanish train-maker was blocked. The leftist government of Prime Minister Pedro Sánchez cited "national security" concerns, particularly regarding potential Hungarian links to Russia, as the reason for vetoing the deal.

The unprecedented move to block the takeover bid is the latest indication of the deteriorating relationship between Hungary and other European Union countries, fueled by accusations that Prime Minister Viktor Orbán's government is aligned with Russia. Responding to the Spanish veto, Ganz-Mávag Europe confirmed its withdrawal of the bid for Spanish train-maker Talgo, while also launching a scathing attack and making legal threats against the Spanish government.

Ganz-Mávag Europe, in a letter addressed to the Spanish market regulator, emphasized that its takeover bid for Talgo complies with all relevant legal requirements, and stated that there are "no well-founded reasons" for Spain to reject it. The consortium, which is 55 percent owned by Hungarian train manufacturing group Magyar Vagon and 45 percent by the Hungarian state investment fund Corvinus, further announced its plans to appeal the Spanish government's decision to the Spanish Supreme Court and "to the competent bodies of the European Union." If their legal challenges prove successful, the consortium expressed that they may consider resubmitting their offer for Talgo.

Spanish media have reported that Madrid's objection to the deal stems from alleged ties between the Hungarian consortium and Russia. Magyar Vagon, a subsidiary of Russian train manufacturer Transmashholding, has historical financial connections with Russia's Exim Bank. Additionally, the Hungarian government, led by Prime Minister Orbán, maintains a friendly relationship with the Kremlin.

The decision to withdraw the takeover bid was made during a board meeting held in Budapest on Thursday afternoon, by the consortium consisting of Ganz-Mávag Europe. With legal action looming and the potential consequences for future investment and relations between Hungary and Spain, this dispute between the two countries is becoming increasingly complex and contentious. The standoff highlights the wider tensions within the European Union regarding perceived pro-Russian sympathies in some member states.