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Vol 2, No 14
10 April 2000
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Hungarian News Review News from Hungary
All the important news
since 1 April 2000

Paul Nemes

MOL (Hungarian Gas and Oil Company) has bought a share in the Slovak oil company Slovnaft. On 3 April, MOL purchased a 36.2 per cent share in Slovnaft for USD 112 million, which will increase Slovnaft's capital by USD 150 million. The deal will improve the capital structure of the loss-making Slovak company. While some have questioned the move, MOL's President of the Board of Directors János Csák said the new "alliance may stabilise MOL's regional oil refining and trading." The company will have a 36 per cent share of the Hungarian oil market, 38 per cent of Slovakia's, three per cent of Romania's and two per cent in the Czech Republic. MOL, now the largest shareholder of Slovnaft, has an option to buy a majority share at a later date. As a result, Slovak nationalists have accused Hungary of trying to take economic and geo-political control of Slovakia.

Hungary has changed the date of expected accession to the European Union from 2002 to 1 January 2003. Endre Juhász said, "This change has an impact on almost all topics discussed. For instance, two Hungarian requests for derogation in the fields of telecommunications and industrial policy have become unnecessary." Juhász said mixed signals had come out of the latest meeting, "We have made considerable progress in some chapters. In other areas, however, there could have been greater advances. So the situation is not completely reassuring in all fields." Meanwhile, Foreign Minister János Martonyi has played down signals that there might be a slowdown in the enlargement process. Martonyi said, "It cannot remain unnoticed from certain statements by leading politicians and the Brussels Commission members that there exists a line of thought which might potentially want to slow down the accession talks," but these comments did not mean that the EU's policy on enlargement would change. Prime Minister Viktor Orbán said on Thursday that it is the lack of a consistent strategy in Brussels rather than Hungary's progress in preparing for membership that is the major obstacle to Hungarian accession.

Ireland supports Hungary's demands for a concrete timetable for enlargement. During her visit to Hungary, Irish President Mary McAleese also told Orbán that she too expects the EU to have a time-table ready by the end of the year and promised help to promote an early accession for Hungary. In return, Orbán promised Hungary's support to Ireland's bid to become a member of the UN Security Council between 2001 and 2002. During talks with János Áder, the Speaker of Parliament, the Irish President said that Hungary was on the brink of a success similar to Ireland's. Áder said that the successful economic situation of Ireland before and after EU accession is in line with the Hungarian government's policy on economic matters. After meeting with his Irish counterpart, President Árpád Göncz said, "Ireland is a great example to us, Hungarians. What Ireland has achieved in recent years is an economic miracle."

The environment ministers of Hungary, Romania, Slovakia and Ukraine met on 3 April to discuss solutions to the problems related to the Tisza disaster. Not surprisingly, the Hungarian and Romanian ministers, Pál Pepó and Romică Tomescu respectively, could not agree on the question of responsibility. Pepó said that governments have to take responsibility for industries polluting neighbouring countries, while Tomescu said that, under Romanian law, the facility causing the disaster would be held responsible and pay compensation. He said that Romania was doing everything it could to prevent further pollution, but he could not promise that it would not happen again. Miklós László, the Environment Minister of Slovakia, said he was sad to say that Tomescu did not have the authorisation to sign the concluding protocol's integrated development plan.

György Surányi, Governor of the National Bank of Hungary (MNB), has again refuted reports saying that he would resign. The rumour began to circulate before a meeting between Surányi and József Szájer (FIDESZ-Hungarian Civic Party) on Tuesday. Szájer said after the meeting with Surányi had been "for the usual consultations" and that the resignation of Surányi had not even been mentioned.

According to Világgazdaság, inflation for next year is projected to be 7.8 per cent. Péter Adamecz, the state secretary at the Finance Ministry, said that the higher than expected oil price increased the inflation target by 0.5 per cent, and that the inflation for 2000 should be 7.5 per cent. The Economic Research Institute, however, predicts that the price of oil will increase inflation by almost 1.5 per cent, bringing the total inflation up to 8.5 per cent. During a visit to Brussels last week, Finance Minister Zsigmond Járai was told by EU Economic and Financial Commissioner Pedro Solbes that Hungary was "rather too optimistic" in its forecasts for inflation targets.

György Matolcsy, the Minister of Economics, has said that the government plans to allocate HUF 343 billion (USD 1.6 billion) of the budget to the Széchenyi Plan, or the "Hungarian New Deal," over the next two years. The idea is to generate as much business capital as possible, with the state acting as coordinator. Projects, like the construction of a new motorway, will, however, get major government backing. The aim is also to increase the economic power of small- and medium-sized companies in a market which is currently dominated by 40-50 multinational companies.

The Government was taken by surprise on 5 April, when Finance Minister Zsigmond Járai declared that he would suggest an increase of the minimum wage from HUF 25,500 to HUF 40,000. Unions, saying that the increase might increase unemployment, and employers responded by saying that the increase is disproportionate. However, István Stumpf, of the Prime Minister's Office, proposed that the minimum wage might even be raised to HUF 51,000. Smallholder, MDF and Free Democrat MPs all had something to say against the move. Following criticism from the opposition that the wage rise could not be financed, Economic Minister György Matolcsy said that this would be possible, due to the five to seven per cent economic growth, but added that the effects on the economy of an increase of the minimum wage would have to be looked at.

After the Southeast Europe and the WTO Conference held in Budapest last week, Foreign Minister Martonyi said, "The WTO has greatly assisted Hungary in liberalising both its exports and imports, and today helps the country to progress on the road of export-orientated, sustainable growth. Therefore, he believed that the countries present at the conference were convinced of the WTO's commitment to assist developing transition economies.

The National Image Centre has sent a letter of complaint to the BBC, saying that the BBC World documentary Four Horsemen of the Apocalypse presented a "distorted" picture of Hungary. The documentary claims that the current "tidal wave" of corruption and organised crime originates in the former Soviet Union. The National Image Centre claims that the film is based on the situation in 1994 to 1997, and it quotes Prime Minister Blair, who praised Hungary's "repression of drug culture." Recent research has, however, been done on organised crime and corruption. The Association of Security Force Researchers established that bribing a police official at Ministry level would cost HUF 15 million (USD 55,500), while the cost of bribing a police officer would cost HUF 25,000 (USD 93). The Interior Minister, Sándor Pintér, concluded, "Bribery should have heavier penalties and preference should be given to defendants who aid the authorities."

Last week, Hungarian customs officers confiscated 16 kilos of heroin and 1200 amphetamine pills at Nagylak, on the Hungarian-Romanian border. The drugs were discovered in the petrol tank of an Austrian car driven by a Polish citizen. The drugs are worth around HUF 67 million (USD 251,000)

Béla Markó, president of the Democratic Alliance of Hungarians in Romania (RMDSZ), said on 5 April that Viktor Orbán's visit to Bucharest next week is very important, because of the significance of developing relations between the two countries. Markó said that relations between Hungary and Romania could be developed, but that much remains to be done. The RMDSZ President stated, "If we prepare an inventory of the Hungarian-Romanian basic treaty and take stock of the problems and results, then we can see there are still many things to do." Markó also expressed his approval of the Romanian Supreme Court's ruling that the establishment of the Petőfi-Schiller University would be lawful, in contrast to views expressed by Romanian nationalists. Markó said, "The verdict confirmed the important principle, whereby it is possible and lawful to set up higher education institutions that teach in the mother language of national minorities in Romania."

Viktor Orbán last week visited flooded areas in northeast Hungary. The Prime Minister, Sándor Pintér and István Stumpf met József Majer, the Mayor of Tokaj, the surrounding area of which has been affected by the flooding of the Tisza and Bodrog rivers. Rains and melting snow in the Carpathians have increased the water level in the Upper Tisza. As water levels in Szabolcs-Szatmár-Bereg County continued to rise at the end of last week, villages in the northeast part of the country were evacuated. László Fazekas, head of the Upper Tisza Water Directorate, said that further rain and thawing were expected to raise water levels to extreme heights.

The by-elections held in Székesfehérvár and Fehérgyarmat will be repeated on 16 April as both were declared invalid. Only 28 per cent of voters turned out for the Székesfehérvár by-election, which would have been won by the Socialist candidate. In Fehérgyarmat, voter turnout was 52 per cent, but since neither the FIDESZ-Smallholder nor the Socialist candidate received more than 50 per cent of the votes the election must be reheld.

In a Szonda-Ipsos poll, Árpád Göncz tops the all-time popularity list of Hungarian politicians, with 85 per cent. In the poll, in which 1000 people were questioned, Socialist Party Chairman László Kovács came second, with 63 per cent, and Foreign Minister János Martonyi third, with 60 per cent. Prime Minister Orbán came in 13th place.

According to another poll by Gallup, the Socialist Party (MSZP) would get 45 per cent of votes, if elections were held now, while FIDESZ would only be able to muster 33 per cent. The poll placed the Free Democrats (SZDSZ) in third, with six per cent, followed by the Smallholders (FKGP) at five per cent. The Hungarian Democratic Forum (MDF) and the Hungarian Justice and Life Party (MIÉP) each received four per cent of votes from the 1010 people questioned.

In September, Hungary's first independent TV news channel will take off. Program Director József Bartha Szabó said that GTV, as the new channel will be called, would transmit news 24 hours a day. GTV will report on news from the EU and neighbouring countries, and focus on business and finance. News will be subtitled in English, German, French, Russian and the languages of Hungary's neighbours.

Hungarian efforts to claim the Seuso treasure continue. The Ministry for Cultural Heritage has now offered a reward to anyone who can produce objects that are part of the fourth century Roman silver treasure. The Hungarian claim to the 14-piece silver set is founded on soil samples and the word "Pelso," the Roman name for Lake Balaton, which is inscribed on the largest plate in the set. After a 1993 ruling that the treasure did not belong to Hungary, two appeals were filed in a New York court. Government Commissioner Éva Hajdú said, "Many believe we have lost the case, but Hungary has not relinquished the treasures."

Construction on the project located on the former expo site, between the Petőfi and Lágymányosi bridges in Pest, will begin in August, next to the new National Theatre. The project, or the New Millennium Centre, will be developed by the Tridránit and TrizekHahn partnership, which also built the West End Centre by Nyugati railway station. Trigránit Rt President Sándor Demján said on 4 April that the USD 550 million project, which according to plans will include the construction of hotels, flats, offices, congress centres and a commercial centre, would take five years to complete.

Paul Nemes, 7 April 2000

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