From hungary-report-owner Wed Oct 18 17:01:41 1995 Received: from localhost (daemon@localhost) (fnord) by nando.yak.net (8.6.5/8.6.5) id RAA03833; Wed, 18 Oct 1995 17:01:41 -0700 Received: from localhost (daemon@localhost) (fnord) by nando.yak.net (8.6.5/8.6.5) id RAA03823; Wed, 18 Oct 1995 17:01:08 -0700 Received: from bruner@isys.hu () via =-=-=-=-=-= for hungary-report@hungary.yak.net (3821) Received: from kingzog.isys.hu (KingZog.iSYS.hu [194.24.160.4]) (fnord) by nando (8.6.5/8.6.5) with ESMTP id RAA03790 for ; Wed, 18 Oct 1995 17:00:01 -0700 Received: from [194.24.161.10] (bruner.dial.isys.hu [194.24.161.10]) by kingzog.isys.hu (8.7.Beta.11/8.7.Beta.11) with SMTP id AAA25798 for ; Thu, 19 Oct 1995 00:58:57 +0100 (MET) X-Sender: bruner@mail.isys.hu (Unverified) Message-Id: Mime-Version: 1.0 Content-Type: text/plain; charset="us-ascii" Date: Thu, 19 Oct 1995 00:55:11 +0100 To: hungary-report@hungary.yak.net From: bruner@isys.hu (Rick Bruner) Subject: Hungary Report 1.24 (Part I) Sender: owner-hungary-report@hungary.yak.net Precedence: bulk Reply-To: hungary-report@hungary.yak.net Dear Readers, No, the Hungary Report is NOT DEAD! After a three week hiatus, it's back and better than ever (or just as good, anyway). If you're new to the Report, don't panic at the size of this edition; it's normally half this size. But as we've been been offline for three weeks, there has been a lot to catch up on. As of the next issue, the service will be going weekly again and weighing in at only 20-30K on average. For more information about what's going on behind the scenes here, see the READER UPDATE below. ======================== The Hungary Report Direct from Budapest, every week Also available on the World Wide Web (http://www.isys.hu/hrep/) No. 1.24, October 18, 1995 ======================== SPONSORED BY: iSYS Kft., providing full Internet solutions for companies and individuals in Hungary. For further information, send e-mail to , view our World Wide Web home page (http://www.isys.hu) or call (+36-1) 266-6090. ======== CONTENTS BRIEFS Political Roundup: Horn backs down to calm coalition dispute Labor Minister resigns Sandor Nagy steps down as union boss Student leaders accept gov't plan; protesters cry betrayal Serb hit man, Marinko, sentenced to life Dutch PM forgives football scandal and privatization snafu Germany grants Hungary DM 1 bn loan Bokros says worst surprises are past Reforms getting good international reception Prime Minister Horn visits Croatia, Serbia Flour shortage halts exports as prices soar Right-wing Csurka calls for mass demos for '56 Police target software pirates Hungarian prisons get high marks Boy saved by Michael Jackson still needs home Lottery winner hits $5 million jackpot Balaton restaurants full of hiegyne problems O/S Warp beats Win'95 to Magyar version All WWII & 1956 partisan fighters awarded with pension bonuses #2 tram line back on track TV journalist Henrik Havas named government PR spokesman Lagymanyosi Bridge receives final name All compensation claims finalized Blobs over Balaton NUMBERS CRUNCHED Average pre-tax monthly wage Final 1994 GDP growth Drug addicts Drop in car sales Popularity of ex-Finance Minister Bekesi Popularity of today's Finance Minister Bokros Anticipated Budapest pubic transport fare for 1996 FEATURE STORY Forgotten drama of Broadway playwright revived as musical READER UDPATE Rick says goodbye, introduces Kriszta and Jennifer ====== BRIEFS Copyright (c) 1995, Rick E. Bruner ------------ GENERAL NEWS Political Roundup: Horn backs down to calm coalition dispute Labor Minister resigns Sandor Nagy steps down as Union Boss Prime Minister Gyula Horn surprised observes recently by showing he doesn't always have to get his way when he gave up his months-old controversial plans to restructure the government. His concession, three weeks ago, has brought at least a near-term conclusion to disputes with his Socialist Party's junior coalition partners, the Free Democrats (SZDSZ). To opposition calls of retreat and cowardice, Horn abandoned his plans to introduce three new ministerial posts, including the hotly disputed naming of hard-line Socialist Party MP and chief of the largest trade union, Sandor Nagy, to serve as minister in charge of economic affairs, which the SZDSZ vehemently opposed. Horn put the best face on the policy change, saying the coalition's stability -- which had seemed due to collapse imminently over the dispute -- was of primary importance. Opinion polls reacted favorably to his move, though the majority of those citizens polled by various firms appear doubtful about the coalition's survival for the 2-1/2 years left in its term. Minister of Labor Magda Kovacs Kosa, meanwhile, announced her resignation Thursday, October 5, in protest against the Finance Ministry's sick-leave policy. Kovacs tendered her resignation after Finance Minister Lajos Bokros, in a cabinet meeting that day, rejected a Labor Ministry proposal by the which the Social Security administration would commence sick leave pay after 15 days of an employee's illness, instead of the Finance Ministry's favored 25 days. Earlier, the Constitutional Court ruled the state must start payments after 15 days of sick leave. The incident represents a powerful protest to Bokros' single-mindedness in pushing through his tough austerity package aimed at controlling in Hungary's bloated budget deficit over the next three years largely through cuts in social spending. Following Kovacs' resignation, the Finance Ministry announced a plan that attempts to comply with the Constitutional Court's demands while maximizing budget savings. Kovacs is the third minister to resign after Bokros introduced his economic reform package last March. Other government members, from both SZDSZ and Socialist ranks, urged Kovacs to stay on, including Prime Minister Horn, to whom Kovacs is a close friend and advisor. But after an hour and a half of Horn's pleas, Kovacs stuck to her convictions and says she'll leave her post after November 30. No replacement has yet been named. One seemingly obvious choice, Sandor Nagy, has already declined the position of Labor Minister. Nagy, whose previous nomination by Prime Minister Horn to the non-existent post of Economic Affairs Minister nearly brought the Socialist/SZDSZ coalition to an end, said he isn't interested in taking a cabinet position at the moment. This despite the fact that he recently announced his own resignation as president of the National Federation of Hungarian Trade Unions (MSZOSZ), effective today, October 18. Nagy, who was the number two candidate of the Socialist Party in last year's election, acknowledged that his role of advising Prime Minister Horn on government policies had reached a conflict of interest with his trade union duties, so he chose to step down from the country's top union position. Identified as a hard-line Socialist conservative by critics, Nagy says he has too many conflicts with Finance Minister Bokros' austerity reforms to consider working with him in the cabinet, and that he'll concentrate only on his duties as a member of parliament for the immediate future. Student leaders accept gov't plan; protesters cry betrayal Tens of thousands of students held demonstrations across the country for the last two weeks in protest of the government's introduction of tuition fees for universities. Culminating in a mass protest in front of Parliament October 5, an estimated 15,000 students (according to Budapest Week) demonstrated and sent representatives inside the legislature to meet with Prime Minister Horn and Education Minister Gabor Fodor. Upon the delegation's reemergence, student leader Laszlo Szabo was greeted with open hostility from the crowd when he announced a compromise agreement he'd reached with Horn and Fodor. The student leaders had accepted the government's proposal of a basic HUF 2,000 (US$ 15) per month tuition fee pending Horn's promise to keep universities from add an additional "supplementary fee" on top of that, at least for this academic year. Students had disagreed with the new tuition policy, part of Finance Minister Lajos Bokros' three-year state budget reform plan, largely due to its open-ended approach, with few guarantees that fees won't continue to rise in the near future. According to the government's original proposal, universities could opt to introduce supplementary fees that could raise tuition as high as HUF 10,000 (US$ 75) a month, in a country where universities have traditionally been cost free to students. Most students demonstrating at Parliament last week interpreted their representatives' concession a betrayal, saying that it also lacks firm guarantees, according to the Week's on-the-scene report. Serb hit man, Marinko, sentenced to life Magda Marinko, a Serb national, was found guilty of four murders in Hungary and received the country's maximum sentence, 25 years in prison, after which he will extradited to Yugoslavia, where he could face the death penalty for more alleged killings there. Marinko, 32, was convicted of killing a married couple and their friend in Kecskemet and another woman in Oroshaza within the space of a month in the winter of 1993-94. He is also suspected of having killed another Hungarian couple and two of their children around the same time in Szeged, but prosecutors dropped those charges in the last days of the trial due to lacking evidence. Marinko's chilling theatrics during the trial gave the case a mini-O.J. fascination in the local media. In the same style, he reacted coolly to the verdict and, in shackles at the defense table, responded to the Budapest Municipal Court judge that if he chooses to appeal the verdict, "it would be with a 9 millimeter" pistol. Throughout the trial, Marinko wore a trademark combination of a dapper three-piece suit, sunglasses and an evil grin. He frequently interrupted his own lawyers, the prosecutor and even the judge with wisecracks, openly threatened witnesses with death and allegedly bit off one guard's finger, according to Budapest Week. The former French Legionnaire said that over the next 25 years, he'll have plenty of time to tell his side of the story, before he's sent back to his native Serbia, where he is currently being tried in absentia for 11 murders there. Dutch PM forgives football scandal and privatization snafu Hungarian-Dutch relations are fine, despite recent friction, The Netherlands' Prime Minister Wim Kok assured his counterpart Gyula Horn in the Hague last Wednesday. The recent conflicts between the two countries notably included the late September Fradi-Ajax football match and the recent privatization decision not to award Hungaroton to Holland's Polygram, both of which topics Prime Minister Kok discussed personally with Horn. At the football match between Budapest's Ferencvaros and Amsterdam's Ajax in the semi-finals of Europe's Champions League soccer competition two weeks ago, it wasn't the score which upset the Dutch. Ajax, a top European team, decimated Fradi 5-1, all in the second half. But the team had come back fighting mad after half-time following the Hungarian fans' displays of fascist flags and habit of making ape-like noises when black players on the opposing side controlled the ball. According to a first-hand report in Budapest Week, the Ajax manager, Louis Van Gaal, appeared furious at a press conference after the game, saying he had considered withdrawing his team from play at half-time in response to the crowd's behavior. Journalists at the press conference proceeded to argue with Van Gaal, defending the fans, according to the Week. Virtually no Hungarian newspapers reported on the scandal before the prime ministers' tete-a-tete, more than a week after the fact. The dispute with Polygram, meanwhile, centers on the Dutch recording company's losing bid for the Hungaroton record company last month, despite it being five times more than that offered by the consortium of local artists and investors who won the tender. Polygram has repeatedly threatened to sue, though it hasn't done so yet. Despite such setbacks, Prime Minister Kok was upbeat about relations, citing US$ 600 million of Dutch investments in Hungary, a narrowing trade deficit with Hungarian exports to Holland up 20% the first half of this year, and bilateral trade worth over $700 million in 1994. -------------------- BUSINESS & ECONOMICS Germany grants Hungary DM 1 bn loan Shortly following a failure by the IMF to grant Hungary a new "standby loan" last month, Germany granted Hungary a DM 1 billion four-year credit during Prime Minister Gyula Horn's visit to Bonn, October 2. The loan, 50% guaranteed by the German federal government and 25% each by the provinces of Bavaria and Baden-Wurttemberg, had earlier hinged on approval of the IMF loan, but the German authorities decided afterwards they were satisfied enough with Hungary's credit risk to extend the loan immediately. Skeptics suggest the loan is a "payment of gratitude" for Hungary and Prime Minister Horn's role in German reunification five years ago, when Horn, then Foreign Minister under the last communist party here, allowed East German refugees passage through Austria to West Germany, precipitating the collapse of the Berlin Wall. German Foreign Minister Klaus Kinkel chose to observe the five-year anniversary of German reunification on October 3 in the Hungarian capital. The Budapest Business Journal, however, quotes an unnamed German official who refutes the charges of a payoff, saying, "For us, the signs that the (Hungarian) government is going in the right direction are convincing enough." Meanwhile, Finance Minister Lajos Bokros and President of the National Bank Gyorgy Suranyi report from Washington D.C. that further talks with the IMF were going well and a standby loan of US$ 1.2 billion may be available as soon as next January. Bokros says worst surprises are past Reforms getting good international reception Finance Minister Bokros, chief architect of the three-year economic austerity plan to reform the state budget deficit, says there will not be any more nasty surprises, at least not on the scale of the infamous March 12 introduction of the plan, which saw a 9% devaluation of the forint, an 8% universal import duty and thousands of layoffs and cut-backs at state institutions. Devaluation of the forint will now adhere to a fixed schedule of just over 1% per month for the next two years, while the 8% "supplementary duty" will be phased out over 1997, Bokros told businessmen at a car exhibition. Meanwhile, certain results of the radical reforms are starting to show, both in terms of macroeconomic statistics and kudos from the international finance community. The best news would seem to be the current account deficit, which for the first time in three years was balanced in July. The C/A deficit, a measure of various import and export indices, should not exceed $100 million for any remaining month this year, National Bank President Gyorgy Suranyi told Budapest Week. The Budapest Business Journal reports that most export-related companies on the Budapest Stock Exchange gained significantly in share prices during the third quarter of this year. A group of US and Canadian institutional investors told local reporters after a meeting with Prime Minister Horn they were very impressed with investment opportunities here. Some international publications have also joined those celebrating Hungary's reforms, including the Wall Street Journal in a recent feature lauding Bokros and Suranyi for their bold reforms, as well as the US magazine Business Week, which included the Hungarian town of Szekesfehervar on its list of top cities worldwide for developing industry. The British magazine Euromoney also raised its estimation of Hungary six notches in its influential worldwide investment ranking. At 44th place, Hungary is trailing only the Czech Republic from this region in the list's credit worthiness. On the downside, another influential credit rating, Institutional Investor, dropped Hungary's ranking slightly in its recent report, though Hungary still holds second place to the Czechs among ex-communist states on that list, too. ----------- SHORT-TAKES PRIME MINISTER HORN IS ON A VISIT TO CROATIA AND SERBIA this week to try to improve Hungary's relations with both those neighboring states. In the two capitals, Horn is expected to raise concerns for ethnic-Hungarian minorities in both those countries, as well as pursuing his plan for Budapest to play host to peace negotiations, which Bosnia's Foreign Ministry has endorsed. Horn meets this Friday with Serbian President Slobodan Milosevic and Prime Minister Radoje Kontic. Horn told reporters in Hungary before he left that relations with Croatia are developing well, but he will seek better ties to Belgrade, with that communication line stymied since UN sanctions. Upholding UN sanctions against Serbia has cost Hungary's economy an estimated US$ 2 billion in unrecoverable losses. A SHORTAGE OF FLOUR HAS HALTED EXPORTS AND SETS BREAD PRICES TO RISE dramatically this month, while authorities are accusing commodities trades of engineering a price cartel. Both the State Audit Office and the Economic Competition Agency are conducting investigations into calls of artificial price speculation. The Ministry of Industry and Trade suspended all flour exports last week, though supplies are already some 600,000 tons short of domestic requirements for the rest of the years. Mills say due to shortages in domestic supply, flour prices will go up 20-30%, which is expected to send the cost for a kilo of bread from around HUF 70-80 today to HUF 100 before the end of the month. RIGHT-WING ACTIVIST ISTVAN CSURKA HAS CALLED FOR DEMONSTRATIONS in Budapest on October 22, one day in advance of official commemorations of the 1956 Uprising. Csurka told the press he didn't want to attract "extremist" elements, though many would call him that, after he gained infamy for publishing a blatantly anti-Semitic tract while serving as an executive member of the then ruling Democrat Forum, under the late Prime Minister Jozsef Antall's administration. Thrown out of the party, Csurka failed to get back into Parliament last elections, but his appearances representing the Hungarian Justice and Life Party regularly draw crowds among skinheads and other alarming far-right elements. Albert Szabo, for example, the Hungarian-Australian youth who has returned to lead his homeland's Nazi revival, says he'll be there. Earlier this month, Szabo, who is currently facing court charges for inciting racism, petitioned for the right to demonstrate in front of Budapest's Grand Synagogue in honor of Ferenc Szalasi, Hungary's WWII Germany-puppet prime minister and leader of the fascist Arrowcross. Szabo was denied permission. HUNGARIAN POLICE HAVE STARTED BUSTING SOFTWARE PIRATES. Police, along with the Business Software Alliance anti-piracy lobby, have made spot checks at some 50 local companies, finding every one of them guilty of illegal possession of software, police and BSA officials announced a press conference this week. Under Hungarian law, violation of the copyright law can carry a prison term of up to three years, though only fines are expected in these cases. LIFE INSIDE A HUNGARIAN PRISON IS GREAT, at least in relative terms, according to an American documentary film company profiled in Budapest Week. The film crew, 44 Blue Productions from Hollywood, has visited maximum security prisons from the US to China and say prison life is considerably better in Hungary than in many other countries. BELA FARKAS, KNOWN AS 'MICHAEL JACKSON'S BOY' after the superstar paid for the five-year-old's liver transplant, is in excellent health since the operation, but he is still in need of a foster family. Abandon by his own parents, the boy remains a guest resident at the hospital where he's lived for more than a year, despite his health being almost fully returned to normal. He is described as intelligent and cheerful, but his half-Gypsy ethnicity is suspected of keeping potential foster parents disinterested. Jackson, who met the child in the hospital during his summer '94 honeymoon visit here with wife Lisa Marie Presley, reportedly spent some four million Belgium francs on the operation and related costs, saving Bela's life. ONE LUCKY LOTTERY TICKET WON HUF 569 MILLION (US$ 5M) last week. The recipient's identity is protected by law but is known to be a married woman in eastern Hungary. An interview with the couple on the investigative news program "Objectiv", where the winners' faces and voices were obscured, brought charges of media misconduct in the face of strict right-to-privacy legislation. MPs have demanded the case be investigated. FELT A BIT ILL AFTER DINING AT THE BALATON? NO WONDER. A survey conducted this summer by the Consumer Protection Agency found hygiene problems at some 64% of 2,000 catering establishments inspected around the lake. Most waiters rarely wash their hands and can't tell you what meat you're eating, reports Nepszabadsag. Surprise, surprise. O/S WARP 3.0 CAME OUT IN HUNGARIAN BEFORE WINDOWS '95. The IBM operating system for PCs debuted in a new version with full Hungarian-language menu commands in mid-September, while Win'95 is due in Magyar sometime in November. ALL WWII AND 1956 RESISTANCE FIGHTERS TO BE REWARDED in the form of a supplement to their pensions, according to a new government decree. THE NUMBER 2 TRAM LINE, running its picturesque route along the Pest side of the Danube in central Budapest, is back on track after some six months of repairs, and is running quicker than ever. WELL-KNOW TV JOURNALIST HENRIK HAVAS has accepted the position of state secretary for public relations, as nominated by Prime Minister Horn. LAGYMANYOSI HID WILL BE THE OFFICIAL NAME OF THE NEW BRIDGE across the Danube, south of the Petofi Hid. The judging committee considered hundreds of names for the bridge, which was completed this summer, but settled on the one by which it had been know throughout its construction, named for the district of Buda to which it connects Ferencvaros on the Pest side. ALL CLAIMS FOR COMPENSATION OF PROPERTY NATIONALIZED BY THE COMMUNISTS must be resolved by December 31 of this year, the government announced. NUMBERS CRUNCHED * Average pre-tax monthly wage of full-time employees (Central Statistics Office): HUF 40,900 (US$ 300). * Final figure for percentage gross national product (GDP) growth for 1994 (Central Statistics Office): 2.9% * Estimated number of hard drug addicts in Hungary (National Health Protection Institute): 35-40,000 * Estimated drop in car sales this year (Association of Hungarian Vehicle Importers): 30% * Public opinion popularity rating of previous finance minister Laszlo Bekesi at his political low-point, when he quit the government this spring (Budapest Business Journal): 43% * Public opinion popularity rating of current Finance Minister Lajos Bokros today (Budapest Business Journal): 15% * Anticipated fare for one ride on Budapest public transportation by next year (Budapest Mayor Gabor Demszky): HUF 50 (US$ 0.37) ------------- EXCHANGE RATE October 17, 1995 (National Bank of Hungary) US dollar - 132.90 (buying), 135.58 (selling) Deutschemark - 93.56 (buying), 95.44 (selling) -------------- WACKY AS USUAL Space Blobs over Balaton Look, in the sky! It's a bird! It's a plane! It's...plasma balls? Scientists are, in fact, at a loss to explain the strange lights that regularly appear in the sky north of Lake Balaton towards Szekesfehervar, which were first observed there by an electrical engineer three years ago. A team of five military and academic scientists, brought together at the urging of former Privatization Chief Lajos Csepi, sighted the hovering lights five times, but say without expensive equipment they can't determine the lights' source or distance from earth. Budapest Week reports that Erno Veroczei, who first spotted the lights, theorizes they are intelligent orbs of plasma from Outerspace. Umm...yeah, right. CONTINUED next message...