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========================
The Hungary Report

Direct from Budapest, every week

Also available on the World Wide Web
(http://www.isys.hu/hrep/)

No. 1.34, January 22, 1996
========================


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=========
CONTENTS

  BRIEFS

  NATO referendum faces Constitutional Court
  Democratic Forum fissure grows
  Ministers agree on privatization revenue split
  Tax-free years for American expatriates are over
  1,100-year Hungarian anniversary launched
  Prominent Hungarians invited to lobby
  Few Hungarian police eligible for Bosnia mission
  OSCE commissioner okays Romanian language law
  Hungary to contribute to Balkan restoration fund
  Jewish ghetto liberation remembered
  Magyars could be lucky stars

  NUMBERS CRUNCHED

  Visits to Budapest's thermal baths last year
  Parliament's 1995 telephone bill
  Expected trade revenue with Serbia this year
  Growth of enterprises registered in Hungary
  Hungary's economic freedom rating

  FEATURE STORY

  The romance novel courts Hungarian women

  PARLIAMENT WATCH

  Media blunders could cause Smallholders' popularity to fall

The Hungary Report is also supported in part by:

MTI-ECONEWS, a daily English-language financial news service. For
on-line (fee-based) subscription information, contact the Internet
address: <->. (It's not automated -- write a nice note.)

======
BRIEFS

By Jennifer C. Brown
Copyright (c) 1995

------------
GENERAL NEWS

NATO referendum faces Constitutional Court

A referendum on Hungary's membership in the North Atlantic Treaty
Organization (NATO) will go before the Constitutional Court following
a case brought against Parliament by the Worker's Party, reports the
Budapest Week. Parliament refused to schedule a referendum after the
Party collected 142,000 signatures calling for a referendum on NATO
membership. Some 100,000 signatures are required to call a
referendum, according to a law that regulates grassroots movements.
Parliamentary members argue that a referendum would be unnecessary
now because Hungary isn't expected to begin membership talks with
NATO until late 1997 or 1998.

The government estimates that a referendum would cost the government
HUF 1 billion (US$ 71,429). But Party President Gyula Thurmer
calculates that Hungary's membership in NATO would cost up to US$ 3
million a year. The Worker's Party has no representatives in
parliament. However, the referendum issue has generated a great
amount of publicity for the party, writes the Budapest Week.


Democratic Forum fissure grows

Former ruling coalition Hungarian Democratic Forum is experiencing
internal battles that threaten to split the party. In two separate
meetings, party leaders nominated two separate presidential
candidates for a March 2 election.
One group elected current president Lajos Fur. He reportedly has not
agreed to run for a re-election yet.  MDF founder and vice president
Sandor Lezsak was the other nominated candidate. The Budapest Week
reports quotes Democratic Forum MP Gyorgy Rasko as saying that the
opposing forces have grown since the last national elections in May,
1994. He said that Fur and parliamentary group present Ivan Szabo
want to strengthen ties between the opposition parties by forming a
group called the Civic Alliance.

Former prime minister Peter Boross was quoted by Magyar Nemzet as
saying that he believes Sandor Lezsak is the only candidate capable
of leading the MDF along Christian, popular and national-liberal
ideas. He also argued that the party's current leadership is leaning
towards a liberal trend, which has resulted in a loss of popularity.
In other developments, MDF presidium member Csaba Ferencz announced
that he is giving up his membership. Magyar Nemzet quoted him as
saying that the two opposing factions are counterproductive.
Democratic Forum MP Gyorgy Schamschula, a former transport minister,
also announced his resignation.

---------------------
BUSINESS & ECONOMICS

Ministers agree on privatization revenue split

Following a month of public bickering, Finance Minster Lajos Bokros
and Privatization Minister Tamas Suchman made an agreement to split
extra privatization revenue, reports the Budapest Business Journal.
Some HUF 190 billion (US$ 1.6 billion) will go toward easing
government debt while HUF 35 billion in interest savings and an extra
HUF 80 billion (total amount: US$ 8.2 billion) from privatization
revenue raised this year will be spent on the economy.

Initially, HUF 35 billion (US$ 250 million) resulting from interest
payments on the paydown of debt will go toward developing exports and
infrastructure. Also on the agenda will be the reform of national
health care and education. The government will decide on the exact
spending of the money in the spring. A possible beneficiary includes
the M3 motorway. This is the first time revenue from privatization
has been used to repay debt. Some HUF 500 billion (US$ 3.5 billion)
in state assets have left to be sold.


Tax-free years for American expatriates are over

U.S. President Bill Clinton's proposal to eliminate a US$ 70,000
income exclusion for Americans living abroad will be felt in Hungary.
The new tax rule hits American citizens dodging Hungarian taxes and
those working less than 183 days for an American company. Under
Clinton's proposed plan, Americans living abroad will have to pay
federal income taxes as if they were living in the United States.

An article in the Budapest Business Journal points out that most
expats who work in Hungary must already pay Hungarian taxes. They
must file U.S. taxes but will don't owe any money if they make less
than $70,000. Now expats can receive credit taxes paid in Hungary
against taxes they owe in the United States. Revenue from taxing
expats will add up to US$ 9.6 billion over the next seven years,
reports the Budapest Week. The article mentions that it will also
increase the cost for U.S. companies doing business abroad and will
reduce the incentives for Americans to work overseas.

-----------
SHORT TAKES

PRESIDENT ARPAD GONZ LAUNCHED HUNGARY'S 1,100TH anniversary
celebrations last week. The opening ceremony was held in the Upper
Chamber of Parliament, reports Nepszabadsag. Other dignitaries
participating in the Millecentenary commemorations included Prime
Minister Gyula Horn, Speaker of Parliament Zoltan Gal, Hungarian
Academy of Sciences president Domokos Kosary and Minister of Culture
and Education Balint Magyar as well as parliamentary group heads and
Magyar Conquest memorial commission members. While delivering the
commemoration speech, Horn said Hungary's past 1,100 year history
points to a necessary position amongst Western European countries.
But the current road toward Western Europe will require sacrifices.

PRIME MINISTER GYULA HORN HAS INVITED 60 PROMINENT Hungarians living
abroad to promote Hungary's interests internationally, reports the
Budapest Sun. His announcement came during his third televised press
conference.
The three most prominent invitees include U.S. philanthropist and
financier George Soros, Canadian real estate investor Andrew Sarlos
and U.S. congressman from California Tom Lantos. The conference will
take place Feb. 9 and 10. Speaking at the event will be Horn, Finance
Minister Lajos Bokros, Foreign Minister Laszlo Kovacs and other
government officials.

HUNGARY'S NATIONAL POLICE HEADQUARTERS ARE UNABLE TO supply a
50-member contingent to serve in Bosnia due to a lack of qualified
applicants. Magyar Hirlap writes that less than 50 volunteers can
speak languages well enough to participate in the Bosnia peacekeeping
mission. A smaller group of police will be sent instead following the
cabinet's approval of the mission, according to Personnel chief Brig.
Gen. Laszlo Bartos

OCSE HIGH COMMISSIONER FOR ETHNIC MINORITIES MAX VAN DER Stoel,
called the Romanian education law harmless to national minorities'
language education, reports Nepszabadsag. What matters, he said, is
how the law is implemented. His comments came after holding talks
with Romanian Foreign Minister Teodor Melescanu and President Ion
Iliescu. He supported the use of Romanian-Hungarian and
Romanian-Ukrainian basic treaties for those countries' European
integration.

HUNGARY PLANS TO POUR HUF 100 MILLION INTO A U.N.-established fund
for reconstruction in the Balkans, according to Industry and Trade
Minister Imre Dunai.  Hungary will be one of 50 countries which will
contribute a total of US$ 1.5 to US$ 2 billion to the fund. Hungary
is also competing with major multinational corporations for contracts
to supply the region with materials.

THE 51ST ANNIVERSARY OF THE LIBERATION OF BUDAPEST'S JEWISH ghetto by
Soviet troops took place last week, reports Magyar Hirlap. The
ceremony was held in a graveyard near the Budapest synagogue. Chief
rabbi Robert Frohlich told Hungarian Jews that anti-semitism has not
disappeared despite a 50-year international pledge against
discrimination and racially-based hatred.

------------------
NUMBERS CRUNCHED

* Visits to Budapest's 22 thermal baths in 1995 (Budapest Week):  4.5
  million

* Parliament's 1995 telephone bill (Magyar Hirlap):  HUF 100 million
  (US$ 7.1 million)

* Expected trade revenue with Serbia this year compared to US$ 50
  million in 1995 (Ministry of Industry and Trade): US$ 300- US$ 400
  million

*  Growth of enterprises registered in Hungary  compared to 15% in
   1994 (Central Statistics Office):  4%

*  Hungary's world ranking in terms of economic freedom ("The
   Economic Freedom of the World", published by the Economist publishing
   group): 92nd

--------------
EXCHANGE RATE

January , 1995 (National Bank of Hungary)

US dollar -  $ 142.36 (buying), $ 143.56(selling)

Deutschemark - DM  96.83 (buying), DM  97.84 (selling)

---------------
WACKY AS USUAL

Magyars could be lucky stars

Hungarians will have the chance to rub elbows with sex symbols Madonna
and Antonio Banderas in Budapest when they begin shooting Alan Parker's
film adaptation of Andrew Lloyd Webber's musical "Evita" in March.
Thousands of extras are needed for some of the film's crowd scenes.
Casting company Ros Hubbard placed an advertisement in English around
bars and clubs in town for extras to play roles ranging from
politicians and mourners. Both English-language newspapers also
carried an advertisement calling for men and women over 30 with "very
strong, distinctive and characterful faces" and "no professional
acting or singing experience required."

Hundreds arrived last Sunday to the try-outs but not all of them made
it through the first round. Some of the would-be extras were rejected
because they were too pale, reported the Budapest Sun, or possibly
too young. "We are looking for  heaps of babushkas," said auditions
coordinator Gabriella Zahoran during an interview with the Sun.
Perhaps a few more trips to the tanning bed would help make those
Magyar faces more "characterful".

=============
FEATURE STORY

Romancing the romance novel

By Emmanuelle Richard
Copyright (c) 1995

"Her heart pounded intensely in her chest. Sounding like a clumsy
love letter, she blissfully repeated 'I love you', in a barely
audible whisper. Chase's answer was to place a flaming kiss on her
lips and.... " Agi greedily turns the page without looking up at the
worn out passengers around her, packed shoulder to shoulder in the
old tram. With its cover promising "Desire, passion, love", the
booklet in her hands causes other middle-aged women to throw sidelong
glances at her. But Agnes pays no attention. The weather is sunny and
she can keep her sunglasses on and read without feeling embarrassed.

There are hundreds of thousands of "Agneses" across Hungary who are
addicted to romance novels. According to a recent survey conducted by
romance novel powerhouse Harlequin, Hungary has the highest ratio of
such book per head, with each woman owning an average 1.3  novels,
far ahead of the Dutch, who placed second with 0.7. "Romance series
have proved successful in Hungary more quickly than anywhere else,"
says Imre Teglasy, editor-in-chief of Harlequin-Hungary and a former
Latin teacher at Eotvos Lorand University.

The Canadian-based company created a joint-venture with German press
giant Axel Springer-Verlag, which tapped into the Hungarian market in
1990. Now with 700 000 copies sold a month, Harlequin has become the
best-selling publishing house in the country. "And these novels don't
all end up in the garbage can," says Teglasy. "According to our
studies, Hungarians keep our low-cost paperback books on their
shelves next to the great classics".

The Hungarian's mania for romance novels has first to do with
history. Although widespread before the World War II, this kind of
literature was strictly prohibited under the communist regime. Every
publication needed the authorization of the Ministry of Culture. As
romantic books didn't rally people around the flag of the
class-struggle awakening the proletarian consciousness, they were
labeled as "bourgeois" and forbidden. This partly whetted the
Hungarians' appetite for such "decadent" love stories.

Hungarians are known to be voracious readers. "Their literature plays
a great role in the construction of their identity," says
psychiatrist Bela Buda. While Polish or Czech books are more inclined
to deal with social, realistic or philosophical subjects, Hungarian
ones have always been more sentimental. Hungarians cherish above all
their romantic poets and writers from the 19th century, such as Mor
Jokai or Mihaly Vorosmarty.

Like anywhere else, nearly all the readers of romantic series are
women. "But in comparison with some neighboring countries, Hungarian
women are late in their emancipation process" says Buda. They live in
a society where men and women's roles fit a rather conventional
pattern. Although most women go to work for financial reasons, they
are expected to keep the house in perfect order, to manage the
household expenses and to cook the meals. Buda believes they find an
escape in reading lots of women's magazines which, with their
romantic serials, are among the best-sellers in the country. TV soap
operas are also popular. "Hungarian women wish they had the same
problems as the heroines in Dallas" says Buda.

And the same American lifestyle.
This thirst for another identity is "the keystone of our success,"
says Teglasy. The Harlequin romance series published in Hungarian
consist entirely of translations of American best-sellers. "Our
readers want an instant dream," he claims.

Competitors' attempts to print Hungarian love stories all failed.
Hungarian women are not interested in Attila and Illona's first kiss
in a spluttering Trabant. But their imagination has limits: "When
translating, we lift out the American details that can't be conceived
of by a Hungarian, such as teenagers driving expensive cars," says
Teglasy. "We are in a country where even an average teacher can't
afford a car. Too many differences prevent the reader from
identifying with the heroes," he adds.

The stories themselves are always the same. A beautiful, sensitive
girl meets a handsome, reassuring man. They only kiss after dozens of
pages. Sometimes, they even go to bed. "And the end is always corny.
That's why I love reading them," says Agi, who works in a bank.

Unlike Agi, 71 year-old Erzsi dares not reading romantic books in the
tram. "But I devour them at home because they really cheer me up,"
she says, blushing. "They help me forget how hard it is to face
loneliness and my daily problems."
According to their Harlequin survey, 43% of Hungarian readers are
between 26 and 35 and three-quarters hold at least the equivalent of
a high school diploma. Every kind of woman can choose the romance
series that suits her best. According to the series' name, one knows
whether the story will be (in the ad-mens' parlance) an "armchair
traveling" story -happening in an exotic country-, a more erotic
novel, a "second chance" story with a divorced women as a central
character, a "medical romance" taking place in a clinic or even a
historical sentimental novel.

The books are sold at newspaper kiosks for around HUF 100 forints,
far less expensive than most serious novels, and each series has a
circulation of between 70,000 and 120,000. Only the teenagers' series
was withdrawn after two years when young readers turned to racier
stories. For psychiatrist Buda, this romance novel phenomenon, which
seems set to last, could be a key to understanding Hungarian society
at large. "A big interest in sentimental stories (as well as in crime
stories) expresses a fierce wish for a clear social order," he says.
It also brings out some of the Hungarian's "naive attitudes" in their
"frantic search for a Western lifestyle". But reading romances can't
be considered "dangerous". "Rather than making people frustrated,
those books make them want to accomplish the same things they read
about and can strengthen their faith in love" he says.

Like anything else, the love-affair with romantic novels could go out
of fashion again.  Nonsense, says Teglasy. "Smokers can enjoy smoking
the same cigarettes every day for years. Sentimental novels addicts
are the same." Even if the readers themselves happen to fall madly in
love? Tramway reader Agi says a strong relationship can't always be
rosy anyway. "At least printed love stories are never deceiving."

                                * * *
Emannuelle Richard works for French Radio and regularly contributes
to the Budapest Week

----------------
Parliament Watch

By Tibor Vidos
Copyright (c) 1996

Is the popularity of Smallholder leader, Jozsef Torgyan real or is it
only a bubble bound to eventually burst?
This has probably been the most frequently asked question about
Hungarian politics over the past year. The answers generally depended
on political sympathy and hope
rather than a desire to accurately predict the future.

In the meantime Torgyan was pushing ahead, using every
opportunity to lecture fellow politicians about rhetoric and "talking
to the camera". Torgyan doesn't seem to make any mistakes. No matter
what he has done, his party's popularity has risen steadily and is
now around 20%, about even with the Socialist Party. The Hungarian
people, just as politicians, seem to be polarized by the Smallholder
president: some like him, some dislike him, but only few remain
neutral.

In 1992 Fidesz was about equally popular, though far less divisive
than the Smallholders today. In this comparison, history seems to
repeat itself on a number of points. In 1992-93 Fidesz was fighting
against the image of being too young to govern. In 1996, the
Smallholders are fighting against the image of being too incompetent
to govern. The reaction of both parties was to stress that they have
a core of highly respected and educated "experts," who quickly drew
up alternative economic policies which failed to attract much
attention.

But of course there are significant differences between the
Smallholders' and Fidesz's story as well. Four years ago the press
and the opinion-forming elite were still enamored with unspoiled
young liberals while they quite dislike the Smallholders already. The
latest move by Torgyan to appoint three well-known, far-right wing
individuals into oversight boards established by the new Media Law
will, certainly pour oil on the fire. Former Hungarian Television
(MTV) acting vice president Gabor Nahlik, former MTV program director
Mihaly Kocsis, and former Hungarian Radio presidential adviser Istvan
Lovas were all at the forefront of the media war on the side of the
conservative government's right wing.

By trying to transform the Hungarian Radio and TV according to their
nationalist and intolerant views, these three gentlemen played a
crucial role in the catastrophic election defeat of the conservative
coalition. The nomination of Nahlik, Kocsis and Lovas into the boards
that control public broadcasting is a declaration of war with the
majority of Hungarian journalists. That is one declaration of a war
that a Hungarian politician has never won.

                                * * *
Tibor Vidos is a lobbyist and political consultant in charge of the
Budapest office of GJW Government Relations. <vidos@ind.eunet.hu> or
<CompuServe: 76702,2227> A version of this article appeared in the
Budapest Business Journal.


===========
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=================
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