Books on Hungary
% of GDP
Update No: 109 - (29/06/06)
Bush comes to town
US President George W. Bush arrived late in Budapest on June 21. Bush was
partially retracing the steps of his father - the first American head of state
to set foot in the country when it was on the threshold of democratic
On June 22 he focused on former communist Hungary as a vibrant symbol of
"New Europe." The Hungarian prime minister urged Europeans to think
more positively of America.
Hungarian doubts and susceptibilities
His visit was overshadowed, however, by concerns about America's fight against
terror. Like Europeans elsewhere, many Hungarians are critical of America's
presence in Iraq, the US prison at Guantanamo for terrorist suspects, reports of
secret CIA prisons in Europe and the controversies surrounding Abu Ghraib and
Haditha in Iraq.
Prime Minister, Ferenc Gyurcsany, cautioned against making too much of
US-European differences. "As European countries, we should end the
perception that ... Europe represents morality and the United States
efficiency," he said after meeting with Bush. "We believe morality and
power should go hand in hand, and we are democrats on both sides of the
Earlier, Bush met with Hungarian President, Laszlo Solyom, who linked the
world's battle against terrorism to the need to be "in line with
international law and to honour international human rights" - an allusion
to European perceptions that the US anti-terror campaign often transcends legal
Bush, in a brief reply, did not respond to Solyom's concerns, but focused on
Hungary's October 1956 revolution, which was crushed by Soviet troops but served
as a harbinger of the changes more than three decades later that transformed
Eastern Europe into free nations.
The US president thanked Hungary for its "contribution to building
democracy," and lauded the 1956 uprising for enforcing the "notion
that all men and women should be free."
"This is mainly about visiting the Hungarian government, and paying homage
to what they went through 50 years ago," White House press secretary Tony
The elder Bush, who arrived here July 11 1989, saw a Hungary poised to adopt
democracy just months before the tumultuous events that swept communist rule
from Moscow's vassal states and led to the demise of the Soviet Union two years
At the time, Hungary was described as "the happiest barrack" in the
Soviet camp with a moderate leadership, hesitant economic reform and a
comparatively kind human rights record.
A democratic future is beckoning
Seventeen years later, Hungary is a member of the European Union and NATO
and - despite current problems with balancing its budget - it is considered a
symbol of what went right in East Europe's transition from communism to
Bush praised Hungary's role in NATO, its presence in Afghanistan and earlier
role in Iraq. Hungary pulled out its 300-strong contingent from Iraq in late
He also spoke of progress in his talks with Gyurcsany about a Hungarian request
to lift visa requirement for Hungarians visiting the United States.
Between the visits by Bush senior and the current President Bush, President Bill
Clinton was in Hungary twice - in 1994 for an international summit on human
rights and democratic transition in Europe, and two years later to visit US
troops due for peacekeeping duty in Bosnia from a military base in southern
Bush looking for new partner in East Europe
Ever since the collapse of the Iron Curtain in 1989, successive US
presidents have tended to pick favourites among the leaders in the former
communist bloc of Eastern Europe.
President George H.W. Bush got on with Lech Walesa, the leader of Poland's
independent Solidarity trade union movement who was elected president in 1990.
Bill Clinton had an open telephone line to Vaclav Havel, the dissident
playwright who served two terms as president of the Czech Republic.
President George W. Bush established a close relationship with Aleksandar
Kwasniewski, a former communist youth leader who ended his two terms as Polish
president in December.
Now Eastern Europe is almost in the same position as Western Europe: Both
regions have leaders who carry little weight on the international stage, with
the possible exception of Chancellor Angela Merkel of Germany.
But Bush's visit to Hungary this week could give Prime Minister, Ferenc
Gyurcsany, a chance to fill that gap.
The arrival of the US president was a stroke of luck for the Hungarians. Bush
had originally planned to travel to Ukraine as a demonstration of Washington's
support for the democratic forces of the country. His visit was postponed
because President Viktor Yushchenko is still struggling to establish a
functioning Parliament and government three months after legislative elections.
So the Bush administration chose Hungary and the opportunity to commemorate the
50th anniversary of the failed 1956 Hungarian uprising - an event that happened
in October, not June. The political establishment in Budapest nevertheless seems
determined to seize the opportunity.
"The US is looking for a partnership with someone in the region who can
replace Kwasniewski," said Istvan Gyarmati, director of the Centre for
Euro-Atlantic Integration in Budapest.
"This could be done without undermining Hungary's relations with the EU,"
added Gyarmati, who last month was offered the job as foreign minister but
turned it down.
If the United States woos this small Central European country, which has 10
million people and joined NATO in 1999 and the EU in 2004, there are risks.
Sixteen years into democratic rule, it is still unclear how Hungary defines its
national and strategic interests, and how close it will steer to Russia on the
one side and the United States on the other.
Foreign policy never took centre stage during the 1990s, when the Eastern
European countries were preoccupied with transforming their economies. The
single foreign policy goal they all shared was to become members of the EU and
Now inside both organizations, some countries, particularly Poland and
Lithuania, have started to push their own foreign policy interests onto the NATO
and EU agendas. Both support the eventual membership of Ukraine and Belarus in
NATO and the EU. In contrast, Hungary's foreign policy under the Socialist
government has been very cautious.
Critics of the government, which is led by the successors to the Communist
Party, say it has failed to define its strategic interests or take a stand when
"I am not sure what Hungarian foreign policy stands for," said Janos
Martonyi, a law professor at Szeged University and foreign minister in the
former conservative government. "It seems it is about adaptation and
Some even say Hungary is too close to Russia. When President Vladimir Putin
visited Budapest in March, Gyurcsany did not openly raise the issue of human
rights, press freedom or the role of the nongovernmental organizations in
And unlike Poland and Lithuania, the Hungarian government did not openly support
Ukraine's Orange Revolution. Martonyi said it was "a shame that we did not
participate in providing assistance to the democratic forces in Ukraine."
He added that an internal Foreign Ministry paper on Ukraine written during the
autumn of 2004 recommended support for Viktor Yanukovich, the Russian-backed
Viktor Polgar, Foreign Ministry spokesman, said an internal paper had been drawn
up. "But it was an assessment of the situation in Ukraine which set out the
options," he said.
He dismissed any suggestion that Hungary's Socialist government had not wanted
to offend Russia because it was dependent on it for its gas and oil supplies. A
former Socialist leader and prime minister, Peter Medgyessy, resigned in 2002
for having been a communist spy.
"For the first time for many years, relations with Russia are absolutely
normal," Polgar said. "They are nonideological. We are working on
close energy contacts with Russia such as pipelines and storage facilities.
These are in our interests."
Hungary also managed to juggle its relations with the United States. It
supported the invasion of Iraq, sending 700 soldiers to join the coalition
forces, though they have now been withdrawn. It has troops in Afghanistan and
the Balkans, and it provides security for NATO officials who are training Iraqi
Gyurcsany, despite having little diplomatic experience, has begun his second
term in office with a higher personal profile in foreign policy because it means
more influence and more international exposure. Like President Lech Kaczynski in
Poland and his predecessor, Kwasniewski, Gyurcsany intended to take over some of
the powers of the Foreign Ministry.
The following is self-explanatory:-
Rudolf and Mayerling
Richard Bernstein, International Herald Tribune
It was opening night at the Operetta Theatre here in beautiful Budapest over the
weekend, and the evening was resplendent with a sense of the radiant past. The
show was "Rudolf," a musical based on the famous story of Crown Prince
Rudolf of the Austro-Hungarian Empire and his double suicide at the Mayerling
hunting estate in 1889 in the company of the Baroness Maria Vetsera, literally a
Many things could be said about "Rudolf" the musical, the latest of a
number of productions over the years based on the Mayerling story. One is that
16 years after the fall of communism, Budapest has a lively musical theatre.
"Rudolf" is done with a high- tech élan the match of anything
Broadway or the West End could muster.
"Rudolf" was clearly warmly welcomed here. The show's eight regular
performances were all sold out in advance, as was an additional performance
scheduled for a 4,000- seat sports arena.
And that leads to another thing that could be said about "Rudolf" in
Budapest. On opening night, the audience gave the cast a standing ovation, no
doubt in part because they found "Rudolf" a darn good show. But wasn't
it also because Hungarians have, after all the recent bad decades they've been
through, developed a retroactive affection for the days of the Hapsburgs and the
"It's all about the role that this dysfunctional royal family played in the
Hungarian imagination and continues to play," said Kati Marton, who has
just finished a book on nine great Hungarian figures, from the mathematician
John von Neumann to the photographer Robert Capa, who were forced to flee
Hitler's Europe and changed the Western world forever. She was explaining the
visceral interest in the Hapsburgs and the days of empire that are evidenced by
all those sold-out performances of "Rudolf." "It's because the
Hungarians haven't had anything like them since," Marton said.
"They went from the soap opera that was the Hapsburgs to the fascists, to
the German occupation, to 40 years of communism, during which time there was no
iconic family around which they could build the myths and legends that every
country has to have."
Not everybody feels nostalgic about the Hapsburgs to be sure, even if one of the
bridges across the Danube here is called the Elizabeth Bridge (after the most
beloved Hapsburg of them all, the Empress Elizabeth, the mother of the Crown
Prince Rudolf). Elizabeth's portrait peers out of countless postcards and the
windows of tourist shops. But the Hapsburgs did crush Hungary's independence
movement in 1848, and they hardly ruled by democratic means. It's at the most
one and a half cheers for the Austro-Hungarian Empire in Hungary today, if there
are any cheers at all.
I asked just about everybody I met over a long weekend in Budapest how they felt
about the Hapsburgs and why "Rudolf" seemed to capture the
imagination, and very few said it was because of nostalgia for a bygone era.
Still, the very staging of such a spectacular musical represents a change and a
restoration of sorts, of the sort of popular entertainment that was banned, or
that Hungarians couldn't afford, during the Communist time.
And in this sense, Budapest has given back to itself the former glitter and
glamour, its quality of profligate ornateness, that itself had its origins
during the empire.
"The second half of the 19th century, between 1867 and World War I, was the
reform age," Krisztian Szabados, director of Political Capital, a research
and consulting firm, said. Szabados rejects the idea that "Rudolf" the
musical sold out because the Hungarians are sentimental about the Hapsburgs, but
he allowed that there is a recognition of the fact that Hungary reached its
zenith during their reign.
"Hungary went though its greatest development in that period, the
railroads, the construction of Budapest as a great cultural capital," he
said. The Budapest that is being physically restored is very much the Budapest
that was Vienna's twin city.
A couple of weeks ago, the old Café New York, which was once one of the great
literary salons of Central Europe, was reopened after 20 years of restoration.
Now part of a new luxury hotel, it is gilded and frescoed and sconced to a
fault, though it doesn't seem like the place where artists, painters and writers
are going to hang out much, as they so famously did during the Café New York's
heyday. The speculation in the press when the café reopened was whether
management would allow poets to pay for their coffee with poems, as they once
did. The answer, needless to say, was that that tradition is no more.
So maybe what "Rudolf" and the Café New York show is not a longing
for a past but a commercialisation of a certain sentimentalised image of
Budapest that is also a consequence of the fall of communism and the restoration
of the free market.
"It's the sense in Budapest that the past was full of grandeur,"
Frederick Morton, author of the book "A Nervous Splendour," which was
the inspiration for "Rudolf" the musical. "After all, the
Austro-Hungarian Empire, in which the Hungarians were equal partners, was known
as Kaiserlich und Königlich, imperial and royal, and royal meant
There are plenty of reminders of that onstage at the Operetta Theatre - the
double-edged eagle that was the empire's emblem, the references to yellow and
black, which were the empire's colours, the large map of the empire, which shows
Hungary extending all the way to the Adriatic, as it once did. There are also
biting references to Hungarian anti-Semitism, an important aspect of this
country's past for which there should be no nostalgia. And there are reminders
of the fact that the empire was held together in large part by repression and
Perhaps the most important lesson of "Rudolf" in this sense is that,
yes, things went bad for Hungary for a long time after the empire fell.
There was fascism, the Nazis, the Iron Cross, the war, Adolf Eichmann, and then
Stalin, Khrushchev and Brezhnev et al.
But the undeniable fact is, even if the restored glitter is an attempt to profit
from the grandeur of the past, the best time ever in Hungarian history is right
Budapest Airport calls tender for ground handling unit
Budapest Airport, the company that runs Budapest's Ferihegy Airport, on May 23rd
called a closed tender for the sale of its ground handling unit, Budapest
Airport Handling (BAH), Deutsche Presse-Agentur (dpa) reported.
British airport operator BAA bought a 75 per cent-minus-one stake in Budapest
Airport for US$2.2 billion in December and has a licence to operate the airport
for 75 years.
Stewart Wingate, the incoming CEO of Budapest Airport, told dpa that ground
handling was not an integral part of an airport operator's business and that it
could be handled more effectively by a company that specialises in such work.
The companies being invited to bid were not named, but Budapest Airport claimed
they were of "international standing."
BAH employs over 500 people, but their contracts will remain valid after the
sale. Airlines, particularly the low-cost operators that have only recently
started flying to Budapest, have complained about the high fees at the airport,
and Wingate said that after the sale airlines could expect to pay less. He added
that Budapest Airport would become more profitable and competitive after the
move. A winner should be announced in July, and the contract could be signed by
OTP top contender in stake in Investsberbank
Hungary's largest bank, OTP Bank, is the front-runner in the competition to
acquire a 25 per cent blocking stake in Russian bank Investsberbank, a source at
the Russian bank said in Moscow, Interfax News Agency reported.
Reacting to a report in the Russian daily Kommersant, which said an agreement
with OTP could be signed soon, the source said that no buyer has been selected
yet and talks are still underway. It also said that OTP is one of the potential
buyers being considered. The reports said that "no legal documents have
been signed. Along with OTP Bank, talks are underway with at least two other
banks that are real contenders." OTP's press department declined to comment
on the reports to Interfax.
Kommersant wrote that Investsberbank's owners had chosen OTP out of four foreign
bidders for the stake. Meanwhile, bank sources told Hungarian state newswire
MTI's Moscow correspondent that talks had progressed furthest with OTP, but that
a decision is only expected in mid-June. It was reported last December that
Investsberbank planned to sell a 25 per cent stake to a strategic investor.
Investsberbank is number 60 on the list of Russian banks, with its 2.74 billion
rouble shareholders' equity, and is the 47th biggest in terms of total assets,
reaching 25.12 billion roubles (US$930 million) at the end of 2005. OTP
officials said in late April that the bank is currently bidding for four banks:
two in Ukraine, and one in Russia and in Serbia. They also said that successful
bids for all four targets would cost a combined 1.2-1.25 billion Euro. One of
the Ukrainian targets is Raiffeisen Bank's corporate bank. The Serbian target
has been revealed as Kulska banka, a small bank with a 1.5 per cent market
share, in which OTP is bidding for an at least 67 per cent stake.
FOREIGN ECONOMIC COOPERATION
MoU signed by Serbia-Hungary
The State Secretary of the Serbian Ministry of International Economic Relations,
Vlatko Sekulovic and State Secretary of the Hungarian Ministry of Economy and
Transport, Gyorgy Gilyan, on May 9th signed a Memorandum of Understanding (MoU)
aimed at intensifying economic relations between the two countries, the website
The MoU is expected to boost foreign trade exchange and increase investment and
cooperation in the field of infrastucture, as well as in the joint participation
of companies on third markets.
Serbian Minister of International Economic Relations, Milan Parivodic, said that
there are no obstacles to continuing the thus far successful cooperation between
Hungarian and Serbian economies. Parivodic said that Hungary's experience in
accessing the European Union would be of great benefit to Serbia. Sekulovic
announced that talks on introducing an air service from Budapest to Belgrade
would be scheduled soon. He added that the regulations, which Hungary applied in
the work of industrial parks will be included in great part into Serbian
legislation regulating that area. He added that infrastructure is being
renovated in Serbia rapidly because the attraction of foreign investment and
economic recovery depends on infrastructure renewal. Gilyan said that Hungary
has received great benefits from becoming an EU member and that foreign
investment last year reached 5.3 billion British pounds. He also added that
trans-border cooperation between Hungary and Serbia is one of the most
successful in the region.
Hungary inks contract with the World Bank
The mayor of Budapest, Hungary's Finance Ministry and Environment Ministry on
May 15th signed a contract with the World Bank for a 5.8 billion forint (22.3
million Euro) comprehensive water management programme, it was reported on the
website www.mti.hu recently.
The World Bank is due to contribute US$12.5 million worth of grants and low-cost
loans to the projects, which will include a number of water treatment centre
upgrades in Budapest, through the Global Environmental Fund. The contract will
be a huge step towards solving Hungary's sewage problems, Tamas Katona,
undersecretary at the Finance Ministry said. Katona added that the water in the
Danube River would be much cleaner as a result of the upgrades to the Central,
South-Budapest and North-Budapest treatment units. In this regard, Environment
Minister, Miklos Persanyi, said the programme would help resolve sewage problems
in all Hungarian towns and villages by 2010. The projects involved in the
five-year World Bank programme would also include a rehabilitation plan for the
natural waters on a 10,000 hectare wildlife conservation area in the south
Hungarian nature reserve of Gemenc and its environs.
T-Online selects Microsoft and Alcatel
A unit of Deutsche Telekom, T-Online Hungary, has selected Alcatel and Microsoft
TV for its internet protocol television (IPTV) pilot. T-Online Hungary is using
the Microsoft TV IPTV Edition software platform for the pilot project, which is
designed to deliver an enhanced user experience by enabling user-friendly
features like instant channel change, picture in picture, personal video
recorder (PVR) functionality (such as one-touch recording and pausing live TV)
and video on demand (VoD), the website www.cbronline.com reported.