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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 82,805 65,843 51,900 41
GNI per capita
 US $ 6,330 5,280 4,830 67
Ranking is given out of 208 nations - (data from the World Bank)

Books on Hungary


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Ferenc Madl

Private sector 
% 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 transition. 
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 Atlantic." 
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 norms. 
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 Snow said. 
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 later. 
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 free-market democracy. 
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 2004. 
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 Hungary.

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 NATO. 
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 appropriate. 
"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 accommodation." 
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 Russia. 
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 presidential candidate. 
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 officers. 
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 femme fatale. 
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 empire? 
"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 Hungarian." 
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 surveillance. 
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 now, today. 

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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 August.

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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.

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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 reported.
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.

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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 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.

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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 reported.

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