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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

Update No: 118 - (29/03/07)

Riots in Budapest in mid-March echo not only the Hungarian Revolution and the Soviet invasion of 1956, but also the Revolution of 1848, which was put down with Russian help. Indeed, because of the failures of these revolutions the citizens of Hungary are inclined not to be a phlegmatic folk when its government deceives them.

The voice recordings of the current socialist Prime Minister Ferenc Gyurcsany indicate that foul play is the only proper expression for what happened. It seems that Gyurcsany, during the parliamentary elections last year, knowingly deceived the voters when he said that the economy - which is heavily indebted by socialist-era spending - was in fine shape. 

But in private, Gyurscany was much gloomier about the finances when he was recorded as actually saying, "We lied morning, noon and night," and he threatened to go back into his multi-million dollar lair and brood if the government didn't let him slash spending. When he tried to cut entitlement payments to the people last fall he was practically run out of town by demonstrations that left the world gaping at pictures of violence in Budapest that reminded us of a not so distant past.

The Hungarians have never forgotten the dual slap in the face from the leathery gloves of the Russians; they celebrate their 1848 and 1856 revolutions every year the way Americans celebrate their July 4, with patriotism sans fireworks, but with some darn-good goulash soup and some Unicum- the national drink of the Hungarians.

Although the anniversary celebrations to the glory of 1848 in March were hijacked by violence, one mustn't judge the Hungarians too harshly; they have a long history of revolutionary rugs pulled out from under them, and this is only a natural reaction to any hints of corruption in a government that is supposed to represent the country honestly.

The Magyar ruse of reason 
Hungary is a country steeped in history, the key recent dates being 1848, 1867, 1918-9, 1944-5, 1956 and 1989. In each case a regime change threatened or actually happened. Indeed there seems to be a pattern, first something threatens, but fails; then in a strange way it is, at least partly yet never quite satisfactorily, realized, a cunning of Magyar reason, which always needs a respite before a new redemption.

While Hungary's 1848 fight for independence ended in defeat a year later, it resulted in a 1867 compromise with the Habsburgs and the formation of the Austro-Hungarian Empire. Key assistance was given by Russia in putting down the resistance in 1848, led by Kossuth.

In the sleep of reason of the late nineteenth century and early twentieth century there lurked monsters, communism and fascism. World War One woke them up.

The auguries cometh; then the real thing
1918 saw the end of the empire and 1919 a bizarre foretaste of the future in the shape of a three-month long communist regime. It had not the slightest chance of success, not least because it was led by Jews, the key being Foreign Minister Bela Kun.

Having been the first European country outside Russia to flirt with communism, it became the first to flirt with fascism, ahead even of Italy, when Admiral Horthy assumed power with the defeat of Kun. Horthy was not quite in the Mussolini, let alone the Hitler, class as a fascist; but he initiated anti-semitic legislation and trammeled the trade unions, while imprisoning liberals and communists alike. 

Then came the Second World War, in which true fascism came to power in the form of the Arrow Cross in March, 1944, who assisted the German authorities, Eichmann to the fore, in dispatching 900,000 Jews to Auschwitz and the like. Then came full-blooded communism in 1945, soon transmogrified into Stalinism under Rakosi, the Quisling of the affair. 

Khrushchev was to replicate the action of 1848 in 1956, greatly helped by the international outrage at the Suez invasion. The communists did not last, going in once again for the next dish on the menu, goulash communism, ie capitalism in all but name for the small firm and farm sectors. They were unseated by 1989, when full-scale capitalism came in.

Rioting last year
On October 23rd last year, the 50th anniversary of the 1956 anti-Soviet uprising, dozens of supporters of Fidesz, the main centre-right opposition group, were injured in a daylong confrontation between a few thousand protesters and police after a rally which drew 100,000 people. Protests against Socialist-led Prime Minister Ferenc Gyurcsany, including several violent riots, began in September, after the broadcast of the leaked recording in which the prime minister acknowledged his coalition lied about the economy to win re-election in April.

Some protestors waved the Hungarian Arpad flag that has become a symbol of the far-right since the country's pro-Nazi regime used a similar one during World War II. Others raised their arms in Nazi-like salutes. 

Protests again against Socialist-led PM Ferenc Gyurcsany 
Violent protests in the capital in mid-March left seven police officers and one demonstrator injured, while more than 50 people were detained, officials said.

About 1,000 right wing protesters hurling cobblestones and bottles confronted hundreds of police in riot gear who used water cannon and tear gas to repel them.

The violence on March 15th, which came after celebrations in Budapest to mark Hungary's 1848 fight for independence, began after word spread that police had detained a man suspected of instigating riots last year. The suspect, Gyorgy Budahazy, had been on the run for months.

The late evening violence ended hopes that the national day -- marking the country's 1848 revolution against Habsburg rule and a traditional day of rallies -- could end peacefully. There had been warnings that violence could erupt, after intelligence services said extremists were stocking up on weapons and planning coordinated attacks. Security was tight as police aimed to prevent a repetition of the riots that rocked Budapest in September and October. 

Authorities in particular feared a repeat of October 23, when violent far-right protestors tried to join a peaceful rally by the opposition right-wing Fidesz party on the 50th anniversary of a failed anti-Soviet uprising. 

But although far-right supporters also joined a Fidesz rally on March 16th, that gathering ended peacefully, drawing an estimated 200,000 altogether. 

Fidesz leader Viktor Orban, who lost his second consecutive parliamentary election last April, reiterated demands that the government resign because it backtracked on campaign promises of tax cuts to push through an austerity package.

In the past months, the government has introduced higher taxes, direct payments for some health services, university tuition fees and has cut subsidies in an effort to lower the state budget deficit.

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Hungary sells Malev to Russian consortium

Russian-backed consortium, AirBridge, finally signed a contract to buy Hungary's state airline, Malev, for 200 million forints (US$1.04 million) plus a huge capital injection and a commitment to pay off the airline's debts, Deutsche Presse-Agentur (dpa) reported citing Hungary's state privatisation agency. 
AirBridge, which is owned by Boris Abramovich, reportedly agreed to pay a modest sum for the company, but would have to shoulder other major costs. The company committed to injecting 50 million Euro (US$65.84 million) into the debt-ridden airline, with 20 million of this to come in the first instalment, the agency said.
The consortium has promised to either pay back or refinance loans worth a combined 13 billion forints by the end of 2007, when a state guarantee on the loans expires. The contract also specifies that AirBridge must provide a 32-million-Euro bank guarantee for another 20-billion-forint loan underwritten by the government.
The agency said that the final payment and first capital injection were expected to be transferred by the end of March. Speaking after the contract was signed, Abramovich - who also owns Russia's fourth-largest airline KrasAir - promised to bring the airline into the black within two years.
He also said passenger traffic would grow by up to 25 per cent annually and promised there would be no mass layoffs. Malev's new owner also said he would push through the airline's plans to join the one-world Alliance of air carriers.
The deal marked the end of a long-running saga, as Hungary put the troubled airline, which has failed to run at a profit for many years, on sale seven times in total. AirBridge beat off competition from several competitors, including Lithuania's LAL, to seal the deal.

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Plans to build hydroelectric power station in Ukraine

Hungary intends to build a hydroelectric power station with power of 20 megawatt for the organisation of export supplies of electric power to Hungary, Hungarian Prime Minister Ferenc Gyurcsany told the press recently after meeting with his Ukrainian counterpart, website reported. 
"Hungary is interested in construction of a small hydroelectric power station with power of less than 20 megawatt to export produced energy in Ukraine to Hungary," he was quoted as saying.

MOL's net income increases 35% in 2006 

Hungarian oil and gas firm MOL saw its 2006 net income rise by 35 per cent year-on-year, despite poorer-than-expected fourth quarter results, the company said in a report to the Budapest Stock Exchange Monday, Deutsche Presse-Agentur (dpa) reported. 
Consolidated net income jumped to 331.4 billion forints (US$1.7 billion), which the company attributed to strong performance of its core businesses and the one-off sale of its gas unit to Germany's E.ON. 
Annual operating profit rose by 31 per cent to 397.4 billion forints. 
The profit came despite a poor fourth quarter, which saw a 53 per cent decrease on the previous year's net income to 24.5 billion forints. Analysts had expected a figure almost double that value. MOL attributed the poor last quarter to several factors, including a negative industry environment - a drop in gas and diesel prices and a weakening dollar - and the planned shut down of its refineries, which happens every three years, it was reported.

BHD to start constructing biomass power plant

Hungary's BHD Hoeromu Zrt will shortly start building a 35 billion forints commercial straw-fired power plant with a maximum output of 49.9 megawatts in Szerencs (northeast Hungary), a report on the said. 
The company reportedly started excavation works on the site on February 15th along with the ordering of equipment and plans to construction and installation on March 20th. The company would finance 15 per cent of the project from its own resources and 85 per cent from banking loans, the report said. 
It added that BHD planned to finalise construction and installation by October 2009 and complete a trial run by the end of the year. Commercial operation would begin on January 1st 2010. The power plant would consist of a straw barn, boiler island, power house (turbine and generator set), water-treatment plant, flue gas filter, stack and an administration building, it was reported. The plant is planned to have 8,000-8,200 availability hours and its year consumption would be 270,000 tonnes of vegetable biomass (straw) - currently an agricultural waste that farmers have to pay dispose of. 

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Hungarian firm will invest 3bn Euro

The Hungarian corporation Trigranit said in Budapest that it will invest three billion Euro in Montenegro, Mnnews reported.
This was announced by the general director of the company Loran Varga and the chief of the sector for investment Zolt Cabo. Both officials of the company told Mnnews that Trigranit is interested to invest in Podgorica, Ulcinj, Skadar Lake, and Budva. Varga said that if the project were approved then the incomes in tourism would double. He added that the company is interested in construction of business centres, as the company has already built such centres in Ljubljana, Zagreb, Bratislava, Budapest. He recalled that per year their shopping malls are visited by about 60 million people. As Varga pointed out, they would work in Montenegro based on the cooperation of the state and the private sector. Trigranit is interested in construction of the roads and investment in energy. It is expected that the capital city could soon announce an open competition for the construction of a Millennium centre at the location of the former military caserne "Moraca."

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Magyar Telekom to feel effects of austerity package 

The Hungarian government's austerity package is expected to effect many corporations' profits this year and the new chief of telecommunications firm Magyar Telekom does not expect to escape it, Deutsche Presse-Agentur (dpa) reported. 
Chairman-CEO of the firm, Christopher Mattheisen, believes the austerity package is likely to severely dent 2007 earnings after indifferent results in 2006. However, he appeared convinced that after 2007, when Magyar Telekom has survived the austerity measures and restructured, it would go from strength to strength. The government last year increased the tax burden as part of a package of measures aimed at reducing a budget deficit that, at around 10 per cent of GDP, is the largest in percentage terms in the European Union. Mattheisen, who has been head of Magyar Telekom - owned by Germany's Deutsche Telekom - since December 2006, sees this as having a two-pronged effect on his company. "The effect of the austerity package is direct - in terms of taxes - but there is also an impact on personal disposable income," he was quoted by dpa as saying. 
"In Hungary, people spend on average about five per cent of their disposable income on telecommunications, higher than in Western Europe, so a decrease will have a bigger impact here," he continued. Mattheisen said the firm expected to see revenue, and earnings before interest, tax, depreciation and amortization (EBITDA) in 2007 stagnate as a consequence of the package. Revenues were 671.2 billion forints (US$3.55 billion) in 2006, up 9.1 per cent from the previous year, while EBITDA was 258.6 billion forints, up 0.9 per cent from the year before, it was reported. Net income in 2006 dropped 2.2 per cent to 76.7 billion forints.

Magyar Telekom to launch naked ADSL 

Hungary's leading telecom service provider Magyar Telekom announced on March 6th the introduction of ADSL services without the need for a voice subscription to its wholesale Internet service provider partners. Magyar Telekom would shortly introduce the naked ADSL service, to be available via Internet service providers, the company said in a statement on the website of the Budapest Stock Exchange (BSE). The service would be launched in Magyar Telekom's ADSL service area and the packages would have the same bandwidth as those currently available, the statement added, New Europe reported.

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Textile retailer Charles Vogele opens 6th store

Charles Vogele Group, one of the leading European textile retailers based in Switzerland, recently opened its sixth store in Hungary which it declared last year as expansion market ahead of schedule, website reported. 
The fashion retailer set foot in Hungary in 2006 and so far has set up shop only in the countryside. The sixth store was opened in Pecs that followed Dunaujvaros, Nagykanizsa, Nyiregyhaza, Szekszard and Veszprem. The 2006 financial year was the first for which Charles Vogele Group said it would report separately on the "Eastern Europe" sales organisations, which include the Slovenian, Hungarian, Czech and Polish markets.

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