Books on Hungary
Update No: 121 - (27/06/07)
The French Hungarian
The Hungarians are intrigued, as well they might be, by the triumph of Nicholas
Sarkozy in France. His father was Hungarian, an exile in 1945, his mother
French. That there is a Magyar corner in his heart is very probable. French is
his mother tongue all right and English his second language; but there is a part
of him that shall be forever Hungarian and Central European.
He is of course first and foremost French. He has shown himself to be a true
heir of his hero, General Charles de Gaulle. His extreme flexibility has led him
to victory over a decidedly more prepossessing opponent in the presidential
elections, Segolene Royale. But de Gaulle was no beauty either. What impresses
the French is to be clever, strong and decisive. That Sarkozy has proved to be -
as the French have acknowledged by giving the right a comfortable victory in
legislative elections in June too.
His assumption of power in the Elysee is an important event for Europe and a
fortiori for Hungary. He is likely to follow a foreign policy far more attuned
to Central European susceptibilities than Chirac, who famously told the
Romanians, traditional allies of the French, in 2003, when they backed the Iraq
War, that they had "missed a fine opportunity to shut up." Sarkozy
will eschew such crudities. Indeed, although an opponent of the war himself, he
has chosen a humanitarian advocate of it in Bernand Kouchner, the founder of
Medicins Sans Frontieres,as his foreign minister.
He is very likely to follow a traditional Gaullist path of integrating Central
Europe into world affairs, that today means the inner counsels of the EU, of
which he is now the ex officio chairman, albeit sharing power and the limelight
with a chairwoman in German Chancellor Angela Merkel, with whom his personal
relations are excellent. The British under Tony Blair hardly count in the EU
these days for obvious reasons; nothing much is expected of Gordon Brown either.
The British lion of yore is now seen as a Yankee poodle.
The Magyar memories and shared past
The Hungarian prime minister, Ferenc Gyurscany, and Sarkozy have yet to meet.
When they do it is likely to be a poignant moment. They will scarcely fail to
recall why the one is installed in Budapest, the other in the Elysee Palace in
Paris, the extraordinary fractious past of their common ancestry.
History is haunting the Hungarians right now, just as it is the Poles with their
new lustration law and the Estonians with their falling-out with Russia over a
World War Two memorial and reburial of Soviet soldiers.
The following news item has something decidedly ghoulish about it:-
Janos Kadar's grave profaned in Budapest
The Hungarians are shocked by the latest act of vandalism: the profanation
of the grave of former Communist Party Leader Janos Kadar in the central
cemetery of Budapest.
The thugs broke open the coffin and made off with Kadar's remains. They also dug
up the urn, containing the ashes of Maria Kadar, the party leader's wife.
The police are looking hard for the culprits. Investigators believe this was
done by a whole gang of hooligans, because it was impossible to move the marble
slabs single-handed. This was obviously a carefully planned action. The cemetery
and the tombs are closely guarded. The profaners got into the cemetery at night
when the car with watchmen was at its other end. They dug up the ground and
marred with black paint the walls of the Pantheon of the Labour Movement, where
distinguished CP leaders are buried.
The Hungarian public is deeply shocked by this outrage. This is an inhuman form
of crime, committed against society, and every civilised human being,
irrespective of political affiliation, should stigmatise the vandals, says a
statement, released by Hungarian Prime Minister Ferenc Gyurcsany.
The Hungarian Communists, the Union of Hungarian Resistance Fighters and
Anti-Fascists, as well as other associations of the country, had come out with
strong protests against this contemptible action.
They believe the campaign, lately unleashed by some political forces to
discredit the former Hungarian leadership, is directly linked with the actions
of the grave profaners.
Kadar was leader of the Hungarian ruling party for more than thirty years
running. He was buried in July 1989. Attitudes to him today, differ among the
various sections of the Hungarian society.
Many people reasonably enough, criticise the former CP leader for the role he
played in the suppression of the 1956 uprising. At the same time, there is
certain nostalgia in the Hungarian society for the past epoch, especially among
those who are painfully suffering from the reforms of the past few years and
from the results of the market economy.
Many people regard Kadar as an outstanding politician of the twentieth century.
A recently held public opinion poll showed that the leader of Socialist Hungary
is now regarded as the third most distinguished personality, who had played an
important role in the country's history.
It is a moment worth reflecting upon. Kadar did some unpleasant things, notably
participating in the brutal Soviet repression of the Rising of 1956 and
imprisoning thousands for years afterwards, who were the true patriots. He
unforgivably, to establish his Moscow's lapdog credentials, had Imre Nagy, the
leader of the Uprising, hanged, which Moscow was not even demanding.
He was a nasty bit of work all right. But he was astute and began an economic
perestroika right away and later a measure of glasnost. He became the most
popular politician in Communist Europe by the late 1960s with his 'Goulash
The significance of that today is that there is nothing like the same hatred of
communism in Hungary as in Poland and the Baltic states. There is no campaign
for a lustration law, as in Poland. Moreover, there is a former communist as
prime minister, Ferenc Gyurscany, who made a fortune by selling the assets of
the Young Communist League he headed to himself and proxies for a song.
Again a rather unsavoury character, as he confirmed by a speech to his party
faithful last summer, when he admitted to having lied, 'morning, noon and
night,' to get his Socialist Party re-elected that spring. This led to riots in
the autumn and again earlier this year.
But what Hungarians are going to judge him on is whether he delivers the goods
and the goulash a la Kadar.
Hungary's economy is in a mess, with a huge budget deficit and public services
in a crisis. Maybe this shifty fellow can deliver on the public budget as he had
already done nearly twenty years ago on his own behalf.
Hungary moves closer to ending healthcare dispute
Gyurcsany has brought down the deficit from around 10% of GDP to a current 6.7%
this year. He has pledged to end a long-running political dispute over
controversial plans to reform healthcare financing and negotiate an acceptable
package by the end of the year.
"I would like to reach a policy agreement in the first half of the year and
finalise negotiations in the second half of the year," said Mr Gyurcsany in
a meeting with journalists in London in early May.
The Hungarian prime minister's difficulties mirror those faced by health
reformers elsewhere in ex-Communist central Europe, where people are loathe to
lose the free health services they enjoyed before 1989.
Hochtief to invest 261m Euro in airport
German Hochtief AirPort's consortium recently promised to invest 261 million
Euro into Hungary's main airport over the next five years, Deutsche
Presse-Agentur (dpa) reported.
This comes as it announced it had finalised the purchase of Budapest Airport,
the company that runs the facility. Budapest Airport spokesman, Domokos Szollar,
said in a statement that the new management would focus on "the further
development, expansion and modernisation of the airport."
Budapest Airport was privatised in December 2005, when Britain's BAA bought the
airport. However, Spain's Ferrioval took over the British company and sold
Budapest Airport to the consortium for 1.9 billion Euro. "We are very proud
of acquiring Hungary's unique national asset," company CEO, Dr Reinhard
Kalenda, was quoted as saying, adding: "We have long sought to acquire a
stake in this airport because there is great potential." The airport is one
of the busiest in Central and Eastern Europe, and recently announced it had
handled over 700,000 passengers in April, a 4.6 per cent increase on the
MFB sells 49% stake in Grafika Press
Hungarian state-owned development bank MFB recently announced in a statement
that it has sold its 49 per cent stake in printing house Grafika Press
Nyomdaipari Zrt to KBC Private Equity NV (KBC PE), Interfax News Agency
"After two years of ownership, MFB has successfully exited its investment
in Grafika Press," the statement said. Belgium-based KBC PE, which has
private equity investments in six countries in the Central and Eastern European
region, received the green light from Hungarian competition authority GVH on May
17th to gain a controlling stake in Grafika in cooperation with current
shareholders, it was reported.
With the financial backing of KBC PE, Grafika bought the printing business -
including printing capacities and related machinery - of Szikra Lapnyomda Zrt,
then Hungary's leading printing firm, in March. The transaction, which was KBC
PE's first private equity transaction in Hungary, made Grafika the largest
printing firm in Hungary. Grafika, which generated revenues of three billion
forints in 2006, had received a 323 million forints equity injection from MFB to
increase its printing capacity, in January 2005.
Emfesz suffers 87% decrease in 2006 net profit
Hungarian energy trader, Emfesz, officials said on May 31st that as tight
competition prevented the company from passing on rising natural gas prices to
its costumers, it recorded a net profit of 1.33 billion forints in 2006, down 87
per cent year-on-year (y/y). The company is indirectly controlled by Ukrainian
investor Dmitry Firtash, Interfax News Agency reported.
"We could not pass on higher prices, in fact we had to cut our prices due
to strong competition, hence the decline in profit," Emfesz Managing
Director, Istvan Goczi, was quoted by Interfax as telling reporters. Emfesz, the
dominant player on the liberalised segment of Hungary's natural gas market and
an aspirant for a similar future role on the country's electricity market,
recorded sales revenues of 144.6 billion forints last year, up 55 per cent y/y.
At the same time, rising gas import prices resulted in a 78 per cent y/y
increase in raw material costs to 144.5 billion forints, leaving Emfesz with
operating income of just 130 million forints for the year, a fraction of the
previous year's 10.7 billion forints. Financial profits of 1.3 billion forints,
up five percent on the year, somewhat improved the bottom line.
Emfesz imports and sells more than 2.5 billion cubic metres of natural gas every
year, from Central Asian (mainly Turkmen) sources. The company now serves more
than 350 customers in Hungary, including large segments of the country's
chemical, construction material and sugar refinery industries.
However, the gradual liberalisation of Hungary's natural gas market has also
seen a rise in the number of natural gas traders active in Hungary. While Emfesz
all but ruled the market when it debuted in 2004, it now has about a dozen
competitors, and may get even more as the country moves toward the full
liberalisation of its natural gas market early next year. "We expect these
trends to continue this year," Goczi was quoted as saying, adding: "We
will remain profitable (in 2007), but our profits will be modest."
MOL joins up with ExxonMobil to search for gas fields
Hungarian energy firm MOL on May 17th said it had agreed to team up with
ExxonMobil to research basins in Hungary for "unconventional"
potential gas resources.
"MOL signed a Heads of Agreement with ExxonMobil subsidiary Esso
Exploration International Limited to undertake a joint technical study of
certain basins in Hungary that present significant unconventional hydrocarbon
gas resource potential," the company said in a statement on the Budapest
Stock Exchange's website, cited by Deutsche-Presse-Agentur (dpa).
MOL said such explorations usually needed heavy financial commitment and
presented production risks, adding that ExxonMobil had extensive experience and
Hungary is currently trying to diversify its gas sources. The nation currently
gets some 80 per cent of all its natural gas from Russia and as a result
suffered during a break in the Russian gas supply in 2006.
MOL and the Hungarian government are looking at the Russian-backed Blue Stream
pipeline, the EU-backed Nabucco pipeline and also a potential LNG pipeline from
the Adriatic coastline in Croatia.
Synergon wins 236m forint public contract for data
Listed Hungarian IT group, Synergon, announced in a statement on May 30th
that it has secured a 236-million-forint public contract to build out broadband
data networks and access points in Southern Hungary's Kalocsa, Interfax News
"Synergon will establish the broadband Internet network in the municipality
of Kalocsa," company spokesperson, Gergely Schutz, told Interfax, adding:
"The project is expected to be completed by the end of 2007." Under
the project, Synergon will provide Internet access for a total of 5,000
families, while the project also includes an optical backbone network with a
coaxial network and access points.
The project is sponsored by the EU-assisted Economic Competitiveness Operative
Program (GVOP), which is managed by the Hungarian Economy Ministry and is aimed
at closing the gap between the less-developed regions of the country and the
Magyar Telekom invests 1.5bn forints to upgrade
Hungary's largest telecom firm Magyar Telekom's Internet protocol (IP) backbone
network revealed on May 22nd that it has invested 1.5 billion forints to install
two high-performance Cisco routers to fulfil future capacity demand as part of
an upgrading process, Interfax News Agency reported.
"Hungary has taken the lead in the region in terms of broadband Internet
access use with over one million broadband Internet connections
registered," Cisco Systems CEE Managing Director Kaan Terzioglu was quoted
as saying in the statement, adding: "So it is not by chance that such a
milestone technological development is first implemented in Hungary."
Magyar Telekom, a member of German telecom group Deutsche Telekom, is the first
to use the router and transport technology in Hungary. The new structure
provides a platform for integrated media services, video, IPTV (Internet
television) and VoIP (Voice over Internet). In addition, corporate users will be
able to use virtual private networks offering higher availability (IP VPN),
which can only be built using devices like the Cisco CRS-1 router, which can be
upgraded and maintained without shutting down, the statement said. Magyar
Telekom had more than 628,000 registered broadband Internet connections at the
end of March 2007, the company's statement said.
MAV Cargo to be fully privatised
MAV announced recently that it has called a two-round public tender for the full
privatisation of its freight division MAV Cargo, Interfax News Agency reported.
The deadline for submitting indicative bids is July 23rd, while binding offers
are to be submitted by October 30th. According to the announcement, the goal of
the tender is to maximise the price of the sale, to increase the company's
efficiency and competitiveness, to develop the rail freight division in Hungary
and to improve working conditions of employees. The company, whose registered
capital is 29.6 billion forints, has been expected to be privatised since its
spin-off from Hungarian state railways MAV in 2005. MAV will hold to its option
of offering some 1.5bn worth of MAV shares on a reduced price to the employers
of MAV Cargo, as the law on privatisation grants this right. According to
earlier reports, the company's assets are worth some 70-80 billion forints, the
bulk of which is made up of the company's 13,000-strong rolling stock. Unlike
the state rail company's passenger division, which generates losses amounting to
tens of billions of forints each year and is heavily subsidised, MAV Cargo
closed 2006 with pre-tax profit of 2.8 billion forints, a loss in 2005. MAV
Cargo's sales revenues reached 93.1 billion forints last year, up from 86.5
billion forints in the previous year.