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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: 120 - (30/05/07)

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 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 party 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. The attitude to him today differs among the various sections of the Hungarian society. 

Many people are criticising the former leader for the role he had 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 Soviet repression of the Rising of 1956 brutally and imprisoning thousands for years afterwards, who were the true patriots. He had Imre Nagy, the leader of the Uprising, hanged, which Moscow was not 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 Communism.'

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 handed 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 had already done nearly twenty years ago on his own. 

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.

Hungary PM addresses in May Day festival 
Nearly a year after his gaffe-ridden speech of last year, Gyurscany tried a more sober style on May Day, aware that his remarks would be well reported. The Socialist-led government will create a strong Left and a strong Hungary to further the causes of the nation, he said in his May Day address. 

Gyurcsany, who became the Socialist party chairman earlier this year, addressed a crowd attending his party's May Day festival in Budapest's city park. The government "would advance and triumph," Gyurcsany said, adding that it would bravely encounter all attacks by the opposition. 

"Those who believe that a dashing attack would be enough to put us to flight simply do not understand the Left," the prime minister said. Additionally, Gyurcsany expressed thanks to those who were loyal to the Left even after the trials and tribulations of the past year. 

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IC Bank to be bought out by Banca Popolare

Italy's Banca Popolare di Verona e Novara (Banca Popolare) is due to acquire Hungary's IC Bank for an undisclosed sum, according to Interfax News Agency.
The Italian bank has already received approval from the Hungarian Financial Supervisory Authority (PSZAF) for the acquisition of the Malaysian-owned Hungarian bank. Banca Popolare has acquired the Budapest- and Prague-based IC Bank in one package with the finalisation of the transaction to take place in the near future, it was reported. IC Bank, one the smallest banks on the Hungarian market, was established in 1992 and currently operates six branches in the country. The bank tripled its sum of total deposits since 2002, while its shareholders' equity was 2.4 billion forints at the end of 2005.

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Cemex to invest 1bn forints in 2007 

Cemex Hungary Country Director Juan Luis Alfiero Caballero told reporters on May 3rd that Cemex, the Mexico-based international construction material maker, is planning to spend about one billion forints in 2007 on its Hungarian expansion, Interfax News Agency reported. 
"Cemex invested one billion forints in Hungary in 2006, and we are planning to spend a similar amount on development and expansion in this country this year as well," Alfiero was quoted as saying at a press conference. Cemex registered revenues of 19 billion forints in Hungary in 2006, which the company plans to maintain in 2007. Cemex has recently completed a new 730 million forints paving stone factory, while it is currently building a new concrete plant in Budapest, at a cost of 550 million forints.
The company operates 38 ready-mix concrete units in Hungary - which produce a type of concrete manufactured according to a set recipe - as well as eight aggregate (concrete component) quarries and five paving stone plants. The units have belonged to Cemex since 2005, when the group acquired UK-based RMC (Readymix Corporation Group), and thus its Hungarian affiliate, building material company Danubiusbeton Betonkeszito. 

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Hungary still mulling Russian and EU-backed gas pipelines 

The Hungarian government on April 27th said that it remained undecided on whether to support the EU-backed Nabucco gas pipeline or its Russian Blue Stream rival after defence minister Imre Szekeres appeared to back the EU pipeline, New Europe reported. 
"The government's standpoint on Hungary's energy security is unchanged: Hungary has not committed to either pipeline and does not rule out participation in either," the government said in a statement, cited by Deutsche-Presse-Agentur (dpa). "We will choose the solution that is the most advantageous and secure for Hungary," it continued. 
Szekeres, during an official visit to the US, said that Hungary would choose the EU pipeline if it were at all possible. 
The main right-of-centre opposition party Fidesz, which is fiercely anti-Russian, immediately welcomed Szekeres' statement and said it hoped this signalled a change in stance from the government. 
Hungary, which receives 80 per cent of its gas from its former overlord, was one of the countries most affected by the gas outages in January 2006, which occurred when Russian gas deliveries through Ukraine were disrupted. 
Since then, the government has been pursuing three different routes to ensure there is no repeat of such events. One of the options has proven to be controversial, however, drawing fire from the EU and domestic sources alike. 
Hungary's gas behemoth MOL has agreed to team up with Russia's Gazprom on extending the Blue Stream pipeline, which carries gas across the Black Sea to Turkey. 
If the plan were carried out, the pipeline would extend into Europe. MOL has also agreed to cooperate on building a 10-billion-cubic-metre storage facility in Hungary. 
However, the Blue Stream pipeline is seen as a rival to the EU- backed Nabucco pipeline, which aims to cut the dependence on Russian gas by bringing in Middle Eastern gas through Turkey. 
Hungarian Prime Minister Ferenc Gyurcsany has faced accusations of undermining the Nabucco pipeline by backing the Blue Stream project.

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Papoulias visits Hungary, discusses bilateral ties

Greek President, Karolos Papoulias, paid a three-day visit to Hungary recnelty. Papoulias, who was accompanied by Defence Minister, Evangelos Meimarakis, and Deputy Foreign Minister, Evripidis Stylianidis, was welcomed by the local residents, whom he told "we are pleased because you have also overcome one of the most tragic pages in modern Greek history." Papoulias also visited the National Gallery in Budapest and met with representatives of Hungarian opposition parties, while on the third and last day of his visit he toured the Lake Balaton region. Meanwhile, Stylianidis inaugurated a Greek-Hungarian business forum, New Europe reported.

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Richter Gedeon suffers Q1 losses of 49%

Recently, two large Hungarian pharmaceutical manufacturers reported a drop in profits, due to a strong forint, the effects of a government austerity package and a drop in sales in Russia, Deutsche Presse-Agentur (dpa) reported. 
The top firm, Richter Gedeon, reported 7.19 billion forints (US$39.73 million) net profit for the first quarter, 48.8 per cent down on the previous year. 
Egis posted a six month net profit of 2.82 billion forints, 70 per cent per less than in the same period last year. Both companies were hit by austerity measures brought in by the government aimed at targeting the country's huge budget deficit, which at 9.2 per cent in 2006 was the largest in the European Union. Pharmaceutical companies now have to pay 12 per cent of the subsidies that the healthcare fund provides for their drugs, pay a hefty fee to register every medical representative and proportionally compensate any annual deficit in the healthcare fund. Domestic sales also dropped due to the austerity measures. The strong forint to the dollar also hit sales, Richter said in its report, as did a decline in sales in Russia. 

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Telecoms must pay 10bn forints to extend concession deals 

Hungary's Ministry of Economic Affairs recently announced that mobile carriers Pannon and Magyar Telekom, or more precisely its mobile arm, T-Mobile, would have to pay 10 billion forints each if they want to extend their concession deals, Portfolio reported. 
The companies would also be required to make massive investments to the value of 20 billion forints, local news reports said, citing a statement from the ministry. The 15-year concession agreements of Pannon and MTel, which is majority-owned by German telco giant Deutsche Telekom, for the 900 MHz frequency is due to expire on November 4th, 2008, according to the ministry statement. If the companies wanted to see their concessions extended by 7.5 years, they would each have to pay 10 billion forints - plus VAT - by the end of 2007 and carry out investments worth 20 billion forints each over the next two years for the enhancement of broadband mobile services. The parties have been given until August 4 this year to agree on the conditions, Portfolio reported.

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MAV, Croatia's TZV Gredelj ink 2.2m Euro agreement

State railway company MAV announced in a statement that it has inked an agreement worth 2.2 million Euro early last week with Croatian train manufacturer TZV Gredelj to renovate five of its passenger coaches, Interfax News Agnecy reported. 
The public tender for the project was issued in September 2006, while MAV announced TZV Gredelj the winner of the tender in March 2007. The Croatian company has already participated in the remodelling of some of MAV's carriages. MAV purchased the coaches. The renewed and modernised carriages will be back on the tracks in the summer of 2008, and will be upgraded with various comfort facilities to allow them to serve domestic, as well as international InterCity lines, it was reported. MAV plans to carry out major developments in the next few years as the company is to renovate 485 of its coaches and introduce them to its InterCity network. 

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