N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 24/1995                                                     01 February 199
5

Hungarian Press Review


        Budapest, January 31 (MTI) - The following is a summary of articles
carried on Tuesday by the Hungarian national dailies:

        Nepszabadsag - Prime Minister Gyula Horn disagrees with the
summary conclusion that Hungary consumes more than is justified. (This
was one of the main arguments of outgoing finance minister Laszlo Bekesi
for his restrictive financial policy. - the editor). Horn added, however, that
managing the deteriorating balance of payments still requires tough, and
perhaps even drastic measures. In an interview, the prime minister
confirmed his insistence on the creation of a post of minister of
privatization.
He also stressed the need for amending certain points in order to eliminate
malfunctions in cooperation between the coalition partners. (Pages 1 and 9)

        Nepszabadsag - Peter Medgyessy, who is seen as the prime
candidate for the finance minister's post, says he is satisfied with his
current
post of president and general director of the Hungarian Investment and
Development Bank. Medgyessy, who was deputy prime minister in Miklos
Nemeth's government until 1990, said, "I do not wish to change my job every
four months, and I have yet to be offered the finance minister's post." (Page
1)

        Nepszabadsag - During the Monday session of the Coalition
Coordination Council, Alliance of Free Democrats (AFD) Chairman Ivan
Peto proposed that Horn and Bekesi discuss tete-a-tete whether the finance
minister's resignation is unavoidable, and if there is any room left for
compromise. (Page 1)

        Magyar Nemzet - Peto confirms that the AFD disagrees with the idea
of setting up a ministry of privatization. (Pages 1 and 5)

        Magyar Hirlap - The majority of those aware of the coalition
composition would prefer the HSP and the AFD to govern the country
together until the next parliamentary elections, scheduled for 1998,
according to a poll conducted for the paper by Marketing Centrum. (Page 4)

        Magyar Hirlap - On Monday the stock exchange index dropped by 70
points. Should Bekesi's programme be watered down, and a mixed
economic policy be introduced, Hungary may face further depression, a
commentary says. (Page 7)

* * *

        Budapest, January 31 (MTI) - Magyar Hirlap - Domestic utilization in
Hungary may drop by 2 per cent this year, a joint prognosis of the Institute
for Economic Research and the Post Bank said. Since an export expansion
may be hindered by the lack of competitiveness and capacities, the GDP
may remain at the 1994 level. Despite major improvements in the balances
of trade and payments, both may still exhibit large deficits. (In 1994, the
balance of trade was USD 3.8 billion in the red, while the balance of
payments deficit amounted to USD 4 billion.) Foreign direct investments are
expected to increase, but still remain insufficient for covering the balance of
payments deficit. As a consequence, the foreign debt stock may continue to
grow. (At present, Hungary's gross debt comes close to USD 29 billion,
while the net surpasses USD 19 billion).


Parliament Discusses Attacks on Hungarian Party in Romania


        Budapest, January 31 (MTI) - Taking the floor in the Tuesday plenary
session of Parliament, Independent Smallholders' Party (ISP) Chairman
Jozsef Torgyan spoke about recent attacks against the Hungarian
Democratic Union of Romania (HDUR).

        "It is now obvious that the January 23 statement of Hungary's six
parliamentary parties proved to be insufficient since the "witch-hunting"
launched against the HDUR is still going on," Torgyan said.

        The six parties protested because a Romanian government statement
called upon the HDUR to disband its local government council, and the
Romanian justice minister spoke about the existence of circumstances for
the banning of the party.

        Torgyan proposed that the Organization for Security and Cooperation
in Europe (OSCE) raise its voice in defence of ethnic Hungarians in
Romania because, as he put it, what happened might also be interpreted as
attacks against the OSCE.

        The ISP chairman called upon Foreign Minister Laszlo Kovacs, OSCE
chairman-in-office, to trigger the mechanism normally applied in the case of
human rights violations, and request an explanation from the Romanian
government.

        In his reply, the foreign minister said he shared deeply Torgyan's
anxieties, and agreed that the Romanian steps contradicted the fundamental
principles of the OSCE.

        Kovacs said the Hungarian government had taken advantage of its
foreign policy opportunities. Without suspending dialogue, it made its
position clear, protested, and spared no effort in halting attacks against the
HDUR. As a sign of protest, the government altered the programme of Viorel
Hrebenciuc, general-secretary of the Romanian government, in Budapest
last week. (Contrary to the schedule, the Romanian politician did not meet
either President Arpad Goncz or Prime Minister Gyula Horn.)

* * *

        Budapest, January 31 (MTI) - The Hungarian foreign minister
informed the ISP chairman that on Wednesday he would take part in the
Strasbourg session of the Council of Europe (CE) Parliamentary Assembly
and, together with his Slovak and Romanian counterparts, would sign a
general agreement on minorities.

        Kovacs is scheduled to hold bilateral talks with both of his colleagues

N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 25/1995                                                     02 February 199
5

Hungarian Press Review


        Budapest, February 1 (MTI) - The following is a summary of articles
carried on Wednesday by the Hungarian national dailies:

        Nepszabadsag - Prime Minister Gyula Horn, scheduled to meet
parliamentary party leaders today, plans to discuss not only the draft
privatization law but also the country's general situation. Alliance of Free
Democrats (AFD) Chairman Ivan Peto will be the only parliamentary party
leader not in attendance. The junior governing party will be represented by
another politician. (Pages 1 and 4)

        Uj Magyarorszag - The opposition Hungarian Democratic Forum
(HDF), Christian Democratic People's Party and Federation of Young
Democrats believe that the parliamentary debate on the draft privatization
law, which began yesterday, should have been postponed because the six
parliamentary parties will discuss the bill only today, HDF parliamentary
leader Ivan Szabo said. "We do not even know who the minister in charge of
privatization will be. Both governing parties announced that they would
propose major amendments. For the time being, only one thing is certain:
the title of the bill will remain unchanged," he said. (Page 1)

        Nepszabadsag - The health insurance authority is to introduce a new
system of subsidies for medicines in March. Simultaneously, the consumer
prices of drugs are to increase by 14.1 per cent. Of the 2,092 medicaments
on sale, 750 drugs, put on the so-called basic list, are granted a 90, 95 or
100 per cent subsidy by the health insurance authority. According to Arpad
Gogl, president of the Medical Chamber, the basic list ignores the reality of
disease statistics in Hungary, thus the chamber initiates an immediate
revision.
(Page 1)

        Nepszabadsag - Talks on the resumption of oil deliveries through the
Adria oil pipeline are to begin soon, Andras Horvath, commercial director of
MOL Rt, said. In view of war risk, no insurance company is prepared to
cover the transaction, he added. (Page 1)


* * *

        Budapest, February 1 (MTI) - Magyar Nemzet - "Hungary should
consolidate its present constitution rather than draft a new one," Istvan
Kukorelli, a senior expert in constitutional law, said. "Five years ago the
constitution was revised. The only task today is to weed out the
contradictions that are still contained within it," he said. (Page 6)

        Uj Magyarorszag - "The parties of ethnic Hungarians in Slovakia
would not object to the Hungarian-Slovak basic treaty addressing the
minority issue in a shorter form while another document attached to it
inseparably discussed the question in detail," Miklos Duray, chairman of the
Coexistence party, said. He added, however, that "should either country fail
to ratify the two documents simultaneously, the other one should act
similarly." Duray does not think this approach to the minority issue should be
viewed as a success of Slovak diplomacy. In his opinion, it would be
unacceptable only if the basic treaty dealt exclusively with the inviolability
of
borders. (Page 3)

        Magyar Hirlap - Although the Hungarian economy began to grow
again last year, its achievements lagged behind expectations, as concluded
by a Finance Ministry report compiled for the Thursday government session,
at the request of Prime Minister Gyula Horn. The report considers it
indispensable for Hungary to reduce the projected deficit of its central
budget (HUF 282 billion), and expects difficulties in financing the budget in
the first half of the year. The report criticizes the National Bank of Hungary
and the previous government, and calls upon the State Holding Company to
step up preparations for further privatization. According to estimates, last
year Hungary's gross domestic product increased by 3.5 to 4 per cent, with
industrial production expanding by 10 per cent, the construction industry by
20 per cent, and the food sector by 3.5 to 4 per cent. (Pages 1 and 11)

        Magyar Hirlap - From today, private individuals wishing to import
dutiable goods to Hungary are obliged to immediately pay the customs
duties at the border. Should they fail to do so, their goods will be held at
the
border until they meet their payment obligation. (page 5)

        Nepszava - Restorers of a church in Vac have found 152 coffins with
mummified corpses from the 18th century. The crypt has supposedly
remained unentered since 1808, enabling its special micro-climate to help
preserve the corpses. The finding is regarded as unique in Europe. (page
16)


Horn to Visit Belgium and Luxembourg


        Budapest, February 1 (MTI) - From February 8 to 11, Hungarian
Prime Minister Gyula Horn is to pay official visits to Belgium and
Luxembourg. He will be hosted by prime ministers Jean-Luc Dehaene of
Belgium and Jean-Claude Juncker of Luxembourg, Hungarian Foreign
Affairs Spokesman Gabor Szentivanyi told MTI today.

        In Brussels, Horn is scheduled to meet King Albert II, and hold talks
with Prime Minister Jean-Luc Dehaene. He will also meet Robert Collignon,
prime minister of the Walloon Region, Luc van den Brande, prime minister of
the Flemish Community, senior Belgian businessmen and financiers, and
representatives of the Hungarian community.

        Horn is to hold talks with the general secretary and the chairman-in-
office of the Western European Union, the presidents of the European
Parliament (EP) and the EU Commission, the secretary-general of NATO,
and other senior EP and NATO officials. Horn will also attend a session of
ambassadors accredited to the North Atlantic Council.

        In Luxembourg, the Hungarian prime minister is to meet Grand Duke
Jean, and hold talks with Prime Minister Jean-Claude Juncker, President of
the Chamber of Deputies Jean Spautz, and senior businessmen and
bankers.

        He is to address a festive session of the European Honorary Senate
to recommend Austrian Foreign Minister Alois Mock for admission to the
group of "European Senators".


Hungary Signs CE Convention on Minorities


        Budapest, February 1 (MTI) - Today, in Strasbourg, Hungarian
Foreign Minister Laszlo Kovacs signed the framework convention of the
Council of Europe (CE) which stipulates the protection of national minorities.
Foreign Ministry spokesman Gabor Szentivanyi summed up the significance
of this step in an interview for MTI.

        The framework agreement, approved by the foreign ministers of the
member states of the CE on November 10, 1994, was available for signature
from today. Of the 33 member states, 20 have already signed the document.
Hungary was among the first signatories, which is a reflection of its special
concern for national minorities, and for the importance it attaches to the
international codification of their rights, Szentivanyi said.

        Hungary notes with satisfaction that all the CE member states in its
immediate neighbourhood have signed the convention. Budapest regards
this step as another way of bringing the everyday lives of Hungarians living
in neighbouring countries closer to international norms, to guarantee their
rights and help with their implementation. Hungary hopes the framework
convention will serve as a starting-point for the deepening of dialogue on
minorities, Szentivanyi continued. It lays the legal groundwork, on which
local agreements can be built using the bricks of mutual understanding and
confidence, he added. The Hungarian government wants to make
constructive use of the framework convention, the protocol to the European
Convention on the Protection of Human Rights and Fundamental Freedoms,
as well as other European documents which protect minorities, in order to
improve the situation of national minorities and by doing so, increase
regional security.

        The Hungarian government"s minorities policy lays special emphasis
on the principles protecting minorities established by international
organizations, and will take practical legal and administrative steps in order
to implement them, said Foreign Ministry spokesman Szentivanyi.


Deputy Foreign Ministry State Secretary Holds Talks in Bucharest


        Budapest, February 1 (MTI) - Deputy Foreign Ministry State Secretary
Zoltan Pereszlenyi held consultative talks in Bucharest from January 30 to
February 1 on problems affecting Asia, Africa and Latin America, at the
invitation of his Romanian counterpart Mircea Geoana, director-general in
the Romanian Foreign Ministry.

        Pereszlenyi was received by Foreign Minister Teodor Melescanu,
State Secretary Marcel Dinu and Director-General Sabin Pop.

        At the initiative of the Romanians, the Hungarian diplomat was
received by Gheorghe Tinca, Minister of National Defence.

        In connection with Pereszlenyi's visit, a statement released by the
Hungarian Foreign Ministry said that with these talks the area of
consultations between the Romanian and the Hungarian foreign ministries
had expanded.

Foreign Minister on Protection of Ethnic Minorities


        Strasbourg, February 1 (MTI) - Foreign Minister Laszlo Kovacs told
MTI that the fact that the representatives of Hungary and Romania had
signed the European Convention on the Protection of Ethnic Minorities in
Strasbourg today, did not remove obstacles hindering the signing of a basic
treaty between the two countries.

        Kovacs added that there was no doubt that the signing of the
Convention would help in settling the problems between the two countries.

        For his part Romanian Foreign Minister Teodor Melescanu said that
signing the Convention would definitely have a favourable impact on the
elaboration of the text of the Hungarian-Romanian basic treaty.

        Gyorgy Frunda, a senator representing the Democratic Federation of
Hungarians in Romania and also present in Strasbourg, said the framework
agreement - despite all its positive features - did not in practice grant any
more rights to the Hungarian minority in Romania than those they already
had.

        Kovacs used his visit to hold bilateral meetings as well.

        In the morning he conferred with Daniel Tarschys, general secretary
of the Council of Europe, and Miguel Angel Martinez, its speaker, and
informed them that Hungarian Prime Minister Gyula Horn would attend the
next session of the parliamentary assembly.

        Kovacs later met Slovak Foreign Minister Juraj Schenk, and informed
him that a draft of a basic treaty, and a closely linked convention on the
protection of ethnic minorities, redrafted after Slovak Prime Minister
Meciar's recent visit to Hungary, would be presented to the Slovaks in the
near future.

        Kovacs told Melescanu that Romania's integration into Europe was in
Hungary's interest, but the current Romanian campaign being conducted
against the Democratic Federation of Hungarians in Romania was harmful to
this process, and to relations between the two countries.

        The two politicians agreed to speed up preparations to complete the
basic treaty.

Tabajdi Holds Press Briefing


        Budapest, February 1 (MTI) - The time is not yet ripe for mediation or
conciliation because communication between the Democratic Community of
Ethnic Hungarians in Voivodina and the Hungarian Federation of Voivodina
has not reached a level where anybody could make such an effort with the
hope of success, Csaba Tabajdi, political state secretary at the Prime
Minister's Office told a press briefing after holding separate talks with the
representatives of the two groups in Budapest today.

        The talks were also attended by members of the consultative
committee representing the six parliamentary parties, and dealing with
ethnic minorities beyond the borders.

        Sandor Pal, vice-president of the Democratic Community, said ethnic
Hungarians in Voivodina had two authorized organizations, but only one, his
organization, had gained legitimacy at elections.

        He said former representatives of the Community who had set up the
Federation, ought to give up their seats.

        Ferenc Csubela, president of the Federation, said ethnic Hungarians
ought to bring about the conditions necessary to enable them to take joint
action.

        Tabajdi said that at the request of the Community - and under the
leadership of academician Ferenc Glatz - a working committee independent
of any party has been busy for two months to produce an up-to-date concept
for the Community on the creation of Hungarian autonomy.

        Laszlo Kocsi, speaking for the Hungarian Socialist Party, said it was
regrettable that the two organizations had failed to hammer out a joint
concept on autonomy which would outline their future cooperation.

        He assured ethnic Hungarians that the political parties in Hungary and
the Hungarian government felt a deep responsibility for their fate.

        Zsolt Nemeth, deputy leader of the parliamentary group of the
Federation of Young Democrats, said a basic treaty could not be signed with
the neighbouring countries that do not guarantee education in Hungarian for
their ethnic Hungarian citizens.

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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

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Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
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N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 26/1995                                                     03 February 199
5

Hungary Solvent, NBH Vice-President Says


        Budapest, February 2 (MTI) - Given the present level of hard-currency
reserves at USD 7.2 billion, the country's solvency can be maintained even in
the
case of shrinking international capital markets. Accordingly, it would cause no
financing problems if Hungary had to refrain from bond issues over the next six
months because of deteriorating credit terms, National Bank of Hungary (NBH)
Vice-President Frigyes Harshegyi told MTI on Wednesday.

        This year the country has to repay a loan of USD 3 billion, with debt
servicing at USD 1.2 billion.

        The balance-of-payment deficit, which also includes debt servicing, mus
t
not exceed USD 2.5 billion. Deficit could be offset by the inflow of working ca
pital,
which may reach USD 2.5 billion, together with the privatization of strategic
companies.

        In 1995 the bank expects to issue USD 1.5 billion worth of bonds abroad
,
of which two major issues have already ensured a loan of USD 320 million. (This
year so far, the NBH has issued bonds worth 750 million schillings and 25
billion
yen.)

        International financial institutes - mainly the World Bank and the
International Bank for Reconstruction and Development (EBRD) - will grant the
country loans worth USD 400-500 million to finance various projects this year.I
n
addition, companies and commercial banks will borrow nearly USD 1 billion
abroad within their own competence, about the same as last year.

        According to Harshegyi, even if the NBH was unable to issue more bonds
this year due to negative trends on international capital markets, the hard-
currency reserves would fall to USD 5-5.5 billion by the end of the year - asum
that still matches the country's six-month import financing requirement and wou
ld
lay foundations for the fulfillment of the USD 3 billion capital repayment beco
ming
due in 1996.

First Meeting of OSCE, Council of Europe


        Strasbourg, February 2 (MTI) - Leading officials from the Organization 
for
Security and Cooperation in Europe (OSCE) and the Council of Europe held their
first official talks in Strasbourg, on Wednesday evening. The OSCE delegation
was led by Hungarian Foreign Minister Laszlo Kovacs, Chairman-in-Office of the
OSCE.

        Before the meeting, Kovacs said its main aim was to harmonize relations
between the two organizations, so that in the future their relationship would b
e
characterized by cooperation rather than by rivalry.

        Cypriot Foreign Minister Alekos Mihaelides, current President of the
Council of Europe, said his organization would like recognition for the special
 role
it is playing in OSCE efforts to protect the minorities and combat intolerance.

Hungarian FM on Russia's Council of Europe Entry


        Strasbourg, February 2 (MTI) - The Parliamentary Assembly of the Counci
l
of Europe will in all probability decide to suspend examining Russia's request 
for
admission. Hungary agrees that now is not the right time to consider this quest
ion,
Hungarian Foreign Minister Laszlo Kovacs said today at the Council of Europe's
Strasbourg headquarters.

        There has been no case of the Council of Europe granting full membershi
p
to a country directly involved in an armed conflict, Kovacs said. He added that
 it
would be better to suspend the matter rather than to discuss and reject the
application, which would create a feeling of isolation in Russia and would in t
urn
favour extremist forces there.

        The foreign minister reported to MTI's correspondent on Wednesday
evening's talks at which leading officials from the Council of Europe and the
Organization for Security and Cooperation in Europe (OSCE) agreed to expand
exchanges of information and coordinate their activities, one example of which
would be the sending of joint fact-finding missions. Agreement was also reached
that the next ministerial conference of the Council of Europe, in May, will inv
ite
non-member OSCE countries to sign the general agreement on minority
protection, drafted by the Council of Europe.

Budget Reserves


        Budapest, February 2 (MTI) - The government has frozen HUF 8 billion
from its HUF 191. billion budget reserve this year.

        A decision was made on how the rest of the funds should be used earlier
,
thus this austerity measure does not affect those funds, Ferenc Batho, head of
department at the Finance Ministry, told MTI today.

        He said the move was necessary because of the fairly serious financial
state of the country.

        He explained that the government was doing its best to reduce its
spending, and part of that effort was to freeze some of the budget reserves.

        This measure does not restrict Parliament. Should Parliament pass a
resolution this year requiring government expenditure, then the money will come
from the reserves.

        If Parliament approves the idea that a minister without portfolio shoul
d be
responsible for privatization in Hungary, then the funds necessary for this wil
l
probably come from the frozen budget reserves.


Chiefs of Staff Meet


        Szeged, February 2 (MTI) - Since Croatia does not require the further
presence of UN troops, another war conflict looms large, and Hungary does not
want to be involved in that in any way, Brigadier-General Sandor Nemeth, chief 
of
staff of the Hungarian armed forces, told his Yugoslav counterpart, Colonel
General Momcilo Perisic at a border meeting in Szeged today.

        Later Nemeth told reporters that he had requested the same from the
Croatian chief of staff at a meeting last January.

        For his part Peresic said the Croatian political and military leadershi
p had
envisaged use of force regarding the Serbian Krajina territory, but he said the
Federal Republic of Yugoslavia had from the outset striven to seek a peaceful
settlement of the conflict.

        Peresic said he was convinced that Hungary contributed to a diplomatic
solution of the crisis.

        Nemeth and Peresic agreed that cooperation between the armies of the
two countries could be improved and that it was in the vital interest of both
countries to maintain the dialogue.

        Nemeth said the UN embargo imposed on Yugoslavia, which Hungary
closely observes, will not hamper the expansion of cooperation.

        He mentioned the verbal agreement on the use of air space made earlier,
adding that a hot line had been established between Veszprem and Novi Sad,
thus ensuring direct contacts between the chiefs of staff.

        Shortly the two sides will set up a joint commission to work out the
possibilities of developing cooperation in detail.


Government Spokesman's Briefing


        Budapest, February 2 (MTI) - In view of the current situation in Hungar
y,
the government will have a review of the country's financial state once in ever
y
fortnight, the cabinet decided at its session on Thursday. The ministers agreed
 on
this future practice following a report by the Ministry of Finance on last year
's
economic results and on the start of this year, not based on final figures yet,
Elemer Kiss, administrative state secretary at the Prime Minister's Office,told
 the
press after the session.

        The exact figure of the current account deficit is expected to be avail
able
by the end of February. However, it can be said that the basic trends of the
economy are not favourable, Kiss continued. Last year's economic results seem
to be worse than the figures forecast at the time when this year's budget was
made. Therefore, the government will discuss what steps to take in order to cut
the current account and budget deficits, at its February 26th session. By that 
time,
the Ministry of Finance and the other departments concerned will have elaborate
d
their proposals.

        The cabinet discussed the current state of preparations for a social-
economic agreement. According to Minister of Labour Magda Kosa Kovacs, the
government sees no chance for the signing of an agreement with the originally
planned contents. Contrary to media speculation, the cabinet has not halted
negotiations between the representatives of employers, employees and the
government, as those have not even started yet. At the February 10th session of
the Interest Coordination Council, the cabinet will propose that the preparatio
ns
under way be ended, and a new series of talks be launched on a new agreement.


        Budapest, February 2 (MTI) - The privatization of Hungary's biggest pub
lic
bank, the National Savings Bank (NSB), will begin in the first half of the year
.
Istvan Farkas, government commissioner in charge of privatization affairs, told
 the
press that the cabinet has approved the strategy drawn up by experts for the
privatization of the NSB. The state is planned to preserve a 25 per cent plus o
ne
vote ratio of ownership in the long run. Terms of privatization will include
guarantees enabling the state to maintain certain licenses in the bank.

        At present, the state holds 80 per cent of the NSB. According to a
government decision, the bank's capital will not be increased, but various meth
ods
will be employed to draw as much cash as possible from the sale.

        A select tender is expected to be called in the first six months of 199
5, with
15-20 per cent of the state's share to be offered. The aim in this first round 
is to
attract foreign and Hungarian financial institutions. Foreign investors can pur
chase
up to five, and Hungarian ones up to ten per cent of the shares. In the second
phase of sales, another 15-20 per cent share package will be available for
bidding, but this time also to the public, thus allowing private investors to b
uy NSB
shares. Finally, the bank's shares will be quoted at the Budapest Stock Exchang
e.
Hungary's two social insurance funds (the health insurance and the pension
insurance funds) will each get a 10 per cent NSB share package. The privatizati
on
of the bank is scheduled to finish by the end of 1996.

        One of the cabinet's prime goals with the privatization of the bank is 
to
significantly increase budget drawings. The NSB is booming: last year's profit 
was
ten times of 1993, and the balance is continually improving, said government
commissioner Farkas.

* * *

        Budapest, February 2 (MTI) - The cabinet discussed certain programmes
that had been originally planned for the 1996 Expo, but are worth organizing
despite the cancellation of the Budapest world fair, State Secretary Kiss said.
The
government wants to make these programmes part of the modernization
programme and has asked the minister of industry and trade to see to preparator
y
and organizational works. An inter-ministerial committee will be also set up to
help the minister in his work. For this series of programmes in 1996, HUF 1.5
billion is to be allocated.

        The cabinet has also passed decisions related to foreign affairs, Kiss
continued. The ministers have agreed that diplomatic contacts should be formed
with the Kingdom of Saudi Arabia. According to another decision, the Russian-
Hungarian treaty of friendship and cooperation will be submitted to Parliament 
for
ratification. The ministers have also given authorization for the signing of an
agreement with Russia on the protection of investments.

        In answer to a question, Kiss said the government had not touched on
Laszlo Bekesi's resignation from the post of finance minister. Finally, it was
announced that the cabinet will sit only on February 16 next, as there are no
further issues which require an immediate decision from the government.


Hungary, Austria Plan Joint Efforts in Fighting Crime


        Vienna, February 2 (MTI) - The Hungarian and Austrian ministries of the
interior plan to sign an agreement in the near future on joining efforts in the
ir fight
against organized crime. Today, in Vienna, Administrative State Secretary Istva
n
Zsuffa, and other delegates of the Hungarian Ministry of Interior, also handed 
over
a draft for a government-level bilateral treaty to their Austrian colleagues, w
hich is
intended to help the two countries to coordinate fight against drug-trafficking
,
illegal migration and terrorism, and is also planned to enable the two countrie
s to
exchange related data, which is essential for successful cooperation.

        According to an interview given by Zsuffa to MTI later, his talks with 
the
Austrian politicians, including Michael Sika in charge of public security,cover
ed
issues related to terms of entry on the Austrian-Hungarian border, the cooperat
ion
of the two countries' electoral offices, and the necessity of coordinated actio
ns at
times of catastrophes.

        The Austrian and Hungarian politicians agreed that Austria's membership
in the European Union, its joining the Schengen agreement, should not have any
unfavourable influence on the current liberal terms of entry between their
countries. Nevertheless, they decided to sum up all the related issues in a
package in order to pass them on to experts, who will start examining what
changes are possible or necessary.

        It is planned that new agreements will be signed in various fields of
cooperation. For instance, the agreement on the mutual abolition of visas will 
be
modified, stipulating that Hungarian citizens may spend 90 days in Austria with
out
a visa, instead of the present maximum of 30 days. Another agreement will
contain criteria for joint actions by the two countries in warding off natural
catastrophes, e.g. fires or floods. (This accord will primarily affect the
civil defence and fire services of the border zone.)

        The treaty on fight against organized crime will be also soon ready for
signing. It will cover a wide range of crimes, including the smuggling of fissi
le
materials and money-laundering, after the model of similar accords which
Hungary has already signed with other partners, for instance with Germany,
Zsuffa said.

OSCE Special Envoy Reports on Chechnya in Vienna


        Budapest, February 2 (MTI) - At its session on Friday, the Permanent
Council of the Organization for Security and Cooperation in Europe (OSCE) is
expected to set down in a document the experiences of the OSCE mission to
Chechnya, and the measures these experiences call for. It can be expected that
Hungarian Foreign Minister Laszlo Kovacs, as Chairman-in-Office of the CSCE,
will initiate certain steps on the grounds of the Council's decision, Istvan Gy
armati
- personal representative of the OSCE Chairman-in-Office who led a mission to
Chechnya last week - told MTI in an interview after his report to the OSCE
Permanent Council.

        On Thursday, Gyarmati summed up the delegation's experiences in
Chechnya at an international press conference. In describing the conditions und
er
which the survey had to be carried out, he said: Russia had recognized its
interests in coordination with the CSCE. Gyarmati said he had been convinced by
what he had seen in Chechnya that the conflict broke out not in last November,
when armed actions began, but much earlier. It is clear that political power in
Chechnya was not maintained previously by democratic means. However, there is
nothing to justify the military intervention, and its scale, he added.

        The OSCE wishes to ascertain that human rights are continually respecte
d
in Chechnya, and wants to give assistance in the establishment of democratic
institutions, and of an administration formed according the choice of the major
ity
of the Chechen people. This goal should be acquired by means of democratic
elections, in which the OSCE is ready to help concretely.

        In an interview given to Hungarian journalists, Gyarmati said it was mo
st
important to safely deliver humanitarian aids to Chechnya, otherwise a major
catastrophe would loom in the region. The OSCE is able and willing to directly
help the organization of free general elections there - if both sides want this
assistance. Gyarmati voiced his belief that both the Russians and a the Chechen
s
would require help from the OSCE, adding that in his view the Chairman-in-Offic
e
was ready to send experts to the region, if so requested.

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06 February 1995
Volume 2, Issue 26

BUSINESS NEWS
-------------

**RUSSIAN OIL EXPORTS DOWN**
  Russian crude oil exports to the Czech Republic, Hungary and
  Slovakia dropped sharply last month because of a 10-day
  interruption in the so-called Friendship Pipeline.  Total
  crude exports along the pipeline averaged 780,000 barrels per
  day, in January, as opposed to 870,000 per day in December.
  The flow of oil along the pipeline was held up twice because
  of a tariff dispute between Moscow and Kiev.  Russian oil
  exports to  Poland and Germany weren't interrupted, because
  that branch of the pipeline doesn't go through Ukraine.


**SWEDISH RADIO FIRM GETS HUNGARIAN DEAL**
  The Swedish radio-telephone firm L.M. Ericsson says it's won a
  $54 million contract to expand Hungary's mobile telephone
  network.  Ericsson struck the deal with Westel, one of two
  Hungarian radio-telephone networks.


BUSINESS FEATURE
----------------

**OPTIMISM SEEN ON CENTRAL EUROPEAN BOURSES, DESPITE POLITICAL
  UNCERTAINTIES AND NEGATIVE SESSIONS**
  Interview with Stpehen Feid, director of emerging markets for
  Nomura International in New York.
  By David Fondler

  Feid:  In general, things throughout the week have weakened,
  we're starting to see a little bit of bounce in some issues,
  in the Czech Republic for instance, but in general, I would
  say, yeah, continued weakness, foreigners sitting on the
  sidelines.

  CET:  Is there a possible turnaround in the Czech Republic?
  Friday we actually had an up-session there after 18 straight
  down days.  What's of interest there?

  Feid:  We think CEZ is getting to a competitive level, we
  also like Komercni Bank as the largest and the cheapest bank
  in the area.

  You've had CEZ hitting lows, and you're seeing some interesting
  values at this level.  I mean, CEZ has been down four to five
  straight days, significantly, it's the big liquid stock in the
  exchange.

  I think that also follows suit with Komercni Bank, they are the
  serious bank in the Czech Republic, and I think those two
  stocks, being big and liquid, have gotten down to some levels
  where you are seeing some interest.

  CET:  Just for the sake of clarification, CEZ is the big
  state-run energy company there?

  Feid:  Exactly.

  CET:  So it's utilities and banks, are these going to bring
  out the bargain hunters in the coming week in the Czech
  Republic?

  Feid:  We're seeing some buying interests at these levels. If
  there was some liquidity in these issues, you'd see some
  active trading going on.  So, my sense is that these issues
  should perform significantly better ... They've bottomed out
  and I think they're going to trade higher.

  CET:  Turning to Hungary, a sharp reaction in the beginning
  of the week to the resignation of Finance Minister Laszlo
  Bekesi, and then some turnaround later in the week.  What's
  your prognosis?

  Feid:  Investors like Hungary in terms of company specifics.
  There are some good companies that are reporting excellent
  earnings, sales plus 50 percent, plus 100 percent.
  I think what you're seeing is with what's happened in Mexico,
  any kind of instability keeps money on the sidelines, and now
  with three key positions open in Hungary, there is certainly
  not a desire to jump in immediately.  On the other hand, when
  these companies are reporting these kind of '94 numbers, we're
  seeing things that are very cheap.

  CET:  Those three positions, now, would be finance minister,
  the privatization commissioner and the head of the National
  Bank.  What's the feeling in the investment community?

  Feid:  I think the key position there would be the head of
  the National Bank.

  CET:  And we've seen absolutely no movement there, just a
  lot

  Feid:  No we haven't.  I think there's also some rumors on
  the finance ministry.  I think we could fill that with a
  strong person, that also has a following in the government,
  maybe some more support and that would be a real positive for
  the market.

  CET:  Are there any names that you're hearing to filling the
  post of finance minister?

  Feid:  I am, Suranyi.

  CET:  That would be Gyorgy Suranyi?

  Feid:  Yes.

  CET:  The length of time it takes to fill these positions,
  is that going to have an influence on investors, or are they
  just going to wait it out?

  Feid:  The longer it takes to fill these positions and to get
  on with the austerity program, the more concern there is.

  CET:  Are there any favorite stocks you have in Hungary
  right now?

  Feid:  We like the exporters.  We think they're going to be
  the obvious beneficiaries of devaluation.  Some of our
  favorite companies are Pick, Pharmavit, Gideon Richter. We're
  very high on individual companies in Hungary, even against a
  backdrop of confused macro-economic policy.

  CET:  In looking at Poland too, we see a lot of potential
  against some very volatile politics.  How does the investment
  community see this?

  Feid:  Walesa preparing to dissolve parliament is certainly a
  very negative backdrop for investing in Poland.  And investors
  are going to stay on the sidelines until they see these types
  of issues clarified.

  CET:  But can investors ignore the potential of Poland for
  very long?  Five percent Gross Domestic Product growth, for
  example.

  Feid:  Exactly, 5 percent, they're taming inflation, the
  companies are reporting good earnings. You can't ignore the
  potential of a country the size of Poland.

  CET:  What are your favorite stocks in Poland right now?

  Feid:  We particularly like Wedel, and we like Mostosal
  Export as two good plays on consumer demand and the increased
  economy.



ABOUT CET ON-LINE
-----------------

* CET On-Line - copyright 1995 Word Up! Inc. All rights reserved.
  This publication may be freely forwarded, archived, or
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  prohibited.  For more information, contact the publishers.

*****************************************************************
A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

           [*]   [*]  [*]   [*]  [*][*]    [*][*][*]
           [*]   [*]  [*]   [*]  [*]  [*]  [*]
           [*][*][*]  [*][*][*]  [*][*]    [*][*] 
           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************