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2nd September, 2010
Public-sector salary ceiling now in effect
The ceiling on public-sector pay is one of several new laws that entered into force yesterday, government spokeswoman Anna Nagy told reporters after Wednesday’s cabinet meeting.
As of Wednesday no one may earn more than a monthly Ft 2 million in the public sector. Another change makes payment of family benefits conditional on the child’s regular attendance at school.
In addition, businesses may take out investment loans for up to Ft 50 million in the Szechenyi card system, to assist SMEs.
On other issues, the cabinet approved a detailed explanation for why Hungary is asking the EU to extend by three years the moratorium on the purchase of farmland by foreigners, due to expire on April 30, 2011.
Regional Development Minister Sandor Fazekas said the most important argument is that the price of land in Hungary is about one third to one half of that in Western Europe. He added that Hungary's endeavours are supported by France, Romania, Bulgaria and the Visegrad Four countries.
EU officials are expected to decide on the land moratorium in October or November.
Nagy announced that more than Ft 29 million has been collected from about 146,000 telephone calls for flood victims. The money will be equally divided among charity organisations that provide help to flood victims.
The cabinet also decided that victims of illegal police excesses in the autumn of 2006 will be paid compensation by October 23 at the latest. The Interior Ministry will assess claims for damages.
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2nd September, 2010
Orban opens Anti-Terrorist Centre
A well-organised, well equipped anti-terrorist centre with outstandingly trained staff is essential in a developed and strong country, Prime Minister Viktor Orban declared Wednesday as he opened Hungary’s first such centre in Budapest.
The opening of the facility is an important step for Hungary as it becomes a modern, confident nation, he added. Orban called the opening of the Centre important and highly significant.
Orban warned that one should expect groups operating in geographically remote areas and multinational terrorist organisations to co-operate, adding that in today's world wars are often waged via terrorist methods.
Gilles de Kerchove, EU anti-terrorist co-ordinator, said in his speech that Hungary is among the first countries to recognise the significance of operating an efficient organisation to prevent tragedies.
The centre will analyse the country's position as regards terrorist threats, protect the prime minister and the president and uncover acts of terror and kidnappings.
The Socialist Party said the establishment of the centre is not justified, as the terrorist threat to the country has not grown.
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2nd September, 2010
Revesz blames judges in 2006 cases
Possible wrongdoing by prosecutors and judges should be examined in connection with the large number of arrests in the autumn of 2006, Fidesz MP Mariusz Revesz told the parliamentary sub-committee investigating violations of law in 2002-10 on Wednesday.
The sub-committee heard two women who said they were repeatedly injured by police during their arrest early on September 19, 2006. An investigative judge decided to detain them without hearing them and their personal effects were taken away during their questioning.
Jobbik MEP Krisztina Morvai asked her Fidesz fellow MPs to help establish a European parliamentary investigative commission to look into the events of the autumn of 2006.
Arpad Szabadfi, deputy national police chief at the time, told the sub-committee that he had two conversations with then prime minister Ferenc Gyurcsany during the siege of MTV on September 18, 2006.
He said the prime minister did not issue any instructions to the police, but spoke of an expectation that the MTV building should be defended by all legal means. Szabadfi said police had had no advance information about the riots.
Asked by Revesz about a “manhunt” in the ensuing days, Szabadfi said he was unaware of any abuses and did not issue orders to make such abuses possible, nor to encourage anyone to carry out abuses.
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2nd September, 2010
Budai lashes out at former PMs
There can be no doubt that the property “scam” related to the Sukoro casino project was carried out on political orders, prime ministerial commissioner Gyula Budai told reporters on Wednesday.
All of the claims made by former prime ministers Ferenc Gyurcsany and Gordon Bajnai collapsed on Tuesday with the arrests of the head and the sales chief of the state asset manager MNV, Budai asserted.
He said the detentions are only the tip of the iceberg, as the number of suspects could grow along with the number of politicians who gave them orders, no matter if they are prime ministers or cabinet members.
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2nd September, 2010
Fidesz sweep expected in counties
Fidesz is likely to win about 60% of the 424 county council seats available at the local elections, according to the Policy Agenda institute.
The analysis sees the Socialists taking 18% of seats, Jobbik 17% and Politics Can Be Different 4%.
Fidesz will be able to gain majority in all but four county councils where its most serious challenger will be Jobbik.
In Budapest Fidesz mayoral candidate Istvan Tarlos has the greatest chance of winning but it is doubtful whether Fidesz will win an outright majority on city council.
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2nd September, 2010
Martonyi on Bucharest visit
Hungary and Romania share identical interests as regards EU decisions about the future, Foreign Minister Janos Martonyi told a conference arranged for Romanian ambassadors in Bucharest on Wednesday.
He gave a speech about the direction of Hungarian foreign policy in view of its stint as EU president in the first half of next year.
Romanian Foreign Minister Teodor Baconshi also stressed the countries' shared interests in the European integration process as regards a Danube strategy and energy policy.
The two ministers held private talks after the conference.
Martonyi met later with deputy prime minister Bela Marko, head of Romania’s ethic Hungarian party, and MEP Laszlo Tokes, to discuss bilateral co-operation, the interests shared by the two countries and the unity of Hungarians.
Martonyi and Marko reviewed topics of a Romanian-Hungarian cabinet meeting set for the autumn.
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2nd September, 2010
Israeli culture institute opens on Friday
An Israeli culture institute that will also assume educational functions will open on Paulay Ede utca in the Sixth District on Friday, director Gabor Balazs announced.
The centre will be the world’s first Israeli cultural institute.
The centre will host concerts, film screenings and other cultural events for Hungarian and Israeli, Jewish and non-Jewish visitors. The institute will not take a stand on political matters, Balazs said.
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2nd September, 2010
Simor: Weak forint holds back growth
The appreciation of the Swiss franc is a threat to Hungarian economic growth, National Bank governor Andras Simor warned yesterday.
He noted in a statement to state news agency MTI that the depreciation of the forint leads to higher monthly payments for households with foreign-currency loans, who then cut back consumption and investments.
To a similar extent, Simor said, the weaker forint means a deterioration in banks’ lending portfolios, in which case they tighten credit conditions, leading to restrained lending.
The effect of lower consumption, reduced investment and restrained lending can slow down growth, outweighing the benefits of a weaker forint, Simor added.
Any further weakening of the currency also endangers the MNB's 3% inflation target, he noted.
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2nd September, 2010
MNB says IMF safety net may be needed
Hungary may need the financial safety net of the IMF and EU if the global investment climate turns negative, which is not at all an unlikely scenario, the National Bank (MNB) told Reuters news agency in an e-mail.
Banks would need an additional Ft 40-50 billion of capital if the Swiss franc remains at an exchange rate of Ft 215 or higher and if the economy falls into recession, according to the scenarios drawn up in the MNB’s stress test earlier this year. In the stress test, the MNB calculated with an exchange rate of Ft 315 per euro, Napi Gazdasag writes.
The forint's depreciation against the Swiss franc has caused higher than expected lending losses for the bank sector, the MNB said, without going to detail.
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2nd September, 2010
No new IMF deal may mean downgrades
The IMF loan programme has had an important stabilising effect on the Hungarian economy and without a new agreement, Hungary's debt rating could be downgraded, according to New York investment consultants AllianceBernstein.
The firm’s analysis states that Hungary made significant progress in the last two years, as the IMF has filled the gap in external financing.
However, unless the government voluntarily re-engages the IMF in talks, then Moody's could downgrade the country's sovereign debt rating by one grade, AllianceBernstein observes.
Credit-rating agencies have warned that they could lower their ratings of Hungarian debt due to the failure of talks with the IMF.
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2nd September, 2010
PMI recedes slightly in August
The Purchasing Managers Index (PMI) fell to 51.9 points in August from 53.9 in July, the logistics and inventory association MLBKT announced. The index was 5.8 points higher than in August of last year.
The PMI sank below the 50-point mark – indicating a contraction of economic activity – only in May and June so far this year.
The index of new orders was 54.4 points in August, down 2.1 points from July, but above 50 for the eighth consecutive month.
Manufacturing companies anticipate a rise in procurement prices, as this sub-index climbed to 69.2 points. The employment index also remained in positive territory at 51 points, suggesting a rise in new hirings.
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2nd September, 2010
Trade surplus widens in June
Hungary recorded a trade surplus of €564 million in June, up from €398 million in May, according to detailed figures released by the Central Statistics Office.
The preliminary data showed a surplus of €567 million.
The surplus in the first six months came to €2.860 billion, as exports were up 21% year-on-year to €34 billion, while imports rose 17.4% to €31.1 billion. Preliminary data indicated a surplus of €2.812 billion.
In the same period, the forint appreciated 6% against the dollar and 6.4% against the euro.
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2nd September, 2010
Car sales pick up in August
A total of 2,994 new passenger cars were registered in August, up from 2,425, a 24% year-on-year rise, according to market researcher Datahouse.
Sales of small commercial vehicles rose from 484 to 773.
Despite the August data, new car registrations tumbled to 28,900 in the first eight months, 37% lower than the 45,900 in the same period of 2009.
Ford regained its leading position, overtaking Suzuki in sales last month, followed by Renault, Opel, Skoda and Volkswagen. Ford's market share was 12.2% by the end of August.
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2nd September, 2010
Rate on student loans at all-time low
Student loans will be available at a record low interest rate of 8.5% from this academic year, state-owned student loan provider Diakhitel announced yesterday.
The creditor lent Ft 22 billion to 68,783 students last year. Since its foundation in 2001, Diakhitel has extended Ft 198 billion in loans to 290,035 students. Outstanding loans stood at Ft 211 billion at the end of June. The average size of the loans is Ft 321,000.
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2nd September, 2010
ASZ slams MNV's practices in audit
The State Audit Office (ASZ) found basic shortcomings in the legal regulation and decision-making of state asset manager MNV, which led to the loss of billions of forints of taxpayer’s money, according to the annual audit released yesterday.
The findings will be given to the Prosecutor's Office, who will decide whether to launch criminal proceedings.
Some decisions by the Finance Ministry, which oversees the MNV, were not in the interests of the state, said ASZ deputy director Tihamer Warvasovszky. Decisions in asset management questions were not transparent, which led to losses, he added.
The state lost Ft 1.3 billion in the land swap agreement linked to the failed Sukoro casino project and at least Ft 3.5 billion in the sale of the Hungarian trade office in Moscow, ASZ director Pal Becker told a press conference.
The ASZ also found that the sales of the MTV and Magyar Posta headquarters were disadvantageous to the state. The report came down hard on the relocation of MAV and MVM to new office buildings, which in their view led to unnecessary spending, as the old headquarters were not sold.
The ASZ discovered irregularities in the MNV’s procurement of the IT system for the unified asset registry system in 2008.
The MNV operated without an approved medium-term asset management strategy, the report highlighted.
In its audit of the budget, the ASZ said there were serious accounting problems at three of the 52 budget chapters, including the Procurement Council, the Agriculture Ministry and the Centre against Organised Crime.
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2nd September, 2010
State issues emergency funds to Malev
State-owned Malev airlines has received an emergency Ft 5.7 billion loan from the government in the last few days to pay back Ft 3 billion owed to International Lease Finance Corp. (ILFC), according to a report in the weekly Figyelo.
ILFC, from which Malev leases some aircraft, issued an ultimatum to the airline and threatened to take back its planes, as Malev was unable to service its debt on time.
If Malev is short of cash at this time of the year, immediately after the peak season, then, there is a question of what will happen later in the off season, when revenue falls along with passenger traffic, Figyelo writes.
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2nd September, 2010
Mixed results for Phylaxia subsidiaries
Holding company Phylaxia incurred consolidated losses of Ft 9 million in the first half, according to results released yesterday. Operating profits rose to Ft 800 million.
The financial results of LPG distributor KEG were not included in the consolidated report, as Phylaxia reduced its stake in the company to 10%. This was positive, as KEG posted heavy losses, Napi Gazdasag notes.
Phylaxia subsidiaries had a mixed half. Its construction and real estate arms posted profits, while the veterinary drug and its animal feeding units incurred losses.
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2nd September, 2010
Humet announces profitable H1
Humet generated sales of Ft 375 million in the first six months, down from Ft 1.2 billion a year earlier, the company reported yesterday.
However, Humet reported a Ft 284 million profit, after a Ft 125 million loss last year.
The significantly lower revenues this year are attributed to the spinning off of chemical company Reanal and the reshuffling of the US subsidiaries, Napi Gazdasag writes.
The revaluation of assets and liabilities due to currency fluctuations boosted financial profits by Ft 272 million.
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2nd September, 2010
TvNetWork boosts profits by offloading
TvNetWork reported a net profit of Ft 476 million in the first half on Ft 1.4 billion revenue, according to the unconsolidated financial results calculated under Hungarian accounting rules.
In the same period of last year, TvNetWork reported Ft 1.5 billion in revenue but a loss of Ft 276 million.
Revenues in the first half were boosted by the sale of the company’s cable television network and broadband internet unit, as TvNetWork plans to have its shares delisted later this year.
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2nd September, 2010
NordTelekom in the black
Internet service provider and telecom company NordTelekom yesterday reported a first-half net profit of Ft 19.4 million on revenue of Ft 142 million. Revenues were four and half times higher than in the same period of 2009. Profits were boosted by a one-off Ft 21.8 million item.
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2nd September, 2010
BSE trading volume down in August
Trading was thin on the Budapest Stock Exchange (BSE) last month, as total turnover fell to Ft 718 billion from Ft 815 billion in July.
Traders expect higher volume this month as investor activity probably hit bottom in August, Napi Gazdasag writes.
Among brokerages, Erste registered the largest turnover, of Ft 158 billion, followed by Concorde and Polish newcomer Ipopema.
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2nd September, 2010
Chinese man suspected in hostel murder
A Chinese man who studies in Budapest is suspected by police of murdering Pernilla Marie Thronsen, the Norwegian woman whose body was found at a youth hostel on Sunday evening.
The 26-year-old, Zhao Fei, who was the woman’s boyfriend, has reportedly left Hungary for an unknown destination.
The tabloid Bors reported on Wednesday that the body was found a few hours after the killer wrote a message “tantamount to a confession” on Facebook. Bors quoted the message as saying “I did not want to hurt you . . . If I die, I hope we shall meet and be together again”.
Police will shortly issue an international arrest warrant. Oslo newspapers said the 21-year-old woman had spent the summer in London after breaking up with her boyfriend and returned to Budapest a short time ago.
A police source said the man was also in Hungary as a student and lived in the City Hostel Flora, where the woman’s body was found.
She was to meet a friend to see a concert in Gyor but never arrived for the meeting.
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2nd September, 2010
Two struck with West Nile Virus
Two Hungarians are being treated in hospital after contracting the West Nile Virus, epidemic specialist Katalin Krisztalovics announced on Wednesday.
She said the disease spread by some types of mosquito has appeared in Hungary every year since 2003 in areas where migratory birds congregate. The virus is not contagious among human beings.
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2nd September, 2010
Italians caught shooting protected birds
Five Italian guest hunters were caught shooting protected species of waterfowl at the Kengyel fishponds, Hortobagy National Park official Akos Monoki reported on Wednesday.
Monoki caught the hunters red-handed as they destroyed the birds. The five were detained and criminal proceedings have been launched against them.
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2nd September, 2010
Hungary bids to host 2015 world swimming championships
The Hungarian Swimming Federation has submitted a bid to FINA, the international swimming authority, to host the 2015 world swimming championships.
The Hungarian federation hosted the European swimming championships in 2006 and 2010, the European short-course tournament in 2007 in Debrecen and the European youths championships in 2005.
The cabinet would support the idea of hosting the world swimming championships in 2017 rather than 2015, Swimming Association general secretary Jozsef Ruza said Wednesday.
He said state secretary for sports Attila Czene indicated in a letter to the Association that hosting the 2017 tournament would be more appropriate under the financial circumstances.
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2nd September, 2010
Zsolnay collection returns home
What may be the world's most valuable collection of Zsolnay porcelain has arrived back in Pecs, where it was made, from the US.
The city bought the 600-piece collection from an American-Hungarian for €2.5 million.
President Pal Schmitt, mayor Zsolt Pava and state secretary Geza Szocs attended the opening of the Golden Era of Zsolnay exhibition in Pecs Wednesday evening.
Two surviving members of the Zsolnay family, Zsofia Mattyasovszky and Antonia Sikorski, also attended.
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