30 December 1994
Volume 1, Issue 29

SURVEY
------

  As the minutes tick away toward midnight on December 31st,
  people all over Europe will be popping champagne corks and
  filling their glasses to bring in the new year. From intimate
  parties to gala events in central Europe's most famous
  venues, Prague, Warsaw and Budapest, each have a distinctive
  way of celebrating the last day of 1994.

  After the presents have all been opened and the distant family
  members have gone home, friends gather to celebrate the
  coming of the new year. Because of a change in the Christian
  calendar from the Roman, the saint day of a humble, early
  Catholic priest is January 1st. This explains why Europeans
  call New Year's Eve Sylvester. As friends come together on
  this holiday, Saint Sylvester becomes the patron saint of
  partying as the new year comes in with a bang all over the
  continent.

  In Poland the whole night is spent out on the town. Marzena
  Darzecka, an old Warsaw resident says that many Poles in
  Warsaw first gather with friends for an early dinner. But, as
  midnight approaches, they head for the heart of the old city
  for the biggest party in town.

  "Every year, all the people can meet at the same square, on
  Zamkova Square and watch fireworks, a laser show and drink
  champagne. People bring bottles of champagne and they meet,
  get together on the Square. This is the special place."

  As clocks strike midnight, Poles sing the Stola song, which
  means 100 years. The popular tune is also sung at birthdays
  and weddings. Its lyrics bestow good health and happiness for
  100 years.

  In the Czech Republic Wenceslaus Square is the place to be as
  the year draws to a close. Thousands gather under the statue
  of Wenceslaus to watch fireworks and enjoy the convivial
  spirit that prevails throughout the night. A more intimate
  celebration can also be had at the Agartha jazz club in the
  city center. Club owner, Michael Hejna is planning his third
  annual New Year's Eve party featuring popular local jazz
  musicians.

  "On the last day of the year there will be a special band, a jam
  session. Saxophone, vibraphone, piano, bass, drums, not a
  regular group."

  Hejna says the party usually goes on into the early hours as
  the musicians play to a packed house of jazz enthusiasts.
  If this isn't intimate enough, try an escape to the mountains.
  Many Czechs prefer to relax with close friends in one of the
  many mountain resorts outside the capital. Most resorts offer
  a special New Year's program with dinner and live
  entertainment. But, reservations must be made early as hotels
  usually fill up well before Christmas.

  Hungarians also prefer small, intimate gatherings on New
  Year's Eve. Unlike in many other European capitals, there's no
  central gathering place for New Year's Eve revelers in
  Budapest. However, the city's musicians outdo themselves
  with a large number of classical concerts on the last day of
  the year. There's everything from light operetta to a gala
  concert and cabaret taking place at the Hungarian State Opera
  House. The coming of the new year in Hungary means more
  than the jovial celebrations in other parts of Europe. Laci
  Pieber, a 41 year old Budapest resident says when the clock
  strikes midnight, Hungarians put their hands on their hearts
  to sing the Hungarian national anthem in solemn remembrance
  of the country's history.

  "It's very serious. When you sing it you are supposed to stand
  up and you're not supposed to talk. It just doesn't fit in with
  the custom."

  Afterwards a toast is proposed to national solidarity and the
  coming of the new year. Young people then take to the streets
  of the city to celebrate with whistles an horns.

  So wherever you find yourself on New Year's Eve, remember
  that though customs differ from country to country, the idea
  everywhere is the same--gather with friends, sing, make a
  toast and mark the passage of yet another year into the
  history books.

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

* CET On-Line - copyright 1994 Word Up! Inc. and Cameron M. Hewes.
  All rights reserved.  This publication may be freely forwarded, 
  archived, or otherwise distributed in electronic format only so 
  long as this notice, and all other information contained in this 
  publication is included.  For-profit distribution of this 
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N  E  W  S  L  E  T  T  E  R

Republic of Hungary                             Budapest, 1394 . 423
Ministry of Foreign Affairs                     Telephone:36(1)156-8000
Press Department                                        Telefax: 36(1) 156-3801
2/1995.                                         Budapest, January 03, 1995

Hungarian Ministry of Defence - Plans for 1995

        Budapest, January 2 (MTI) - The Hungarian Ministry of   Defence will
have numerous tasks in the new year, for instance, to launch military
reform, to further reduce the number of conscripts and to continue
participation in NATO'S Partnership for Peace   programme.

        Ministry spokesman Colonel Lajos Erdelyi told MTI on Monday
thatthe medium-term tasks of military reform will have to be implemented
by 1998, however, the higher and medium-level command system of the
Hungarian Army will be transformed this year. This will affect the central
command, and the Szekesfehervar ground, and the Veszprem air defence
commands. Two military districts will be created instead of the current four,
which could result in staff cuts of 20 per cent in leadership.

        The number of conscripts was reduced by 2,000 in 1994, and this
tendency will continue in the new year as well: the number will drop by
another 2,000 this February, and a further 5,000 in August. At the same
time, a new training system for conscripts will be prepared in order to
reduce the compulsory military service time from the current 12 to 9
months.

        A major task facing the ministry is continued participation in NATO'S
Partnership for Peace programme. Accordingly, a Hungarian-British-
German military exercise will be held in Hungary in the second half of the
year, and plans envisage inviting one sub-unit each from the neighbouring
countries to join in. Hungarian soldiers are to participate in a military
exercise in Italy. Preparations will also begin for the Hungarian-American
joint search and rescue exercise planned for 1996. The Hungarian Army will
be further reorganized in order to accord to the requirements of the Euro-
Atlantic integration organizations.


NBH Devalues Forint by 1.4pc

        Budapest, January 2 (MTI-ECONEWS) - The National Bank of
Hungary (NBH) has devalued the forint by 1.4pc as of Tuesday, January 3,
the central bank announced on Monday.

        This is the third time the NBH has devalued the forint on its own
authority following the 8pc devaluation in August which was decided on by
the government.

        The NBH is allowed to devalue the forint by up to 5pc following each
government devaluation.

        The central bank devalued the forint by 1.1pc in October and by 1pc
in November.

        This means that the NBH may still devalue the forint by a further
1.5pc.

        The forint was devalued by a total of 16.8pc last year.


Exports and Imports On The Rise

        Budapest, January 2 (MTI) - The balance of foreign trade turnover in
customs statistics showed a USD3.435 billion dollar deficit in late
November, of which USD2.687 billion fell to the balance of payments.

        In the first eleven months of the year, the value of Hungarian exports
attained USD9.469 billion, while imports attained nearly USD 13 billion.

        Exports increased 17.8 per cent and imports by 19.3 per cent as
opposed to the same period of the previous year, the Press Department of
the Ministry of Industry and Trade told MTI today.

        Some 73 per cent of Hungarian exports went to the advanced
countries, 5 per cent up on the figures of the previous year.

        The share of the former socialist and developing countries
meanwhile dropped in exports. The former attained 23 per cent, while the
latter accounted for 4 per cent.

        Exports to the developed countries exceeded the figures of the
previous year by 25 per cent, while those to the former socialist countries
by nearly 3 per cent.

        Exports to the developing countries, however, dropped by 11 per
cent as opposed to figures registered in the first eleven months of 1993.

        Some 70 per cent of the overall Hungarian imports came from the
developed countries, 25 per cent from the former socialist countries, and 5
per cent from the developing countries.

        52 per cent of Hungary's exports went to the countries of the
European Union, and 45 per cent of Hungary's imports came from that
region.

        Hungary's major trading partners are Germany, Austria, the former
Soviet republics and Italy.

        77 per cent of the overall exports were represented by industry and
23 per cent by the agrarian sector.

        Exports in all sectors - evens though with signal differences - were
on the rise.

        Exports showed a beyond average increase in machine engineering
and the light industry, and were below average in agriculture.

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date=1/4/95
type=correspondent report
number=2-171735
title= Hungary/Economy (l only)
byline= Barry Wood
dateline= Prague
content=
voiced at:

Intro:  Hungary has again devalued its currency in a bid to
reduce imports and boost exports.  V-o-A's Barry Wood reports
there are increasing worries about Hungary's slowness in
implementing the reforms that could lay a foundation for
increased economic growth.

Text:  This week's one and a half percent devaluation is the
eighth time in 13 months that the forint has been marked down
against other currencies.  Successive devaluations in 1994
reduced the exchange value of the forint by nearly 17 percent.
And bankers say with Hungary's inflation again creeping up,
larger devaluations are likely in coming months.

Germany's Deutsche Bank Research has just issued a report about
Hungary.  The central finding is that six months after
parliamentary elections the decisive policy actions that were
expected from the new socialist led government have still  not
occurred.  Deutsche Bank says the wasted chance to put through
unpopular measures early has shaken the confidence of foreign
investors.

Foreign bankers and lenders say what is needed are decisive steps
to bring down the budget and trade deficits and reduce inflation.
Hungary's nearly 20 percent inflation is twice as high as the
Czech Republic and far more than that of neighboring Austria, a
principal export market.

Otto Storf is chief economist at Deutsche Bank Research.

                       // Storf act //

         The Hungarians have to show that they are in a position
         to  reduce the current account (trade and services)
         deficit.  That is number one.  Number two -- and this is
         very important to the capital markets -- they must reach
         an agreement with the International Monetary Fund.

                          // End act //

Hungary's economy expanded by nearly three percent in 1994 but
growth  is expected to slow to one-point-five percent this year.
Unemployment remains high at 10 percent.  The International
Monetary Fund's managing director recently bluntly told the
Hungarians that they were living beyond their means.  He said the
I-M-F would continue to lend to Hungary only if tough spending
restraints were implemented.  (Signed)

neb/bdw/mh/cf

04-Jan-95 1:27 pm est (1827 utc)
nnnn

source: Voice of America

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05 JANUARY 95
Volume 1, Issue 4


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

**Government Wants More Money for Hotels**
  Hungary's State Property Agency says it wants more money from
  American General Hospitality for the 51 percent of the
  Hungarhotels chain its selling. The agency says it now wants 67
  million dollars. That's about 10 million more than Budapest had
  accepted when American General Hospitality won a bidding war in
  mid-December. The government's new offer includes the Hotel
  Budapest, originally not part of the deal, and valued by the
  state property agency at 9 million dollars. The SPA also wants
  the Americans to raise their three-year investment in
  refurbishing the hotels to 24 million dollars over the previously
  agreed 19 and a half million. The Hungarian media is reporting
  that the American firm would sooner pull out of the deal than re-
  negotiate. A company representative in Budapest declined
  comment, but AGH's president Steven Journes says he is not
  happy that the price is going up, after the agreement had already
  been accepted.

SURVEY
------

**'95 May Be Watershed in Hungary**

  While this is the year of the bull in China, in Hungary it should
  be called the year of the economy. After years of living
  beyond its means, Hungary could turn the corner, or it may
  continue to drown in a sea of red ink. The stakes are high. Not
  only is the long term economic health of the country in
  question, but the survival of the political coalition hinges on
  its ability to implement economic reforms.

  Five years after the fall of the communist regime in Hungary
  the euphoria has completely worn off. Hungary is walking a
  tough road economically and its citizens know the situation
  may get worse.

  "Two average salaries can barely keep a family above the
  poverty line."

  Pensioner Ferenc Kovacs and his wife are near poverty. The
  retired soldier has had to find work as a security guard just
  to pay the rent. Kovacs says it'll be another hard year all
  around, with strikes and demonstrations likely.

  President Arpad Goncz, in his New Year's Eve Presidential
  Address, has asked citizens like Kovacs to be patient, but
  things aren't likely to improve soon. The government wants to
  freeze wages and control social spending to reduce Hungary's
  budget and trade deficits. But the current coalition made up of
  the Free Democrats and their old communist foes, the
  Socialists, could break up if it can't implement the austerity
  measures. The Free Democrats only joined the coalition to
  give it the added strength needed to carry out tough economic
  measures. Peter Hack is a leading Free Democrat and member
  of Parliament.

  "If our main goal, to solve the economic crisis, is fulfilled
  within the 4 years, there is no reason to leave the coalition.
  If we can't, if the government is not able to push through the
  harsh economic reforms that are needed in this situation then
  it is possible because we don't want to share their
  responsibility for a bad economic policy."

  But Socialist leaders say the coalition is in good shape.
  Deputy faction leader Monika Lamperth:

  "This coalition is stable, the debate between the 2 parties is
  absolutely normal because they are 2 different parties with
  unique characteristics."

  These unique characteristics have the government deeply
  divided over economic policy. While the Free Democrats and a
  more liberal faction of the Socialist party favor reduced
  government spending, left wing Socialists sympathize with
  the trade unions. According to political analyst Istvan
  Stumpf, this may be because several union officials are
  Socialist party members.

  "The question is, what are the Socialists going to stand for.
  And if they want to keep the supporters from the trade union
  side, they have to turn back and provide some kind of
  Socialist welfare system. It's not impossible. You can see lots
  of different strikes and demonstrations against the new
  government."

  But Attila Balint, spokesman for the National Confederation
  of Hungarian Trade Unions, says that if a social pact was
  made, workers would not strike. The government is seeking an
  agreement with unions on economic policy for the next 4
  years. However, trade unions aren't happy with the agreement
  so far. Balint says the unions want more details before any
  deal is made.

  "We will not sign a blank check. The promise that people will
  be living at the same level in 1995 as they lived in 1987 or
  '88 is too little. There is not a real commitment to reaching
  an agreement from both sides of the government, but
  especially from the Free Democrats."

  If an agreement is made and if political instability can be
  avoided, 1995 should be a good year economically. Janos Deak,
  president of the economic think tank Kopint Datorg, says the
  government's economic program which passed Parliament in
  December, will lead to a reduction in consumer consumption.
  He says a limited domestic market and economic growth in
  western Europe should increase exports by 14% and drop the
  trade deficit from $3.5 billion. He predicts the national debt
  will decline for the first time since 1990 to 8% of Hungary's
  gross domestic product. Even if consumption falls, Hungarians
  will still be living beyond their means, buying more than they
  produce. But Deak says Hungary can cope with this problem.

  "If foreign capital continues to come on in, even with this
  trade deficit, the growth of foreign debt can be stopped. So
  multinational companies must bring their capital in and must
  not stop the process of pouring money into Hungary."

  For the first time since 1990, Hungary was not the top
  central European destination for investment in 1994. The
  Hungarian government hopes to change that. It wants
  Hungary's business laws to match European Union norms,
  making Hungary more attractive to foreign business people.
  But if Hungary wants to move forward, the government must
  find the backbone to control spending soon.

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

* CET On-Line - copyright 1994 Word Up! Inc. and Cameron M. Hewes.
  All rights reserved.  This publication may be freely forwarded, 
  archived, or otherwise distributed in electronic format only so 
  long as this notice, and all other information contained in this 
  publication is included.  For-profit distribution of this 
  publication or the information contained herein is strictly 
  prohibited.  For more information, contact the publishers.

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OMRI DAILY DIGEST
Vol. 1, No. 4, 5 January 1995

SLOVAK OPPOSITION CONCERNED ABOUT
GOVERNMENT MEASURES. Speaking on 4 January,
Democratic Union (DU) Chairman and former Premier Jozef
Moravcik expressed his party's concern about certain steps
taken by the current government, particularly in relation to the
electronic media, Pravda reports. He also criticized the
restrictive character of the provisional budget in the areas of
education and health care and the slashing of the budget of
the presidential office. According to Narodna obroda and
Sme of 5 January, the Christian Democratic Movement, DU,
the Hungarian Christian Democratic Movement and the Social
Democratic Party plan to request that the Constitutional Court
review two controversial privatization laws recently passed by
the parliament. -- Sharon Fisher, OMRI, Inc.

MECIAR INVITED TO BUDAPEST. During a meeting on 4
January, Hungarian Ambassador to Slovakia Jeno Boros
presented a letter from Hungarian Premier Gyula Horn
inviting Slovak Premier Vladimir Meciar to visit Hungary. The
two prime ministers would discuss broad bilateral issues,
including the basic treaty between the two states, as well as
European integration and cooperation in international
organizations. A date for the visit has not yet been set, Pravda
reports. -- Sharon Fisher, OMRI, Inc.

[As of 1200 CET]
Compiled by Pete Baumgartner and Steve Kettle

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