OMRI DAILY DIGEST
No. 51, 12 March 1996

HUNGARIAN FOREIGN MINISTER IN MOSCOW. Hungarian Foreign Minister Lazlo
Kovacs met with his Russian counterpart, Yevgenii Primakov, in Moscow on
11 March, Russian and Western media reported. Afterwards, Primakov said
Russia remains opposed to NATO expansion, but he expressed hope that a
compromise "taking into account the concerns of all sides" could form
the basis for a new European security system. He suggested that such a
compromise could include a decision by NATO not to station troops in
Eastern European countries if they joined the alliance. Kovacs
reiterated Hungary's desire to join NATO but said the policy is not
directed against Moscow. The two diplomats also agreed to form a new
bilateral working group that will strive to reduce Hungary's trade
deficit with Russia by stimulating Hungarian exports. In 1995, Hungary
ran a $1 billion trade deficit with Russia, accounting for almost half
of its overall trade deficit. -- Scott Parrish
NEW CAUCUS IN HUNGARIAN PARLIAMENT. Breakaway deputies opposed to the
rightward shift in the Hungarian Democratic Forum (MDF) on 11 March
achieved formal recognition as an independent caucus, international
media reported. The Hungarian Democratic People's Party (MDNP), led by
Ivan Szabo, former industry minister and finance minister, has 15
deputies (the minimum number required for a caucus). It aims to form a
center-right alternative to the ruling socialist-liberal coalition.
Meanwhile, the rump MDF has only 19 deputies and will seek to renew ties
with the Hungarian Truth and Life Party, which is led by extremist
Istvan Csurka. -- Sharon Fisher

HUNGARIAN BORDER GUARDS SEIZE HEROIN. Hungarian customs officials on 11
March announced the arrest of three Bulgarians attempting to smuggle 28
kilograms of heroin across the Hungarian-Romania border the previous
day, international media reported. The officials said the highly pure
heroin was found hidden in the back seat of a Mercedes at the Battonya
border crossing. The Bulgarians were handed over to the police for
questioning. Sharon Fisher


[As of 1200 CET]

Compiled by Victor Gomez
Compiled by Jan Cleave


Monday, 11 March 1996 Volume 1, Issue 305


REGIONAL NEWS
-------------
> -------------------------------------------
                       SLOVAKIA APPROVES DRAFT LAW ON "SUBVERSION"
> -------------------------------------------
Slovakia, criticised by the United States last week for its human
rights record, has approved a draft law allowing punishment of
people who organise anti-government rallies or spread false
information abroad.  The law on the "protection of the republic"
defines as subversive "organised public rallies aimed at
subverting the constitutional system ... the defence capability
of the country or destroying its independence".  Individuals
found guilty can be jailed for six months to three years or
fined.  If the crime is committed by "an organised group" the
punishment is up to five years in jail.  The wording is similar
to a 1961 criminal law of the communists, their law punished
"the subversion of the socialist state system... the defence
capability or destroying its independence".  Opposition
politicians, such as, Gyula Bardos, deputy leader of the
Hungarian Christian Democratic Movement, which represents
members of Slovakia's ethnic Hungarian minority, believe the
cabinet approval of the draft is linked to the publication of a
U.S. State Department report on international human rights which
criticised Slovakia.  Opposition politicians were also quick to
mention that Prime Minister Vladimir Meciar defended the draft
at a rally of his ruling Movement for a Democratic Slovakia on
Thursday with the following quote, "We shall not allow the
republic to be subverted. " Czechoslovak communist leader
Klement Gottwald used the same phrase in February 1948 at the
start of a coup which resulted in 41 years of communist rule in
Czechoslovakia.


> --------------------------------------------
POLES AND CZECHS SEEK SEPARATE PATHS TO NATO
> --------------------------------------------
Poland and the Czech Republic have decided to cooperate on
modernising their armed forces but will pursue individual paths
on joining NATO, according to the defence ministers of Poland
and the Czech Republic.  Both countries want to modernise their
Warsaw Pact-era armed forces and are considering buying U.S.
fighters to replace their old Soviet-designed MiGs.  Diplomats
said relations had been warming generally between Prague and
Warsaw, something which was unlikely to harm Czech ambitions to
join NATO.  Poland is a front runner for NATO membership due to
its size -- it has almost four times as many people as the Czech
Republic or Hungary -- and its strategic location between
Germany and the Russian enclave of Kaliningrad.  Prague bases
its ambitions on its political stability and steady progress in
democratic and economic reform. It will host a regional
security meeting between U.S. Secretary of State Warren
Christopher and 12 eastern European foreign ministers on March
20.


BUSINESS NEWS
-------------
> -----------------------------------------------
HUNGARY COALITION PARTNERS REFINE BUDGET REFORM
> -----------------------------------------------
The Hungarian Prime Minister, Gyula Horn, says his  government
will announce its timetable for the reform of the state budget
by the end of April. Horn spoke following talks between the
senior coalition member, the Hungarian Socialist Party, and the
junior member, the Free Democrat Party.  The reform of the state
budget will cover the health and pension systems, education, the
social network, as well as that of local municipalities.  Former
Finance Minister Lajos Bokros resigned in mid-February over a
bitter dispute about the state budget, especially his plans to
reform health insurance and pension schemes.  His successor,
current Finance Minister Peter Medgyessy, promises to continue
Bokros's reforms. However, he and Prime Minister Gyula Horn
agree that Hungarians cannot be burdened with further
restrictive measures.


> -------------------------------------------
HUNGARY'S DEBT SHOWING SIGNS OF IMPROVEMENT
> -------------------------------------------
One of the greatest burdens facing the citizens of Hungary is the
country's foreign debt, but the central Bank is reporting an
improvement, noting that Hungary's improving economic
performance has considerably eased the country's foreign debt
burden.  According to the Central Bank, Hungary's net foreign
debt fell to $16.8 billion last year from $18.9 billion in 1994,
mainly due to a surge of privatisation revenues in December.  In
an effort to improve living standards, Hungary's communist
government became one of the most indebted in eastern Europe in
the 1980's, leaving the first democratic government of 1990 a
net foreign debt of some $15 billion.  The economic
stabilisation programme launched last March has greatly improved
the country's macroeconomic position and the structure of its
foreign debt.  The March package, which devalued the forint by
nine percent, brought in an eight percent import duty surcharge
and slashed public spending, resulting in a reduction in the
current account deficit to $2.48 billion last year from $3.9
billion in 1994.  The Central Bank is also reporting that
companies are gradually taking over from the state in debt
markets, as shown by the fact that within the total debt figure
for 1995, public sector foreign debt dropped to $11 billion from
$15.2 billion in 1994.


> ----------------------------------------------------
COCA-COLA'S BUSINESS ENVIRONMENT TOUGHEST IN HUNGARY
> ----------------------------------------------------
Australian soft drink bottling giant Coca-Cola Amatil Ltd (CCA)
will continue to grow by acquisition, chairman Dean Wills said.
CCA would also continue to build through organic growth, Wills
said in the 1995 annual report.  The reference to acquisitions
was repeated several times in the report but details were not
given. CCA has declined in the past to give specific information
on prospective acquisitions. The annual report shows that in the
past three years, CCA has spent close to A$1 billion on
acquisitions and invested almost A$900 million in marketing and
production infrastructure.  In calendar 1995, CCA acquired
bottling operations in Poland, Croatia, Switzerland and Romania,
while its interests were extended in Indonesia and Ukraine.
CCA's market share of more than 23 percent in Poland was
expected to rise sharply over the next five years, CCA said.
Sales of Coca-Cola products in Romania were growing strongly
with per capita consumption of soft drinks expected to catch up
rapidly with nearby markets, it said.  The business environment
in Hungary was the toughest the company had faced in a long
time, but the outlook was positive, CCA said. Notes to CCA's
accounts show that the fully-owned controlled entity Oasis
Enterprises Ltd incurred a loss of A$11.6 million in the latest
year.  CCA as a whole lifted its net profit by 25.1 percent to
A$138.6 million in 1995.  CCA is owned 40 percent by The
Coca-Cola Co .


> -------------------------------------------------
HUNGARY MKB BANK SIGNS CROATIAN CREDIT AGREEMENTS
> -------------------------------------------------
Hungary's Foreign Trade Bank Magyar Kulkereskedelmi Bank Rt (MKB)
signed an agreement with Croatian commercial bank Zagrebacka
Banka on a five million German marks credit facility.  The
three-year facility aims at financing the exports of Hungarian
commercial vehicle maker Raba Rt to Croatia, the official MTI
news agency said.  Separately, MKB has participated with a
"substantial" amount in a 50 million German marks, 18-month
loan, provided by Germany's Bayerische Landesbank to the
Croatian Reconstruction and Development Bank.  The loan, the
repayment of which is guaranteed by the Croatian government, is
planned to be used for the development of tourism. With a 25
percent stake, Bayerische Landesbank is one of MKB's
shareholders.  In a third agreement, MKB has participated in
consortium of banks, which provided a 130 million Swiss frank,
one-year syndicated loan to Zagrebacka Banka recently.  The loan
was arranged by three west European banks, the names of which
were not released.


---------------------------------------
TELULAR SETS SHIPMENT FOR $19 MLN ORDER
---------------------------------------
Telular Corp said Friday it scheduled for shipment in 1996 a $19
million order for its PhoneCell SXH fixed wireless terminal from
Motorola Inc's Cellular Infrastructure Group. The equipment will
be installed in Hungary for use by MATAV, a Hungarian telephone
service provider.  Telular said the customer is expected to
schedule soon orders for another $6 million of fixed wireless
terminals will be scheduled for delivery in early 1997.
Separately, Telular said Robert Montgomery was named executive
vice president and chief operating officer.  Montgomery had been
president of Telular-Adcor, Telular's wireless security alarm
subsidiary.



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date=3/11/96
type=correspondent report
number=2-194109
title=Hungary Economy (l only)
byline=Barry Wood
dateline=Prague
content=
voiced at:

Intro:  This is an important week for the Hungarian government as
parliament is set to approve the 1996 budget and the
International Monetary Fund decides Friday whether it will
endorse the economic policies of prime minister Gyula Horn.
V-o-A's Barry Wood reports from Prague.

Text:  By some measures,Hungary is one of the most successful
economies in post-communist Europe.  It has attracted more
foreign direct investment -- 10-billion dollars -- than any other
Eastern European nation.  Its privatization is nearly completed,
and exports are soaring.

But there is another less positive side of the Hungarian economy.
Wages are low, and when adjusted for inflation, getting lower.
They declined by eight-percent last year.  Many health workers
and teachers earn less than 250-dollars a month.

Hungary has the highest debt per capita in Eastern Europe, and
the country has lived beyond its means on borrowed money for
15-years.

Prime minister Horn expects parliamentary approval of the budget
in the next few days.  He has delayed until next month the
politically explosive issue of cutting back social benefits to
assure the solvency of the Hungarian social security system.

The International Monetary Fund, seemingly content with the
government's proposals, is set on Friday to approve its first
loan package for Hungary since before Mr. Horn's government came
to power in 1994.

The I-M-F had decided in 1993 that it would not lend more to
Hungary unless the government presented a long-term plan to
shrink its chronic budget deficit.  The social security system
has been identified as the principal cause of the deficit.
Reformist finance minister Lajos Bokros resigned last month after
he failed to persuade Mr. Horn to go along with proposals for
deep cuts in social welfare.

Hungary needs I-M-F endorsement more than it needs its money.
Budapest wants badly to follow the Czech Republic into the
Organization for Economic Cooperation and Development -- the
Paris based research agency of 26 mostly-rich industrial nations.
The O-E-C-D says Hungary can be its second former east bloc
member by mid-year, provided the I-M-F approves the government's
economic policies.

Outwardly, Hungary's economic prospects are good.  Growth should
accelerate to about three-percent this year.  Foreign exchange
reserves are growing.  The trade deficit is narrowing, and the
Budapest stock exchange is at record highs.

But, inflation remains above 25-percent, compared to under
10-percent in the Czech Republic and Slovakia -- and experts say
the budget deficit, while shrinking, is still too high.
(Signed)

neb/bdw/jwh/rae

11-Mar-96 11:59 am est (1659 utc)
nnnn

source: Voice of America


Tuesday, 12 March 1996 Volume 1, Issue 306


REGIONAL NEWS
-------------

> -------------------------------------------------
SLOVAK JOURNALISTS SLAM DRAFT ANTI-SUBVERSION LAW
> -------------------------------------------------
Slovak opposition journalists attacked a draft anti-subversion
law on Monday, saying it could stifle media criticism of the
government.  Editors said the "law on the protection of the
republic" could help to smother Slovakia's outspoken print media
even if it were never applied in practice. "The law can put
pressure on journalists to practice self-censorship and create
an environment of fear," said Karol Jezik, chief editor of Sme,
one of the most critical dailies of Prime Minister Vladimir
Meciar. Meciar's cabinet last week approved the draft law which
allows punishment of people who organise anti-government rallies
in certain cases. Those who "purposefully circulate false
information abroad harming the interests of the republic" can
also be jailed or fined. "I expect that it will certainly put
psychological pressure on journalists," said Joszef Szilvassy,
chief editor of the Hungarian-language daily Uj Szo, which has
the largest circulation among Slovakia's Hungarian minority. The
cabinet approved the draft on Thursday, a day after the U.S.
State Department criticised Slovakia in its annual international
human rights report for abuses concerning police behaviour,
minorities and the media.  The draft defines as subversive
"organised public rallies aimed at subverting the constitutional
system ... the defence capability of the country or destroying
its independence".  Its wording is similar in parts to the old
Czechoslovak criminal law of the communists, who were overthrown
in 1989. Their 1961 law punished "the subversion of the
socialist state system... the defence capability or destroying
its independence".  This law was used to jail dissident Vaclav
Havel in 1979 before he led Czechoslovakia's anti-communist
revolution.  Western diplomats were cautious in assessing how
the new law might affect the country's democratic processes, and
Bratislava's ambitions to join the European Union and the NATO
defence alliance, pointing out that several Western countries,
including Germany, also had laws on the protection of the state.


> -----------------------------------------------------------
BUDAPEST WILL PLAY HOST TO INFRASTRUCTURE TALKS WITH THE EU
> -----------------------------------------------------------
Central and east European countries will meet this week to
discuss financing opportunities and to prepare proposals to be
put to the European Union (EU) on how to integrate their
communications systems into the Europe network.  Hungary will
host the two-day conference, which will start tommorow. The ten
central and east European countries began talks last June in
Brussels at the initiative of EU commissioner Martin Bangemann,
responsible for industrial policy, information technology and
telecommunications as part of an EU project entitled
"Information Society".  The project is designed to promote
faster and more efficient information exchange.


> --------------------------------------------------
HUNGARY'S PANNON GSM PLANS TO DOUBLE SALES IN 1996
> --------------------------------------------------
One company doing busines in Hungary that is having no problem
communicating with its customers is Pannon GSM.   According to
the Hungarian mobile phone company's general director Pannon GSM
plans to double its sales revenue in 1996.  The company reported
losses for 1995 and loan repayment obligations will leave the
company in the red for this year.  Pannon GSM also plans to
invest $100 million dollars in its infrastructure in 1996.
Industry analysts expect that in 1996 the Hungarian mobile
phones market could attract 150,000 new customers.  Pannon GSM
is catching up with its only competitor in the Hungarian market,
Westel, which until recently had a better coverage of the
country and hopes to conquer at least half of the market.



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

* CET On-Line is Copyright (c) 1996 Central Europe Media Ltd.,
all rights reserved.  Not-for-profit redistribution of CET
On-Line in electronic format is allowed only if our copyright
notice, and all other copyright and by-line information
contained in this publication is included. For-profit
distribution of this publication or the information contained
herein is strictly prohibited without the express written
permission of Central Europe Media Ltd. These conditions are
subject to change without notice.

Some portions of the news provided by special agreement with
Reuters.  For information on Reuters news and information
products, contact your local Reuters office.

**Subscription Information**
CET On-Line is a free e-publication.  Subscribe by sending a
message with the word SUBSCRIBE in the body of a message to
>.  For an automated information
response, send a blank message to >.

To unsubscribe at any time, send the word UNSUBSCRIBE in the
body, not the subject line, of a message to
>.

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