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    Forint slides admidst growing fears of global inflation & rate hikes

    • 18. June 2007 - by Illés Tóth, Fixed Income analyst in Economy

    External factors outweigh good news at home
    The
    volatility of the forint intensified markedly since the start of June
    with the domestic currency hovering in a 1.5-2.0% wide range. Hungarian
    bonds were also down (the yields rose by 15-25 base points compared to
    the levels in the previous month) in tandem with the depreciation of
    the forint, which reflects a worsening of the risk assessment of forint
    instruments. Taking into account the market environment which is more
    unfavourable than earlier, in our opinion the weakening of the forint
    exchange rate was triggered not by worsening domestic macroeconomic
    processes, but by inflation fears in the USA affecting international
    markets and growing rate increase expectations in the eurozone.

    0

    Finger pointed at Kóka in “receipt case”, but Manager resignations unrelated

    • 18. June 2007 - by Robert Hodgson in Articles

    Tax allegations envelop minister
    Minister
    of Economy and Transport János Kóka came under intense media scrutiny
    last week as the hunt for the politician who allegedly paid for a
    restaurant function off the books, thereby cheating the state of its
    20% VAT, singled out Kóka as the alleged culprit. This newspaper spoke
    last Wednesday to the two journalists from Manager Magazin who sparked
    the “VAT cheating” scandal. Attila Mong and Éva Vajda – the editor in
    chief and deputy editor – who explained the background to their
    departure, along with all the other six members of the editorial staff,
    from Manager.

    0

    New MT CEO says firm will pitch streamlining to shareholders

    • 18. June 2007 - by Robert Hodgson in Articles

    Mopping up, moving on
    Magyar
    Telekom, the German-owned telco is still reeling from revelations of a
    HUF 2 billion corruption scandal at its unit in Montenegro. Last week,
    the company sought to assure the Hungarian press of its commitment to
    being open and accountable from now on.

    0

    Jordanian Royal visit

    • 18. June 2007 - by Sean Sampson in Articles

    Jordanian Royal visit
    King Abdullah
    and Queen Rania of Jordan made a two-day official visit to Hungary last
    week. Hungarian President László Sólyom received the royal couple at
    his official residence the Sándor Palace last Thursday. The king also
    met Prime Minister Ferenc Gyurcsány.

    0

    Museums facing their darkest hours

    • 18. June 2007 - by Sean Sampson in Articles · Comment

    Museums facing their darkest hours
    The
    Night of Museums is an annual event that sees museums in the capital
    and across the country stay open until late into the night. The aim is
    to get a wider section of the public interested in what museums have to
    offer. Expect long queues and a festive atmosphere.

    0

    G8 summit: thunder, but little to clap about

    • 11. June 2007 - by Sean Sampson in Background · Column · Cultural Quests · Region · Remembrance Day

    US-Russian relations coolThere were several bouts of verbal sparring between the US and Russia in the run up to last week’s G8 summit in Germany, with some commentators predicting the outbreak of a new Cold War, but in the end it appeared to be all smiles in Heiligendamm. Tensions appeared to ease over the US missile shield and a decision on Kosovo was delayed to have another shot at a negotiated solution.

    0

    Betting on Balaton

    • 11. June 2007 - by Peter Bognar in Economy

    Big investment talk promises bigger investment actionThe days of Communist-era prefabricated hotels, poor quality “Zimmer frei” bed and breakfasts and dingy sausage stalls will become a thing of the past if the ambitious plans of a Hungarian company come to fruition. SCD Holding, a property development and management company, plans to turn Balaton into an attractive holiday destination. SCD will invest more than HUF 100 billion (EUR 395.01 million) in a total of 28 projects near the lake by 2014. The projects at 21 locations around “Hungarian Sea” would create some 20,000 new hotel beds, 600 to 800 modern bungalows, 2,200 to 2,600 camp site spaces and 260 to 300 new landing stages for yachts. Large-scale theme and amusement parks are also envisaged.

    0

    Bencze gave mother of his child three bonuses before she left customs guard

    • 11. June 2007 - by Michael Logan in Articles

    New top cop tainted by whiff of corruptionWhen József Bencze was sworn in as National Police Chief last Monday, it was supposed to be the start of a clean sheet for a force beset by accusations of corruption and wrongdoing. However, Bencze is already facing Paul Wolfowitz-style accusations of favouring his girlfriend during his previous job at the Customs and Finance Guard (VPOP).

    0

    Hochtief promises investment as it takes over Budapest Airport

    • 11. June 2007 - by Michael Logan in Articles

    EUR 261 million airport plansA consortium led by Germany’s HOCHTIEF AirPort last Thursday promised to pump EUR 261 million into Budapest Airport over the next five years as it announced it had finalised the purchase of the company that runs Ferihegy international airport. Budapest Airport spokesman Domokos Szollár said in a statement that the new management would focus on “the further development, expansion and modernisation of the airport”.   Budapest Airport was privatised in December 2005, when Britain’s BAA bought the airport. However, Spain’s Ferrioval took over the British company and sold Budapest Airport to the consortium for EUR 1.9 billion.

    0

    SZDSZ seeking attention & glory

    • 11. June 2007 - by Péter Krekó, Political Capital Institute in Articles

    Coalition crisis little more than a desire for the limelightThe Alliance of Free Democrats (SZDSZ) has shown two different faces in the media concerning the coalition debate. The first is threatening to withdraw from the coalition and referring to irreconcilable differences of opinion, while the other says there is merely a disagreement on technical issues which will be resolved shortly. These two messages reveal that the liberal party’s real aim is not to break up the coalition with the Socialists, but to make its own work in the coalition more visible. Nevertheless, the fact cannot be ignored that there is a genuine difference in interests between the two coalition partners, making it tricky to reach a compromise which both parties can serve up to the public as a success. Since 2002 the SZDSZ has faced two main criticisms. The first complaint (typically made by the right, but occasionally also by Socialists) is that the liberals, despite minimal support, force their unpopular, liberal, market-based measures onto the governing coalition, and via the government onto the rest of society. The other typical criticism (made by the opposition within the SZDSZ and the liberal press), is that the SZDSZ is not capable of putting across and enforcing its principles in government policy.  Puffing up plumageAfter breaking its tax cut promises, the reforms could now be the only way for the liberal party to combat discontent with its performance. The party’s criticisms of the slowing down of reforms and its direct or veiled threats of withdrawing from the coalition, are not in fact designed to break up the coalition, but to make the liberal’s party’s work in government more visible. On a personal level, SZDSZ party chairman János Kóka, whom many still think of as “Gyurcsány’s right-hand man” needs to be seen to distance the party from the Hungarian Socialist Party (MSZP), in order to prove his independence both to his own party and to the public. Where next?Healthcare reorganisation remains the main area of conflict for the coalition parties. Although both parties have come up with new proposals recently, neither has budged significantly from their original position. The difference of opinion between the two parties on the issue of having one or more health insurers has not yet been resolved, but willingness to reach an agreement was signalled by Gábor Horn, SZDSZ state secretary for coalition negotiations who said last Tuesday evening following talks between the coalition partners that there has been an convergence of attitudes, and the debate now is only about the solution. Power relations in Parliament mean that the two parties are forced to cooperate and compromise. It would not be in the interests of either party to dissolve the coalition in the current political situation. If the next elections were brought forward, the MSZP would achieve its worst result since 1990, and it would also be suicidal for the SZDSZ. If the SZDSZ failed to clear the five per cent hurdle in an early election, the partly could disappear once and for all from the political palette. The most likely scenario, therefore, is that the coalition partners will reach agreement on the insurance model by the end of June.  A tie as good as a winOne way out of the current situation is for the coalition parties, stressing the values they uphold, to try to save face and reach compromise decisions which later both sides can pass off to their voters as a success. Nevertheless, given that both parties have publicly declared their positions, it will be tough to reach a decision which does not look like either side has backed down. The most likely outcome of a mixed health insurance model will still pose a challenge to the coalition parties, since if the MSZP stresses that the new model is still based on state solidarity and “national risk community” whilst the liberals emphasise that healthcare has been opened up to market competition, it could weaken the messages of both parties.

    0

    Let the fest begin

    • 11. June 2007 - by kinga in Articles · Comment

    The Budapest Summer Festival features a number of concerts at Margaret Island’s outdoor theatre located at the foot of the water tower.

    0

    British intelligence killed Litvinenko, ex-KGB spy alleges

    • 4. June 2007 - by Sean Sampson in Background · Column · Cultural Quests · Region · Remembrance Day

    Lugovoy: I am innocent of murderAndrey Lugovoy, the man British prosecutors want to try for the murder of Alexander Litvinenko, last week accused the British secret service of being responsible for the killing. When challenged to prove the accusation, he claimed that he had evidence but declined to produce it.

    0

    Analysts watching, waiting & divided

    • 4. June 2007 - by Illés Tóth, Fixed Income analyst in Economy

    MNB Monetary Council proving itself with steady approachIt is two weeks since the central bank rate decision on 22 May and the National Bank of Hungary (MNB) inflation report published on the same day, yet the development of monetary policy and related expectations are still the main driving factors on the forint and bond markets. This should give no cause for surprise. Firstly, market surveys carried out prior to the decision reflect the division of opinion among analysts, and, secondly, the latest inflation forecast of the MNB caused a negative assessment.

    0

    Gov’t ‘playing with fire’

    • 4. June 2007 - by Michael Logan in Articles

    Gov’t ‘playing with fire’The freshly-appointed Justice and Law Enforcement Minister Albert Takács last Friday evening faced a literal baptism of fire as he received a petition from several thousand torch-carrying demonstrators. The Armed Services and Civil Defence Workers’ Interest Association, FRDÉSZ, called the torch-lit demonstration to complain about working conditions, including pay, overtime and pensions. People from the fire brigade, police, army, prison guard, customs and border guard as well as the disaster management agency stood in regimented ranks and waved torches outside Parliament while union leaders warned that the government was “playing with fire” by ignoring their demands.

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