Paul Nemes

Hungarian Foreign Minister Janos Martonyi and his Polish counterpart, Bronislav Geremek, began trying to put an end to the two countries' long-standing trade dispute on 28 August. Both were aware that the European Union would closely study how the two fast-track EU candidates settle their disagreements. Geremek said that "we must be able to convince the EU that we can live, discuss and exist together, because this is a basic principle of the Union." Poland withdrew the preferential Central European Free Trade Agreement (CEFTA) treatment of Hungarian agricultural produce, and placed import restrictions on Hungarian maize, wheat, poultry and pork, after complaints from Polish farmers that Hungarian imports were threatening their livelihood. Budapest responded by abandoning CEFTA tariffs. Hungary will now, according to Martonyi, start defusing the trade dispute by lifting the import ban on Polish cheese, while Geremek announced that Poland would let in a 20,000-tonne Hungarian maize shipment.

The Hungarian Smallholders Party has said it will stick with its demand for higher budget spending on agriculture than that outlined in next year's budget, and thereby break coalition discipline. The Hungarian government, consisting of FIDESZ, the Hungarian Civic Party, the Smallholders and the Hungarian Democratic Forum, had approved the key figures of the budget, setting a 3.5 percent Gross Domestic Product (GDP) target. However, the Smallholders' President and Minister for Agriculture and Regional Development Jozsef Torgyan says that his party still wants HUF 413 billion (USD 1.70 billion) allocated to agriculture instead of the promised HUF 250 billion (USD 1 billion), pointing to EU compliance as one of the reasons. The Prime Minister, Viktor Orban, will amend next year's draft budget to give ministers an additional HUF 13 billion (USD 50 million). The funds will come from general budget reserves. According to spokesman Gabor Borokai, the Cabinet did not, however, discuss the public criticism of the budget made by Torgyan at its 31 August meeting. On the same day Smallholder members of the agricultural committee voted against a package of tax amendments presented by the Cabinet, while FIDESZ MPs voted against a bill on transforming agricultural co-operatives submitted by the Ministry of Agriculture. The Smallholders have further threatened to vote against the budget if it remains in its present form. Finance Minister Jarai has said that Torgyan's demands were justified but that there were other areas which also lagged behind EU requirements, while Orban has made it clear that he disapproves of a minister questioning official cabinet decisions regarding the budget.

The Hungarian Prime Minister, Viktor Orban, said after meeting the Slovak Premier, Mikulas Dzurinda, in Slovakia on 27 August that the Hungarian government "views relations with Slovakia above all through the [eyes] of ethnic Hungarians" living mostly in southern Slovakia. Orban further stated that "the extent of our satisfaction [with these relations] depends on the extent to which Hungarians in Slovakia are able to say that they are all right, not discriminated against and can feel at home." Bela Bugar, Chairman of the Hungarian Coalition Party, which is part of the Slovak government coalition, was also present at the meeting. He said that the much-debated and recently passed law on the use of minority languages in official contacts only is "a gesture for the EU".

One positive thing to come out of the meeting in Slovakia was the decision by Dzurinda and Orban to sign an inter-state agreement setting the terms for the rebuilding of the bridge over the Danube connecting Esztergom and Sturovo/Parkany. Officials from both the Hungarian and Slovak transport ministries have set in motion a bilateral agreement to rebuild the symbolically important bridge which was destroyed during the Second World War. Sandor Gyurkovics, State Secretary at the Hungarian Ministry of Transport, said that the project which will start in the spring of 2000 and is planned to be completed by the end of 2001 would cost USD 16 million. The EU has promised to help fund the reconstruction.

On 1 September, Hungarian border guards started to register everyone crossing the border, and record data on all vehicles entering or leaving the country. The measure had been expected to slow traffic and already on the first day there were queues lasting several hours. The new system, which it is hoped will combat organised crime, will affect around 100 to 110 million people per year. For rail crossings, mobile scanners to register passengers are not available, and data will instead be entered by hand.

Twelve refugees drowned in the river Tisza after their rowboat capsized near Tiszabecs on the Ukrainian border. A Sri Lankan refugee has also died in a Dutch lorry near the Romanian border. Border guards suspect that the accident on the Tisza happened when Hungarian people-smugglers tried to guide a group of 34 Afghani and Pakistani refugees across the border into Hungary. The death of the Sri Lankan refugee was according to Hajdu-Bihar County Police reported by the driver of the lorry, who was taking Bangladeshi and Sri Lankan refugees from Romania to Italy.

On 30 August, the US embassy in Budapest issued a statement denying a report by Hungarian daily Nepszabadsag that quoted a US government judicial expert as saying Hungarian official bodies had placed obstacles before the implementation of co-operation between the two countries' law enforcement bodies.

A few short notices: Albanian Prime Minister, Pandeli Majko, met Viktor Orban in Tirana on 30 August. Also related to the Balkans, Yugoslav opposition mayors will meet in Szeged on 7 and 8 October. Meanwhile, Orban met the Austrian Chancellor, Viktor Klima, in Vienna on 1 September to discuss the two countries' joint bid for the 2004 European football championships.

A 43-year-old man has been arrested on charges of manufacturing and storing explosives. The man who works at the National Traumatology Institute in Budapest, where police found home-made bombs, is well known to the police because of his extreme, right-wing affiliations. Police now believe that he may have been the mastermind behind the 1997 bomb attack against the Socialist and Free Democrat headquarters in Budapest. Immediately after the attack, police arrested four men who were unwilling to turn in the person whose orders they were following.

On 2 September, Hungarian police raided the offices of Vilaggazdasag to search for a list of celebrities reported to have received preferential loans from Postabank. A journalist at the business paper, which had published the list on 30 September, said that "they had a search warrant and they looked for the original of the 'VIP' list." The list published by Vilaggazdasag contained the names and loan amounts of more than 100 politicians, entertainers and other members of the Hungarian elite who have received preferential loans totalling around HUF 2 billion (USD 8.3 million) since 1991. A police spokesman said that police searched the offices after the editor of the newspaper had declined to hand over the original, saying it had been destroyed.

The parents of three world-famous chess players, the Polgar sisters, have decided to spend part of the year in Israel because of an increasing amount of anti-Semitic hate mail against the family. Laszlo Polgar, the sisters' father, said that "we have received such letters before, but it has gotten worse lately."

At a conference organised by The Association of Hungarian Historical Families held at the Academy of Sciences in Budapest, solidarity for a better future was the motto. The idea was to encourage the nobility to take a more active role in the transformation of the Hungarian nation. Janos Nyary, President of the Association, said that "a better future for generations to come can be reached only if real social solidarity is achieved in the hearts of every Hungarian."

The town of Balatonbolgar has remembered the opening of the only Polish school in Hungary 60 years ago and the Polish refugees who went to the school. Grzegorz Lubczyk, Poland's Ambassador to Hungary, expressed gratitude on behalf of the Polish people, and said that despite Hungary being an ally of Germany, it had not allowed its territory to be used for additional offences against Poland. Out of 60,000 refugees, about 32,000 made it to third countries, while some even remained in Hungary after the war.

Prime Minister Viktor Orban has said that he was surprised by the resignation of Tax Office President Lajos Simicska. Last week, Simicska lashed out against Free Democrat MP Matyas Eorsi, and called the accusations of VAT fraud made by Eorsi unfounded. Balint Magyar, President of the Free Democrats, said that Simcska's resignation is proof of the strength of Hungarian democracy.

Starting on 1 September, old HUF 500 and HUF 1000 notes (worth roughly USD 2 and 4 respectively) were no longer accepted as payment. The National Bank of Hungary did, however, say that they will exchange the notes, which now have been withdrawn from circulation, until 1 December 2002 and 1 September 2000 respectively. The old HUF 5000 notes withdrawn in July will be exchangeable until 30 November 1999.

Hungary's Tax Office (APEH) has announced that it has extended the investigation into alleged multi-billion dollar money laundering by Russian businessman Semyon Mogilevich. Ukraine-born Mogilevich, who is both a Russian and Israeli passport-holder and is thought to have built his wealth by trading Soviet arms during the collapse of the former Soviet Union, has been linked to allegations of Russian mafia money launderings of up to USD 10 billion through accounts held at the Bank of New York. The APEH investigation had been due to close on 10 August, but it is now expected that it will take several more weeks to go through possible evidence. APEH and organised crime investigators seized a large number of documents at six offices of Mogilevich's Hungarian firm Cruman Magnetics on 11 June. The investigation is thought to be unlikely to result in a breakthrough beyond local accountancy breaches. A Hungarian law enforcement official said "the best we can hope for is a fine of maybe several million forints [tens of thousands of US dollars], unless APEH's investigators can find evidence leading to substantial criminal charges."

The new owner of the Csemege-Julius Meinl supermarket chain has not been revealed yet, but it is known that the new owner is connected to the Delhaize group that is also building up the Cora and Profi retailing network. The name of Csemege-Julius Meinl will remain unchanged for two years, but it is thought that Csemege-Julius Meinl's expansion plans made public last month will be terminated. Meanwhile, Cora has opened its third hypermarket in Hungary at the junction of the M3 and M0 motorways. Cora plans to open stores in Debrecen, Kecskemet, Miskolc, Pecs and Szeged in the next two or three years. Two new Tesco stores will also open this year, in Debrecen and Pecs. The British retail giant, which already has five supermarkets and several hypermarkets in Hungary, plans to open five additional stores in 2000.

Paul Nemes, 4 September 1999