*********************************************************** 
Sajnos a Kulugyminiszterium a hirkozlemenyeket nem naponta, 
hanem nagyobb idokozonkent, nagyobb mennyisegbe tovabbitja. 
Igy elnezest kerek a rendszertelen es az oriasi terje-
delmu tovabbterjesztesert, ami valojaban nem az en hibam. 

A 26 kozlemenybol allo anyagot, egy-egy hetre feldaraboltam. 
Ket tovabbi reszt a holnapi Mozaikba hagytam.

Buchwald Amy
***********************************************************


N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 56/1995                                                             20 Marc
h 1995


Hungarian-Slovak Basic Treaty - Main Points


        Budapest, March 19 (MTI) - After prime ministers Gyula Horn of
Hungary and Vladimir Meciar of Slovakia had signed the two countries' basic
treaty in Paris today, the Hungarian Foreign Ministry provided the full text of
the document at the disposal of the National Press Service.

        The main points of the treaty are printed below.

        The contracting parties recognized that the members of national
minorities form integral parts of the society and state, on the territory of
which
they are living, contribute to its prosperity and strengthen confidence,
friendship and cooperation between the two countries. They declared that they
feel responsibility for protecting and fostering the national or ethnic,
religious
and language identity of the minorities living on their territory.

        The sides agreed that they would develop their relations in the spirit
of
goodneighbourliness, confidence and friendly cooperation, and maintain a
dialogue in all fields of common interest.

        In compliance with the fundamental principles and norms of
international law, the sides confirm that they respect the inviolability of
their
common state boundary and one another's territorial integrity. They reaffirm
that they have no territorial claims towards one another and will not raise
such
claims in the future either. In bilateral relations, they will refrain from the
threat
or use of force against one another's territorial integrity and political
independence.

        The sides will settle their disputes exclusively by peaceful means. The
y
will hold regular consultations to develop bilateral ties, and get acquainted
with
one another's position on international affairs. Both the two prime ministers
and the two foreign ministers will meet at least once a year to survey the
implementation of the basic treaty. They confirmed their shared interests and
endeavours concerning integration into the European Union, NATO and the
Western European Union, and ties with the Council of Europe and the
Organization for Security and Cooperation in Europe.

        The sides confirmed that the protection of national minorities and the
rights and freedoms of individuals belonging to a national minority form an
integral part of the international protection of human rights, and therefore
fall in
the scope of international cooperation. In this sense, it is not an exclusively
internal affair of states but a matter of legitimate interest by the
international
community.

        The treaty stipulates the principles that govern the contracting partie
s in
protecting the national minorities and the rights of individuals belonging to
them. Under one of these principles, the members of a minority have the right
to freely declare, preserve and develop their ethnic, cultural, language and
religious identity and preserve and foster their culture in all aspects, both
individually and together with other members of the minority.

        The contracting parties agree that - without prejudice to the fundament
al
principles of international law, for instance the territorial integrity of
states -
they will apply recommendation no. 1201 of the Council of Europe as a legally
binding norm.


Hungarian-Slovak Basic Treaty Signed - Update


        Paris, March 19 (MTI) - Prime ministers Gyula Horn of Hungary and
Vladimir Meciar of Slovakia signed the two countries' basic treaty in Paris
today.

        The treaty confirms that both countries respect the inviolability of th
eir
common border and one another's territorial integrity, and have no territorial
claims towards one another. Simultaneously, it declares that belonging to a
national minority is a matter of anyone's individual, free choice, and that
members of a minority have the right to preserve and develop their ethnic
identity, individually or together with other members of the minority. The
contracting parties agree that - without contradicting the fundamental
principles of international law, for instance the territorial integrity of
states -
they will apply as a legally binding norm recommendation no. 1201 of the
Council of Europe, which stipulates the possibility of autonomous public
administration.

        After the signing ceremony, held in the presence of French Prime
Minister Edouard Balladur and Foreign Minister Alain Juppe, the three
premiers gave short statements.

        Balladur called the treaty as of historic importance, which "proves in
the
clearest possible way that the two Central European states want to live
together as good neighbours. This should be the common rule governing
relations between European peoples," he said.

        Horn said, "this is the first bilateral treaty in Hungary's modern hist
ory
not based on the dictate of a great power but signed of our own free will."
Among the guarantees of implementation, Horn mentioned democracy and its
institutions that are operating and should be further developed in both
countries, and the two states" common endeavour to catch up with the
advanced regions of Europe.

        Meciar said the treaty reflected that both countries chose the "Europea
n
path" and the "European norms". "Hungary and Slovakia declared their wish to
leave their past behind and walk together towards new directions," he said.

        After the ceremony, journalists asked whether the treaty stipulated the

chance for minorities to gain autonomy. Meciar answered that he had no
knowledge of "an agreement on autonomy". He added, however, that
recommendation no. 1201 of the Council of Europe was included in the treaty.

        "The path towards autonomy is not a European norm. It is a path that
may generate conflicts," he said.

        Meeting Hungarian journalists, Horn said, "recommendation no. 1201,
which envisages the establishment of autonomous organizations, should be
taken as a basis, and not the realization of political or territorial autonomy.
We
should consider that no country in our region would accept territorial autonomy
or any reference to political autonomy that implies territorial autonomy. These
forms of autonomy, as collective rights, are not recognized by the
international
community either.

        "We sought to make the Slovak side accept all norms that are included
in the European documents. It is a great success of Hungarian diplomacy that
the basic treaty reflects all these norms." Horn said.

        At 7 p.m., Horn started talks Romanian Prime Minister Nicolae Vacaroiu.

Before the meeting, Horn said, "there is a chance of concluding a basic treaty
but not here and not now.

Szent-Ivanyi on Hungarian-Slovak Basic Treaty


        Budapest, March 17 (MTI) - It is a great achievement that the
Hungarian-Slovak basic treaty, initialled late Thursday by the two prime
ministers, includes the Slovak commitment according to which Bratislava will
apply the principles of autonomy for ethnic minorities as a domestic legal
norm.

        Until now no single state in Central Europe had managed to have the
principles of the supplementary protocol No 1201, passed by the Council of
Europe on ethnic minority rights, accepted as domestic law, stressed Istvan
Szent-Ivanyi, parliamentary state secretary at the Hungarian Foreign Ministry,
at a debate staged here today.

        The basic treaty winds up a process that has gone on several months or
in fact several years. The Hungarian government has always considered the
basic treaty to be a means rather than an end.

        If a good agreement can be concluded which can defuse tensions, then
one should support the conclusion of a basic treaty.

        Apart from settling the question of bilateral ties, the agreement can h
elp
to speed up Hungary's integration into Europe and can make life easier for
Hungarians living beyond the border, he noted.

        The agreement is a major achievement, yet it cannot be considered
perfect. In Szent-Ivanyi's view, nothing more could have been achieved with
the present Slovak leadership. The opposition in Hungary and Hungarians
beyond the border will probably criticize the treaty's shortcomings.

        Miklos Duray, for instance, objected to the failure to mention abrogati
on
of the Benes decree in the treaty. However it would have been unrealistic to
expect this, since Germany has tried unsuccessfully for years to have this
decree repealed and the Czech constitutional court recently passed a ruling
confirming the Benes decree.

        The Benes decree had been left out of the agreement, but this could not

be regarded as a shortcoming, he said. The two sides had agreed to settle all
outstanding issues in a separate agreement. Neither country had made any
concession over the hydro-electric power plant since the International Court in
the Hague has not yet made a ruling, he said.

        Szent-Ivanyi also said that the Hungarian government had consciously
conducted the talks on the Slovak and Romanian basic treaties parallel to
each other. Budapest has come up with a basically identical draft text for both
countries. Conclusion of the basic treaty with Romania appeared, a few weeks
ago, to be much closer than that with Slovakia, because Bucharest appeared
flexible on practically all issues, except for the minorities issue.

        However due to the anti-Hungarian campaign that appeared recently in
Romania, the scope for movement available to the Romanian leadership was
reduced, and the negotiating teams changed their positions on several
provisions of the basic treaty.

        Szent-Ivanyi added that the Romanian foreign minister nonetheless had
let it be known unofficially that he had no objections to the draft proposed by
Budapest.

        The basic treaty now initialled - which has yet to be ratified by the t
wo
Parliaments in Budapest and Bratislava - will surely make Romania's friends
think why it was unacceptable for Bucharest but acceptable for Bratislava.

        The Hungarian-Slovak basic treaty is a good example of Hungarian
diplomacy's flexibility and willingness to reach agreements.

        Hungary cannot be faulted for unwillingness to make compromises in
order to reach agreement with Romania on the basic treaty. The Romanians
have rejected outright the idea of converting the principles on autonomy
regarded by Hungary as a minimum, into a domestic legal norm.

        The text proposed by Romania would not guarantee the rights of
minorities to establish and maintain political parties, - and this would
jeopardize the existence of the Democratic Federation of Hungarians in
Romania. It also made no mention of compensating the churches, and
dissociated itself from introducing a control mechanism in bilateral relations,
Szent-Ivanyi said.

Hungarian, Romanian Prime Ministers Meet in Paris


        Paris, March 19 (MTI) - Hungary and Romania tonight approved a brief
joint statement which will be attached to the Pact on Stability in Europe,
Hungarian Foreign Minister Laszlo Kovacs said after a meeting between prime
ministers Gyula Horn of Hungary and Nicolae Vacaroiu of Romania in Paris
tonight.

        The statement confirms that both sides consider it important to improve

their ties, and agree that their relationship is linked with their
Euro-Atlantic
integration. They declare their preparedness to settle disputes according to
the
European norms, and resume talks on expert level in two weeks, Kovacs said.

        According to MTI's information, the meeting was initiated and the idea
of
the joint statement raised by the French side, governed by the obvious
intention that the Pact on Stability in Europe initiated by Paris should also
reflect some advancement in Hungarian-Romanian relations.

        In the prime ministerial meeting, Vacaroiu confirmed that Romania could

not accept recommendation no. 1201 of the Council of Europe.

        Horn said that another half a dozen questions, including the use of
language and the right to found political parties, are still open.

        The prime ministers agreed that cooperation between Hungary and
Romania represented a broader category than the basic treaty itself, so the
two countries could develop their cooperation in a number of concrete fields in
the recent period.

Hungarian OSCE Envoy Arrives in Moscow


        Moscow, March 19 (MTI) - Istvan Gyarmati, the envoy of the OSCE
Chairman-in-Office in charge of Chechen affairs, arrived in Moscow today.
Next week the Hungarian diplomat will hold talks in the Russian Foreign
Ministry on the establishment of a permanent OSCE representation in
Chechnya. In the second half of the week, Gyarmati is to visit the crisis
region
to examine the concrete logistical conditions of setting up an OSCE
representation.

Finance Minister gives Press Conference


        Budapest, March 17 (MTI) - The government is determined to  take all
the measures necessary to avoid the state becoming insolvent, even if they
are unpopular with some sections of society. It will not weaken in its resolve,
even in the face of opposition from the trade unions, Finance Minister Lajos
Bokros told media representatives here today.

        He said the government was not to blame for the fact that employers"
and employees" representatives had not been consulted.

        On Sunday Prime Minister Gyula Horn announced that the Cabinet was
ready to hold consultations, and such readiness for a social dialogue still
exists
on the part of the government.

        Bokros also said that temporary liquidity problems had arisen in
financing government spending, in other words expenditure was continuous,
but revenues were not.

        In such circumstances the government is in urgent need of credit.

        The Finance Ministry has entrusted the National Bank of Hungary with
arranging a USD 400 million loan from commercial banks operating in
Hungary.
        So far offers to extend credit totalling USD 340 million and for a
probable period of six months have been received. The Finance Ministry
considers this financing temporary, Bokros said in conclusion.

        Bokros says the HUF 150 billion revenue hoped for from this year's
privatizations will not now be realized. Even if Parliament passes a new act on
privatization, only HUF 100 billion can be expected.

        Savings from between HUF 22 and 24 billion are expected through the
austerity measures related to family allowances.

        The government would like to cut its expenditure on family allowances
by a quarter.

        Officials said at the press briefing that consultants from the Internat
ional
Monetary Fund had largely been in agreement with the planned government
measures.

        The talks ended in Budapest on Thursday, and the IMF experts said the
direction and extent of the government measures were completely satisfactory.
        The question is, to what extent is the Hungarian leadership determined
to carry out its austerity measures?

        In as much as they do so quickly, then negotiations on preparing a new
loan agreement could start in May or June.

        Bokros said he did not plan to submit an additional Budget to
Parliament, although the amendments to the Budget that had been prepared
could be regarded as such. However, there was no time to wait for all the
amendments to be prepared and present them in one package to Parliament.

        Nearly 25 laws will have to be amended to implement the planned
government measures. Preparation of this is in progress. The government will
submit draft amendments to Parliament continuously.

        The goal of the government's austerity measures is to maintain
equilibrium and ensure sustainable growth. The Cabinet is determined to take
all the measures necessary to avoid becoming insolvent even if some sections
of society are unhappy.

        The Hungarian economy cannot support a so-called "premature welfare
state", which is how the present Hungarian system could be described.

        The principal cause of the external indebtedness is that the state's
welfare spending is too high in comparison with the resources available in the
economy, Finance Minister Bokros told reporters.

        He said fairly stringent measures were needed to curb spending on
social services, which should be adjusted to correspond to the modest
resources available in the economy.

        Bokros did not go into detail about the planned austerity measures
since further negotiations will be held with the ministers of welfare and
labour.

        However, he did say that the goal was to reduce the budget deficit by
HUF 170 billion. This will partly be achieved by requiring social insurance
contributions to be paid on all incomes.

        This will raise HUF 25-26 billion extra revenue annually, but this year

only HUF 12 billion can be expected, depending on when this reform is
introduced.

        The tax levied on cars will go up by 10 per cent. This, however, will n
ot
lead to more state revenues, but to a fall in imports of foreign cars.

        Last year USD 1 billion worth of foreign cars were imported into
Hungary.

        Real wages are expected to drop by 9 per cent this year.

        If this fall is added to last year's rise, then altogether, over this y
ear and
last, real wages will have fallen.

        The planned surcharge on customs duties should raise revenues of
HUF 56 billion.


OSCE Troika Meets in Budapest


        Budapest, March 17 (MTI) - The troika of the Organization for
Security and Cooperation in Europe, that is the Italian diplomat, who was
chairman last year, the Hungarian foreign minister, who is chairman-in-
office this year, and the foreign minister of Switzerland, who will be
chairman next year, met in Budapest today.

        Italian state secretary Emanuele Scamacca, Foreign Minister Laszlo
Kovacs and Flavio Cotti as well as Wilhelm Hoynck, general secretary of
OSCE and Max van der Stoel, high commissioner in charge of minority
affairs attended the meeting. Later a press conference was given at the
Foreign Ministry.

        The Hungarian host, Kovacs, told reporters that an intensive
dialogue had been held on the crisis in Chechnya, with special regard to
what role the OSCE could play in resolving the crisis. Kovacs informed his
partners about his experiences during his visit to Russia accompanying
Prime Minister Gyula Horn.

        Kovacs said Horn and he had had a chance to discuss the Chechen
crisis with Russian leaders including President Boris Yeltsin. The Russian
leaders agreed that the OSCE could set up a permanent mission in
Chechnya to monitor developments. They also agreed that the OSCE could
take part in a political dialogue aimed at resolving the crisis. A meeting was
also held with the Russian leaders to discuss a planned peace keeping
mission to Karabakh.

        A planned meeting of the OSCE Commission of Senior Officials, due
to take place in late March, in Prague, was also discussed at the OSCE
Troika meeting. At this meeting the subjects for discussion will include a
European security structure for the 21st century, which will require
considerable imagination from the participants.

        Kovacs also took the opportunity to inform his partners about the
latest developments in Hungarian-Romanian and Hungarian-Slovak
relations with special regard to the basic treaties. He recalled that the
Conference on European Stability would open in Paris in two days and both
basic treaties are intended to form part of a system of agreements on
stability.

        Kovacs told the Troika that no agreement had been reached with
Romania to conclude the basic treaty but negotiations would be resumed to
that end. At the same time, he described it is a success that last night
solutions had been found to all the problems standing in the way of the
Hungarian-Slovak basic treaty, which would now be signed in Paris.

        Swiss Foreign Minister Cotti commenting on the Chechen crisis, said
the Swiss government highly appreciated the major effort the Hungarian
government had made to end this dramatic conflict, which also helped
enhance the prestige of the OSCE.

        Cotti said at present there is still no international structure which
would have been acceptable to the warring sides.

        As for the Paris conference on stability, Cotti said Switzerland highly

appreciated the fact that Hungary and Slovakia had reached agreement on
an essential minority question in Central Europe. For its part Switzerland
has always ascribed great importance to a pact on stability, particularly as
regards minority affairs.

        Italian state secretary Scamacca said it was time for European public
opinion to receive more comprehensive information about the activity of the
OSCE as very little is known about the major efforts that the OSCE has
been making to settle problems.

        In answer to questions about the conclusion of the Hungarian-Slovak
basic treaty, Kovacs said that the breakthrough was due to the fact that
agreement had been reached on the key question that recommendation No
1201, passed by the parliamentary assembly of the Council of Europe,
should be accepted as one of those European documents whose
provisions the two sides accept as domestic legal norms.

        Asked if Hungary had given up collective rights that national
minorities were entitled to, Kovacs said Hungary was realistic in this matter,
and was aware that the international community did not support the use of
the category of collective rights in the documents.

        At the same time a formula suitable to both parties had been found,
according to which minority rights can be exercised either individually or "in
community with others".



NATO Welcomes Hungarian-Slovak Treaty


        Brussels, March 17 (MTI) - NATO welcomes wholeheartedly the
treaty signed by Hungary and Slovakia, NATO officials, who did not wish to
give their names, told reporters at NATO headquarters in Brussels today.
Stabilization of the regions acceding to NATO, including elimination of
minority conflicts, is a major component of the planned extension of NATO,
the officials said.

        If the agreement reached by Budapest and Bratislava substantively
contributes to improving the situation in Eastern and Central Europe, and to
strengthening stability there, then it coincides with NATO's objectives, the
officials added.

        As regards the pending Hungarian-Romanian basic treaty, the
officials said that NATO hoped this could be completed shortly.




Balladur Congratulates Hungarian-Slovak Treaty


        Budapest, March 17 (MTI) - In a message to Hungarian Prime
Minister Gyula Horn today, French Prime Minister Edouard Balladur
congratulated the success of Hungarian-Slovak basic treaty talks.

        Balladur writes, "I pay respect to the generosity and political courage

of your government because you have found a solution that promotes
goodneighbourly relations and stability in Europe.

        The treaty to be signed by Hungary and Slovakia will form an
important part of the Pact on Stability, which the European Union defined as
an objective."

Hungarian FM on Basic Treaty with Slovakia


        Budapest, March 17 (MTI) - After the special cabinet session today,
Foreign Minister Laszlo Kovacs told reporters that the Hungarian-Slovak
basic treaty was based on three international documents: recommendation
no 1201, passed by the Parliamentary Assembly of the Council of Europe,
codifying the freedom of national minorities to set up autonomous local
organizations; the UN Declaration on Minority Rights; and the document of
the Copenhagen Meeting of the Conference on Security and Cooperation in
Europe. The three documents imply a political commitment for the signatory
states. Under the basic treaty, the two countries will apply these political
commitments as legally binding, the minister said.

        In Bratislava both sides made concessions in issues of lesser
importance which did not hurt the fundamental interests of either country,
Kovacs said. Although the treaty will only be published after it has been
signed, the minister mentioned as an example that in the chapter on
economic cooperation Hungary retreated from the original draft where
cooperation between border regions would extend to adjacent areas as
well. In return, Slovakia did not object the inclusion of the plan of regional
cooperation into the treaty.

        As far as the Hague proceedings on the Gabcikovo-Nagymaros
water barrage is concerned, the sides sought to codify the treaty in a way
which would not prejudice the position of either party before the
International Court of Justice. For this reason, they agreed to abandon the
clause on cooperation related to the Danube, and regulate that question in
a separate agreement. Nor does the basic treaty deal with the legacy of the
Czechoslovak state, Kovacs said.

        It was agreed that observance of the treaty would be verified by a
minority joint committee. The Slovaks voiced reservations over international
verification, the minister said.

        Concerning two points left out of the treaty, Kovacs said that a
separate Hungarian-Slovak agreement would regulate the legal succession
of agreements concluded with the one-time Czechoslovakia. Danube
cooperation may largely be settled by an agreement the two prime
ministers reached on provision with water of the Szigetkoz area which may
become the basis of a concrete agreement. The Hungarian Parliament has
already authorized the government to conclude the latter agreement, the
minister said.

        Kovacs gave concrete reasons for failure to agree on a basic treaty
with Romania. He mentioned Romanian unwillingness to accept norms laid
down in the European and international documents being made legally
binding. The Romanian side accepted that the basic treaty should refer to
UN and CSCE documents but rejected including recommendation no 1201
of the Council of Europe, Kovacs said.

Hungarian Coalition in Slovakia on Basic Treaty


        Budapest, March 17 (MTI) - The leaders of the coalition of three
Hungarian parties represented in the Slovak Parliament obtained
information in Budapest today about the details of the Bratislava agreement
on signing the Hungarian-Slovak basic treaty. In their joint response sent
from Budapest to the Bratislava correspondent of MTI, they say:

        The Hungarian parties in Slovakia "take note of the agreement
between Gyula Horn and Vladimir Meciar." They hold it important that "the
Hungarian government, cooperating with representatives of the Hungarian
community in Slovakia, should agree on a concrete package before the
treaty has been ratified."

        The coalition sees it as vital for the treaty to be revised annually.
"Should the Slovak side fail to fulfill its obligations, we will propose
cancelling the treaty," the statement says.

        "The contracting parties should guarantee, together with the
European institutions, that the full text of recommendation no. 1201 of the
Council of Europe, and especially its clause 11, is implemented," the
statement says.

        The three parties recall that "the draft treaty contains no appropriate

guarantees for the assertion of minority rights and the provision of finances
for maintaining minority institutions."

        "It is an essential condition of verification that the minorities shoul
d
take an effective part in the joint committee to be set up under the treaty,"
the statement says.

        Hungarian Christian Democratic Movement chairmen Bela Bugar,
Miklos Duray of the Political Coexistence Movement, and Laszlo A. Nagy of
the Hungarian Civic Party signed the statement.

Horn Statement - Hungarian Television


        Budapest, March 18 (MTI) - Hungarian Prime Minister Gyula Horn
tonight made a statement in Hungarian Television on the recent financial
and economic measures of his government.

        Concerning social reaction, he said, "I experienced what you did: our
March 12 decisions have caused indignation and divided society in many
aspects. I know that many believe that this government is not better that its
predecessors: it also tries to put things right at the expense of families that
are already in a plight.
        "No one can seriously believe that the present government ruined a
prosperous economy and a rich country in a matter of a few months.
Hungary has never been a welfare state. No one can seriously believe that
a Socialist-liberal government finds pleasure in distressing society."

        "In the course of many years Hungary piled up huge internal and
external debts. At present even the interests on its foreign debts are repaid
from foreign loans. The country has become on the verge of internal
insolvency. If this happens, we will no longer have any foreign partner
prepared to help us. We cannot expect any improvement until our products
become more competitive on the world market, new jobs are created, and
production becomes really profitable. The measures taken on March 12 aim
to make it worth investing in Hungary, modernizing production, and
manufacturing goods for both export and the domestic market. Villages and
towns will only prosper if their products and services come up to the
European standards of the end of the century. All this requires money, a
series of carefully considered government measures and international
confidence.

        "No matter how painful it is, we must realize that Hungary cannot
afford to spend 27 per cent of its gross national product on social welfare.
Countries that are much richer than us provide less than that. We should
unavoidably adjust state expenditure to our genuine resources. We will be
able to guarantee that burdens are shared equitably. Of course, this will
also affect the government which has taken strict austerity measures within
its own scope. It will curb expenditure on state administration, reduce the
salaries of managers in loss-making state-owned companies, and put an
end to the provision of severance pays amounting to several million forints.

        "The government will soon publicize its measures to suppress the
black economy and corruption. It will not launch a short-term campaign but
create general conditions that comply with society's sense of justice and
express desire.

        "I declare that, despite the restrictive measures, we will protect thos
e
in need and halt impoverishment.

        "We are still governed by what we were elected for: if supported, we
will put an end to the crisis. Transformation should be carried out in all
fields, which is essential for Hungary to catch up with the community of
advanced nations.

        "This year the government will compile a modernization programme,
which will in fact be a plan of action for joining the European Union,
something that lies in the interest of the whole nation. I suggest working
together. It creates favourable conditions for common work that the
government takes resolute steps against any artificial division of society.
We advocate meaningful dialogues and reasonable agreements and the
joint solution of tasks.

        "We advance step by step to improve the external conditions. It is
encouraging that the advanced world has welcomed our decisions.

        "We have started regaining our eastern markets. Our basic treaty
with Slovakia strengthens our security and we are prepared to conclude a
similar treaty with Romania. All this serves the interests of Hungarians living
either in Hungary or abroad, and promotes favourable trends in Europe.

        "We will put things right. By the end of the parliamentary cycle, we
will fulfill everything what we promised in the government programme,"
Prime Minister Gyula Horn said tonight on Hungarian Television.

Foreign Affairs Committee Meets in Session


        Budapest, March 18 (MTI) - In its Saturday session, the Hungarian
Parliament's Foreign Affairs Committee heard a report on the Hungarian-
Slovak basic treaty. The tone of the debate, held behind closed doors for
several hours, was set by the statement in which the Federation of Young
Democrats, the Christian Democratic People's Party and the Hungarian
Democratic Forum called upon Prime Minister Gyula Horn not to sign the
basic treaty with Slovakia in its present form.

        Former foreign minister Geza Jeszenszky told MTI, "the inclusion of
recommendation no. 1201 of the Parliamentary Assembly of the Council of
Europe was the minimum the Hungarian side had to achieve. I regret,
however, that the treaty contains some unfortunately worded parts. The
real question is whether the atmosphere surrounding the Hungarian
minority in Slovakia will change in the future.

        "I would welcome even an imperfect treaty if it brought about a
change in the planned reforms of public administration and education
threatening the Hungarian community," Jeszenszky said.

        Chairman Matyas Eorsi said it would be impossible and
inconceivable to meet the demands raised by the opposition parties in their
statement. Eorsi said that the committee had heard the opinion of the
representatives of the Hungarian parties in Slovakia. "They are also divided
over the acceptance of the basic treaty," he said.

HSP Presidium Meets in Session


        Budapest, March 19 (MTI) - The Hungarian Socialist Party (HSP)
Presidium agrees with Prime Minister Gyula Horn, nominating Gyorgy
Szabo, President of the Borsod County Assembly, as minister of welfare,
and Istvan Nikolits, director of the party's parliamentary group, as minister
without portfolio in charge of the civilian secret services, Deputy Chairman
Laszlo Mate told reporters after the Sunday session of the Presidium.

        Szabo and Nikolits will be the successors to Pal Kovacs and Bela
Katona, who resigned on March 12.

        On the basis of a report by HSP Chairman Horn, the Presidium
surveyed what had happened since the government had taken strict
financial and economic measures on March 12. It confirmed that the
government should not retreat from its stance but it should be prepared to
resume talks with the unions and employer organizations. Although the
government should not make any concession in the fundamental issues, it
should be open to talks on the methods of implementation, he said.
        The Presidium was shocked by the demagogic tone of the
opposition's reaction. In the HSP's view, the opposition should display a
bigger deal of modesty since the measures now under fire should have
been taken three years ago, Mate said.

        Although the HSP insists on its manifesto, it has realized that it
cannot be implemented in its original form, and needs some corrections to
be made by a national party meeting on March 26, Mate said. As an
example, he mentioned that the party would propose a 15 per cent cut in
state subsidies for the parties.
        After hearing a report by Foreign Minister Laszlo Kovacs, the
Presidium unanimously qualified the Hungarian-Slovak treaty as a success
of Hungarian diplomacy, Presidium member Vilmos Fedor said.

        The treaty appropriately expresses the interests of the country.
Keeping realities in view, the Hungarian delegation sought to reach, and
could reach, the maximum that could be achieved: both countries accepted
the European documents on minorities as legally binding norms, Fedor
said. The Presidium considers it highly important that the delegation
consulted with the representatives of ethnic Hungarians abroad
continuously, he said.

*****************************************************************
A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

           [*]   [*]  [*]   [*]  [*][*]    [*][*][*]
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           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************



N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 57/1995                                                             21 Marc
h 1995

Hungarian Prime Minister in Paris


        Paris, March 20 (MTI) - French Prime Minister Edouard Balladur
received Hungarian Prime Minister Gyula Horn for separate talks at noon
today.

        Foreign Minister Laszlo Kovacs said that the discussion had lasted
15 minutes and concerned the future of the Pact on Stability in Europe
(PSE) and the related role of the Organization for Security and Cooperation
in Europe, of which Hungary is the current chairman-in-office. (The OSCE
will monitor implementation of the Pact.) Several bilateral questions were
also discussed.

        Hungary would like to see greater participation by French companies
in the privatization of Hungarian state enterprises, Kovacs added.

        Earlier, Prime Minister Horn had attended the opening of the PSE
closing conference at the UNESCO headquarters in Paris.

        In his speech, the Hungarian prime minister described the
conference as an event of great importance, and pointed out that conditions
in Central Europe cannot be seen separately from the situation of the
minorities, which are numbered in millions. Whether their rights are
enforced, or ignored, fundamentally influences the stability of the region.

        The past decades have proved that conflicts between countries of
the region can only be solved in a European manner.

        The Hungarian-Slovak basic treaty settles bilateral questions for the
first time, and is the first to lay down principles in a bilateral document
that
are in line with European norms, Horn said.

        At the same time, he stressed that the basic treaty and all further
documents of this type, including the future Hungarian-Romanian treaty,
are only valuable in so far as what they contain becomes a reality.

        In conclusion Horn pointed out that the internal stability of Central
Europe and bilateral relations between its states largely depend on further
support from the West. He said he believed it was also in the West's
interest to avoid having volatile regions within Europe.

        "In view of all this, we urge the expansion of the European Union and
NATO," he added.

        The Hungarian prime minister once again met his Romanian
counterpart, Nicolae Vacaroiu, before the PSE conference began on
Monday morning. In the presence of French Prime Minister Balladur, they
adopted the joint Romanian-Hungarian statement to be attached to the
Stability Pact.

        According to this document, Romania and Hungary were close to a
successful completion of the talks leading to the landmark treaty between
Hungary and Romania. It states that the two countries reaffirm their
determination to continue negotiations on the treaty, which will be based on
European norms. Finally it announces that the negotiations will be resumed
in April.



Hungarian FM on Slovak Statement


        Paris, March 20 (MTI) - Yesterday evening, in Paris, Hungarian
Foreign Minister Laszlo Kovacs denied that the passage in the Hungarian-
Slovak basic treaty concerning the Council of Europe's recommendation
no. 1201 on the autonomy of the minorities contains any restrictions.

        The Slovak government issued a statement saying that Bratislava
agreed with recommendation no. 1201 from the Parliamentary Assembly of
the Council of Europe only on condition that it had a restrictive clause
attached to it. Kovacs admitted that Slovakia had accepted inclusion of
recommendation no. 1201 only on condition that a supplementary phrase
be added to it, but he added that in the opinion of legal experts and linguists
this phrase is not restrictive.

        The phrase in question says that the two sides accept the
recommendation "with the observance of individual human and civil rights,
including the rights of national minorities". As Kovacs put it, the word
"observance" has no restrictive meaning, but would be of coercive nature
only if the recommendation violated human rights, which is not the case.

        "If the intention of the Slovaks was to attach a restrictive supplement
,
then they did not succeed," the Hungarian foreign minister said.

Parliament - Debate on the Basic Treaty


        March 20 (MTI) - Speakers from opposition parties lashed out at the
Hungarian-Slovak basic treaty signed in Paris on Sunday, before regular
business in Monday's plenary session in Parliament, describing the treaty
as badly prepared and damaging to Hungarians.

        Jozsef Torgyan, chairman and head of the parliamentary group of
the Independent Smallholders' Party, said the Hungarian government had
concluded a treaty harmful for ethnic Hungarians in Slovakia, and ignoring
their interests. He described the signing of the treaty as a betrayal of the
homeland.

        Imre Konya, representing the Hungarian Democratic Forum, said
Bratislava interpreted the text of the document differently.

        Ivan Szabo, the head of the parliamentary group of the Hungarian
Democratic Forum, said the basic treaty had rendered ethnic Hungarians in
Slovakia defenceless.

        Istvan Szent-Ivanyi, parliamentary state secretary for the Foreign
Ministry, had appraised the basic treaty before the opposition speakers,
stressing that it contributed to improving relations between Budapest and
Bratislava and guaranteeing the rights of ethnic Hungarians beyond the
border.

        He said the international response was extremely positive.

        Ivan Szabo (Hungarian Democratic Forum) expressed doubts about
the implementation of the provisions of the basic accord, hinting that there
was no reference in the document to the control mechanism of international
organizations - Council of Europe, European Union, and NATO.

        He said the treaty failed to settle the issue of revoking the Benes
decrees, the hydroelectric power plant at Gabcikovo, and the planned
nuclear power plant at Mochovce.

        He also said it was a mistake that the signing had not been preceded
by an impact analysis to clarify whether the basic accord would stabilize or
destabilize the ethnic Hungarian minority.

        He regretted that the text of the accord was only made pubic to
ethnic Hungarians afterwards.

        Zsolt Nemeth (Federation of Young Democrats) said it was clear why
ethnic Hungarians in Slovakia did not support the accord. He recalled that
Prime Minister Horn had promised Hungarian minorities that they would be
given a right of consultation on the documents.

        He explained the Federation of Young Democrats could not identify
with the basic accord or its consequences.

        Imre Szekeres, head of the parliamentary group of the Hungarian
Socialist Party, stressed that the Foreign Affairs Committee of Parliament
had continually debated the text of the basic accords and consulted ethnic
Hungarians several times.

        Matyas Eorsi, Free Democrat chairman of the foreign affairs
committee, said the Hungarian Civic Party of the Hungarian parties in
Slovakia had backed the basic accord, and Miklos Duray, chairman of the
Coexistence Movement had described it as acceptable.

        Foreign Ministry State Secretary Istvan Szent-Ivanyi said the
government had not promised a right of consultation to ethnic Hungarians,
but pledged to take their position into consideration.

        Tamas Isepy, Christian Democratic People's Party parliamentary
head, missed precise guarantees for minorities.


Voigt Meets Hungarian Parliament President


        Budapest, March 20 (MTI) - "NATO should determine the dates for
the admission of new members still before the year is out. Next year it could
name countries joining as full members and the dates of their entry, and the
documents of first-round entrants could be ratified by 1996-1997," North
Atlantic Assembly President Karsten Voigt told MTI at noon on Friday after
an hour-long discussion with his host, Speaker of Parliament Zoltan Gal.

        Voigt is here preparing the spring session of the North Atlantic
Assembly in Budapest from May 26 to 29, Gal told reporters.

        Voigt said the North Atlantic Assembly supports NATO's expansion
to the east, and he himself would do all he can for the enlargement of
NATO and the EU to take place as quickly as possible.

        Before the next U.S. presidential elections there should be a decision
on both expanding NATO and how the organization wishes to cooperate
with Russia, Ukraine and all those countries that still cannot or will not
enter
the North Atlantic organization.

        Voigt also said that last week Russian Foreign Minister Kozyrev
asked him if NATO was not growing too fast. He reassured the Russian
politician that NATO is usually far too slow in making decisions.

        The speaker of Hungarian Parliament said this will be the first North
Atlantic Assembly session held outside NATO territory.

        Hungary wishes to use this forum to inform the 188 Assembly
deputies and 800 invited guests on Hungary's preparations for EU and
NATO membership, Gal said.

        The plenary session will hear lectures by Prime Minister Gyula Horn,
German Defence Minister Volker Ruhe and U.S. Deputy State Secretary
Richard Holbrooke. Speakers at committee meetings will include Foreign
Minister Laszlo Kovacs, Defence Minister Gyorgy Keleti, Finance Minister
Lajos Bokros, and Minister of Environment and Regional Policy Ferenc
Baja.

        Gal proposed the North Atlantic Assembly accept Hungary and other
applying countries as full members.

        As a temporary solution, Voigt offered these countries membership
with consultative voting rights, and expressed the hope that the Assembly
session would serve not only the dialogue between east and west, but also
that between east and east.


Karsten Voigt Holds Talks at the Foreign Ministry


        Budapest, March 20 (MTI) - Foreign Ministry State Secretary Istvan
Szent-Ivanyi on Monday talked to Karsten Voigt, chairman of the North
Atlantic Assembly, about NATO expansion. The state secretary said that
Voigt felt terms of admission to NATO could be clarified as early as late this
year, and the first group of applicants, with Hungary, could fully join by late
1997 or 1998.

        Szent-Ivanyi quoted Voigt as saying that the Hungarian-Slovak basic
treaty signing would help Hungary's admission to NATO.

        Voigt then gave an account of his visit to Russia two weeks ago
where he said there was quite a great resistance in the Russian leadership
in the face of expanding NATO.

        He added that in his assessment Russia has no right to interfere in
the expansion of NATO and has no negotiating role on this.

        Szent-Ivanyi told his negotiating partner that Hungary was prepared
to get on with the process of admission to NATO, and knew the problems
raised by the North Atlantic organization.

        An inter-governmental commission is already working to eliminate
these problems as fast as possible, Szent-Ivanyi told Voight.

Hungary's Foreign Debt at USD 28.5 bn


        Budapest, March 20 (MTI) - The National Bank of Hungary issued
bonds 14 times and the Hungarian Foreign Trade Bank once last year on
world capital markets, worth in total USD 2.9 billion.

        The maturity period for the bonds steadily dropped, and in the first
half of the year seven year bonds were issued, and from the second half
bonds were issued on a three to five year maturity period, officials from the
National Bank of Hungary told MTI.

        The country's foreign gross debt reached USD 28.5 billion by late
December, having grown four billion dollars in a year.

        Due to the change in the foreign currency rate of exchange,
Hungary's debt calculated in dollars increased by USD 2.3 billion.

        Some 71 per cent of the country's overall debt, USD 20.2 billion is
payable by the National Bank. The government owes USD 2.3 billion to
foreign creditors.

        The structure of the gross debt changed last year: the debts owed by
the National Bank and the government to foreign creditors dropped by four
per cent, while the indebtedness of companies and commercial banks
increased.

        In late 1994 the volume of reserves piled up by the National Bank
totalled USD 6.8 billion.

        A USD 3.9 billion deficit is in Hungary's balance of payments. The
National Bank and the commercial banks have financed the deficit of the
current balance of payments with nearly USD 1.5 billion.

Gyarmati in Moscow Talks


        Moscow, March 20 (MTI) - Ambassador Istvan Gyarmati, authorized
by the chairman in office of the OSCE, now in Moscow to establish a
permanent OSCE mission in Chechnya, Monday met Hamad Kurbanov, the
permanent representative of President Djohar Dudayev.

        Gyarmati also met Arkady Volsky, Chechen-subcommittee head for
the chamber of social reconciliation operating next to the Russian
President. Gyarmati goes to the crisis zone on Wednesday.

        Gyarmati said he had told President Dudaev's Moscow
representative about the OSCE position on the crisis, notably that Russia
regarded the organization as a point of departure designed to maintain the
territorial integrity of Russia. Kurbanov reportedly understood this and
supported the OSCE objectives.

        Gyarmati and Volsky agreed on the need for an assembly that would
pass a basic law including an agreement between Grozny and Moscow on
the sharing of power. On Tuesday Gyarmati is expected to meet Russian
deputy foreign Minister Sergei Krilov at the Foreign Ministry to discuss
details of his trip to Chechnya.

        Gyarmati intends to pin down issues related to the establishment of a
permanent OSCE mission in Chechnya and examine the terms for
establishing such a mission concretely. A permanent mission is designed to
cover humanitarian issues including aid shipments and seeks to help along
the process of political settlement.

        Gyarmati wants to meet representatives of President Dudayev, as he
did not have a chance to do that on his last trip.

*****************************************************************
A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

           [*]   [*]  [*]   [*]  [*][*]    [*][*][*]
           [*]   [*]  [*]   [*]  [*]  [*]  [*]
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           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************



N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 58/1995                                                             22 Marc
h 1995


Far East Priority for Hungarian Foreign Trade


        Budapest, March 21 (MTI) - Boosting business links with the Far
East is a priority aim for Hungary's economic policy. Last year's exports to
the region were worth USD 130 million and imports from there amounted to
USD 450 million. As this represents only 3 per cent of Hungary's foreign
trade turnover, there is ample room for development, it was stated at a
recent meeting organized by the Hungarian-Far Eastern Business Club in
Budapest.

        At the conference, Minister of Industry and Trade Laszlo Pal said that
controversial phenomena were apparent in Hungary's economy, with
sound microeconomic processes accompanied by macroeconomic
problems.

        In 1994, Hungarian exports increased by 20 per cent, faster than
imports in terms of volume. Industrial production grew by 10 per cent,
investment by 17 per cent and over the last two years productivity rose by
22 per cent. At the same time, the macroeconomy is struggling with deficits
in the central budget and the international balance of payments, which
forced the government to announce austerity measures on March 12.

        The main relation for Hungary's foreign trade is Western Europe,
which receives 65 per cent of its exports. Concentration here is so high that
no further increase can be expected.

        The second group comprises Eastern Europe and the
Commonwealth of Independent States. Hungary conducts 23 per cent of its
trade with these countries. The minister stressed opportunities are far from
being tapped in this relation either.

        The third priority area, the Far East, is all the more important to
Hungary as it is expected to account for 30 per cent of the world's total
investment by the end of the century. These projects, worth a total HUF
1,000 billion, will be mainly in transport, the energy industry and health-care
development - fields where Hungarian companies also have a chance to
participate.


Horn on Slovak Treaty in Parliament


        Budapest, March 21 (MTI) - Addressing Tuesday's session of the
Hungarian Parliament before the start of the day's business, Prime Minister
Gyula Horn analyzed the importance of the Hungarian-Slovak treaty.
Progress has been made in two important areas, crucial for both the region
and the international community: the recognition of borders and the national
minorities. Hungary has received praise from the international community
for having done something civilized and forward-looking in a region plagued
by grave tensions. "It was good to be a Hungarian in Paris," the prime
minister said, referring to the spotlight directed on the signing ceremony in
the Matignon Palace.

        All in all, the treaty is in accordance with the three aims of Hungary'
s
diplomacy: to maintain good relations with its neighbours, to represent the
interests of ethnic Hungarians living beyond the borders and to ensure the
opportunity to join the European Union.

        The treaty is also important because it incorporates European norms
into the legal systems of Hungary and Slovakia and contains a mechanism
to monitor compliance with the commitments made. This mechanism is not
just bilateral, but also relies on the documents produced by the
Organization for Security and Cooperation in Europe, the Council of Europe
and the United Nations.

        "Another important aspect of the treaty is that it will help to frustra
te
possible attempts to revive the notorious small Entente in our troubled
region," Horn said.


Kozirev to Visit Budapest


        Budapest, March 21 (MTI) - Russian Foreign Minister Andrei Kozirev
will pay a working visit to Budapest, on Friday, to meet the Hungarian
foreign minister in his capacity as current chairman-in-office of the OSCE,
Foreign Ministry spokesman Gabor Szentivanyi told a press briefing today.

        Kozirev and Hungarian Foreign Minister Laszlo Kovacs are expected
to discuss the role played by the OSCE in trying to solve the Chechen
crisis, the expansion of NATO and the crisis in former Yugoslavia.

        The Russian foreign minister will also meet Prime Minister Gyula
Horn.
        It was also announced today that according to indications from
Hungarian embassies abroad, foreign reaction to the Hungarian-Slovak
basic treaty, which was signed in Paris on Sunday, is clearly positive.

        Foreign observers say that the document will strengthen Hungary's
Euro-Atlantic position and contribute to stability in the region.

        Diplomatic sources consider it a positive sign that negotiations on the

Hungarian-Romanian basic treaty will resume.

        The spokesman said Hungary does not intend to interpret the text of
the Hungarian-Slovak basic treaty, since it speaks for itself.


Hungarian-Slovak Civil Defence Agreement


        Komarom, March 21 (MTI) - Today, in Komarom Town Hall, civil
defence cooperation agreements extending along the entire length of the
Hungarian-Slovak border were signed by the chairmen and civil defence
commanders of five Hungarian counties in northern Hungary and chairmen
and civil defence commanders from 11 Slovak districts.

        The agreements provide for the prompt exchange of information in
emergency situations whose consequences could seriously affect both
parties, such as accidents in plants manufacturing dangerous materials,
accidents to vehicles transporting such materials, floods, river pollution,
large conflagrations or epidemics.

        This cooperation is in harmony with the European framework
agreement relating to boderzone cooperation between local governments
and public administration bodies, and considerably contributes to
comprehensive civil defence coverage for the protection of residents in the
border areas of the two countries.

        Hungarian officials announced that they were preparing similar
agreements with Slovenia, Romania and Ukraine.


Bank President on Foreign Currency Reserves


        Budapest, March 21 (MTI) - The foreign currency reserves of the
National Bank of Hungary increased by USD 500 million in the first two
months of this year to total USD 7.3 billion.

        Considerable amounts of foreign currency are flowing into the
National Bank as a result of speculators selling their holdings of foreign
currency following the devaluation of the forint, and because of the quicker
influx of export earnings into Hungary.

        Liberalization of Hungary's foreign currency management - an
essential component of the forint's growing convertibility - will continue,
Frigyes Harshegyi, vice-president of the Bank told MTI on Tuesday.

        He said the position of the country's foreign currency reserves would
be further strengthened by the measures recently announced by the
government.

        Hungary's obligations to repay debts this year will total USD 2.6 to
2.7 billion.

        Harshegyi said it would cause no problem if the National Bank did
not draw on any more credit in the remaining nine months of the year.

        He added that foreign reaction to the measures aimed at cutting the
Budget deficit was unambiguously positive.


Horn Meets North Atlantic Assembly President


        Budapest, March 21 (MTI) - Hungarian Prime Minister Gyula Horn on
Tuesday met Karsten Voigt, President of the North Atlantic Assembly
(NAA), who was in talks here about the NAA holding its spring session in
Budapest in May.

        On Voigt's request, Horn discussed his Paris talks early this week.
Voigt welcomed the Hungarian-Slovak basic treaty, saying that documents
like that promote Central European countries" chances of joining Euro-
Atlantic organizations.

        In Voigt's view, the expansion of NATO should go in tandem with the
intensification of cooperation with Russia.

        Horn thought Central European admissions to NATO should not
depend on Russia, but Moscow should not be excluded from any European
security system. Horn hoped the December North Atlantic Council session
would fix a date to start NATO membership talks.

        Horn felt Hungary's associate NAA membership should go up to a
higher level, perhaps to full membership.

        Voigt confirmed that the NAA was considering that idea.

Kovacs on Basic Treaty with Slovakia


        Paris, March 21 (MTI) - The Hungarian-Slovak basic treaty has no
ambiguities and leaves no room for any misinterpretation, Hungarian
Foreign Minister Laszlo Kovacs told an MTI correspondent in Paris today
who asked him to expound Hungary's position on the Slovak interpretations
causing controversy in the past few days.

        Last weekend the Bratislava government issued a separate
statement on the issue, then Slovak Premier Vladimir Meciar, addressing
the Monday session of the Conference on European Stability, referred to
individual human rights in the context of the basic treaty and rejected the
principle of collective minority rights and the idea of autonomy.

        Kovacs said, "the treaty does not contain the expression "collective
rights". However, the provision that the minorities exercise their rights
individually or in community with others can be read in both the treaty and
the international documents which it refers to as legally binding.

        "In essence, the latter wording corresponds to the concept of
collective rights," Kovacs insisted.

        "As for "autonomy", the treaty refers to two documents (the
Copenhagen Document of the CSCE and recommendation no. 1201 of the
Council of Europe) which contain the word "autonomous": clause 11 of
recommendation no. 1201 clearly stipulates the possibility of setting up
autonomous organizations for public administration," the Hungarian foreign
minister said.

        "All this cannot be "interpreted", or, to be more exact, it can be but
it
has no point," Kovacs said, adding that "a treaty is binding in the form it was
signed".

        The minister described it as very unusual in diplomacy for, a few
seconds before signing a treaty, one of the signatories to present to the
other a note which "interprets" the treaty. With his Slovak counterpart on
Monday Kovacs brought up this question, saying that "Hungary will give a
concrete answer to the Slovak note presented just before the treaty
signing."

        Finally, Kovacs said he agreed this morning to meet his Croatian
counterpart in Croatia early April. "If we are authorized by our governments,
we will sign the bilateral minority protection agreement already coordinated
at expert level."

Hungarian OSCE Envoy to Visit Chechnya


        Moscow, March 21 (MTI) - Ambassador Istvan Gyarmati, the envoy
of OSCE Chairman-in-Office Laszlo Kovacs (also Hungarian foreign
minister), leaves Moscow for the North Caucasian region tomorrow to hold
talks on setting up a permanent Organization for Security and Cooperation
in Europe (OSCE) mission in Chechnya.

        Early next week, after an on-the-spot visit, the envoy will negotiate
on the political aspects of the issue in Moscow. It became clear during his
Moscow talks earlier this week that Moscow accepted the idea of the
mission. The OSCE is eager to open the mission in the near future, if
possible next month, so as to provide humanitarian aid and pave the way
for a political settlement.

        Gyarmati will travel to Chechnya via Mozdok, North Ossetia, and visit
Grozny, the Chechen capital, and Nazrany in Ingushia.

        Gyarmati will go with Arkady Volsky, head of the Chechen sub-
committee of the social reconciliation chamber working alongside the
Russian President, and several members of Yeltsin's staff.

        Gyarmati said that, if possible, he would meet representatives of
Chechen President Jokar Dudaev, too.

*****************************************************************
A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

           [*]   [*]  [*]   [*]  [*][*]    [*][*][*]
           [*]   [*]  [*]   [*]  [*]  [*]  [*]
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           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************



N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 59/1995                                                             23 Marc
h 1995

Kozyrev to Visit Hungary


        Budapest, March 22 (MTI) - Andrey Kozyrev, Foreign Minister of the
Russian Federation, is to pay a working visit to Hungary on Friday at the
invitation of his counterpart Laszlo Kovacs, the Foreign Ministry's Press
Department announced.

        Kozyrev is scheduled to hold talks in the Foreign Ministry and, in the
afternoon, meet Hungarian Prime Minister Gyula Horn.

        Earlier, Foreign Affairs Spokesman Gabor Szentivanyi told reporters
that Kozyrev would hold talks with Kovacs, as the OSCE Chairman-in-
Office, primarily on the Chechen crisis.

        Other issues, including the enlargement of NATO and the crisis in
the former Yugoslavia, may also come up during the discussions.

Hungarian OSCE Envoy in North Ossetia


        Mozdok, March 22 (MTI) - Ambassador Istvan Gyarmati, the envoy
of OSCE Chairman-in-Office Laszlo Kovacs (also Hungarian Foreign
Minister), held talks with Russian military leaders in Mozdok, North Ossetia,
today. It was agreed that the Russian forces would suspend their attacks as
long as the Organization for Security and Cooperation in Europe (OSCE)
delegation remains in the region.

        Gyarmati met Kim Tsagolov, head of the provisional administration of
Chechnya, and Gen. Anatoly Kulikov, Commander-in-Chief of the Russian
forces.

        The sides discussed the ways and means of putting an end to the
war and seeking a political solution to the crisis. They agreed on the priority
of ending the fighting, and shared the view that the conflict could not be
solved by military means.
        In turn, opinions differed about who should make the first step and
what kind it should be.

        In the OSCE's view, no preconditions should be set for a cease-fire.

        The Russians, however, insist that the Chechen forces should
surrender their heavy armament, while the Chechens demand the
withdrawal of Russian troops.

        According to the OSCE's position, these steps should be made
during the negotiations.

        The sides agreed that all political forces, including Jokar Dudaev's
representatives, should be involved in the talks.

        Informing the delegation on the military situation, Gen. Kulikov said
that the Russian forces, comprised of 30,000 soldiers and 15,000 interior
ministry troops, were controlling about two thirds of Chechnya.

        The sides discussed the idea of setting up a permanent OSCE
representation in Chechnya, for which Kulikov promised his assistance.

        After talks in Mozdok, the delegation left for Nazrany, Ingushia,
where they met President Ruslan Aushev and the Chechen mufti.

        The OSCE delegation is accompanied by a number of Russian
politicians, including Arkady Volsky, head of the Chechen sub-committee of
the social reconciliation chamber working alongside Russian President
Boris Yeltsin, Aleksandr Nikonov, member of the Duma committee in
charge of examining events in Chechnya, and Andrey Logynov, a member
of Yeltsin's staff.

Vranitzky Initiates Meeting with Horn, Meciar


        Budapest, March 22 (MTI) - Austrian Federal Chancellor Franz
Vranitzky on Tuesday phoned Hungarian Prime Minister Gyula Horn and
warmly congratulated him upon the conclusion of the Hungarian-Slovak
basic treaty, the Government Spokesman's Press Office told MTI.

        Vranitzky expressed the conviction that the Paris pact would further
strengthen ties between Central European countries.

        The chancellor initiated a meeting in Vienna with Horn and Slovak
Premier Vladimir Meciar to discuss issues affecting the three Danube
countries.

        According to his plan, the three prime ministers would meet in
Budapest in the autumn and in Bratislava some months later.

        Horn expressed thanks for the congratulations, and welcomed the
initiative to hold regular trilateral summits.

        The date of the first Viennese meeting will be coordinated through
diplomatic channels.

Vranitzky Hails Hungarian-Slovak Treaty


        Vienna, March 22 (MTI) - Austrian Chancellor Franz Vranitzky today
received a delegation of the Alliance of Free Democrats (AFD), led by party
chairman and parliamentary group leader Ivan Peto. Vranitzky
congratulated the Hungarian government on its basic treaty with Slovakia,
which he defined as a major step in Hungary's integration with European
organizations.

        "This is true even if Slovakia is not yet ready to fulfill all provisio
ns of
the treaty," Vranitzky added. He asked AFD politicians Matyas Eorsi,
chairman of Parliament's Foreign Affairs Committee, and Attila Karoly Sos,
parliamentary state secretary at the Ministry of Industry and Trade, about
the chances of concluding a similar treaty with Romania.

        On discussing issues related to the European Union, the chancellor
described the strategy Austria had used in its preparations for joining. Citing
his country's example, he said it was purposeful to begin multifaceted
preparations well before the start of admission talks.

        This was the first negotiation the AFD has held abroad since coming
to government. The main aim of the trip was to strengthen relations with the
Liberal Forum, led by Heide Schmidt.

        Peto and Schmidt told an international press conference that
cooperation between the two parties could become the basis for
transfrontier liberal cooperation in Central Europe. Reporters were mainly
interested in the Hungarian-Slovak treaty.

Students Protest Against New Tuition Fees


        Budapest, March 22 (MTI) - Responding to the call of the National
Federation of Student Self-Governments, day-time students from most of
Hungary's 70 universities and colleges staged a street protest -
simultaneously throughout the country - against the government's decision
to introduce monthly tuition fees of HUF 2,000 starting in September.
        The measure affects 140,000 day-time students, although the
government said about 20 per cent of them would pay nothing for tuition.

        In the capital, students of the Budapest Technical University set out
from Gellert Square marching to Pest across Szabadsag Bridge, to be
joined by students of the Eotvos Lorand University of Arts and Sciences,
the University of Economics and the Semmelweis Medical University.

        At Jozsef Nador Square outside the Finance Ministry, the protesters
will hand over their petition to Finance Minister Lajos Bokros, who will then
sit at a conference table with student representatives.

        Addressing the protesters, the minister said, "Hungary should be
saved from bankruptcy. This is why the government must introduce tuition
fees. The monthly fee of HUF 2,000 will not ruin the equality of chances in
education because such equality did not exist before either. A large number
students had to pay hundreds of thousands of forints for non-state
education."

        The minister's arguments failed to convince the youth. Instead, it
added fuel to the fire. The protesters shouted and booed, preventing
Bokros from continuing.

        The minister tried to answer questions he heard from the crowd. He
confirmed that those who had greatly contributed to state debts should
repay them. "This is, however, impossible since the bulk of foreign loans
has been wasted and what does not existent cannot be taken back," he
said.

        "The financial government, committed to restoring economic stability
in Hungary, imposes burdens not only on students. All should share a part
of the burdens. As a matter of fact, education was also not free before
because it was financed by the taxpayers. From now on, students will have
to contribute HUF 2,000 a month to the costs."

        The minister's statement that HUF 2,000 is not a considerable sum
generated sharp protest. Bokros tried to explain that students would now
have the right to demand quality education and genuine student
representation for their money.

        Since this argument had no effect either, the minister accepted the
petition and returned to his office.

        Laszlo Szabo, chairman of the National Federation of the Self-
Governments of Students, told the protesters that the quality of education
would indeed have to be raised, but the government has not yet done
anything to meet this end.

        In January, the government agreed not to introduce the tuition fee
before 1996. Two months later, however, it changed its mind and
disregarded the agreement. Should talks in the next few weeks be
unsuccessful, students may have to gather again in front of the Finance
Ministry, Szabo said.

        Students, supported by their lecturers, demonstrated in provincial
cities as well. No incidents were reported.

PM Addresses Industrialists' Assembly - Newsflash


        Budapest, March 22 (MTI) - Today, Hungarian Prime Minister Gyula
Horn visited the assembly of the Hungarian Federation of Industrialists, the
first prime minister to do so.

        Horn said the government wishes to be a reliable and constructive
partner to entrepreneurs and industrialists.

        He welcomed the participation of the federation in working out the
government's modernization programme, which essentially is the
programme necessary for membership of the European Union. He
expressed the hope that the federation would continue to play an active
role in working out the government's stabilization programme, which is now
about 60-70 per cent complete.

        The President of the Federation of Industrialists, Gabor Szeles, told
today's assembly, the 4th to be held, that the federation was on the
threshold of a new era and had to play a more active role in the formulation
of economic policy, instead of merely being a spectator, as it had been in
the past.

        Western capital can flow into Hungary only through concrete
economic programmes, so the federation will have to concentrate on
cooperating with the government in the elaboration of such programmes.

Industrial Production Continues to Rise


        Budapest, March 22 (MTI-ECONEWS) - Hungary's industrial
production was HUF 261.5 billion in January, 14.5 per cent up on
December 1994 calculated in seasonally-adjusted volume terms, the
Central Statistical Office (KSH) reported on Wednesday.

        Industrial output in January, 1995 was 12.7 per cent higher in volume
terms than in January, 1994.

        Industrial sales in volume terms rose by 13.8 per cent in January
compared to January 1994, and by 16.5 per cent on December 1994.
Export sales in the processing industry were up 41.8 per cent and domestic
sales 5.9 per cent on January last year. Industrial output per employee was
16.8 per cent up over the same period.

        The machine industry increased output 50 per cent over the same
12-month period, and the iron and steel industry by 21 per cent due to
increases in both domestic and export sales. Machinery exports doubled
while steel exports grew by 40 per cent. Exports in the wood, paper and
printing industry grew by 43 per cent while its output was 18.6 per cent up.

        Of total industrial sales, the share of exports was 26 per cent in
January 1994 compared to 20 per cent in January, 1994 and a 25 per cent
1994 average. Export sales were 42 per cent higher than January 1994.

        Industrial producer prices rose by 6 per cent in January over
December, including a rise in domestic sales prices of 6.7 per cent. This is
the highest monthly increase for the last three years, the KSH reports.

No Freeze on Personal Foreign Exchange Accounts


        Budapest, March 22 (MTI) - The Hungarian government issued a
statement today denying the rumour that it was going to freeze personal
savings held in foreign exchange accounts.

        According to the statement sent to MTI by the Government
Spokesman's Press Office, "Hungary's foreign exchange reserves exceed
USD 7 billion, and the National Bank of Hungary has always duly met, and
will continue to meet, its payment obligations.

        "Thus there is no reason for the government to consider a proposal
limiting the flow of personal savings held in foreign exchange accounts.

        "The government is committed to making the forint convertible. As an
important step in this direction, from April 1, 1995 not only private
individuals but even entrepreneurs will be permitted to hold their foreign
exchange incomes in such accounts.

        "The government has no legal instrument to take a restrictive
measure of this kind.

        "Since 1989 the safety of personal savings held in foreign exchange
accounts has been regulated by a parliamentary decision, stipulating that
these accounts are inaccessible to the government. The free flow of
savings held in forint or foreign exchange accounts cannot be limited in any
form."
        "As the decision is still in force, the government cannot limit the fre
e
flow of personal savings held in forint or foreign exchange accounts in its
own scope, without parliamentary approval.

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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
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and Information Service.
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OMRI Daily Digest
No. 72, 11 April 1995


EU PROVIDES "ROUGH GUIDE" TO MEMBERSHIP. The EU provided a "rough guide"
to membership at its meeting of foreign ministers 10 April, Western
agencies reported. The foreign ministers of six East European states--
Bulgaria, the Czech Republic, Hungary, Poland, Romania, and Slovakia--
joined the meeting as the first example of "structured dialogue" agreed
to at the EU summit in Essen in December 1994. The EU commissioner for
foreign relations, Hans van den Broek, sketched an outline of the EU
White Paper on membership requirements set to be unveiled later in
April. Although Polish Foreign Minister Wladyslaw Bartoszewski said he
and his East European colleagues were glad to see that the EU moving
ahead with its plans to expand eastward, he added, "We'd be happier if
the plan had time-tables and more specific facts." He also noted that
the EU should provide incentives for Eastern Europe to adapt its
economies to suit EU policies. Hungarian Foreign Minister Laszlo Kovacs
welcomed the opportunity to meet with his EU counterparts. "Every
meeting brings these countries closer to the EU; after every meeting we
understand each other a little better," he said. --  Michael Mihalka,
OMRI, Inc.

SLOVAK-CANADIAN DEFENSE AGREEMENT. On 9 April in Toronto Slovak Defense
Minister Jan Sitek and his Canadian counterpart David Collenette signed
an intergovernmental agreement concerning military relations and a
Memorandum of understanding between the two countries' defense
ministries, Narodna obroda and Praca report on 11 April. Stressing that
the recent signing of the Slovak-Hungarian state treaty shows that
Slovakia is able to resolve problems in bilateral relations, Collenette
said the treaty also strengthens Slovakia's position among countries
interested in NATO membership. According to Collenette, Canada will
support Slovakia's entry into NATO. Sitek is currently on a 5-day visit
to Canada and the US. Traveling to the US on 10 April, Sitek is expected
to meet with US Secretary of Defense William Perry as well as
representatives of the National Security Council and the State
Department. --  Sharon Fisher, OMRI, Inc.

GROWING DISSATISFACTION WITH HUNGARIAN GOVERNMENT. A public opinion
survey published by Magyar Hirlap on 10 April shows a substantial
decrease in support for the government of Prime Minister Gyula Horn.
Compared to March, approval for the government's performance in general
declined from 40.9 to 34.4 percent. Meanwhile, support for the
government's handling of social problems fell 12 percent, and its
credibility declined 11 percent. The survey measured the public's
reaction to the cabinet's announcement in March that it would implement
rigorous economic measures designed to reduce the state budget deficit
that involve substantial cuts in social spending. --  Edith Oltay, OMRI,
Inc.

HUNGARIAN REFERENDUM ON ELECTION OF PRESIDENT? The National Election
Committee announced on 10 April that the Independent Smallholders Party
headed by Jozsef Torgyan collected enough valid signatures (157 000) to
initiate a referendum on whether the president of the republic should be
elected by direct popular vote and whether the scope of his authority
should be expanded, Magyar Hirlap of 11 April reports. Under the current
constitution the president has limited powers and is elected by the
parliament, thus receiving his mandate from the legislature and not from
the people. The referendum would also ask the population to answer
whether the right of young people to a place of employment and to
housing should be enshrined in law and whether the pension age of women
should be reduced to 55. Some constitutional lawyers and government
politicians questioned the legality of holding a referendum on a
question that involves changing the constitution. The parliament's
constitutional committee plans to ask the Hungarian Constitutional Court
to decide the matter. --  Edith Oltay, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
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Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************



OMRI Daily Digest
No. 73, 12 April 1995


HUNGARY'S ROMA FORM OWN GOVERNMENT. Roma representatives from across
Hungary elected a 53-member national Roma government at a meeting near
Budapest on 9 and 10 April, international and Hungarian media reported.
The new body will represent Roma interests in areas such as local self-
government, rural development, employment, housing, and education.
According to official estimates, 500,000 Roma live in Hungary; but
unofficial estimates put the number at almost 1 million. Under the 1993
legislation on minorities, the Roma government will receive about
$500,000 to finance Roma causes, a senior Internal Affairs Ministry
official said. -- Jiri Pehe, OMRI, Inc.

ROMANIAN PRESIDENT REFLECTS ON ROMANIA'S ACHIEVEMENTS. Ion Iliescu, at a
press conference on 11 April, delivered a long speech reminiscent of a
"state of the nation" address. He said Romania has achieved a certain
degree of macroeconomic stabilization and that there are signs that the
country's political life is "maturing." Romania is increasingly
perceived abroad as an "oasis of stability," he said. Iliescu praised
his country's efforts to join Euro-Atlantic structures, stressing that
Romania's decision to push for integration into NATO was based solely on
defensive needs. He added that Romania was interested in consolidating
relations with its neighbors, singling out those with Hungary, which he
described as "normal." Iliescu expressed hopes that a basic treaty with
that country could be signed soon. Finally, he deplored the early start
to the election campaign, which, he said, could put a strain on
political life at a time when political and social peace were needed.
Elections are scheduled for fall 1996. -- Dan Ionescu, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

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and Information Service.
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Monday, 10 April 1995
Volume 2, Issue 71


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

**OSCE EXPECTS ANSWER ON ITS CHECHNYA MISSION TODAY**
    Russia could give its approval to the mandate of an
    Organization for Security and Cooperation in Europe, or OSCE,
    monitoring mission to Chechnya as early as today.  The Russian
    delegation to OSCE headquarters in Vienna couldn't approve the
    mandate last week because it didn't have instructions from
    Moscow.  If the mandate is approved early this week, the
    monitors could be sent by the middle of this month.  The
    delegation will probably be headed by a Hungarian because
    Hungary is now chairing the OSCE.  The delegation's mandate
    would include promoting human rights and establishing facts
    on the violation of human rights.  It would also help to
    promote democracy and democratic institutions, including the
    restoration of local organs of power.  And it would facilitate
    the delivery of humanitarian aid.  It would also help local
    and federal authorities and international organizations such
    as the UN High Commissioner for Refugees to organize the
    return of refugees.


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

**COMPUTER FIRM EXPANDS HUNGARIAN INTERESTS**
    IBM Hungary has opened a branch office in Gyor, in northwest
    Hungary.  The company plans to open two more regional offices,
    one in the northeastern town of Miskolc and one in the town of
    Pecs, near the Croatian border, possibly in the first half of
    1995.  Each of the branch offices in the countryside will
    employ three or four people.  More than half of IBM's sales
    outside of Budapest come from the northern part of the
    country.


**HUNGARY NOT SURPRISED TO BE IN THE RED**
    The Hungarian Finance Ministry said the country's cumulative
    budget deficit soared to $1.2 billion at the end of March.
    That's up from $750 million at the end of February and more
    than twice as high as planned.  The new deficit figures were
    announced a day after the government said it would submit a
    supplementary budget for 1995, slashing the shortfall to 3
    percent of Hungary's gross domestic product (GDP).  The 1995
    budget, passed last year, called for a deficit totalling 5.4
    percent of the GDP.  The government said the first quarter
    deficit was caused by the instability of revenues which were
    5.2 percent behind target. Expenditures were on target.  Some
    parts of the government's March 12 austerity package are
    expected to have an impact only in the second half of this
    year.



BUSINESS FEATURE
----------------

**POLAND'S MARKET RALLY HIGHLIGHTS ECONOMIC STRENGTHS**
    Interview with  Nick Wergen, emerging market analyst, Smith New
    Court, London.
    By Nancy Marshall

    If this week is anything like last week on the region's stock
    markets, Poland is the place to be.

  Wergen: It's certainly been a good week for Poland.  The Polish
    market's up by 16 percent for the week.  Hungary and Czech doing
    nothing in comparison.  A market observation is, it's the
    beginning of the second quarter. international institutions
    are prepared to take more risk.  The first quarter was dominated
    by Mexico.  Now that the first quater is out of the way we can
    spread the risk slightly.  I think Poland has benefited from
    that in terms of volumes.  Volumes are even up in Hungary and
    you can look at Turkey in the same manner.

  CET: There really was a big rally on the Warsaw Stock Exchange.
    Do you think this signals the end of of the year-long bear
    market?

  Wergen: I'm not sure whether I want to get too carried away with
    it just yet.  We could see the market remaining strong at the
    beginning of next week.   Whether that'll be maintained I'm
    slightly dubious.  There has been new international money
    coming in, but nothing has really changed yet.  Whether this
    triggers the snowball and a market rally I'm not sure.  I'm
    sure you'll see some profit taking instead.

  CET: It was also reported earlier this week that the National
    Bank of Poland will free the zloty exchange rate, probably
    later this month, although the zloty will still not be fully
    convertible.  How will this affect foreign investment?

  Wergen: I think it really shows Poland has an independent
    central bank.  It's an internationally recognized currency now
    and that helps.  I'm not sure we'll move toward convertability
    in the full western sense of the word.  We could rather see
    a broadening of the bands or the introduction of commercial
    banks into the equation.  I think it does show that the zloty
    can be trusted and that's quite important given the risks
    we've learned in emerging markets so far this year.

  CET: Poland also announced this week that five commodity
    exchanges will be established.  Are these likely to provide
    good investment opportunities?

  Wergen: It's slightly early to look at the international
    appetite for Polish commodities, but certainly anything in
    terms of the development of a capital market infastructure,
    be it commodities, stocks, debt, will always help in Poland
    becoming an emerged market rather than a pre-emerging
    market.

  CET: Poland isn't the only Central European country where there
    is talk of opening new exchanges.  A third exchange may open
    in the Czech Republic.  Do you think that's viable?

  Wergen: I would hope it'll be opened with more aplomb and
    planning than we saw with the opening of the second wave
    stocks between the RM-System and the Prague Stock Exchange.
    There's plenty of opportunity to purchase stock anyway in
    Czech.  I'm not sure whether the opening of a third market
    will lead to new money coming in.

  CET: The Prague Stock Exchange celebrated its second birthday
    this week.  What are its prospects in the near future?

  Wergen: It wasn't a particularly jolly birthday party given the
    performance of the Czech market over the past six months, and
    given the prospects for the market to continue correcting to
    below the 400 level.

  CET: Turning to Hungary, the Dutch bank, ING, says it's no
    longer interested in purchasing Budapest Bank.  Earlier,
    Credit Suisse also pulled out of the running.  What do you
    think the problem is?

  Wergen: In both cases it could be more to do with internal
    concerns.  For Credit Suisse and ING rather than problems at
    Budapest Bank.  I think what it does highlight is, if you're
    looking at Hungary, you need to be concerned as to whether the
    privatization revenues are going to come in on target for the
    year, and clearly there is a requirement for them to do so
    if we're going to meet International Monetary Fund
    requirements on things like the budget deficit.

  CET: Do you think that the problems in privatizing Budapest Bank
    will affect the investment climate in Hungary?

  Wergen: The investment climate in Hungary is fairly static
    anyway.  Interest is going to come into the bond market first
    anyway.  The bond market in Hungary is getting sold off almost
    to the extent of the Mexican market.


ANALYSIS
--------

**ECONOMIC REFORM MEANS SOCIAL SACRIFICE**
    Interview with Paul Rayment, UN Economic Commission for Europe.
    By Duncan Shiels

    Public discontent in Central Europe over high unemployment and
    decreased social benefits may be hard to contain without help
    from the west.  That's one conclusion from a new United
    Nations report on the social costs of Central Europe's
    transition to capitalism.  According to the report published
    last week by the UN Economic Commission for Europe, Central
    Europe's economies may at last be through the worst of the
    so-called transitional recession.  But the UN is warning that
    the cost of economic recovery may be high in terms of social
    unrest.  Rayment is the author of the UN report, and he
    tackles the question of privatization and explains how
    attitudes among the region's governments have changed since
    the end of communism.

  Rayment: In '89, early 1990, I remember a Polish minister saying
    "the best industrial policy is no industrial policy," and that
    was the optimistic climate of the time.  You know, you just
    get rid of these things as quickly as possible and the private
    entrepreneurs will take over all the decision making and
    everything will work out fine.  Well, it didn't work like
    that.  It proved very difficult to sell.  You have to start
    breaking up enterprises, you've got to find managers and
    you've got to set up new corporate legislation and so on.  I
    mean the crucial thing with this is to change the incentive
    structure facing managers and the labor force, and you don't
    necessarily have to go full hog and push it into the private
    sector before you do that.  There are some intermediate stages
    where you put the enterprises at least at arm's length from
    the governments and avoid day-to-day political interference
    and give the enterprise time to adapt to a commercial
    environment and let the management learn things.  There are
    intermediate stages and I think these are being adopted
    through Eastern Europe, "force majeur," because one comes up
    against very difficult problems which can't be solved
    overnight.

  CET: Coming to one of the main points of the report, which is
    the social cost of all the changes: now, while there is
    cautious optimism that the corner's been turned economically,
    there is some worry about social instability, unemployment.
    How do you see the immediate future?  Do you see a real danger
    of social instability?

  Rayment: The recovery in the transition economies is obviously
    benefitting a lot of people.  If you're young and skilled, and
    have a good university education and speak several languages,
    you'll find a very nice job probably in a foreign financial
    company, and it's an exciting time to be there.  But of course
    if you're middle-aged and unskilled, if you're a pensioner
    or a civil servant, and sometimes doctors in hospitals and
    so on, of course life is getting very difficult indeed.  And
    I think there are increeasing numbers of political leaders
    in Eastern Europe who are worried about that, and to some
    extent the electoral successes of the so-called post-Communist
    parties over the last few years at least is a signal, a
    warning signal, that the social costs of the transition are
    high and are a source of concern.  There are positive signs
    and one shouldn't lose sight of that.  Output is recovering,
    and for us, more importantly, the fixed investment has risen
    last year and there've been very large increases in investment
    in machinery and equipment in Poland, Slovenia, the Czech
    Republic and Hungary.  And this is a sign that the
    restructuring and the rebuilding process is under way.  But
    all that is having costs.  The unemployment rate is likely
    to stay high and probably rise for some time to come.  It's
    a question of the distribution of the benefits of growth and
    their timing.  And that seems to me is a very difficult
    problem for politicians, but that's what politicians are there
    for, to deal with that sort of problem.  But I do think they
    can be helped in easing the strain by a more generous program
    of official assistance from the Western countries.

  CET: What about conditons that financial institutions such as
    the International Monetary Fund and the World Bank attach to
    loans?  Do you think they're too stringent?

  Rayment: In the context of what I've been speaking, I think one
    can say they're too stringent.  And this bearing down on public
    expenditure very hardly.  But then they're subject to their
    rules and they often don't have much option.  Our view here
    has been you need a sort of rather broader context for
    official assistance and to go outside of the IMF framework,
    if you like, and to take a much longer view and to think in
    longer terms at the transition process.  It's not something
    that's going to take place in 18 months or two years, it's a
    much longer process.  Probably we're talking of at least a
    decade or more.



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Reposting is supported by Hungarian Human Rights Foundation News
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Tuesday, 11 April 1995
Volume 2, Issue 72


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

**EBRD SUMMIT UNDERWAY IN LONDON**
  Hungary was one of the topics of discussion at the EBRD's
  annual general meeting yesterday.  United States
  Undersecretary for International Affairs Lawrence Summers told
  the meeting's first planning session that Hungary's trade and
  budget deficits need to be reduced.  He also said the country
  needs to speed up reform and privatization so the business
  community will depend less on the government.


**HUNGARIAN BANK OFFICIAL REJECTS MEXICO COMPARISONS**
  Also, on Sunday in London, Hungarian Central Bank Vice
  President Frigyes Harshegyi assured investors that the
  country's financial troubles do not parallel Mexico's.
  Harshegyi said unlike in Mexico, Hungary's foreign investment
  has come in the form of long-term corporate deals, rather than
  securities.  Mexico began the year with a financial crisis as
  its stock market and currency crashed, serving as a warning
  sign for all investors interested in global emerging markets,
  especially in countries like Hungary which are heavily in debt
  and have a weak currency.


**HUNGARIAN MOBILE PHONE CO. GETS LOAN**
  The Dutch-owned ING Bank is leading a group of 15 western banks
  who are joining forces in loaning a $115 million to the
  Hungarian mobile phone company Pannon GSM.  The bank plans to
  call in the loan in seven years, with the first payment due in
  1997.  Pannon will use the money to expand its Hungarian
  network.  ING said the loan is the biggest ever to a Hungarian
  firm without government guarantees.


**CENTRAL EUROPEAN TREATY GROUP CONSIDERS NEW ADDITIONS**
  The Central European Free Trade Agreement, or CEFTA, may admit
  new members this year.  That's according to Czech Industry and
  Trade Minister Vladimar Dlouhy, who opened a two-day CEFTA
  meeting in Brno in the Czech Republic.  Admission will be
  considered for Romania, Bulgaria, the Baltic states and
  Slovenia when CEFTA's prime ministers return to Brno this
  fall.  CEFTA currently includes the Czech Republic, Slovakia,
  Hungary and Poland.  Slovenia already is considered an
  observing member of the group.



BUSINESS FEATURE
----------------

**BUDAPEST RESIDENTS SEARCH FOR ELBOW ROOM**
  By David Fink

  Since 1990, there's been a suburban construction boom around
  Budapest.  About 3,000 units have been built per year as
  Hungary's new middle class seeks out clean air and green
  grass.  But high interest rates and new zoning regulations
  could stifle growth and prevent the development of a
  western-style suburbia here.

  Conductor Andras Toth has struggled for years to provide a
  decent living for his family.  Now he'd like to give them the
  good life in the suburbs: a yard, more room for the kids, and
  even a garage for the family car.  But when Toth found his
  dream home in one of Budapest's new suburban developments, he
  couldn't afford it.

  "Our desires didn't match the financial possibilities. The bank
  loans really had a very high interest 28 or 30 percent."

  Amnon Bor knows all about that problem.  He's in charge of
  building two suburban developments for Alef Alef Projects, an
  Israeli company.  Nearly 1,000 potential customers have
  visited the neighborhoods, but not one person could afford the
  high interest rates banks are charging.  But interest rates
  aren't the only problem.  When you consider the 25 percent
  value added tax, and the limited government aid for home
  buyers, Bor said Hungary is a bad place to build housing.

  "The country is in need of a lot of apartments and if the policy
  will not be changed very quickly all of the foreigners will
  leave  the country.  They will not invest one cent here
  because it is suicide."

  Bor said local banks, which are still state run, are also leery
  of putting money into housing developments.  Andrasne Bordas
  disagrees.  She's head of the home loan department at OTP
  bank, the largest provider of home loans in Hungary.  Bordas
  said her bank is more than happy to give loans to developers.
  And she said the bank's high interest rates for loans to home
  buyers, 27 percent and 29 percent simply reflect basic economics.

  "The main cause is the inflation.  When there was no inflation
  in Hungary the rate on this type of loan was 3 percent."

  Bordas also said an increase in the interest rates for home
  loans is likely soon.  To make matters worse for developers,
  the city of Budapest wants to sharply reduce suburban growth
  and channel development toward the city's transition zone, a
  decaying industrial area in-between downtown and the green
  belt.  Istvan Schneller is the city planner.

  "The capital always likes to go to green field areas where it
  can find the territory which has no problems, no ownership
  rights problems, no environmental problems.  Therefore they
  step over transitional zone, which stays in Budapest and it
  goes in the direction of a slum."

  Schneller said slums can be prevented if Budapest and
  surrounding towns create a region-wide planning council to
  develop a comprehensive master plan.  He said the council is
  in the suburbs' best interest since uncontrolled growth puts a
  strain on their ability to provide municipal services, like
  water or garbage collection.  Schneller said legislation to
  form the council will be considered this year in Parliament.
  If the council is created, developers may find much of the
  green belt off limits.  But Budapest residents will still need
  new homes and apartments.  If developers want to meet that
  demand, they'll  probably find themselves involved in  urban
  renewal.



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* CET On-Line - copyright (c) 1995 Word Up! Inc. 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
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Wednesday, 12 April 1995
Volume 2, Issue 73


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

**OSCE APPOINTS LEADER FOR CHECHEN MISSION**
  The Organization for Security and Cooperation in Europe, or
  OSCE, has appointed a Hungarian career diplomat to head its
  permanent mission based in the Chechen capital of Grozny.  The
  OSCE's special envoy, Hungarian Istvan Gyarmati, yesterday
  confirmed that the OSCE's permanent Council in Vienna approved
  the appointment of Sandor Meszaros as head of its Assistance
  Group.  Meszaros received a six month mandate to head a six
  member group, whose other members will be selected later.  The
  group's duties will include the promotion of a political
  settlement, the restoration of local organs of authority and
  the promotion of the respect for human rights in Chechnya.
  Meszaros said it'll be able to travel freely with two armoured
  cars and a Land Rover.  Meszaros added that he hopes to start
  work in a week or two.


**PARTY WANTS TO CHANGE ROLE OF HUNGARIAN PRESIDENT**
  Hungarians could get a chance to vote on whether they want to
  directly elect their president.  Yesterday the country's
  Electoral Commission verified more than 100,000 signatures
  collected in a campaign for direct presidential elections
  headed by the opposition Smallholders Party.  Commission
  official Attila Peteri said the Smallholders actually gathered
  157,000 signatures.  Under Hungary's constitution, a
  referendum must normally be called if 100,000 voters sign
  petitions requesting one.  Peteri said all of the signatures
  have been verified and presented to Parliament.  Right now,
  Hungarian presidents are elected for five-year terms by
  Parliament on the prime minister's recommendation.  They have
  largely ceremonial functions, but can veto legislation.
  Current President Arpad Goncz has rarely used that right.  The
  Smallholders Party wants to increase the president's power,
  but haven't specified how.  They said yesterday they'll
  nominate their leader Jozsef Torgyan as head of state.  The
  ruling Socalist Party said it's going to ask the
  Constitutional Court to rule on the validity of the
  referendum.


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

**ING BACK IN BID FOR BUDAPEST BANK**
  The Dutch-owned ING Bank may be interested in Budapest Bank
  after all.  Earlier this month, ING said it was bowing out of
  Hungary's planned Budapest Bank privatization because it had
  just bought the ailing British merchant bank Barings. But, ING
  said it's renewed talks with Hungarian officials about taking
  a stake in the bank.  Still, an ING spokesman said the Dutch
  bank's highest priority remains Barings. Budapest Bank is
  Hungary's sixth largest, and is the next bank set to be
  privatized.


**HUNGARY'S SLOW MARKET ATTRIBUTED TO SLOW ECONOMIC PROGRESS**
  Hungarian share prices were flat yesterday in light trading on
  the Budapest Stock Exchange.  The BUX index ended at 1,261 up
  2.14 points.  Investors said economic uncertainty is still
  restricting activity.  Analysts don't expect major changes on
  the market for the rest of the week.  A report by Bank
  Austria-Girocredit said investors are anxious for Hungary to
  pass a privatization law.  The privatization bill is currently
  making its way through parliamentary committees, and is
  expected to be up for a vote next month.


SURVEY
------

**MINORITY RIGHTS CHALLENGE SLOVAKIA'S WESTERN AMBITIONS**
  By James Drake

  The prime ministers of Hungary and Slovakia met last month in
  Budapest to sign a basic treaty which included provisions on
  the treatment of the Slovak minority in Hungary and the
  Hungarian minority in Slovakia.  The document guarantees
  minorities certain rights and is intended to lay the
  foundation for a wider agreement which will set down
  constitutional guarantees for minority communities.  But while
  the document was hailed in Budapest as a landmark, across the
  Danube Slovakia's minorities are cautious.

  At a vocational school in the Slovak town of Dunajska Streda,
  right on the border with Hungary, the students are all
  citizens of Slovakia.  But most are ethnic Hungarians, whose
  first language is Hungarian.  It's natural, then, that when
  hanging out during lunch break, they should chatter to each
  other in their native tongue.  Most classes here are also
  taught in Hungarian.  But if the school's headmaster, Mirslav
  Simko, had his way, the language of the classroom would be
  Slovak.  Unlike the majority of his students, Simko is not
  ethnic Hungarian. He says the newly signed minority treaty
  between Hungary and Slovakia is all very well.  But he and his
  pupils have to live in the real world.

  "I'm sure in Britain, your minorities are taught in the language
  of the majority.  Mr. Meciar can say what he likes, but when
  my pupils leave here, they'll still live in Slovakia, they'll
  have to make a living in Slovakia.  So they have to learn to
  live and work in our language."

  Last month Simko announced that all classes, except for
  Hungarian and Hungarian literature, would be taught in Slovak.
  He only backed down after parents and teachers called a public
  meeting and demanded his resignation.  Even so, what Simko
  proposed was perfectly legal.  True, most of the Hungarian
  communities along the Danube border, where the majority of
  Slovakia's half-million strong Magyar minority lives, have
  their own schools.  But that's not a right which is guaranteed
  under the Slovak Constitution.  The three main parties
  representing the Hungarian minority in Slovakia have pledged
  to fight to ensure that the right to native tongue tuition
  will be one of the guarantees enshrined by the new bilateral
  agreement currently being prepared by the Hungarian and Slovak
  governments.

  But although the Hungarian parties are nominally part of an
  alliance, each in fact has its own very different priorities.
  One of them actually has a seat in the ruling coalition
  government and is therefore bound to toe the government line.
  Many observers claim Prime Minister Vladimir Meciar and his
  HZDS Party, the senior partner in the ruling coalition, are
  following a conscious strategy to divide and rule in their
  ethnic policy.  Last year, for example, Meciar branded the
  country's estimated 300,000 strong Romany, or Gypsy,
  population "socially unadaptable," and "mentally backward."
  He even advocated cutting family allowance benefits to
  Romanies in a bid to cut their birth rates.  Yet in the run up
  to the last election, Meciar's HZDS gave money to the campaign
  funds of the more conservative Romany parties and even sent
  HZDS recruiters into Romany communities.  Karel Bat'a is a
  Romany activist leader in the central Slovakian town of
  Kocise.

  "The Romanies are hopelessly divided and that's very dangerous.
  It seems to me, there should be one unified Romany voice.  The
  problem is that, like every other nationality or group of
  people, there are a variety of different shades of opinion.
  The government is playing on those differences in order to
  split us.  It's actually very clever what they're doing."

  Plenty of other minority leaders don't know whether to deplore
  or applaud Meciar's tactics.  Juraj Medved is an ethnic
  Ukranian businessman and member of the local council Hummene
  in eastern Slovakia.  That area of the Carpathian Mountains
  was once part of Ukraine.  Before 1989, Medved remembers,
  nationalist feeling was kept in check by full employment and
  high wages in the region's heavy industries.  Now, though,
  some of its inhabitants are looking eastward.  At the start of
  the year, Meciar allowed east Slovakia to join the Carpathian
  Euroregion, an organization designed to foster economic ties
  between the border regions of Poland, Ukraine, Romania,
  Hungary and Slovakia.  A month later, though, Meciar rescinded
  Slovakia's membership.  According to Medved, these conflicting
  signals make Meciar a tricky man to do business with.

  "I think the biggest problem of this government is that it's
  unpredictable.  If they were more like the previous regime
  everyone would know how to react.  I don't know what to expect
  and this is perhaps the worst thing."

  It could be, though, that far from playing hard to get, Meciar
  is simply redefining his political goals.  Like all the other
  Central European countries, Slovakia is aiming for early
  membership in the European Union, NATO and other western
  organizations.  Any hint of a move eastward would have sent
  the wrong messages to Brussels and Washington.  Likewise, the
  shifts in Meciar's Romany and Hungarian policies may be
  designed to placate western critics of Slovakia's human rights
  record.  Whatever Meciar's motives, though, opinion polls do
  show that most Slovaks want to join the EU and NATO as soon as
  possible.  As for Slovakia's minority groups, anything that
  makes their lives a little easier is all right by them.



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

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  This publication may be freely forwarded, archived, or
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  this notice, and all other information contained in this
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OMRI DAILY DIGEST
No. 74, 13 April 1995

BALTIC STATES, EU INITIAL EUROPEAN AGREEMENTS. Alan Mayhew, head of the
European Commission's Foreign Affairs Directorate, and representatives
of Estonia, Latvia, and Lithuania initialed the so-called Europe
Agreements on 12 April in Brussels, Western agencies reported. The
accords must now be approved by the European Parliament, the 15 national
parliaments of the Union, and the three Baltic parliaments. Under their
terms, the Baltic States will join Poland, Hungary, the Czech Republic,
Slovakia, Romania, and Bulgaria as associate EU members. Compared with
agreements signed by the six Eastern Europe countries, the accords
between the EU and the Baltic States are more ambitious as regards the
timing of full membership. The Commission statement issued the same day
says: "The transition period of the agreements will end at the latest on
31 December 1999 instead of 2004 or 2005." -- Saulius Girnius, OMRI,
Inc.

SLOVAK PRESIDENT SIGNS VETOED LAWS. Michal Kovac on 11 April signed
three laws that he vetoed earlier this year and the parliament recently
passed again, Pravda reported on 13 April. The laws are on the residence
of foreigners in Slovakia, on the organization of ministries and other
central bodies of the state administration, and on the Slovak
Information Service. Hungarian Christian Democratic Movement chairman
Bela Bugar, at a press conference on 12 April, expressed fear about the
possible use of the SIS to discredit opposition politicians. The party's
spokesman noted that the HCDM wants the opposition to unite to send the
laws to the Constitutional Court for review. -- Sharon Fisher, OMRI,
Inc.

SUZUKI TO SUPPLY EUROPE FROM HUNGARY. Suzuki Motors President Osamu
Suzuki told a news conference on 12 April that his firm has stopped
exporting cars from Japan to Europe and will sell cars assembled in
Hungary through the European dealer network, Western news agencies
reported. He said the change is prompted by high European import duties.
To meet the demand of the European market, Magyar Suzuki will double its
output in 1995 to 40,000 vehicles and increase its work force from 840
to 1,000. The parent firm will invest 2-3 billion forint ($17-$25
million) this year to finance the expansion. Suzuki said his firm plans
to raise the Hungarian content in its vehicles to around 80% from the
current 52% and increase the Western European content, now about 11%. --
Edith Oltay, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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Thursday, 13 April 1995
Volume 2, Issue 73


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

**NOMURA LIGHTENS UP ON HUNGARY'S FOTEX -- A BIT**
  London's Nomura Research has changed its tune a bit on the huge
  Hungarian retailer Fotex.  It said Fotex shares should have
  hit bottom at their current $1.25 share price.  Nomura
  recommended Fotex as a buy for large investors, but only if
  they're already Fotex shareholders.  But the analysts said
  small retail shareholders should sell.  Earlier this year,
  Nomura recommended against buying Fotex shares, because it
  said the company was too diverse and, as a domestic retailer,
  it would suffer under the country's new austerity plan.  Since
  then, Fotex shares have dropped by about $1.  Fotex has
  disputed the Nomura report.


**HUNGARY TO SELL OFF FOOD COMPANIES TO FARM CO-OPS**
  Hungary's State Property Agency will sell shares in the food
  industry to agricultural cooperatives for compensation
  coupons.  The agency hopes this will speed up sales of key
  food processing firms.  The cooperatives have a glut of the
  coupons, distributed as compensation for land seized under
  communism.  The coupons were originally designed as a kind of
  privatization currency, but last year the government said
  it'll only accept them in small privatization deals.


**SUZUKI LEAVES THE DRIVING TO HUNGARY**
  Japan's Suzuki Motors corporation announced yesterday that it
  has stopped exporting cars from Japan to Europe, turning over
  production of its entire European market to itsHungarian
  division, Magyar Suzuki.


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

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  This publication may be freely forwarded, archived, or
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  this notice, and all other information contained in this
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