17 JANUARY 1995
Volume 2, Issue 12


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

**Sour Grapes**
  Hungary's dismissed privatization minister says he got the best
  offer he could for the HungarHotel chain. Ferenc Bartha lost his
  job last week over the botched deal. Bartha says the entire 14-
  hotel chain was valued at between 100 and 120 million dollars.
  So, he contends American General Hospitality's offer of 57 and a
  half million for 51 percent of the chain was above Hungarhotels
  market value. The deal fell through when the government said it
  wanted 67 million dollars for the 51 percent stake. Bartha also
  disputes reports that the government has received better offers
  for the chain.


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

**Budapest Faces Ecoomic Crossroads**
  By David Fink in Budapest

  Hungary's 1995 budget was supposed to signal the economic
  direction of the new Socialist-Liberal government. But the
  budget has left many observers wondering where Hungary is
  headed. It freezes social spending and cuts corporate taxes,
  while at the same time ending tax breaks for investment and
  leaving Hungary with an enormous deficit. CET's David Fink
  reports.

  With free market proponent Laszlo Bekesi at the Finance
  Ministry helm, it was expected the 1995 budget would
  contain painful cuts in government spending. Hungary faces
  crushing budget and trade deficits and hasn't qualified for
  International Monetary Fund assistance in 2 years. After
  months of bargaining on the budget table, the final product is
  less stringent than the IMF says is needed. The budget which
  passed Parliament last month calls for spending more than
  $17 billion while collecting about $14.5 billion in revenues,
  leaving a deficit of $2.5 billion. That's $400 million lower
  than 1994. But many argue that this projected cut in the
  deficit is unrealistic. According to Laszlo Urban, chief
  economist of the opposition Young Democrat Party, the
  deficit might grow in 1995 unless sweeping reforms are
  made.

  "I don't agree with the evaluation of the Minister of Finance
  and some other people close to the government that just
  because they were able to resist some of the demands on the
  expenditure side to keep up with inflation. It doesn't mean
  they've done the necessary turnaround."

  Urban says Hungary's generous communist-era welfare
  system, which consumes 40% of this year's budget, should
  keep many of these entitlements at last year's levels. But
  Urban argues that there isn't enough supply to meet demand.

  "In Hungary, 4 million people can't earn enough revenue to
  provide universal health care for 10 million people, pensions
  for almost 3 million people and finance all the other
  dependents."

  In fact, the country is running in the red at all levels.
  Interest on the national debt alone is 30% of the budget. If
  Hungary didn't have to make interest payments, it would have
  a budget surplus. Finance Ministry State Secretary Tibor
  Draskovics says the government wants to tackle this problem
  by reducing interest.

  "What we can do is fight against inflation. If we have a lower
  inflation rate we have lower interest rates and less debt
  service."

  Draskovics adds that this year's debt could drop from 7% of
  the gross domestic product to 5%, meeting IMF standards for
  funding. Experts outside the government say that's not
  realistic. Judit Bartha, an analyst with the GKI economic
  research company, says no matter what, this year's budget
  won't meet IMF requirements. To make matters worse, the IMF
  is also demanding that Hungary reduce it's entire debt, which
  was about $3.7 billion last year. It also wants to see a
  concrete plan for economic reform. Bartha says IMF
  recognition is essential if Hungary wants to boost foreign
  investment as it did in the early 1990s.

  "It was very important regarding the name and fame of
  Hungary in the international press and other financial
  institutions."

  Bartha adds, the current budget is both good and bad for
  foreign investment. On the other hand, it slashes corporate
  taxes in half, to 18%. But it also taxes dividends paid outside
  the country by 21% and raises the basic value added tax by
  2%. Plus eliminating many long term tax breaks
  and tax holidays granted by the previous government. But
  most experts say it's not Hungary's budget that will influence
  foreign investment, but privatization. The Socialists expect
  $1.3 billion in privatization revenues this year. Opposition
  parties say that's too optimistic. But as long as the
  government's plans on privatization remain murky so too will
  the long term economic picture.



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N  E  W  S  L  E  T  T  E  R

Republic of Hungary                             Budapest, 1394 . 423
Ministry of Foreign Affairs                     Telephone:36(1)156-8000
Press Department                                        Telefax: 36(1) 156-3801
9/1995.                                 Budapest, January 16, 1995

Hungarian Press Review


        Budapest, January 13 (MTI) - The following is a summary of articles
carried on Friday by the Hungarian national dailies:

        - Nepszabadsag - The countries of Central and Eastern Europe must
become members of the European Union because without them the organization
would remain only a torso, German Foreign Minister Klaus Kinkel said in his
contribution to the paper. (Page 7)

         - Uj Magyarorszag - The Hungarian-language Canadian newspaper "New
Bridge-Head" reported - quoting Budapest sources - that 200,000 Jews, mainly
from Ukraine, are to be resettled in Hungary. In connection with the news,
former
Prime Minister Peter Boross told the paper that although he had visited Israel
as
minister of the interior, he had no knowledge of anybody discussing anything
like
that with the Israelis. Gabor Deak, press secretary at the Israeli Embassy,
termed
the news as completely unfounded.
(Pages 1 and 11)

* * *
        
        Budapest, January 13 (MTI) - All papers dealt with the governmental
decision yesterday on the HungarHotels affair. The government asked the State
Property Agency (SPA) to close this phase of the sale of the 15 hotels, and
term it
unsuccessful.

        - Nepszabadsag - The real test will be when it is discovered if use of
the
hotels as intended by the government is indeed possible, runs a commentary on
page 3.

        - Magyar Hirlap - The head of the Government Supervisory Office said th
e
problems began with the bad privatization tender. (Page 3)

        - Nepszava - "Government commissioner fails in HungarHotels deal" reads

a headline on page 1.

        - Magyar Nemzet - The views of the political parties on the departure o
f
government commissioner Ferenc Bartha are carried on page 5.

        - Uj Magyarorszag - Interviews with leading officials of the former
government in charge of privatization are published on pages 1 and 4.

        - Kurir - With Bartha gone, the privatization bodies are beheaded, the
paper states, adding that the current privatization law is inappropriate.
(Page 5)

U.S., Hungary Hold Business Talks

        Cleveland, January 13 (MTI) - American readiness to invest in Hungary i
s
set to increase even further, with a growth in trade, Hungary's Minister of
Industry
and Trade told Hungarian reporters in Cleveland today after his talks with U.S.
Secretary of Commerce Ronald Brown.

        Laszlo Pal is leading a business delegation at an investment conference

organized under the auspices of President Clinton's proposal to increase
American presence in the East European economies.

        The U.S. is Hungary's fifth largest trading partner, while it ranks fir
st
among foreign investors here.

        Regarding the aims and importance of the conference, Brown told
journalists that the United States would like to promote the stability of
Central and
Eastern European economies mainly by boosting trade and investment links. He
particularly stressed cooperation between small ventures. The U.S. supports the
bid of countries of the region to join the European Union, but it could not
accept
the idea of American traders being adversely affected as a result of this,
Brown
said. He believed that NATO's expansion might provide further support for
economic relations by strengthening cooperation.

Telecommunications Satellite for Hungary in 1997


        Budapest, January 13 (MTI) - Hungary may become a leading
telecommunications power in Eastern Europe by launching MAGYARSAT and
leasing out its channels. The government decided at its Thursday session to
begin
the Hungarian satellite programme.

        Government spokeswoman Evelyn Forro said the aim of the MAGYARSAT
scheme is to create a comprehensive and unified telecommunications service
network with the help of a Hungarian regional communications satellite. Its
channels will be suitable for the distribution of radio and television
programmes,
transmission of telephone calls and the meeting of governmental, individual and
business needs.

        The Israel Aircraft Industries and Hungary's Antenna Hungaria Co. will
set
up a business organization to finance the programme, arrange for foreign
capital
investment, sell satellite services and operate the satellite. Its launching is
expected to cost USD 160 million.

        According to plans, two satellites with identical technical parametres
will be
sent up in the same geostatic course. The Israeli AMOS would begin operation
early next year and MAGYARSAT in 1997, serving as reserves of one another.

        In the first half of next year, future MAGYARSAT users will have access
 to
eight channels ensured by AMOS, which will not seek business partners in
Eastern Europe until the full capacity of MAGYARSAT is utilized.

        The government has commissioned the finance minister and the minister
of transport, telecommunications and water management to hold talks with the
Israeli partner on the launch of the programme.


Duma Ratifies Hungarian-Russian Basic Treaty


        Moscow, January 13 (MTI) - The Duma, the Lower House of the Russian
Parliament, has ratified the Russian-Hungarian basic treaty on friendship and
cooperation, concluded during a visit to Moscow by then Prime Minister Jozsef
Antall on December 6, 1991.

        The treaty, including a preamble with a clause condemning Russian
intervention in Hungary in 1956, was ratified by the Duma this afternoon.

        The treaty was now approved by 230 of the 280 deputies present. For the

treaty to be ratified, 226 Duma votes were required.

        Earlier, the Supreme Council, the predecessor to the Duma, postponed
ratification because of the clause declaring both countries' commitment "to do
away with the heritage of totalitarianism, especially condemning the
intervention
that crushed the democratic efforts of the Hungarian people in 1956."

        Previously, some Russian MPs argued that Russia should not be blamed
for the decisions of the then Soviet leadership.

        This Friday the Duma saw a similar debate, with Viktor Ilyukhin, a
communist MP heading the Duma security policy committee, saying, "since
Hungary did not apologize for cooperating with fascist Germany, Russia should
not apologize for the 1956 events either."

        Vladimir Lukin, Chairman of the Duma's foreign policy committee, said t
hat
Russia did not make any apology in the basic treaty, only condemned the 1956
intervention. Lukin believes the Chechen crisis and Russian army activity in
the
Caucasus have prompted Central European countries to step up their efforts to
join NATO.

        Hungarian Ambassador to Moscow Gyorgy Nanovfszky welcomed, after
three years, the basic treaty finally being ratified. The treaty, he said, may
further
strengthen already good bilateral ties.


Pal Meets Holbrooke in Cleveland


        Cleveland, January 13 (MTI) - Hungarian Minister of Industry Laszlo Pal
,
who is in Cleveland at an international conference on trade and investment
opportunities in Central and Eastern Europe, had talks with Richard Holbrooke,
U.S. Deputy State Secretary in charge of Canadian and European affairs, today.
The talks focused on economic affairs.

        Pal explained the objectives and prospects for development of Hungary's

economy. They also discussed talks between the International Monetary Fund
and Hungary.

        Holbrooke indicated that he would soon come to Hungary to attend a
regional conference.


Foreign Minister Welcomes Russia Ratifying Basic Treaty


        Budapest, January 13 (MTI) - Hungarian Foreign Minister Laszlo Kovacs
welcomed as a "positive development" that the Russian Duma on Friday had
ratified the Hungarian-Russian basic treaty signed over three years ago.

        In the inter-governmental and inter-parliamentary talks of the past few

years, Budapest pressed for Russia to ratify the treaty, and followed with
concern
the related debates in Russia.

        Kovacs said that the ratification of the basic treaty created favourabl
e
conditions for the further development of Hungarian-Russian relations.





Smaller, More Modern Hungarian Army to Use Fewer Conscripts


        Budapest, January 13 (MTI) - Plans to cut compulsory military service f
rom
12 to 9 months would not only help Hungary's financial shortage and the wishes
of
Hungarians, but also emulate advanced European countries where the army staff
makes up a mere 0.8 per cent of the population, Hungarian Defence Minister
Gyorgy Keleti told journalists in Zalaegerszeg, W Hungary, today.

        The minister said, "Hungary plans to maintain a smaller, 80,000-strong
army, develop it in line with the technical standards of NATO, raise the
efficiency
of military training, and introduce a more advanced system of command. All this
can be implemented only gradually. In the long term, by 2005 to 2010, it would
be
desirable for the country to establish a professional army."

OSCE Chairman-in-Office Reacts to Criticism from Belgrade


        Budapest, January 13 (MTI) - "I am convinced that, in my capacity of
Chairman-in-Office of the Organisation for Security and Cooperation in Europe
(OSCE), I am obliged to raise my voice if the basic principles of the
organisation
are violated anywhere," Hungarian Foreign Minister Laszlo Kovacs told MTI
today.

        "The brutality applied by the Serbian authorities against 200 Albanians
 of
Kosovo is not at all justified by the arguments used by the Serbs. Their
mistreatment and imprisonment constituted a violation of human rights. As the
OSCE member states do not classify such cases as internal affairs, the Serbian
position that the issue is their internal affair is inadequate," he said.

        Kovacs spoke after the Belgrade Foreign Ministry called one of his rece
nt
statements on Kosovo as unfounded and malicious.

        Kovacs added, "the regrettable event and the debate afterwards have onl
y
confirmed my view that OSCE observers should return to Kosovo, Sanjak, and
Vojvodina as soon as possible."

Hungarian Press Review

        
        Budapest, January 14 (MTI) - Nepszabadsag: French Minister in charge of

European Affairs Alain Lamassoure, the current president of the European
Union's Council of Ministers, gave an interview to the daily's Paris
correspondent,
prior to his forthcoming visit to Budapest. Lamassoure said the presence of
Central and Eastern European leaders at the Essen summit of the EU was an
example of the joint commitment which they show for the European integration of
the associate countries. During the French EU presidency, talks will be held
every
month between the leaders of the foreign affairs, internal affairs, economic,
finance and cultural ministries, and representatives of the associate states
will
also be attending.

        Uj Magyarorszag: The Inter-Europe Bank is the only financial institutio
n in
Hungary today whose shares are on the stock market. The bank thus has to stand
the test every day through its share rates, and its 1994 result shows it has
been
successful. Its pre-tax result was more than HUF 1.2 billion. Thanks to its
conservative crediting policy, it has safeguarded the good quality of its
portfolio,
has increased its risk reserves and its capital correlation index ranged
between 18
and 21 per cent in 1994.

* * *

        Budapest, January 14 (MTI) - Magyar Hirlap: According to the
administrative State Secretary of the Prime Minister's Office, Elemer Kiss, the
working order of government makes it possible for ministers to pass decisions
without voting on these. He said that in most cases there is no genuine debate
about the reports. At such times, the prime minister sums up his decision
proposal, and views differing from this are entered in the minutes. The State
Secretary denied reports whereby the prime minister will have his own press
office, but said it may be possible for one single person to deal exclusively
with the
prime minister's press work.


        Magyar Hirlap: The agreement on building a new passenger terminal at
Budapest's Ferihegy II. Airport is ready for signing, all that is needed is
approval
from the government. The Ministry of Transport is not aware that the decision
passed last summer, when the Canadian Huang-Danczkay investment group won
the tender, would be re-examined. The project would cost HUF 10 billion, and
financing was accepted in full by the Canadian firm. The contract can be signed
after the government gives its approval.

Hungarian Delegation Returns from Cleveland


        Budapest, January 15 (MTI) - Hungarian Minister of Industry and Trade
Laszlo Pal evaluated the Cleveland trade and investment conference as extremely
successful.

        The Hungarian delegation returned to Budapest on Sunday.

        In an interview with MTI at Ferihegy Airport, Pal, who headed the
delegation, said the programme focused the attention of the most important
American investors on the region. The conference will certainly contribute to
investors concentrating greater forces in the Central and Eastern European
region. American political and strategic considerations, and economic
interests,
will also figure in this.

        The members of the Hungarian delegation held talks with U.S.
administration leaders and representatives of financial institutions, and
attended a
meeting with representatives of 200 American companies.

        Discussions focused on potential trade and investment opportunities, an
d
Minister Pal said these talks will yield several concrete results.

        A group consisting of energy industry, agriculture, telecommunications
and
several engineering industry company leaders also attended the Cleveland
conference. These experts held direct talks with their American partners, and
concrete results are also expected from these.

OSCE Envoy Gyarmati Returns to Moscow


        Moscow, January 15 (MTI) - Istvan Gyarmati, envoy of the chairman-in-
office of the Organization for Security and Cooperation in Europe (OSCE),
arrived
in Moscow on Sunday evening.

        The Hungarian diplomat is to hold talks in the Russian capital about th
e
planned visit of an OSCE delegation to Chechnya, in the wake of the OSCE
Permanent Council's decision passed on Thursday to send a delegation to the
crisis zone.

        Gyarmati will travel to Chechnya accompanied by experts, after
coordination with the Russian side. The mission is to promote the settlement of
the crisis through concrete proposals based on what they experience there.

        According to MTI's information from diplomatic sources in Moscow,
Gyarmati is to meet Russian Deputy Foreign Minister Nikolai Afanasievsky, and
will hold talks with Dimitry Ryurikov, foreign policy advisor to Russian
President
Yeltsin, and Vladimir Lukin, Chairman of the Russian Duma's Foreign Affairs
Committee.

        Gyarmati is also expected to meet with the Moscow Ambassadors of the
OSCE and the European Union troikas, that is Italy, Switzerland and Hungary,
and France, Germany and Spain.

        This is the second time within a week that Gyarmati is to hold talks in

Moscow. A week ago, an agreement in principle was reached whereby Moscow
consented to sending an OSCE delegation to the crisis zone.

*****************************************************************
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.
*****************************************************************



OMRI DAILY DIGEST
Vol. 1, No. 12, 17 January 1995


VISEGRAD FOUR TO HAVE UNIFIED AIR DEFENSE. Central Europe Today reported on
16 January that the four Visegrad countries--the Czech Republic, Hungary,
Poland, and
Slovakia--have agreed to a Pentagon proposal for the establishment of a
unified air defense and air traffic control system. The radio said that the
Regional Airspace Initiative was approved by senior defense and transport
ministry officials from the four nations at a meeting in Trencin, Slovakia.
The Pentagon is said to have pledged up to $25 million to the project. -- Doug
Clarke, OMRI, Inc.

HUNGARY AND THE EUROPEAN UNION. During an official visit to Hungary on 16
January, EU President and French Minister for European Affairs Alain
Lamassoure said that
Hungary is the most prepared of the countries seeking full EU membership but
still needs to reform its economy substantially and establish good relations
with  Countries with Hungarian minorities, MTI reports. He offered France's
and the EU's help in resolving differences of opinion between Hungary and
its neighbors over the exercise of minority rights, an issue which has
delayed the signing of bilateral treaties with Slovakia and Romania.
Lamassoure reiterated that the EU will not accept members who cannot solve
their problems with their neighbors. -- Edith Oltay, OMRI, Inc.

HUNGARIAN AGRICULTURAL OUTPUT IMPROVES. Hungarian Agricultural Minister
Laszlo Lakos told a press conference on 16 January that after years of
decline Hungarian agriculture is on the way to recovery, MTI reports. He
noted that agricultural production increased
by 5%, exports by 15%, and producer prices rose by 30% compared to the same
period last year. Lakos said that the agricultural sector received 80
billion forint from the central budget in 1995 compared to 57 billion forint
in 1994, and that the increased subsidies will be used mainly to support
food exports and to supply agricultural machinery. -- Edith Oltay, OMRI, Inc.

[As of 1200 CET]

Compiled by Liz Fuller and Steve Kettle

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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

Republic of Hungary                             Budapest, 1394 . 423
Ministry of Foreign Affairs                     Telephone:36(1)156-8000
Press Department                                        Telefax: 36(1) 156-3801
10/1995.                                        Budapest, January 17, 1995

Hungarian Press Review

        Budapest, January 16 (MTI) - The following is a summary of articles
carried on Monday by the Hungarian national dailies:

        - Nepszabadag - Ferenc Bartha, the privatization government
commissioner who was dismissed last week, said the new offers to buy the
hotel chain HungarHotels cannot be taken seriously. (A Swiss company
offered USD 240 million and an Italian USD 112 million.) Bartha said the State
Property Agency had been trying to sell the hotels for four years, contacted
all
potential buyers, called a public tender, so serious buyers must have already
made at least one offer so far. (Pages 1 and 4)

        - Nepszabadag - Laszlo Lakatos, head of the Justice Ministry's
constitution-drafting secretariat, said the constitutional process is not in
delay. The ministry will present the parliamentary draft resolution on the new
basic law concept to the government in March. (Pages 1 and 5)

        - Nepszava - Jozsef Torgyan, chairman of the Independent Smallholders
Party (ISP), said he can imagine a non-Hungarian citizen holding the post of
president of the republic. The paper's information that the ISP would like to
see Calvinist Oradea Bishop Laszlo Tokes as president was neither denied nor
confirmed by Torgyan. (Page 3)

        - Magyar Nemzet - The Hungarian Socialist Party has 37,214 paying
members, acting deputy HSP chairman Sandor Csintalan said. The first half of
last year saw 500-700 new admissions a month, while in the second half of
1994 the party accepted 400-500 new members monthly. Membership
increased by a total 6,000 people in 1994, as compared to 1,000-1,500 in the
previous year.

* * *
        - Nepszava - On Monday a police action will be launched at the country'
s
26 airports, where previously collected petrol samples indicated non-
compliance with aviation security standards. (Page 1)

        - Magyar Hirlap - The government programme has aimed at more than
that can be accomplished, and this is also noticeable in culture and education,
Minister of Culture and Education Gabor Fodor pointed out in an interview on
governmental experience from the last six months. He said he could not create
a confidential relationship with Prime Minister Gyula Horn going beyond
contacts of a strictly working nature. (Page 8)

        - Uj Magyarorszag - The opposition Hungarian Democratic Forum
agrees to Parliament electing the president of the republic, which does not
mean that it would agree with the repeated nomination of Arpad Goncz, HDF
spokesman Karoly Herenyi said. He recalled the arrangement in 1990 when the
president was nominated by the opposition, and the speaker of parliament and
the prime minister by the ruling parties. Nothing would justify diverting from
this practice in the near future, because this is the only way to keep the
balance of political life, he said.

Agriculture: The Worst Is Over - Minister

        Budapest, January 16 (MTI) - "Hungary's agriculture has got over the
low point, with 5 per cent greater production than last year, satisfactory
domestic supply and a 15 per cent increase in exports. Meanwhile, producer
prices have hiked by 30 per cent," Agriculture Minister Laszlo Lakos told the
press on Monday.

        Compared to the previous year, exports of fresh vegetables rose by 50
per cent, canning industry products and sausages each by 30 per cent and
wines and champagnes by 15 per cent, Lakos said.

        Exports to the ex-Soviet republics were 30 per cent up on 1993.

        The situation is less favourable with advanced capitalist countries,
where pork, beef and grain exports experienced a general decline.

        More lard and grain was brought into the country, with a simultaneous
decrease in dairy product imports.

        Livestock numbers continued to fall last year, but to a slightly smalle
r
extent than previously.

        The farms raised 10 per cent less cattle and the pig population dropped

from 6 million to 5 million. At the same time, more poultry was kept last year
than in 1993.

        Central subsidy for agriculture will be HUF 80 billion this year, as
compared to HUF 57 billion in 1993. The sum has to be spent mainly on the
promotion of food exports and farm machine supply.
Hungary Hopes French Chairmanship of EU Keeps up Momentum

        Budapest, January 16 (MTI) - Alain Lamassoure, French minister in
charge of European affairs, chairman for the EU on behalf of France, today
completed a one day visit to Budapest. First he met the Foreign Minister
Laszlo Kovacs, and in the afternoon Prime Minister Gyula Horn. Later he met
MPs.

        He told reporters he had explained to Kovacs that the EU wants to admit

Hungary under the best terms. He hinted that the EU Commission had decided
to accept Hungary and its neighbours, and now the decisions of the EU Essen
summit are being implemented.

        Lamassoure said ties between Brussels and Hungary would develop
under a working schedule which specifies monthly meetings between the EU
members and the relevant ministers of the countries seeking to join the Union
to discuss strategic issues of accession.

        For his part Kovacs said he highly appreciated the fact that the French

minister in charge of European affairs was visiting Hungary as the first
country of the associate countries, after only holding his post of chairman for
just a few days.

        Kovacs told Lamassoure that Hungary wants to see the same dynamic
rapprochement prevail during the EU's French chairmanship that marked the
previous six months during the German chair.

        In addition, Hungarian diplomats informed Lamassoure of where
Hungary stood in preparing for accession.

        They discussed Hungary's economic and social modernization, legal
harmonization, Hungarian ideas about the white book on an internal market,
and preparing public opinion for joining.

* * *

        Budapest, January 16 (MTI) - Kovacs also told MTI the meeting covered
the European Pact on Stability, initiated by French Prime Minister Balladur and
now under drafting.

        He said it was in Hungary's interest to complete the pact by March to
help strengthen neighbourly links in Central-Eastern Europe. Hungary believes
the pact would support minority rights.

        Kovacs told the French visitor that Hungary was ready to insert its bi-

and multilateral interstate treaties into a European Pact on Stability. This
applies both to the 14 basic treaties - including the Hungarian-Russian Treaty
ratified in Moscow days ago - already concluded, and to the Hungarian-Slovak
and the Hungarian-Romanian basic treaties now under negotiation.

        Nevertheless Hungary considers it important to check the
implementation of the pact on stability, which could be the duty of the
Organization of Security and Cooperation in Europe.

        Lamassoure wanted to find out if there was any likelihood of completing

the Hungarian-Slovak and Hungarian-Romanian basic treaties by the time of
concluding the pact on stability.

        Kovacs said that Budapest had presented drafts to the two
neighbouring countries in November 1994 which could provide a good basis
for agreement, with their recognition of the inviolability of borders and the
exclusion of territorial demands. In addition, they contain, in line with
European norms and documents, a need to guarantee minority rights and put
them into practice.

Horn Expected in Washington on June 6

        Budapest, January 16 (MTI) - Speaking on behalf of President Bill
Clinton, the White House Monday confirmed an invitation that was presented
to Prime Minister Gyula Horn during President Clinton's meeting in Budapest
with the Hungarian President and the Hungarian Prime Minister in December.

        The White House proposed June 6 for a meeting between President
Clinton and Prime Minister Horn in Washington, which was accepted by the
Hungarian Prime Minister, the Foreign Ministry told MTI.

Lamassoure Meets Hungarian MPs

        Budapest, January 16 (MTI) - Hungary is in first place among the
associate states of the European Union seeking full membership, in its
preparation for integration into Europe, said Alain Lamassoure, French
minister in charge of European affairs, before Parliament's Foreign Affairs
Committee and the Committee in charge of European Integration Affairs today.
        The French minister said that before admitting new members the
organization should renew its obsolete system of institutions.

        Lamassoure explained that Hungary has a lot to do in restructuring its
economy and should strive to build good links with neighbouring countries.
        The EU does not intend to give countries membership that cannot solve
their problems with their neighbours. He added that some Mediterranean
countries possibly joining the EU would not harm the chances of East
European countries also seeking admission.

EU and OCSE Cooperate in Settling Chechen Crisis

        Budapest, January 16 (MTI) - Close cooperation is needed between
France holding the post of chairman of the European Union, and Hungary
holding the post of chair of the Organization for Cooperation and Security in
Europe, to settle the crisis in Chechnya, said both Alain Lamassoure, French
minister in charge of European Affairs and Hungarian Foreign Minister Laszlo
Kovacs at a meeting in Budapest today.

        Kovacs told MTI that the EU and the OSCE chair have already
cooperated in seeking a solution to the crisis in Chechnya. Cooperation
helped make sure the representative of the current chair of the OSCE was
received in Moscow.

OSCE's Mission to Chechnya Ready to Leave

        Moscow, January 16 (MTI) - Moscow has for the time being not
committed itself openly and definitely to letting a delegation of the
Organization for Security and Cooperation in Europe leave for Chechnya
within days, Ambassador Istvan Gyarmati, acting for the current chairman of
the OSCE, said after talks in Moscow today.

        Gyarmati added that his Russian negotiating partners had confirmed
that Moscow is still ready to cooperate with the OSCE if the frameworks and
objectives for such cooperation were determined.

        Gyarmati said he hoped that the Russian party would give a final date o
f
departure for the delegation within one or two days.

        The group will mostly deal with human rights issues in Chechnya, and
so the team will include the delegate of the current chairman, a human rights
expert, a military expert, and several diplomats.

        Gyarmati on Monday met deputy Foreign Minister Nikolay Afanayevsky,
and Dmitry Ryurikov, President Yeltsin's foreign policy adviser. On Tuesday
he will talk to the chairman of the foreign affairs committees of both houses
of
Russia's Parliament and to Russia's Minister of Justice.

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

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