OMRI DAILY DIGEST
No. 75, 16 April 1996

CONTROVERSY OVER ALLEGED GUARANTEES BY HUNGARY'S FORMER GOVERNMENT. The
senior coalition Socialist party is at odds with former government
representatives over guarantees to various business organizations that
the present government allegedly inherited from the Boros-government in
1994, Hungarian media reported. Prime Minister Gyula Horn's unexpected
statement two weeks ago that the present cabinet has to make good on 600
billion forints ($4 billion) sparked a heated debate. On 15 April, Horn
accused former governing parties of financial mismanagement and
falsifying files on international negotiations, and he increased the
debated amount to 900 billion forints. The statement led to an
acrimonious debate, with the former ruling parties disputing Horn's
claim. Neither side has revealed any evidence in the case. -- Zsofia
Szilagyi

[As of 12:00 CET]

Compiled by Jan Cleave


Tuesday, 16 April 1996 Volume 1, Issue 329


REGIONAL NEWS
_____________

> -------------------------------------------------
SOLANA ASSURES UKRAINE ON EXPANDED NATO'S WEAPONS
> -------------------------------------------------
NATO Secretary General Javier Solana began a tour of candidates
for Alliance membership in eastern Europe on Monday by
confronting Ukraine's worries that expansion could mean
deployment of nuclear arms on its borders. Ukrainian leaders
told the NATO chief they want a closer relationship with the
Alliance, but say Ukraine is not yet ready to join, or to
abandon its non-aligned status.  Volodymyr Gorbulin, a secretary
of Ukraine's Security Council, told reporters after Solana's
talks with President Leonid Kuchma that Ukraine favoured
"transparent" enlargement to ensure all European states were
aware of developments. Solana arrived in Kiev on the first leg
of an east European trip which will take him to other states at
the head of the queue for Alliance membership including Poland,
Hungary and the Czech Republic. His itinerary also includes
stops in the three Baltic states of Estonia, Latvia and
Lithuania.


----------------------------------
JEWISH TEACHER STABBED IN BUDAPEST
----------------------------------
Jewish organisations everywhere are bracing themselves against
possible Hizbollah violence after the Moslem guerrilla group
threatened to strike at Israeli interests around the world.  The
pro-Iranian Hizbollah group said it wants to avenge an Israeli
blitz against its guerrillas in Lebanon which began last
Thursday. Hizbollah is threatining to deploy suicide bombers
against the United States and Israel. Recently, the group showed
about 70 camouflage-clad volunteers at a televised ceremony.
But, if the televised ceremony and calls by Hizbollah for action
are causing fear in Jewish communities throughout the world, it
appears that television pictures of the bombing of Lebanon have,
in return, caused an unexpected attack on a teacher at a Jewish
school in Hungary's capital.

An Afghan angry at Israel's offensive in Lebanon stabbed and
lightly wounded a teacher at a Budapest Jewish school on Monday.
According to the Israeli Ambassador to Hungay, Joel Alon, the
attacker stabbed the teacher three times and was then caught by
the police.  The Ambassador was quick to add that the religious
education teacher's wounds were not life-threatening.  Budapest
police confirmed the incident and the nationality of the
attacker, but declined to give further details at this time.
The attacker is not believed to have any ties with the Hizbollah
terrorist group.  He was employed as a health inspector and is
well known by the staff of the school, making the incident all
the more unexecpected.


> ----------------------------------------
HUNGARY PLANS TO REDUCE IMPORT SURCHARGE
> ----------------------------------------
Hungary's economic cabinet is recommending the government reduce
the country's import duty surcharge by two percentage points
later this year and abolish the surcharge altogether by
mid-1997.  The import surcharge reduction forms part of an
anti-inflation package to be discussed by the government at its
weekly cabinet meeting on Thursday. The surcharge was introduced
by former finance minister Lajos Bokros in March last year as
part of a package of austerity measures which brought the
country's current account deficit down from $3.9 billion in 1994
to 2 and a half billio by the end of last year. His replacement
Peter Medgyessy has vowed to continue Bokros's policies by
shifting the emphasis to increasing GDP growth and reducing
inflation.


> ----------------------------------------------
HUNGARY LAUNCHES NEW STATE DEBT DEALING SYSTEM
> ----------------------------------------------
Hungary is introducing a new system for secondary trading in
government debt in an effort to boost liquidity in the
securities market.  Twenty of the 22 primary dealers Hungary
named began publishing quotes on Monday via Reuters screens for
six-and 12-month treasury bills and government bonds issued
after January 3rd.  Before the new system was introduced a
number of state securities were traded on the Budapest Stock
Exchange.  With the new system, Hungary aims to make the market
more transparent and help traders in state debt to follow price
movements more easily. The price quotations should have begun in
January, but they were delayed by a dispute between dealers and
the State Supervision for Securities over fees and commissions.
Eventually, a compromise was found whereby fees and commission
were reduced, but not by as much as the dealers originally
demanded.



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OMRI DAILY DIGEST
No. 76, 17 April 1996

HUNGARIAN PREMIER REASSERTS NEED FOR OFFICE TO INVESTIGATE WHITE-COLLAR
CRIME. Gyula Horn reconfirmed his intention to establish a national
investigation office to curb the black economy, Hungarian media reported
on 17 April. Horn emphasized the need for the office given the relative
ineffectiveness of government efforts in this area. He added that the
office would not undermine the jurisdiction of existing state
authorities with investigative duties, such as the police and the Tax
and Customs Office, and predicted that his party would succeed in
"reaching a consensus" with the coalition partner, the Alliance of Free
Democrats (SZDSZ) on the matter. The SZDSZ is presently opposed to the
idea (see OMRI Daily Digest, 12 April 1996). -- Zsofia Szilagyi

HUNGARY STEPS UP SECURITY AFTER TWO JEWS STABBED. The Hungarian police
announced on 16 April that they would step up security in the Israeli
embassy, Jewish community buildings, and the Israeli airlines after two
Jews were stabbed in Budapest last week, Hungarian media reported. The
Israeli ambassador to Hungary had requested security to be tightened
after an Afghan stabbed and wounded two staff members at a Budapest
Jewish school in response to the Israeli bombing of southern Lebanon.
The suspect, identified as Wahab Abdul Bashkir, is a 40-year-old from
Afghanistan, who settled in Hungary 10 years ago. -- Zsofia Szilagyi

[As of 12:00 CET]

Compiled by Jan Cleave


(Elnezest az esetleges kisbetukert, de az eredeti szoveg csupa
nagybetuvel volt irva, amit at kellett cserelnem.)

Buchwald Amy

*****************************************************************

date=4/15/96
type=correspondent report
number=2-195746
title=East Euro bank ( l only)
byline=Barry Wood
dateline=Sofia, Bulgaria
content=
voiced at:

 /////  Make tape conform to text.  Text drops graf 1 on tape.
                              /////

Intro:  The European Bank for reconstruction and development has
opened its two-day annual meeting in the Bulgarian capital,
Sofia.  V-o-A's Barry Wood reports about three-thousand bankers
and finance officials braved a spring snow storm to attend the
opening ceremonies in sofia's palace of culture.

Text:  In opening remarks, European Bank president Jacques de
Larosiere praised the 25 former communist countries that borrow
from his London-based institution.  He said the results in
implementing reform are better than expected and that most member
countries will register economic growth this year.

The top item for discussion is the plan to double the bank's
lendable resources to 25-billion dollars during the next two
years.  Almost all  of the bank's 59 shareholder countries favor
the plan, which has already been informally approved.

Since its formation in 1991 the E-B-R-D has committed more than
eight-billion dollars to 368 projects and enterprises in former
communist countries.

Assistant treasury secretary, David Lipton, says the United
States supports the capital increase, but wants the bank to shift
its lending from the successful Central European countries to its
more needy members in Eastern Europe and Central Asia.

                       /// Lipton act ///

         We are interested in seeing the bank develop a
         graduation policy.  We would like that to be a policy of
         phased graduation.  It is not as though it is a race
         where a country crosses the finish line and is cut off
         at an arbitrary point.  Rather, as a country completes
         certain steps in the transformation, the bank phases out
         support for those activities and lets the private sector
         take over and focuses its future support on the
         remaining transition steps.

                         /// End act ///

Not surprisingly, the Czechs, Hungarians, and Poles are not eager
to lose access to European Bank support.  Mr. Lipton says since
the E-B-R-D was set up to promote only the transition to market
economies, there will not be a need for any future capital
increase.  He said ultimately the bank will complete its work and
go out of business.

European Bank officials are delighted delegates and observers are
meeting in one of Eastern Europe's less developed countries.
They say it is good bankers and journalists from the rich
industrial countries are able to spend time in a country where
most people are earning much less than 200 dollars a month.
(Signed)

neb/bdw/jwh/rae

15-Apr-96 12:00 pm edt (1600 utc)
nnnn

source: Voice of America