OMRI DAILY DIGEST
No. 29, 9 February 1995

UKRAINIAN FOREIGN TRADE IN 1994. Russia was Ukraine's most important
trade partner in 1994, Interfax reported on 5 February. No less than 39%
of Ukraine's exports were to Russia and 30% of its imports came from
that country. Former Soviet republics accounted for two-thirds of
Ukraine's trade. Belarus accounted for 6% of its exports and 3% of its
imports; Moldova, 5% and 1%; Turkmenistan, 3% and 7%; and Kazakhstan, 1%
and 2%. Overall, Ukraine exported more than it imported. Among its non-
CIS trading partners, China was the largest, accounting for 6% of
Ukraine's total trade. The U.S. and Switzerland followed with 3% each;
and Hungary, Italy, and Germany, 2% each. -- Ustina Markus, OMRI, Inc.

CONTINUED DISAGREEMENT OVER HUNGARIAN-ROMANIAN TREATY. Romanian Foreign
Ministry spokesman Mircea Geoana said at a press conference on 8
February that the teams of experts that met in Budapest from 6-8
February still disagree over two points in the basic Hungarian-Romanian
treaty. These concern minority rights and collaboration to achieve
Romania's admission as a full member of the Central European Initiative
and the Central European Free Trade Association. Geoana was quoted by
Radio Bucharest as saying that Hungary has submitted new proposals,
which he described as representing "some steps forward but also some
backward." Responding to Hungary's proposal that the treaty be
accompanied by a separate document detailing minority rights, Geoana
said there should be no linkage between such a document and the basic
treaty. He added that the proposal was not in line with what had been
agreed by the two countries' foreign ministers a few days earlier in
Strasbourg and during Theodor Melescanu's visit to Budapest last
September. The Romanian side will make its own proposals at the next
round of negotiations at expert level, to be held in Bucharest later
this month. -- Michael Shafir, OMRI, Inc.

[As of 1200 CET]

Compiled by Jan Cleave

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OMRI DAILY DIGEST
No. 30, Part II, 10 February 1995

HUNGARIAN PREMIER REAFFIRMS COMMITMENT TO REFORM. Gyula Horn, during a
visit to the European Union and NATO headquarters in Brussels on 9
February, stressed his country's commitment to economic reform and said
that his government even plans to accelerate the pace of change, Western
news agencies report. Horn was responding to a warning by the European
Commission that Hungary's failure to stick to its reform program could
derail its chances of joining the EU before the end of the century.
Doubts about the Horn government's commitment to reform came in the wake
of the resignation of liberal Finance Minister Laszlo Bekesi and the
government's cancellation of a major privatization deal. Horn said he
believed there is a good chance Hungary will become a member of NATO
before it gains admission to the EU. -- Edith Oltay, OMRI, Inc.

DEMOCRATIC CONVENTION OF ROMANIA TO SEVER HUNGARIAN TIES? The Party of
Civic Alliance, a member of the opposition Democratic Convention of
Romania, has asked the DCR to sever ties with the Hungarian Democratic
Federation of Romania if the HDFR does not give up its demands for
regional autonomy based on ethnic criteria. The HDFR is also a member of
the DCR, but its demands for autonomy have been denounced by virtually
all other members. PCA Deputy Chairman Nicolae Taran told a press
conference on 9 February that the DCR must state explicitly that Romania
is "a national, sovereign, independent, unitary, and indivisible state."
The HDFR objects to the term "national." Meanwhile, presidential
spokesman Traian Chebeleu said at a Bucharest press conference that
remarks made by HDFR President Bela Marko in an interview with the BBC
were "propaganda" aimed at distorting Romanian realities. Chebeleu
objected in particular to Marko's claim that Romania has been trying to
assimilate the Hungarian minority since 1918. He also took exception to
Marko's designation of the 1918 unification of Transylvania with Romania
as an "annexation." -- Michael Shafir, OMRI, Inc.

[As of 1200 CET]

Compiled by Jan  Cleave

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date=2/10/95
type=correspondent report
number=2-173915
title=Central Euro Stocks (l only)
byline=Barry Wood
dateline=Prague
content=
voiced at:

Intro:  There were modest rebounds from record low levels this
week in East European stock markets.  V-o-A's Barry Wood reports
an improved political climate in Hungary and Poland helped
exchanges in those countries.

Text:  The emerging markets in Eastern Europe were swamped with
sell orders during the past eight weeks as institutional
investors acted to protect their capital in the wake of the
Mexican financial crisis.  The small, fragile East European
markets were hit especially hard since institutional money from
New York and London accounts for a majority of trading volume.
The exchanges in Budapest, Warsaw, and Prague all fell to
12-month lows.

But there were slight improvements this week as investors
cautiously returned to the markets in search of bargains.

In Warsaw, the market liked the apparent resolution to the Polish
political deadlock and the likely naming of a more reform minded
politician to take over from Prime Minister Waldemar Pawlak.  The
Warsaw market index gained 672 points to close at 65-hundred 99.
But the Polish market still is down 68 percent from its 1994-1995
high.

In Budapest, the market registered only a mild response to the
naming of reform minded bankers to the vacant posts of Central
Bank chief and Finance Minister.  The market is still unsettled
from Prime Minister Gyula Horn last month undoing a privatization
deal for the Hungarhotel chain.  The Budapest exchange gained
four points on the week to close at 11-hundred-88.  But it still
is down 50 percent from its 1994-1995 high.

In Prague, the stock exchange index of 50 shares gained 13 points
to 499.  The Prague market also still is down 50 percent from its
1994/95 high.

Other smaller post-communist markets were mixed.  In Slovenia the
Ljubljana exchange registered a 27 point decline.  In Bratislava,
Slovak stocks were mostly unchanged.  Share prices in Bulgaria
were slightly higher.  There is still  no  stock exchange in
Romania.  (Signed)

neb/bdw/mh/jwh

10-Feb-95 1:25 pm est (1825 utc)
nnnn

source: Voice of America

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Not All Partners Will Join NATO, Perry Concedes

  DANA PRIEST (WASHINGTON POST STAFF WRITER)
  
  (C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 222372)


     Defense Secretary William J. Perry told Congress yesterday that some
states of the former Soviet bloc "will never qualify for NATO membership,"
even though they have been admitted to a NATO-sponsored group viewed by some
as a steppingstone to alliance membership.

     Perry's comments were the bluntest statement to date from the
administration that some members of the "Partnership for Peace" -- the
alliance's program to foster closer military links with former adversaries --
cannot expect to join NATO.
     Previously the State Department and Pentagon have been careful not to
leave NATO aspirants with the impression that only certain countries are
likely to qualify.
     Several countries, including Poland, Hungary and the Czech Republic, are
viewed as likely eventual members by many NATO states, administration
officials and members of Congress.
     Countries such as Uzbekistan and Kazakhstan -- in central Asia, far from
NATO's base in Europe -- are among the least likely. "These countries aren't
early candidates," one Pentagon official said. "They wouldn't be members in
the first tranche or even the second tranche."
     Pentagon spokesman Kenneth Bacon said Perry's remark "is not a policy
statement as much as it is a statement of the obvious." But the obvious is
what the administration has been reluctant to state.
     Secretary of State Warren Christopher has insisted that giving
preference to certain countries over others would demoralize those left in
waiting.
     The Pentagon official said that if countries believe the Partnership for
Peace is a steppingstone to NATO, "it's a misperception. From the beginning
we've said it will have an important role to play, but it's not a guarantee
for membership."
     Perry's remarks came in response to a question by Rep. Herbert H.
Bateman (R-Va.), who said the administration's statements to date have been
misleading and that "we shouldn't deceive people into thinking that
[membership in the Partnership for Peace] is going to bring them there at
some point, when it would be irrational to extend NATO that far."
     Perry said, "For those countries qualified to become NATO members, and
only those countries, the Partnership for Peace is a path to NATO membership.
Many members of the Partnership for Peace will never qualify for NATO
membership. . . . Thank you for the opportunity to clarify that point."
     Some Republicans want to set a timetable for the admission of Poland,
Hungary, the Czech Republic and Slovakia into NATO. They also want to require
the United States give Estonia, Latvia, Lithuania and Ukraine assistance to
facilitate their transition to full NATO membership.

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Friday, 10 February 1995
Volume 2, Issue 30


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

**HUNGARY WON'T OPEN BORDER**
  Hungarian Television is reporting that Hungarian officials say
  they'll ignore a request from rebel Serbs in Croatia to open a
  border crossing between the territory they hold, known as
  Krajina, and Hungary.  The crossing, at Udvar in southern
  Hungary, has been closed since fighting began in the former
  Yugoslavia in 1991.  Hungarian Foreign Ministry spokesman
  Norbert Konkoly says Hungary will only open the Udvar crossing
  at the request of Croatia.  So far, Zagreb hasn't made that
  request.


**FATE OF NUKE PLANT DECIDED TODAY**
  A Hungarian-Slovak environmental group plans a protest today in
  Budapest outside a public hearing on a partially built nuclear
  power plant Slovakia wants to finish near the Hungarian
  border.  The plant is also near Austria and is opposed by
  environmental groups there as well.  The hearing, hosted by
  the Hungarian Minsitry of Environment and Regional Development
  is part of the European Bank for Reconstruction and
  Development's effort to find out what the public thinks about
  the plant.  The EBRD is now deciding whether to loan Slovakia
  the $612 million it needs to complete the project.  The plant
  at Mochvoce, about 20 miles from the Hungarian border and 60
  miles from Austria, was started under communism with Soviet
  technology.  But construction stopped in 1991, due to lack of
  funding.  Environmental groups plan to testify at the hearing
  that nuclear power is dangerous and inefficient.  They're
  afraid of another Chernobyl-type accident which they say could
  affect four million people in Slovakia, Hungary and Austria.
  But Slovak officials say if the EBRD funding comes through,
  the plant will be completed by Electricity de France which has
  agreed to install updated technology and safety guarantees.
  According to the EBRD, public opinion will play a major role
  when it decides whether to bankroll the project. --David Fink



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

**HUNGARY DEVELOPING NEW ECONOMIC POLICY**
  A high-ranking Hungarian finance ministry official says the
  country is developing a new three-year program to both
  stabilize and modernize its economy.  Deputy state secretary
  Akos Balassa says this means balancing consumption against the
  county's economic growth.  It also means bringing Hungary's
  imports in line with exports.  This new gradual policy is seen
  as a departure from some of the harsh stabilization moves of
  out-going finance minister Laszlo Bekesi.  Balassa says
  domestic consumption is now 10 percent higher than production
  and imports exceed exports by 30 percent.  But he adds that --
  in his opinion -- the country has enough hard currency
  reserves to avoid an economic crisis.


**BUDAPEST SHARES UP SLIGHTLY**
  Prices were up slightly on the Budapest Stock Exchange
  yesterday. Traders say the market still hasn't reacted to this
  week's nominations of a new finance minister and central bank
  president. The index rose 3.52 points, closing at 1,145.79.
  Traders have confirmed that the government's moves may calm
  the market, but they're still waiting for word of new
  financial policies.  They also say a devaluation of the forint
  would help the market by making shares cheaper for foreigners.


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

**STOP AND PAY FOR THE FLOWERS**
  By Tom Hoover

  It's the month of cupid which means Valentine's Day is upon us
  again.  If you want to show that special person the true depth of
  your feelings, what do you get?

  "Flowers are all right I suppose."
  "Probably flowers."
  "Flowers are easy."

  Unimaginative, maybe...but flowers are easy to find, and a good
  way for men to skate around the holiday of love.  Klara Biza,
  writes for Hungarian horticulture trade magazines.  She says
  Women's Day on March 8 was once the major Socialist holiday
  for flower giving.  Now with the help of Hungary's flower shop
  owners that has changed.

  "It was the florists who founded this Valentine's Day in Hungary
  and now it has become a big flower consumption day."

  No, people aren't eating the flowers.  They're buying them for
  loved ones.  Biza says there are a variety of flowers given as
  gifts here.

  "Carnations, gerbaras, roses, lilies, but the most popular are
  carnations."

  They're not exactly a Central European specialty, though.
  According to Biza, Hungarian growers import nearly 70 percent
  of the flowers so pleasing to the eyes, nose and heart.  Most
  come from Holland which is the largest exporter and producer
  of decorative flowers in the world.  In fact, Holland's flower
  exports have grown some 4 to 5 percent a year since the new
  markets opened in Central Europe and Russia. And although the
  floods in northwestern Europe will dramatically diminish this
  year's crop, Dutch exports to Central Europe doubled last
  year. Some flower varieties are grown locally, however, and
  you can either buy from people hawking them loudly on the
  street, or from huge cooperatives like FloraHungaria where
  growers sell their goods in warehouses. Anna Sennyey
  represents Sasad, one of Hungary's largest growers with 11
  greenhouses on 13 acres outside Budapest, plus a number of
  retail stores in the city.

  "Sasad has 50 shops in Budapest and from the country come the
  shoppers."

  Sennyey says under Socialism Sasad was a cooperative and a
  state-owned nursery, now it's a profitable share-holding
  company distributing around the country. For the local
  farmers, competing with these large companies isn't easy.
  Their advantage is their proximity to you on the street and
  their sales tactics.  That little, old flower-lady, for
  example, peering through Budapest restaurant windows is as
  ruthless as a loan shark.  She'll find every poor slob in the
  place who's trying to make a good impression on his date.
  When she comes to your table, though, remember to buy an odd
  number of flowers.  In Hungary, even numbers are given for the
  deceased. But, go ahead take the easy way out and buy her
  flowers again this Valentine's Day. Just remember, flowers may
  mean more to her, on an ordinary day.



DAY TRIP
--------

**GETTING AWAY FROM IT ALL IN HUNGARY'S DOMOS**
  By David Fink

  Nestled in the Pilis Hills, 90 minutes north of Budapest, the
  village of Domos is a picturesque rural getaway.  Forestry and
  agriculture used to provide most of the jobs in Domos.  But
  now the village is dependent on tourism.  In warmer weather,
  the Danube bend, which the sleepy hamlet overlooks, is packed
  with visitors. If you go to Domos this time of year you can
  soak up the tourist-free atmosphere of a small Hungarian
  village.  The local cafe, for example, where posters of the
  Ferencvaros soccar team line the walls alongside varieties of
  fish to be caught in nearby streams and a sign reading: "No
  more beer will be sold on credit."

  Locals here have a lot of time on their hands since the
  state-run forestry industry and area farm cooperatives
  collapsed.  In fact, you might say this cafe is a microcosm of
  the Hungarian economy in transition. Ildiko Toth used to be a
  manager at a catering company, now she's working behind the
  counter in the cafe she and her husband, Sandor, own.

  "It was a nice cafe.  People had to dress up and come here and
  we controlled who entered.  But we couldn't get enough
  business so we had to change the atmosphere."

  But not so much that the cafe wouldn't still attract summer
  tourisits. Sandor and other business picks up in the summer,
  too.  He sells clothes from his car outside the cafe.

  "In summertime there are so many tourists, I can sell bathing
  suits and slippers. But now business is not so good. Things
  are quiet."

  But that village quiet might be something to enjoy.  The main
  trail out of Domos winds along a stream into the Ram Szakadek,
  a famous ravine in the Pilis Hills.  It's an easy hike at
  first, but things do get rougher.  As the trail moves higher
  into the ravine, it merges with the stream.  Hikers can either
  jump from log to log, or just slosh through the water and mud.
  After almost half an hour, the fun really begins.  You're at
  the base of the precipice now and the water's moving fast,
  rolling off the rocks above your head.  The only way out,
  besides retracing your steps, is to climb along the wet rock
  walls of the ravine, using conveniently placed chains as a
  grip.  It's not a trip for the fainthearted.  Not
  surprisingly, this trail is a popular one for Hungarian
  teen-agers.  Gabor Szabo and his two friends have just climbed
  down.

  "If someone is a good climber it takes about 20 minutes.  It's
  difficult in the winter because it's icy.  Of course in the
  summer it's difficult too because of the heat."

  Winter or summer, Szabo says he doesn't frequent this particular
  trail.  In fact, he prefers others in the Domos area which
  wind through the beautiful Pilis Hills. But if you're tired of
  wandering in the woods, yopu can always head back to Domos.
  The cafe is waiting with a warm drink and friendly company.



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

* CET On-Line - copyright (c) 1995 Word Up! Inc. All rights reserved.
  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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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. 28/1995                                                     07 February 199
5

Hungarian Press Review


        Budapest, February 6 (MTI) - The following is a summary of articles
carried on Monday by the Hungarian national dailies:

        Magyar Hirlap - The most likely candidate for the post of finance
minister is thought to be Lajos Bokros, President and Director-General of the
Budapest Bank, says the paper. In reporting on the session of the National
Executive of the Hungarian Socialist Party, the paper quotes the words of
deputy chairman Miklos Horn, who voiced the party's commitment to the
programme associated with the name of Finance Minister Laszlo Bekesi,
who resigned recently, in order to create the conditions needed for economic
stability and growth. (pages 1 and 3)

        In an interview given to Magyar Hirlap, Peter Medgyessy, President
and Director-General of the Hungarian Investment and Development Bank,
said he had refused the post of finance minister not because of the
difficulties involved, but because he wanted to continue the work he started
as head of the bank a few months ago. As regards future economic policy, in
his view it should have two main pillars - economic stability and growth.
Medgyessy believes it would be a mistake if the government only
concentrated on stability and neglected economic growth. (page 3)

        - Nepszabadsag - The popularity of the ruling parties (the Hungarian
Socialist Party and the Alliance of Free Democrats) has fallen significantly
since early December, according to a Szonda-Ipsos survey carried out in the
second half of January. However, there has been no parallel increase in
popularity for the opposition parties. Voters have become more uncertain
and are more apathetic towards politics. (pages 1 and 6)

        Today's issue of Nepszava contains an interview with top financial
expert Janos Fekete, former president of the National Bank of Hungary. He
says that, when he reads the newspapers, he has the impression that those
responsible for Hungary's economic policy think economic growth is harmful.
In Fekete's view, the current state of the Hungarian economy is not as bad
as people say, and comparisons with Mexico, which recently went bankrupt,
are uncalled-for since Hungary always pays its debts on time. (page 5)



PM Horn Meets Top Economists


        Budapest, February 6 (MTI) - After his meeting with top economists in
Budapest today, which lasted over three hours, Prime Minister Gyula Horn
told MTI he would like to consult with top financial experts in the future as
well. He also said the talks had not dealt with questions of personnel.

        Most of those attending the meeting confirmed that concrete
measures had not been discussed. Each of those present gave his own
assessment of last year's economic performance and of what they saw as
this year's most important tasks.

        According to Finance Minister Laszlo Bekesi, there was agreement
that in the present state of the economy, stability is an absolute priority.

        Gabor Kuncze, Deputy Prime Minister and Minister of the Interior,
said there was no reason to change the government programme, and
stressed the importance of resoluteness in implementing it.

        Socialist MP Sandor Nagy, president of the National Confederation of
Hungarian Trade Unions, said the tasks were obvious: to decrease the
budget deficit and even more importantly, the current account deficit. The
purpose of the meeting was to outline solutions to these problems, he
added.

        In the opinion of Gyula Gaal, the leader of the Free Democrats'
parliamentary group, the prime minister's assessment of the situation was
identical to that of Bekesi.

        Bela Kadar, chairman of Parliament's Budget and Finance
Committee, from the opposition party Hungarian Democratic Forum, said
that apart from the assessment of the current situation, new solutions had
also been proposed. The economists at the meeting only presented their
own solutions and did not criticize one anther's ideas, he added.

        Rezso Nyers MP, of the Hungarian Socialist Party, said although
during the meeting there was some convergence of opinions, differences still
remained.



Hungarian-Slovene Foreign Ministerial Talks in Budapest


        Budapest, February 6 (MTI) - Foreign Ministers Laszlo Kovacs of
Hungary and Zoran Thaler of Slovenia signed a protocol on the legal
succession of bilateral contracts concluded with the former Yugoslavia.

        At a press conference after the ceremony, Thaler announced that
Hungarian Prime Minister Gyula Horn would visit Slovenia this spring.
Slovenian President Milan Kucan will attend the meeting of Central
European heads of state in Hungary. Foreign Minister Laszlo Kovacs
accepted an invitation from his Slovene counterpart for a visit.

        Zoran Thaler said his country considers Hungary a very important
neighbour and partner and, based on the good relation maintained so far,
future cooperation can also be exemplary.

        Foreign Minister Kovacs detailed the five topics discussed during the
talks. Their views were fully identical in the evaluation of the results, and
as
regards the tasks.

        The development of contractual relations, the planning of the next
high-level visits, the expansion of economic and trade, and infrastructure
relations, and cooperation that serves to ensure the rights of the minorities
also received great emphasis at the talks.

        Kovacs said he believes regular exchanges of views in issues of
regional cooperation is important, all the more so because "we both
participate in the Central European Initiative, in the Alps-Adriatic Working
Community, in European free trade, and Slovenia wishes to join the
Visegrad Group as well."

        He added it is important for the two countries to coordinate their
integration efforts, and Hungary would support Slovenia's membership in
NATO as the Hungarian government is convinced it is not in Hungary's
interest to be the only country to win membership.

        The foreign ministers discussed the possibilities for a Hungarian-
Slovenian free trade agreement, and said both sides are ready to expand
relations, for instance, in road traffic and other areas. It was stated that
settling the situation of the national minorities will become possible at the
March conference of the minority joint committee. Discussions were also
held about the possibilities of membership in the European Union, and the
relation
between Italy and Slovenia.


New Hungarian Ambassador in the Vatican


        Vatican City, February 6 (MTI) - The new Hungarian Ambassador
accredited to the Vatican, Jozsef Bratinka, on Monday presented his
credentials to Pope John Paul II.

        The Pope received the incoming Ambassador in his private library in
the Vatican. After the official speeches, the Pope held a 15-minute private
meeting with the Ambassador.

        Pope John Paul II said the Holy See appreciates the efforts which the
Hungarian government has made to create the conditions necessary for the
educational activity of the various church institutions and communities.

        After presenting his credentials, Ambassador Bratinka called on
Cardinal Angelo Sodano, the Prime Minister of the Vatican.


Hungarian-Italian Presidential Talks


        Rome, February 6 (MTI) - Hungary can count on Italy's support
throughout its quest for membership in the European Union, Italian
President Oscar Luigi Scalfaro said on Monday in Rome, in the course of his
meeting with Hungarian President Arpad Goncz.

        The Hungarian President arrived in the Italian capital for a three-day
official visit earlier in the day.

        Goncz and Scalfaro held talks in a good atmosphere for nearly an
hour. The main topics discussed were Hungary's membership in the
European Union, and the development of Hungarian-Italian relations.

        President Goncz highly appreciated the Italian role played in the
Central European region, and the fact that Rome was one of the founders of
the Central European Initiative (CEI).

        As regards Hungary's membership in the European Union, President
Scalfaro promised his personal support. "If you have any problems, please
call me and I shall personally mediate," Scalfaro told the Hungarian
President.

        The Italian President also voiced his conviction that the European
Union should not merely be a monetary and economic community, but the
community of European nations as well, as it can fulfill its original goals
only
in this manner.
        Goncz briefly detailed Hungary's current home political and economic
situation. He said the first promising economic signs are emerging after the
three-year-long recession, and the Hungarian leadership wishes to speed up
the privatization process.

        Issues related to national minorities were also discussed by the two
presidents. Scalfaro said this problem should be settled on the basis of
universal human rights. Goncz mentioned the Italian-Slovenian debate and
raised the idea that Rome should support Slovenia's membership in the
European Union, and that all problems can be settled based on the norms of
the EU.

Hungarian-Italian Visa Agreement


        Rome, February 6 (MTI) - The political State Secretary of the
Hungarian Foreign Ministry, Istvan Szent-Ivanyi, and the Italian Foreign
Affairs State Secretary Walter Gardini signed a visa agreement in Rome on
Monday.

        Accordingly, Hungarian freight carriers traveling to Italy will not fal
l
under visa obligations.

        In the course of foreign affairs consultations, the sides reviewed the
matter of Hungary's membership in the European Union. Szent-Ivanyi
indicated that Hungary would like to participate in the EU conference
scheduled to be held in Messina in June, at which preparations will be made
for the 1996 inter-governmental conference that will examine the
implementation of the Maastricht Treaty stipulations.

        Both sides held the realization of the so-called Trieste-Budapest-Kiev
corridor to be important. This combined - road and railway - route is one of
the priority plans of the Central European Initiative, and is included in the
White Paper compiled on the trans-European networks.

        The Hungarian State Secretary noted that Italian authorities had taken
overly strict steps against numerous Hungarian tourists who visited Italy in
the past period. Walter Gardini said those were merely measures by local
authorities, and the Italian Foreign Ministry would ask the Ministry of the
Interior to clarify the situation.


Constitutional Court Ruling on Compensation Law


        Budapest, February 6 (MTI) - The fact that the Compensation Law
discriminated between the persecutes taken to concentration camps by the
Germans and the citizens taken to forced labour camps by the Russians is
unconstitutional, according to a ruling of the Hungarian Constitutional Court
handed down on Monday.

        It also runs against the Hungarian Constitution that the compensation
law discriminated between the forced labourers at fighting and non-fighting
military troops.

        Under the ruling, there can be no consideration which makes it
possible to differentiate between those deported, those taken to forced
labour camps, and those who were stripped of their freedom and lives
because of racial, religious or political considerations. All these people are
entitled to compensation.

        This ruling of the Constitutional Court has annulled several
paragraphs of the so-called third compensation law passed in 1992. The
Court called on Parliament to enact a new law by September 30, 1995, on
the compensation of those deported, taken to forced labour, and those
condemned without criminal proceedings.


President Goncz's Programmes in Rome on Monday


        Rome, February 6 (MTI) - Hungarian President Arpad Goncz's official
visit to Italy began on Monday at the Altar of the Homeland memorial that
symbolizes the creation of a unified Italy.

        The Hungarian President, who arrived for a three-day official visit to
Italy on Monday morning, placed a wreath at the Tomb of the Unknown
Soldier, at the monument.

        After the ceremony, President Goncz was driven to the Italian
President Palace, the Quirinale, where he met Italian President Oscar Luigi
Scalfaro, who later hosted a gala lunch in honour of the Hungarian
President.

        In the afternoon, the Hungarian President and the businessmen
accompanying him on the visit met with Italian businessmen in the
headquarters of the Confindustria, the General Confederation of Italian
Industry. After a brief introductory lecture by President Goncz, Hungarian
Minister of Industry Laszlo Pal gave a detailed account about the state of
Hungarian economy and the 1994 foreign trade results.

        Also during the afternoon, Mrs Goncz visited the San Giovanni
Laterano Basilica, where she was informed about one of Rome's oldest and
most beautiful churches by the canon of the Basilica.

        Monday's programmes ended with economic meetings. President
Goncz met Michele Tedeschi, the president of IRI, which rallies the Italian
state companies. After the meeting, the Corvin Matthias Italian-Hungarian
Economic and Cultural Chamber hosted a dinner in honour of President
Goncz, which was attended by Italian financial and economic leaders.

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

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           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
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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. 27/1995                                             06 February 1995


Changes on Austrian-Hungarian Border


        Budapest, February 3 (MTI) - Hungary and Austria will shortly
sign a new treaty on border controls, to replace an old accord which
has been in force for the past 16 years.

        This treaty and several other agreements were the main topics
of talks that Istvan Zsuffa, administrative state secretary at the
Hungarian Ministry of the Interior, held in Vienna on Thursday.

        At his press conference on Friday, Zsuffa detailed the various
modifications, which are expected to become effective in the summer.

        Austria's full membership of the European Union has led to
tighter border regulations between the two countries, Zsuffa pointed
out. This, however, does not affect Hungarians traveling to Austria, he
added.

        The tightening-up of border checks is primarily aimed at fighting
organized crime, terrorism, drug trafficking and illegal immigration.

        According to a modification which is expected to come into
force this summer, Hungarian tourists will be allowed to spend 90
days in Austria without a visa, instead of the 30 days previously
allowed.

        However, if they are looking for work Hungarians will still
require a visa in the future.

        The elaboration of common regulations for use in times of
natural catastrophe is also in progress, including the guaranteeing of
a continuously open border section at Lake Ferto. Hungary and
Austria are also seeking a compromise to allow deliveries of animals
and plants across the border at Rabafuzes. This necessitates joint
customs and health controls.
        Austria would also like to reach an agreement with Hungary
which would guarantee Austrian farmers renting or owning land in
Hungary free passage into Hungary.



Hungarian Police Commander in Ljubljana


        Ljubljana, February 3 (MTI) - Sandor Pinter, the Hungarian
national police commander, paid a visit to Slovenia at the head of a
delegation on Thursday and Friday, invited by Borut Likar, Slovene
state secretary responsible for law and order.

        The delegation met Minister of Interior Andrei Ster.

        The two delegations reviewed joint work by the police bodies of
both countries since 1993 and possibilities for cooperation.

        They discussed links between border counties, coordinated their
future work on organized crime and combating drug trafficking.

        They agreed on the need for more efficiency in exchange of
information and regular meetings to evaluate results achieved.

        Pinter and Likar signed a memorandum after the talks.



Hungarian and Romanian Defence Ministers Meet


        Budapest, February 4 (MTI) - Romanian Defence Minister
Gheorghe Tinca today held an unofficial meeting with his Hungarian
counterpart, Gyorgy Keleti, in Debrecen, eastern Hungary, the Defence
Ministry told MTI.

        The visit is part of a regular series of discussions between the
two countries' defence ministers, aimed at reviewing the state of
military cooperation, including questions raised in Gyula, southeast
Hungary, and Bucharest last summer.

        While in Hungary, Tinca attended an equestrian show in the
nature conservation area of Hortobagy near Debrecen (eastern
Hungary), visited the nearby village and agricultural center of
Nadudvar and saw the historical sights of Debrecen.
Hungarian FM at Munich Security Conference


        Munich, February 4 (MTI) - Hungary wants to organically
integrate with the Euro-Atlantic community because the country's
socio-economic modernization and security cannot be guaranteed
without that, Hungarian Foreign Minister Laszlo Kovacs told the
traditional security-policy conference in Munich on Saturday.

        At the two-day event, organized for the 32nd time this year, a
total of 200 participants, including several foreign and defence
ministers, generals and military experts, are holding an informal
discussion on the interrelations between the economy and military
policy, the new tasks of Euro-Atlantic cooperation and the expansion
of NATO eastward.

        Ewald von Kleist, who founded and organized the forum, invited
guests now for the first time from Eastern Europe, including Hungary,
Russia, the Czech Republic and Poland.

        In his contribution, Kovacs stressed Hungary does not aspire
for NATO membership against the interests of her neighbours, nor
does it seek defence from a concrete threat from the outside.

        At the same time, he drew attention to the fact that the country
lies near two crisis zones and NATO membership is vital to its
security.

        Moreover, he noted that NATO is the sole authentic force that
can act as a deterrent and stabilizer in the region.

        The foreign minister pointed out that NATO membership would
also strengthen Hungary's internal stability by slashing the leverage of
extremist political forces.

        Hungary gives priority to normalizing relations with its
neighbours. It is already happening with Slovakia and Romania, and
there is progress, if with occasional hitches. Each country is aware
that normal bilateral relations are crucial to their joining European
integration, Kovacs said.

        On possible adverse effects of NATO's eastern enlargement, he
said resistance can be expected from Russia and countries that may
be left out of the first admission phase.

        The Hungarian foreign minister believes Russia should
understand that NATO does not endanger its security and Hungary's
admission.



No Alternative to Ruling Coalition - HSP Board Meeting


        Budapest, February 4 (MTI) - There can be no doubt that the
coalition of the Hungarian Socialist Party (HSP) and the Alliance of
Free Democrats (AFD) represents the long-term interest of society,
and this has no alternative, Miklos Horn, general deputy chairman of
the HSP's national board, said after a survey of governmental work so
far by the body's Saturday meeting.

        At a news conference after the over six-hour session, Miklos
Horn said the board had come to the agreement that the country has a
calm atmosphere free from extreme occurrences even in the face of
serious social problems. This is something they owe to the
population, he added.

        The board believed society has to be continually informed of the
real economic conditions, but it should also be saved from being
shocked by weekly disaster reports.

        The Socialists consider decisions based on an agreement
between the prime minister and his coalition deputy (Gabor Kuncze,
who is also minister of the interior) to be vital to the uninhibited and
effective operation of the government coalition, Miklos Horn said. He
added that at the end of the discussion the prime minister promised
firm steps on urgent economic and social matters.

        The HSP general deputy chairman also quoted the board's
position that governmental work so far has been characterized by rush
and a wait-and-see attitude.

* * *

        On the relationship between the Socialist Party and the
government, the board considered it very important that the
appropriate party bodies are able to express their views on strategic
questions. In this respect, a relevant change was deemed necessary,
Miklos Horn said.

        He noted that the board basically agreed with the economic
programme of the government, but thought its prognoses should be
supplemented and corrected at some points in view of the economic
indices of the last six months.

        The aim is to create stability, together with conditions for
economic growth based on exports, the board stated.

        
        In reply to reporter's questions, the politician finally said that
the question of separating the posts of party chairman and prime
minister had not been raised in any form at the session, and that the
issue was also completely untimely at the moment.

        In the recess of the board meeting, Prime Minister and HSP
Chairman Gyula Horn told reporters that the government had received
several critical remarks at the conference, and reasonable proposals
had been made.

        The board confirmed the coalition with the AFD as necessary,
while stressing the need to change and improve cooperation with
them in many respects.

        Regarding likely personnel decisions in connection with the
vacant economic posts (Finance Minister Laszlo Bekesi resigned last
week and National Bank of Hungary President Akos Peter Bod on
December 15), the prime minister indicated he would soon go public
with his choices.

        He stressed candidates would be selected on the basis of their
professional skills, instead of party policy considerations.

        On the separation of the functions of party chairman and prime
minister, Horn said he was ready to discuss the matter at any time, but
he added that the question had not come up at the board meeting.

* * *

        Reflecting on AFD Chairman Ivan Peto's Monday remarks about
the coalition having arrived at a crossroads, Horn said that saying
such things is up to the AFD chairman, but he added that no similar
statements had so far been made by either him or other Socialist
politicians.

        The HSP, he continued, would like if debates were not revealed
to the public, only the agreements reached through negotiations.

        In conclusion, the prime minister confirmed he had held talks
with Peter Medgyessy about the finance minister's post, at which
Medgyessy gave a negative answer. (Medgyessy was formerly deputy
prime minister in the Nemeth cabinet, and is currently the president of
the newly-founded Hungarian Investment and Development Bank.)
Horn stated he observes Medgyessy's position, but the question had
not been dropped as yet. Nevertheless, he was having talks with other
candidates as well, the prime minister added.


Hungarian Foreign Minister in Munich


        Munich, February 4 (MTI) - Hungarian Foreign Minister Laszlo
Kovacs, in Munich to attend the security policy forum, on Saturday
held bilateral talks with his German and French opposite numbers, as
well as NATO Secretary-General Willy Claes.

        Kovacs discussed with Volker Ruhe the expansion of NATO to
the east. They agreed that when accepting new members, NATO
should pay attention to both the fulfillment of admission criteria and
the external consequences of the enlargement.

        Kovacs informed his partner on his recent negotiations in
Zagreb and Sarajevo.

        Ruhe inquired about trends in Hungary's relations with Slovakia
and Romania, saying he also experienced the anti-Hungarian campaign
when visiting Bucharest last week. Kovacs said the Romanian
statements had slowed the building of relations, but voiced his
confidence that the normalization of links would nonetheless
continue.

        In connection with the Pact on Stability in Europe, French
Foreign Minister Alain Juppe asked about the talks on the basic
treaties between Hungary and Slovakia and Hungary and Romania.
Kovacs said this week Hungary would hand over the draft of the
documents to both countries and was ready to continue expert talks
within the shortest possible time.

        The foreign ministers of France, holding the rotating presidency
of the European Union, and of Hungary, chairman-in-office of the
Organization for Security and Cooperation in Europe (OSCE), agreed
that the cooperation between the two organizations in the Chechen
conflict had proved successful. Kovacs and Juppe also held extensive
discussions on possible solutions to the Yugoslav crisis.

        Kovacs's talks with NATO Secretary-General Willy Claes focused
on the Chechen war. The Hungarian foreign minister briefed Claes
about the results of the OSCE delegation to Chechnya, and they
analyzed the possible effects of the Chechen war on Russia's future
domestic and foreign policy.


Statements by Hungarian and Romanian Defence Ministers


        Budapest, February 4 (MTI) - Concrete plans related to the
development of military cooperation between Hungary and Romania
will be presented to the parliaments of both countries shortly,
Hungarian and Romanian Defence Ministers Gyorgy Keleti and
Gheorghe Tinca agreed in Debrecen (Eastern Hungary) on Saturday.

        Following the unofficial meeting, initiated by the Hungarian side,
Keleti told MTI that the present discussion was a follow-up to the
meetings in Gyula last summer and Bucharest at the end of last year,
where the most important questions of improving military cooperation
were laid down in 15 points.

        Although the majority of these need not be approved by
parliament, it was decided that both sides would present to their own
legislatures the draft containing, for instance, the training of
Hungarian troops in Romania and of Romanian troops in Hungary.

        In two weeks in Bucharest, a group of experts will work out a
detailed schedule of troop exchanges, also determining the number of
soldiers and their equipment.

        The draft to go before the two parliaments also calls for the
organization of a joint conference to be held in Bucharest as part of
the Open Skies programme.

        Tinca described Hungarian-Romanian military cooperation as
exemplary, and said that the 15-point cooperation package he drafted
jointly with Keleti had aroused the interest of other countries as well.

        According to the Romanian defence minister, this cooperation is
also aimed at making bilateral inter-state relations one of the best and
enabling the two countries to join the European and Atlantic
structures as soon as possible.

Hungarian FM on Munich Security Forum


        Munich, February 5 (MTI) - Addressing the Munich security
policy forum, the foreign and defence ministers of NATO member
countries stated that the matter of the organization's eastward
expansion had been decided, and they formulated its admission
criteria in a more clear-cut and systematic manner than at any time
before, Hungarian Foreign Minister Laszlo Kovacs told MTI on Sunday
wrapping up the conference.

        "Among others, U.S. Defence Secretary William Perry and NATO
Secretary-General Willy Claes made absolutely clear that joining is a
two-way process, carrying both advantages and obligations for new
members.

        They pointed out that besides adopting the principles and basic
values of Western-style democracy and free-market economy,
applicants must also make their armies suitable for membership. They
have to guarantee civilian control over the military and take their share
in joint defence efforts as well, meaning financial burdens, Kovacs
said.

        Speakers at the conference reiterated that East European
countries cannot enter the Euro-Atlantic community with unsettled
territorial disputes and ethnic conflicts.

        They also established there is no transitory, only full
membership, the final criteria of which will be approved by the alliance
by the end of the year.

        As expansion is a uniform process taking place in different
stages, countries not accepted in the first phase should not feel
isolated.

        Russia was harshly criticized on account of the Chechen war,
but all participants agreed that Moscow's just security interests
should be taken into consideration, and that its democratization and
stabilization should be assisted by all possible means.

        Several contributors praised the balanced, though unequivocal,
position taken by the Organization for Security and Cooperation in
Europe on the Chechen conflict, Kovacs said.

* * *

        The Hungarian foreign minister said that the Munich security-
policy conference, to which he was now first invited together with
other East European politicians, had also offered an opportunity for
several bilateral discussions.

        Kovacs met the French foreign minister, the German defence
minister and the secretary-general of NATO on Saturday, and German
Foreign Minister Klaus Kinkel on Sunday.

        His talks concerned Hungary's preparations for joining the
European Union and the useful cooperation that has developed
between the EU and the OSCE in the matter of the Chechen crisis.

*****************************************************************
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. 30/1995                                                     09 February 199
5


Hungarian Press Review

        Budapest, February 8 (MTI) -Nepszabadsag - Fulfilling the
conditions of joining NATO does not automatically mean that the
applicant is admitted to the organization, NATO Secretary-General
Willy Claes told the Bonn correspondent of the paper. Claes is
scheduled to meet Hungarian Prime Minister Gyula Horn in Brussels
tomorrow. (pages 1 and 6)

        Nepszabadsag - In an article entitled "Impoverishment: the main
challenge to Eastern Europe", the paper carries a summary of a recent
World Bank study edited by Professor Nicholas Barr, which analyses
what kind of government strategies could ease the pains of transition
and what role the government should play in the labour market and
social welfare. (page 12)

        Magyar Hirlap - Hungary's foreign exchange reserves are
sufficient to finance foreign debt repayments in the coming two years,
Frigyes Harshegyi, Deputy President of the National Bank of Hungary,
says. Without taking privatization into account, an average USD 100
million is invested in Hungary each month, which corresponds to the
interest payable on Hungary's whole debt, he says. (page 11)

        Magyar Nemzet - Today the Constitutional Committee of
Parliament is to discuss the affair of the judges" panel set up to
expose the secret agents of past regimes. (Under the related law, two
of the three judges should not have accepted the job because they
themselves had passed sentences declared as invalid after the
collapse of the communist regime in 1990.) "Relieving them of their
post would generate serious constitutional problems," Gyorgy Tarr,
the third judge, says. (pages 1 and 5)

        Nepszava - Ivan Peto, Chairman of the Alliance Free Democrats.
denies that the coalition parties held talks on candidates for the post
of privatization minister. The paper mentions Tamas Suchman, a
Socialist MP and head of the Marcali branch office of Budapest Bank,
as a strong candidate for the post. (pages 1 and 5)

Hungarian Premier in Brussels


        Brussels, February 8 (MTI) - Economic, educational and cultural
matters were discussed during talks that Hungarian Prime Minister
Gyula Horn had in Brussels on Wednesday afternoon.

        As a guest of the Confederation of Belgian Industry, the
Hungarian prime minister met leading Belgian businessmen, and later
had separate meetings with the Prime Ministers of Wallonia and
Flanders.

        Hungary's privatization plans for this year were discussed at all
these meetings, and the Belgians expressed their interest in concrete
terms, especially in connection with energy production and the service
sector.

        Walloon Prime Minister Robert Colligno proposed a cooperation
agreement between Hungary and Wallonia (similar to that already
signed by Hungary and Flanders). Colligno saw major opportunities
for developing trade links and for Wallonia's businessmen to
participate in the transformation of Hungarian industry. The two men
agreed that the concrete details should be elaborated by experts from
both countries. However, Wallonia hopes to cooperate with Hungary
before an agreement is signed, for instance in shipping on the Danube,
and in projects aimed at modernizing Budapest's trams, Colligno said.

        Flemish Prime Minister Luc van den Brande, said that Flemish
companies wanted detailed information about the opportunities for
them to take part in the privatization's in Hungary, and said they were
willing to participate in the renovation of the Danube bridge at
Esztergom, N Hungary.

        In the evening, Prime Minister Horn met the representatives of
the Hungarian community in Belgium at the Hungarian Embassy in
Brussels.

Horn-Dehaene Talks in Brussels

        
        Brussels, February 8 (MTI) - Hungary's reputation abroad has
not been dented in any way recently, Hungarian Prime Minister Gyula
Horn said at a brief press conference which he held jointly with
Belgian Prime Minister Jean-Luc Dehaene after their talks in Brussels
on Wednesday. Belgium regards Hungary as one of those states which
are most likely to be first to fully integrate into Euro-Atlantic
organizations, Horn continued.

        Dehaene praised Hungary for being among the first to recognize
the importance of this integration process and added, "It is clear that
Hungary belongs to Europe both politically and historically".

        The Hungarian premier arrived in the Belgian capital in the
morning. After an audience with King Albert II, he went on to have
talks with the Belgian prime minister.

        The main topic of their discussions was how Hungarian-Belgian
relations could be broadened, including the opportunities available for
Belgian investors to participate in the Hungarian privatizations, and
Hungary's progress towards integration into the Euro-Atlantic
institutions.

        The Hungarian prime minister detailed Hungary's privatization
plans for this year, and in particular the planned sales in five
strategically important sectors. Belgian participation in these
privatizations, which will involve assets with a value of over USD 10
billion, is important not only for Hungary but also for the development
of relations between the two countries. Horn said that the privatization
of banks in which the state at present has a 50 per cent share will soon
begin, and Hungary would welcome the participation of foreign
investors. Hungarian railways, river transport and the development of
roads are further areas where foreign investment would be welcome.

        Hungary also proposed that Belgian citizens need only show
their identity cards when entering Hungary instead of their passports,
as at present. This and other concrete proposals will be discussed
later by experts.

        Hungary would like to see the European Union (EU) examine
how they could help those states aspiring to be full members to
transform and modernize their economic structures, as they prepare
to join the union, and it hoped Belgium would support this initiative,
said Horn. Hungary is not asking for aid, but for assistance, Horn
stressed.

        Hungary would like the EU's inter-governmental conference in
1996 to announce the beginning of the negotiations on the admission
of those associate member states ready for it. This would have a
favourable effect on the economies of these countries, and on
investment. Horn urged that they should be judged on the basis of
their actual capabilities.

        The Hungarian prime minister pointed out that for smooth
integration into the Euro-Atlantic institutions it was vital to maintain
good and balanced relations with neighbouring countries. In this
context he mentioned that the Hungarian-Slovak and Hungarian-
Romanian basic treaties might be signed before the Conference on
European Stability begins. Up to now, Slovakia has seemed more
willing to cooperate with Hungary in this respect, he added.

        Horn raised the idea that the agreements which are expected to
be reached during the stability conference would be of more value if
the European community, in its broader sense, would monitor the
fulfillment of commitments made and possibly sanction breaches of
them.
        The Belgian prime minister underlined Belgium's interest in
Hungarian privatizations, but the final decisions on investments rest
with companies, he added. However, much depends on the stability of
the Hungarian legal and institutional framework. Nevertheless, it is the
Belgian government"s firm intention to encourage companies to
invest in Hungary, because Brussels believes closer business ties
could be a key factor in strengthening relations in general.

Hungarian Foreign Minister in Helsinki


        Helsinki, February 8 (MTI) - Hungarian Foreign Minister Laszlo
Kovacs paid an official visit to Helsinki on Wednesday. He met
Speaker of the Finnish Parliament Ritta Uosukainen, and held official
talks with his host Paavo Rantanen, who only became Foreign Minister
last Friday. This was Rantanen's first official engagement as foreign
minister.

        Kovacs met Kalevi Sorsa, a senior official at the Bank of
Finland, and was received by President Martti Ahtisaari. He later held
talks with Deputy Prime Minister and Minister of Trade Petti
Salolainen, and in the evening delivered a lecture at the Finnish
Paasikivi Association.

        Foreign ministry spokesman Gabor Szentivanyi told MTI that all
of today's talks focussed on Hungarian-Finnish relations. The
friendship between the two countries, which has lasted 1,000 years
and has survived many testing times, could receive new impetus now
that Finland is a member of the European Union. Finland became a full
member on January 1 and Hungary, at present an associate member,
would like to become a full member.

        The Finns assured Kovacs that they backed Hungary's
aspiration to become a full member of the EU. Kovacs said Hungary
could learn from the experience Finland had gained from preparing for
entry into the EU. The Finns, for their part, said they were willing to
share this experience with Hungary. During the talks, Kovacs had an
opportunity to discuss the various stages leading to full membership
of the EU with the leader of the team who negotiated the terms of
Finland's entry.

        Kovacs presented President Ahtisaari with an invitation to visit
Budapest in the first half of March. Their talks mainly covered issues
related to the expansion of the EU and the Finnish president assured
Kovacs that he supported Hungary's aim of joining the union.

        Kovacs had talks with the speaker of the Finnish parliament
covering various issues related to the operation of the two countries"
legislatures.

        The Finnish foreign minister confirmed the invitation made to
Hungarian Foreign Minister Gyula Horn to visit Finland in the second
half of the year. The two foreign ministers discussed European affairs
in general and European integration and security. Kovacs gave an
account of his work as Chairman-in-Office of the OSCE, especially in
connection with the present crises in Chechnya and Karabakh. He also
briefed his host on the steps Hungary has taken to improve relations
with its neighbours, and to complete basic treaties with Slovakia and
Romania. As regards Hungarian-Finn economic links, the two
ministers noted with satisfaction that bilateral trade is increasing. At
present, there are 50 Hungarian-Finn joint ventures in Hungary.

Hungarian-EU Links


        Budapest, February 8 (MTI) - Prime Minister Gyula Horn is due to
start a visit to Brussels today.

        Fact-finding negotiations opened between Hungary and Brussels
in 1982. In 1985 experts opened talks on drafting a would-be bilateral
agreement between Hungary and the European Economic Community.
In 1987 the Brussels-based European Commission received the
necessary mandate for officially negotiating a Hungarian-EC treaty,
and in November that year, the first top-level contacts were
established: the then Hungarian party general secretary Janos Kadar
met Jacques Delors, president of the EC Commission, during his trip
to Brussels.

        An EC-Comecon agreement on mutual recognition was
concluded in the summer of 1988, enabling Hungary and the EC to
initial a trading and economic cooperation agreement on June 30,
1988. It was signed in Brussels in September the same year to enter
into force on December 1, 1988.

        In August 1989 the G-24 held negotiations on developing a
Hungarian-Polish aid operation, and established the first form of the
PHARE programme, which used the initials of these two countries.

        In June 1990 Prime Minister Jozsef Antall, the head of the first
government following the change of regime in Hungary, visited
Brussels and handed to Delors a memorandum on Hungary's
European policies. The document mentioned that Hungary wants to
become a member of the EC.

        In December 1990 formal talks opened in Brussels between the
12 and Hungary, Czechoslovakia and Poland on a future associate
agreement.

        Prime Minister Antall signed an associate agreement between
Hungary and the EC in December 1991.

        Due to delays in the process of ratification, the agreement only
entered into force on February 1, 1994, but the key chapter - on the
gradual elimination of customs duties and quota restrictions - went
into effect on March 1, 1992.

        In June 1993 the future membership of the "associate eastern
countries" was decided as a "common goal" at the EC summit in
Copenhagen.

        On April 1, 1994, the Hungarian foreign minister presented
Hungary's official application for membership to the then chairman of
the EU Council in Athens.

        In June 1994 the EU summit in Corfu officially "acknowledged"
Hungary's application for membership.

        The December summit in Essen worded the "strategy preparing
for the accession" of East European countries.

        A EU recommendation (White Paper) is to be drafted to promote
the legal harmonization of the economies of Eastern Europe before
the June summit.

        A strategy of rapprochement between the farming policies of the
EU and Eastern Europe is to be completed before the end of the year's
summit.

        Meanwhile preparations for an EU intergovernmental conference
in 1996 to carry out a comprehensive institutional reform of the EU
member countries are under way. The preparations are designed to
draw up a way to further expand and admit new members.

Defence Minister on Links with NATO


        Budapest, February 8 (MTI) - A Language Teaching Centre within
the framework of the Partnership for Peace scheme is expected to
open in Budapest on September 1, this year, Hungarian Defence
Minister Gyorgy Keleti told reporters today.

        Keleti said that HUF190 million from a HUF493 million fund set
aside for projects connected with the Partnership for Peace scheme
will be allocated for this purpose.

        Five study groups will start learning English, German, and
French. Several NATO countries have offered to help with this project.

        The minister also said that a committee from the ministry had
earlier in the day approved a package of measures that need to be
taken if Hungary is to be able to join NATO.

        Keleti said the Hungarian armed forces must adjust to NATO
standards.

        This adjustment, however, is only partly a technical question -
"intellectual adjustment" is even more important, and progress must
be made especially in language teaching and military planning.

Goncz in Milan - Press Breakfast


        Milan, February 8 (MTI) - Hungarian President Arpad Goncz said
his current official visit to Italy had been very important and had
revived the two countries" interest in each other, which had waned
somewhat recently.

        Meeting Italian and Hungarian reporters at a press breakfast,
Goncz said that strengthening ties with Italy was all the more
important because that country would fill the post of the EU
Presidency in the first half of 1996, a period crucial for Hungary's
admission to the European Union.

        Goncz said he had suggested to the Italians that they should
invite Hungary and other Central European states aspiring to be
members of the EU to the Messina conference, in July 1995, which has
the task of preparing for the conference which will examine the results
of the Maastricht Treaty.

        "There is only one road ahead of Hungary, and it leads to the
West. The Hungarian economy is facing two major challenges:
completing its transformation, and accelerating its ongoing
modernization," the president said.

President Goncz Leaves Milan for Bologna


        Milan, February 8 (MTI) - In Milan today, President Arpad Goncz
met Paulo Arrigoni, president of the province of Lombardy.

        After the meeting President Goncz described Arrigoni as a well-
prepared and professional negotiating partner, adding that Lombardy
was planning to establish a trade centre in Hungary.

        About 80 per cent of the trade between Italy and Hungary is
conducted by companies based in Northern Italy.

        Helped by the favourable exchange rate of the Italian lire and EU
funds, Lombardy's companies are very active in foreign markets.

        The planned trading centre in Hungary is primarily designed to
provide assistance and information to small and medium-size
companies.

        At the end of his visit President Goncz flew from Milan to
Bologna.


Minister on Italian-Hungarian Economic Links


        Milan, February 8 (MTI) - Doubts about Hungary formulated by
the Italian financial press in the last few days were raised at every
round of negotiations held by the Hungarian business delegation
accompanying President Arpad Goncz to Italy.

        Minister of Industry and Trade Laszlo Pal told Hungarian
journalists that the Italian businessmen's fears had been allayed. Pal
said he had stressed at his talks with them that it was merely a
temporary state of affairs that some top financial posts had not been
filled.

        Hungary is grappling with many economic difficulties, but this is
nothing new. The serious problems with the balance of payments and
budget deficit have developed over a period of years.

        At the same time positive trends have emerged in the Hungarian
economy. Exports have increased considerably (by about 20 per cent)
and there has been economic growth of late.

        Pal also said that Italy has displayed very keen interest in
privatization in Hungary.

        Italy is Hungary's fourth major trading partner - and third among
the EU member states. Italian investors have invested more than
USD500 million in Hungary, where about 700 Italian-Hungarian joint
ventures are operating.

C/A Deficit of USD 3.404bn January-November

        
        Budapest, February 8 (MTI-ECONEWS) - Hungary's current
account deficit totalled USD 3.404bn in the first eleven months of 1994,
USD 209m of which was run up in November, the National Bank of
Hungary (NBH) reported on Wednesday. This compares with a C/A
deficit of USD 330m in November, 1993 and of USD 2.986bn between
January and November 1993.

        The trade balance under the NBH's current account statistics
showed a deficit of USD 253m in November as a result of exports of
USD 771m and imports of USD 1.024bn.

        The November balance of services and other income showed a
deficit of USD 23m. Within this category tourism showed a surplus of
USD 41m. The income transfer on investments had a deficit of USD
75m in November with the most important single item being net
interest payments of USD 66m on foreign debts. The surplus of
unreturned transfers was USD 67m in November.

        With direct foreign cash capital inflow of USD 79m in November,
direct foreign cash investments in the first eleven months of 1994
totalled USD 1.048bn against USD 1.099bn in the same period of 1993.

        International reserves stood at USD 7.2bn on November 30,
1994, up from USD 6.1bn in the same period of 1993, and from USD
6.9bn in October.

        Hungary's gross external debt grew from USD 24.6bn at the end
of December, 1993, to USD 28.1bn by November 30, 1994, the NBH
figures show. Hungary's net foreign debt increased from USD 14.9bn
at the end of 1993 to USD 18.5bn at the end of November, 1994. Of the
eleven-month increase of the net debt in dollar terms, USD 1.4bn was
due to changes in cross exchange rates.


22.8pc Rise in Salaries Last Year


        Budapest, February 8 (MTI) - In 1994 the average gross monthly
wage amounted to HUF 33,643, 22.8 per cent higher than in the
previous year, and the net average wage was HUF 23,108, 25.4 per cent
up on the 1993 figure, the Central Statistical Office said. The figures
were registered by economic units with more than 10 employees.

        The lowest average gross monthly wage - HUF 20,600 - was
registered in the textile industry, with slightly higher figures in the
service sector, the catering industry and the construction industry.

        The highest figure - almost HUF 62,000 - was registered in the
financial sector. Workers in the chemical industry earn HUF 44,400,
and miners HUF 42,800 on average.

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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. 29/1995                                                     08 February 199
5

Hungarian Press Review


        Magyar Nemzet, Nepszava - It is not the trade union leaders who were
behind Bekesi's resignation, Sandor Nagy, President of the National
Confederation of Hungarian Trade Unions and a Socialist MP, says. Social
groups should continue to seek compromises on the crucial issues even in the
absence of a general social and economic agreement, he told Magyar Nemzet
(pages 1 and 4). In another interview carried by Nepszava (pages 1 and 3),
Nagy said, "it would be very difficult to reach a general social and economic
agreement without the approval of a medium-term modernization scheme. For
this reason, the postponement of the agreement was not a surprise."

        Uj Magyarorszag - In an interview entitled "Antipathy Towards Szekely
Land Can Still Be Felt", Socialist MP Matyas Szuros says, "the long-awaited
restoration of Hungarian-related symbols in Transylvania has started. In the
past few decades, their restoration was prevented by efforts to destroy the
ethnic Hungarians' sense of identity." (pages 1 and 5)

Prime Minister Holds Press Conference in Budapest


        Budapest, February 7 (MTI) - Prime Minister Gyula Horn plans to
propose that Lajos Bokros, president of Budapest Bank, fill the post of finance
minister from March 1, and that Gyorgy Suranyi take the post of president of
the National Bank of Hungary. This was announced at an international press
conference held in Parliament on Tuesday.

        Horn said he had proposed to the Alliance of Free Democrats (AFD) that
a post of minister without portfolio in charge of privatization be established,
but he did not wish to name the candidate for the post before coordination
with the coalition partner AFD. Both the AFD and the deputy chairmen of the
Hungarian Socialist Party (HSP) have agreed to the appointment of those
nominated by the prime minister for the post of central bank president and
that of finance minister.
        In answer to a question, the prime minister said: the post of
parliamentary state secretary of education has been offered to various
Socialist MPs, but none of them has accepted it. Therefore, the idea has been
raised that a Free Democrat MP should fill the post. The appointment of the
head of the banking supervision belongs to the finance minister's scope of
authority, Horn said, adding that this is due to happen before the end of
February.

        On its February 23 session, the cabinet will decide on short-term
stabilization measures. Earlier, on February 20, the same issues will be
discussed by the top financial experts whom the prime minister consulted on
February 6. Asked whether the new finance minister will have to make a
supplementary budget, Horn said this question had not been decided yet,
because the reaching of a unanimous agreement required final data.

        The prime minister refuted the presumption that the government would
want to exclude foreign investors from the privatization of strategic
companies. Preparatory negotiations are under way with foreign firms that are
seriously interested in these sales, he said.

        The prime minister detailed his Monday meeting with top economic
experts at which, according to him, the real situation of the country was
brought to light. The meeting was timely as it took place a couple of days
before his visit to Brussels, which will start on Wednesday, Horn pointed out.

        In Brussels, the prime minister will have talks with senior officials o
f the
European Union (EU), the European Parliament, the Western European Union,
and NATO, as well as with Belgian, Flemish and Luxemburgian political
leaders.

        Monday's talks with economic experts covered such issues as financial
stability, the curbing of the budget deficit, and the balance of payments. In
his
introductory speech at the meeting, Horn referred to assessments by the
Ministry of Finance, the National Bank of Hungary, and the Central Statistical
Office. Those present all agreed that the unfavourable trends of the economy
had begun in the middle of 1992, and some of the experts even put their
 of the Warsaw Treaty in April 1991.

        First the North Atlantic Cooperation Council was set up, and this was
supplemented and surpassed by the Partnership for Peace.

        Hungarian Prime Minister Gyula Horn is starting a visit to NATO on
Thursday at a time when - since January 1994, the last summit meeting of the
Alliance - the possibility of these countries to be admitted as NATO members
is officially on the agenda (which issue was raised by the prime minister as
chairman of Parliament's foreign affairs committee in April 1992).

        July 18, 1990 - Hungarian Prime Minister Jozsef Antall had talks with
Manfred Warner, NATO's Secretary General in Brussels, and invited him to pay
a visit to Hungary.

        Antall was the first prime minister of a Warsaw Pact member country to
visit NATO headquarters. After his talks the Hungarian Prime Minister
announced that Hungary's Brussels ambassador had been commissioned to
keep permanent contacts with NATO.

        April 1, 1991 - The Political Consultative Body, military organization
of
the Warsaw Pact ceased its operation in line with its resolution passed in
Budapest on February 25, 1991.

        October 27-29, 1991 - Prime Minister Jozsef Antall took part in the
session of the NATO North Atlantic Council and met NATO Secretary General
Worner in Brussels.
        October 30 - November 12, 1991 - General John Galvin, the commander-
in-chief of the NATO European Allied Armed Forces paid an official visit to
Hungary.

* * *

        Budapest, February 7 (MTI) - November 7-8, 1991 - NATO summit
conference in Rome accepted the Declaration of Rome on relations with the
dissolved Warsaw Treaty's member states. NATO decided to establish a joint
organization for NATO and the East European countries under the title North
Atlantic Council of Cooperation.

        December 20, 1991 - In Brussels the North Atlantic Council of
Cooperation was formed with the participation of 16 NATO and 9 former
Warsaw Treaty countries, the first consultative organization since World War II
that admitted countries opposed one another during the cold war, amid
common structural frameworks on security policy matters. (Since the Soviet
Union ceased to exist on the same day, its successor states, the CIS countries
joined the Council in March 1992.)

        April 6, 1992 - Gyula Horn, chairman of the Parliament Foreign Affairs
Committee, proposes to Parliament to oblige the government to submit an
application to NATO for membership. Prime Minister Jozsef Antall said a week
later at a plenary session that the situation is not yet ripe for such a move.

        July 16-18, 1992 - NATO Secretary General Manfred Warner visits
Budapest and meets Prime Minister Jozsef Antall.

        October 31, 1992 - AWACS reconnaissance planes under NATO
command start patrolling Hungarian air space to monitor observance of a UN
ban on flights over Bosnia.

        February 14, 1993 - John Shalikashvili, commander in chief of NATO's
European forces, visits Budapest.

        November 1993 - Manfred Warner pays last visit to Budapest and meets
Prime Minister Jozsef Antall for the last time.

        January 10-11, 1994 - NATO summit officially announces Partnership for
Peace, and the final document envisages possible expansion of the Alliance
"gradually and in an evolving manner."
        February 8, 1994, General George Joulwan, commander-in-chief of
NATO's European forces, pays a visit to Budapest.
        November 15, 1994 - Foreign Minister Laszlo Kovacs and Defence
Minister Gyorgy Keleti formally finalize a NATO-Hungarian working programme
for bilateral cooperation.

        October 21-27, 1994 - Exercises involving East European troops are
staged on NATO territory in the Netherlands for the first time in the framework
of the Partnership for Peace. Present is Colonel General Janos Deak, chief of
staff, commander of the Hungarian armed forces.

        February 9, 1995 - Prime Minister Gyula Horn is expected at NATO
headquarters in Brussels.

Foreign Ministry Holds Press Briefing


        Budapest, February 7 (MTI) - Foreign Ministry spokesman Gabor
Szentivanyi told reporters today that the Hungarian people and the ministry
were shocked to hear about the terrorist bombing which claimed more than 40
lives in Algiers on January 30, 1995.

        He said Hungary expressed its condolences to the relatives of the
victims and the injured. Hungary rejects all forms of violence, and shares the
view expressed in the EU declaration on Algeria of January 23, 1995, that such
internal problems can only be solved through peaceful negotiations.

        The spokesman said that there was no Hungarian among the casualties.
He also warned Hungarians not to travel to Algeria except when unavoidable.

        He also said the Hungarian government regrets the outbreak of the
armed conflict between Peru and Ecuador and hopes for an early and peaceful
settlement.

        He announced that deputy foreign minister Sergei Krilov paid an officia
l
visit to Budapest on February 3 and had talks with Foreign Deputy State
Secretary Janos Toth and State Secretary at the Prime Minister's Office Csaba
Tabajdi about the Chechen conflict, a larger NATO, and relations between the
Council of Europe and Russia.

        The visit by PM Gyula Horn to Moscow in the first half of the year will
 be
an important landmark in the two countries' relations.

        He said the French Minister on European Affairs Alain Lamassoure, in
his letter dated January 31, 1995, addressed to Foreign Minister Kovacs,
responded to earlier Hungarian initiatives in the Memorandum titled
"Hungarian Endeavors and Expectations under the French EU Presidency"
given to Lamassoure while he was in Hungary January 16, 1995.

        The letter responds to earlier Hungarian proposals for participation in

the second and third pillar of European cooperation and supports Hungary's
efforts to participate in an adequate way in the 1996 EU conference. Hungary
considers the quick and detailed French response as a positive political signal
towards Hungary.

        Hungary has relayed more proposals concerning basic treaties to be
made with Slovakia and Romania. Gabor Szentivanyi told his usual press
briefing that Budapest was ready to hold substantive consultations on
wording.

        He also said Hungary was ready to speed up talks on a basic treaty in a
n
effort to conclude the agreements in March.

        At the same time Budapest holds the view that in addition to the
framework agreement on the protection of minorities signed in the Council of
Europe recently there are many other international and European norms that
Hungary wants to involve in negotiations.

Hungary's Arpad Goncz Meets Italy's Lamberto Dini


        Rome, February 7 (MTI) - Hungary joining the European Union (EU) was
the main topic in talks Hungarian President Arpad Goncz had on Tuesday with
Italian Prime Minister Lamberto Dini.
        Goncz told Dini that Hungary wanted to be at the meeting of EU member
foreign ministers in Messina in June 1995, where preparations start for a
Treaty of Maastricht conference. Dini assured was encouraging, but other EU
member states needed to discuss it.

        Rome sees Hungary as in the western half of Europe, and will strive to
help Hungary join, Dini pledged. Hungary should improve its domestic savings
ratio and balance of payments, Dini said.

        Goncz voiced his belief that NATO might be the most important
segment of the changing security system of Europe. Dini stressed it was vital
to develop the Partnership for Peace programme, and that the expansion of
NATO should not mean forming new opposing blocs.

        Goncz also met Italian Chamber of Deputies President Irene Pivetti, and

Senate President Carlo Scognamiglio. Both meetings focused on the
importance of closer links between both countries' legislatures. Goncz invited
Pivetti and Scognamiglio to Hungary.

Goncz in Milan


        Milan, February 7 (MTI) - Hungarian President Arpad Goncz, currently on

an official visit in Italy, arrived in Milan early this evening with a
political and a
business delegation.

        After his arrival, he paid a short courtesy visit to Prefect of Milan
Giacomo Rossano. Later on, a meeting of Hungarian and Italian business
people took place at Milan's Giurenconsulti Palace, under the auspices of the
Milan Chamber of Commerce. The conference was opened by Piero Bassetti,
president of the chamber. The Hungarian president outlined Hungary's
political and economic situation.

        Later in the evening, the Hungarian head of state paid a courtesy visit
 to
Mayor of Milan Marco Formentini.

Parliament Votes on UN Death Penalty Clause


        Budapest, February 7 (MTI) - At Tuesday's plenary session, Hungarian
Parliament passed a law - by 197 votes for, none against, and 11 abstentions -
on announcing the second facultative protocol to the International Convention
on Civil and Political Rights.

        Presenting the document, Justice Minister Pal Vastagh said the
convention had been approved by the United Nations in 1966, with Hungary
becoming a signatory in 1976.

        Hungary is also a signatory to the first protocol of 1988. The second
protocol of 1989, the main point of which is the banning of death penalty, has
become part of Hungarian law with Parliament's approval. (Hungary's Penal
Code already excludes death penalty.)

        Hungarians have concerns over ruling out the death penalty, fearing
this might result in more violent crimes, Vastagh said. Therefore, the Ministry
of Justice intends to provide guarantees that people who commit serious
crimes get no further chances to commit an offense, the minister said. At a
debate in Parliament's Committee on Human Rights, it was raised that the
introduction of actual lifetime imprisonment should be considered.

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