OMRI DAILY DIGEST
No. 122, 23 June 1995

SLOVAK ROUNDUP. The Slovak parliament on 22 June approved an amendment
on child allowances as well as legislation raising minimum living
standards. Former Privatization Minister Milan Janicina said that
although the opposition will not be able to stop the passage of the
draft law on changes to the privatization program, it will be "ripe" for
the Constitutional Court immediately after it has been approved. He also
revealed that only about 60,000 signatures have been collected for his
petition to hold a referendum on the second wave of coupon
privatization, which was organized before the government's new plans
were announced, Janicina called the Slovak population "apathetic" and
"intimidated," Narodna obroda reported on 23 June. Meanwhile, following
the signature of a statement protesting government plans to implement
"alternative" (bilingual) education in Hungarian schools, the directors
of four secondary schools in southern Slovakia received letters that
they will be removed from their posts as of 30 June, Sme reported on 23
June. -- Sharon Fisher, OMRI, Inc.

HUNGARIAN INDUSTRY AND TRADE MINISTER SACKED. Hungarian Prime Minister
Gyula Horn fired Industry and Trade Minister Laszlo Pal on 22 June,
Reuters reported. According to government spokesman Elemer Kiss, Pal has
agreed to leave office on 15 July. Imre Dunai, the ministry's
administrative state secretary, has been named as his replacement. Pal,
who served as a senior official in the ministry during the last
communist government, was associated with the left wing of Horn's
Socialist Party, which opposes the government's economic austerity
program and its plans for quick privatization of loss-making public
utilites. -- Sharon Fisher, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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

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Editorial- NATO: The Case For Holding Back

  JIM HOAGLAND
  
  (C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 232107)

    BERLIN -- Those who would force the tide in Central Europe should have
been here to listen to Jack Galvin, one of America's most distinguished
generals during the struggle against Soviet tyranny. They would have heard
Galvin warn: "We won the Cold War. But we are losing the peace."

     A conference hall full of high-energy, high-profile politicians,
business leaders, policy wonks and officials from Germany and America fell
silent as Galvin asked Western nations to rethink policies that "are creating
a sense of dismay, and of betrayal, in Russia." Prime among those policies is
the rush to expand NATO into Central Europe by taking in Poland, the Czech
Republic and Hungary as members.
     Galvin knows NATO. He served as Supreme Allied Commander, Europe (SACEUR
in NATO jargon) and U.S. commander on the continent before his 1992
retirement. He spoke on June 17 to a conference on German-American relations
sponsored by a nonprofit policy organization he now chairs, the American
Council on Germany, and its German counterpart, the Atlantik-Brucke.
     On the subject of NATO expansion, Galvin is no lonely voice of dissent
in the U.S. national security community. His doubts are shared by many in the
current U.S. military command leadership in Europe and by many other top
professionals at the Pentagon. Galvin is now free to express his concerns.
They are not.
     Galvin's words also echo the strong reservations recently voiced in
Washington by Paul Nitze, a leading hawk in previous Democratic and
Republican administrations. Nitze and other retired U.S. ambassadors joined
to issue a public statement opposing NATO expansion now. So does George
Kennan, who along with Nitze wrote the key national security documents that
guided America in the dawn of the Cold War.
     What a spin of the Washington merry-go-round: While conservative
generals, some of Ronald Reagan's favorite diplomats and other foreign policy
thinkers on the right line up to cut Russia some slack, liberal and moderate
Democrats at the top of the Clinton administration have grabbed the banner of
NATO expansion and being firm on Russia.
     The Clintonites initially sought to buy time for Boris Yeltsin by giving
ex-Warsaw Pact countries associate status with NATO in the Partnership for
Peace program. But National Security Adviser Anthony Lake, who quit Henry
Kissinger's National Security Council staff in protest over Indochina, has
gradually pushed the administration into enthusiastic support for NATO
expansion, pulling along State Department skeptics led by Deputy Secretary of
State Strobe Talbott. When Clinton went to Moscow in May, he told Yeltsin
firmly that expansion was inevitable.
     Why the Washington turnaround, which has the liberals pushing causes
they did not come to office propounding? Here's my view:
     The White House is in part responding to the strategic concerns raised
by Kissinger and Jimmy Carter's former security adviser, Zbigniew Brzezinski,
both of whom strongly favor quick expansion. Even more important, however, is
Clinton's political vulnerability to Republican presidential hopefuls wooing
Polish American communities and blasting Clinton for keeping Poland out of
NATO.
     The White House also was responding to heavy pressure from the German
government, which wants to move the eastern frontier of NATO to Poland's
border. When Clinton bought Lake's argument, the skeptics at State went with
the flow, hoping to mitigate the impact of NATO expansion on U.S.-Russian
relations.
     But Galvin, Nitze and the others wonder if the Clintonites have thought
through the strategic costs of rushing NATO expansion at a time when the fate
of democracy in Russia is still uncertain. Even greater than the financial
costs of aiding dilapidated Central European armies will be the missed
opportunities in establishing a totally new military relationship with
Russia.
     Moreover, my sense from this conference is that Germany's political
parties are not nearly as united behind NATO expansion as the White House
seems to believe. The continuing debacle in Chechnya and growing problems for
Russian troops in Central Asia show the Russians are badly bogged down
elsewhere and will not be a threat to Central Europe for the foreseeable
future.
     Speeding NATO expansion will not sink Yeltsin; postponing it will not
save him or Russian democracy. Russia's own giant political currents will
decide who swims and who sinks. Making Poland part of the NATO command will
not turn the tide of the human events that will determine Russia's fate.
     That tide is not yet full -- Russia's fate is not yet decided, democracy
not yet lost. To push NATO expansion is to force the tide, to command it to
keep pace with our ideas and prejudices instead of the true rhythm of events.
     If Russian democracy fails, the West will have the time and the duty to
respond, honestly and forcefully. Until then, the West has the time and duty
to listen to clear thinkers like Jack Galvin and Paul Nitze.

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

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Reposting is supported by Hungarian Human Rights Foundation News
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Friday, 23 June 1995
Volume 2, Issue 121


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

**ANOTHER CASUALTY IN HUNGARY'S CABINET**
  Hungarian Prime Minister Gyula Horn has fired Industry and
  Trade Minister Laszlo Pal.  Pal was one of the government's
  leading left-wing ministers and he has close ties to trade
  unions.  The firing seems related to Pal's opposition to the
  rapid privatization of gas, oil and electric companies.  Pal
  has spoken out against selling a controlling interest in the
  state electric company to foreigners.  According to a
  statement issued yesterday, Horn thinks it's essential that
  all members of the government carry out the policies of the
  government.  But spokesman Elemer Kiss said he doesn't know
  the exact reason for Pal's dismissal.

  "I can't judge what the last drop in the glass was.  The only
  person who can answer that question is Prime Minister Horn."

  Pal will step down July 15.  He'll be replaced by Imre Dunai.
  Dunai is now a state secretary in the Industry and Trade
  Ministry. --David Fink


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

**NEW HUNGARIAN PRIVATIZATION AGENCY TAKES THE REIGNS**
  By Tom Hoover

  With the sale of shares in Hungary's largest savings bank,
  Orszagos Takarek Penztar (OTP), and its fifth largest,
  Postabank, scheduled to begin Monday, Hungary's new State
  Privatization and Holding Company (APV) hasn't given itself
  much of a window for preparation.  The new agency, a merging
  of the State Property Agency (AVU), which previously handled
  the privatization of all state firms, and the State Holding
  Company (AV), which took care of the privatization of
  companies in which the state was to retain a stake, officially
  began operations a week ago and named its Board of Directors
  last Monday.  The new agency, led by Attila Laszcsik, jumps
  into the fire June 26 when Postabank begins its subscription
  period at roughly $100 a share.  This subscription period is
  scheduled to run until September 5, with a listing on the
  Budapest Stock Exchange to follow.  OTP's private placement of
  shares starts Tuesday as brokerage firms, which the government
  won't name, vie for a 5 percent share in the bank.  Hungary's
  government plans to sell 20 percent of OTP through this
  private placement plan, while a further 5 percent will be sold
  publicly.  Bank employees will also be offered a 5 percent
  share and the government will retain 25 percent.  After the
  sales, OTP will be floated on the Budapest Stock Exchange, the
  Luxembourg Stock Exchange and London's SEAQ.

  "The OTP and Postabank sales are ready to go," said Janos
  Bartha, the Chief Executive Officer of CS First Boston in
  Budapest.  In his opinion the merging of the government's
  privatization bodies will streamline the decision-making
  process, but it is up to the government to stand by its
  promises of reform.  "Privatization is a political issue," he
  said.  "It can only happen and be successful if the political
  will is there."

  Hungary's economic leaders have been busy most of this year
  trying to convince foreign investors that there is a will to
  privatize here.  The collapse of the high-profile deal to sell
  the Hungarhotel chain to a US firm and the sacking by Prime
  Minister Gyula Horn of his privatization chief, which in turn
  provoked the resignation of Finance Minister Laszlo Bekesi,
  caused some dismay in international financial circles.
  However, the situation calmed in March when the new Finance
  Minister, Lajos Bokros, introduced an economic austerity plan
  designed to reduce the budget deficit.  The plan is not
  popular at home, but has been well received by international
  financial institutions like the World Bank, which this week
  approved credits of over $1 billion for Hungary.

  Istvan Abel, who is overseeing the OTP and Postabank deals at
  APV, said the government has a strong desire to complete these
  transactions.  The problem, he contends, is finding qualified
  and knowledgeable personnel.  "The uniting of the holding
  company and property agency, in the short term, has made
  everything more confusing," he said.  "These procedures are
  complicated and time consuming.  Privatization needs diverse
  expertise."   To highlight the confusion, Abel admitted he was
  unaware that APV had appointed members to its board of
  directors on  Monday.  The board appointees are Zoltan
  Bessenyei, a former diplomat to Algeria and advisor to late
  Prime Minister Jozsef Antall's finance minister, Tamas
  Lajtner, an economist and adviser to AVU and Jozsef Spanyol, a
  geophysicist and founder of Bankinvest.

  Another obstacle are the powerful, Socialist-affiliated trade
  unions which oppose the sale of Hungary's national electrical
  utility, Magyar Villamos Muvek (MVM), as well as other deals.
  Privatization Minister Tamas Suchmann said MVM would provide
  nearly a quarter of the $1.2 billion Hungary hopes to raise
  through privatizations this year.  However, the trade unions
  won't give their blessing out of fear that new owners will try
  to trim the Hungarian work-force.  A compromise must be
  reached if Hungary wants to lose its tag as the great
  hesitator among central Europe's emerging markets.



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

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