HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU
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BUSINESS JOURNAL BUDAPEST
VOL. 29. NUMBER 3
FEBRUARY 12 – FEBRUARY 25, 2021
Photo by Lázár Todoroff / AmCham
SPECIAL REPORT
Language & Translation
SPECIAL REPORT
Coronavirus Ravages Language Education
The initial fall out from the COVID-19 pandemic on the language education sector was “an absolute disaster,” Zoltán Rozgonyi, chairman of Nyelvtudásért, an association of language teaching and testing professionals, tells the BBJ. 10
SPECIAL REPORT
New Rules Make Language School Licensing Easier
New rules have increased administration, but also brought progress for teachers and security for students. Some private instructors may still opt to operate in the grey economy, though, despite the new system making it significantly easier to register. 13
SOCIALITE
István Bergendy’s Place in Hungary’s pop Culture
István Bergendy was perhaps Hungary’s best-loved popular musician, a clarinet player, band leader, songwriter and mentor to many of the country’s stars. It is claimed that his band was the longest-lived in Hungarian popular music. 18
Setting the Policy Agenda
N ES BUSI
S
In his first interview with the BBJ since he was elected president of AmCham Hungary, Zoltán Szabó tells us what sets apart the chamber’s latest Policy Agenda publication from its predecessors, where NEWS progress needs to be made, and why sustainability is so important Yearend Industrial Data to the Hungarian economy.7 Below Expectations BUSINESS Industrial production in the last month of 2020 proved a negative surprise; however, analysts still expect notable expansion this year, mainly due to low base effects. In the meantime, the government has introduced its action plan to restart the economy. 3
Broker Comparison Firm With Global Ambitions BrokerChooser has ambitious plans. The fast-growing Budapest-based broker comparison platform wants to evolve from a small startup to the first globally successful Eastern European fintech company. 6
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Budapest Business Journal | February 12 – February 25, 2021
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THE EDITOR SAYS
EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Kálmán Béres, Zsófia
Czifra, Kester Eddy, Bence Gaál, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Gergely Sebestyén, Robert Smyth, Zsófia Végh. LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:
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LEARNING THE LANGUAGE OF LOVE Two days after the publication date of this issue, as you surely could not have failed to notice, Valentine’s Day falls. It is a holiday, or perhaps more accurately an occasion, that has grown massively in terms of visibility in Budapest in the 22 years since I first arrived here. Back then it seemed like most Hungarians, even most florists and retail outlets, had little idea that here was a day made for monetizing love and all its essential accessories: flowers, wine, and chocolate. I soon gave up trying to find a greetings card dedicated to anonymously declaring my feelings for the woman who became my wife. Now hotels advertise Valentine’s specials (usually offerings of food and drink delivered to your door in these COVID-conscious times of ours), travel agents offer the promise of romantic getaways, shops dress their windows and you can even spot specially themed cards on those rotating racks in your local supermarket. It is possible that is simply because time has passed and expats have raised awareness of the day, but I suspect it has much more to do with the marketing output of chocolate producers (among others) and the ubiquity of cultural references on TV, the movies and the internet. But rather than the “language of love,” I wanted to talk about the “love of learning language.” Our Special Report this issue looks into Language and Translation. Just as with every other sector of life, language schools had to switch to an online mode to continue studies. As Kester Eddy points out in his excellent overview of the schools market on page 10, the effects of the coronavirus pandemic have “ravaged” the sector.
Interestingly, some players we have spoken to talk about initial reluctance to move online (the fear of the unknown, one assumes), bookended now by a reluctance to do anything else. Language classes are actually allowed to meet face-to-face (or at least to offer a mix of online and off ) under the government restrictions, provided they adhere to certain criteria, though many chose not to do so. As for the experience of the student, some do just fine following online methods, while others miss the social aspects and even the “push” given by a teacher or their peers within a classroom setting. Zoom (other service providers are available) can do many things, but it cannot replace that, a point made to me the other day by my oldest daughter, who confesses to have had enough of the whole home schooling experiment and interfacing with her education via a computer screen. It is probably redundant to make the point that translation agencies require staff with excellent language skills, so here’s another thought. Given the importance of language skills to the future career paths of my daughter’s generation (not least her peers who, unlike her, did not have the advantage of growing up bilingual), one can only hope that: a) the government really does prioritize language learning across a student’s entire school life, with money as well as fine words; and b) that language schools targeting the rest of society can bounce back post-COVID. Hungary’s improved competitiveness will likely depend upon it. Robin Marshall Editor-in-chief
BBJ Expat CEO of the Year Shortlist Announced The Budapest Business Journal has announced the three-person shortlist for its annual Expat CEO of the Year Award, one of the most anticipated events in the expat business calendar. BBJ STAFF
Daniel Korioth of Bosch Group, Erik Slooten of Deutsche Telekom IT Solutions Hungary and Prabal Datta of Tata Consultancy Services will contest the overall title, with the decision due to be made minutes before the annual Expat CEO of the Year Gala, to be held later this year. The Budapest Business Journal, Hungary’s leading business biweekly, founded the award in 2015 with the aim of recognizing the efforts of expat CEOs in Hungary, both for their companies and the country. The title is given to the person living and working in Hungary who is assessed to have done the most
Daniel Korioth
Erik Slooten
Prabal Datta
for this country’s development and its international recognition through his or her professionalism and outstanding achievements last year. The shortlisted trio were chosen by the award’s professional awards jury, which will also make the final decision. This year its members are Írisz Lippai-Nagy, CEO of the American Chamber of Commerce in Hungary; András Sávos, president of the German-Hungarian Chamber of Industry and Commerce; Róbert Ésik, CEO of the Hungarian Investment Promotion Agency (HIPA), the official award partner, and Balázs Román, CEO of the BBJ. The fifth seat on the jury is traditionally taken by the previous year’s award winner, which was Melanie Seymour, former head of
BlackRock Budapest from 2017-2019, now Head of Global Client Services for the world’s largest asset manager. The jury met at the Budapest Marriott Hotel on Friday, January 29, to whittle the long list of nominees down to the final three. In a sign of the COVIDinfluenced times we live in, Seymour, who still has a team reporting to her in Budapest, was unable to attend in person and joined the meeting via a video call. The date was also somewhat poignant. In its six-year history, the gala has always been staged in late January, and the 29th had been the date it was scheduled to be held on in 2021. Robin Marshall, editor-in-chief of the BBJ and the host of the annual gala,
congratulated the three finalists. “Thankfully, I am not involved in the selection process; that’s way above my pay grade,” he joked. “I do know that it was a strong field yet again this year, and that reducing the longlist to three finalists was no easy matter. The task of picking the eventual winner just before the gala later this year will not be easy.”
Look out for a short video due to be released soon introducing the three candidates for the overall title. More information about both the award and the gala evening can be found at www.expatceogala.com.
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Budapest Business Journal | February 12 – February 25, 2021
News///macroscope
Yearend Industrial Data Below Expectations
Industrial production in the last month of 2020 proved a negative surprise; however, analysts still expect notable expansion this year, mainly due to low base effects. In the meantime, the government has introduced its action plan to restart the economy.
Industrial Production in Hungary, 2001-2020 Producer volume index
Source:
ZSÓFIA CZIFRA
Following an uptick in October, Hungary’s industrial output declined for the second month in a row last December. According to data released by the Central Statistical Office (KSH), the volume of industrial production in December 2020 grew by 5.8% year-onyear. Based on working-day adjusted data production rose by 1.1%. Compared to the raw data, the significant difference is due to the fact that there were two more working days in December 2020 than in December 2019. The decrease was
2.4% compared
to the previous month according to seasonally and working-day adjusted data. The majority of manufacturing subsections contributed to the increase, the KSH said. The rate of growth accelerated in the manufacture of transport equipment (representing the largest weight), although the manufacture of food products, beverages and tobacco rose at a rate below the industrial average. The manufacture of computer, electronic and optical products declined. As for the full year, the volume of production was 6.1% lower compared to 2019. Industrial output in December grew by 58% compared to the nadir of April. The December data was more of a negative surprise than a positive one,
analysts say. Furthermore, due to the lack of components in the automotive industry, the negative tendency was not likely to turn around in January, they say. They are agreed that the fourth quarter was weaker than the third in terms of economic performance. ING Bank head analyst Péter Virovácz said it was disappointing that industrial output shrank in December following the setback in November, breaking the positive tendencies of the preceding six months.
Automotive Dragging
January data will also be weakened by the automotive sector, which performed poorly at the beginning of the year; the question is whether other sectors were able to counterbalance that in the first month of 2021. Virovácz thinks industrial production might shrink for the third consecutive month. Following the strong October data, when it seemed that industrial production had put the worst days of the crisis behind us, December was equally disappointing for Takarékbank head analyst Gergely Suppan. He calculates that in the fourth quarter of 2020, industrial production was up 3.1% from the same period of 2019. Compared to the previous quarter, the increase was 4.3% in Q4 2020. Based on this, Takarékbank now forecasts an annual GDP
fall of
4.9%
in the fourth quarter and a 5.2% annual setback for the entire year.
Suppan thinks that the following months will see further stabilization of the industry; however, January is still likely to be weak, mainly due to the automotive industry facing a significant shortage of chips. However, there could be notable expansion this year, partly due to the low base effects but also because of new capacities: annual increase might be as high as 14-16%. In April, due to the extremely low base from April 2020, expansion might reach 60%. This year, industrial production might contribute more than three percentage points to the economic performance, which is significant growth compared to 2020, Suppan said. On the other hand, Gábor Regős, an analyst from research institute Századvég, thought that the December industrial output was actually better than expected. He said it was a good sign that most of the sectors performed quite well, and the latest data showed that the second wave of the coronavirus pandemic had not impacted industrial production as heavily as the first. As for 2021, he believes industrial production will expand and might be backed up by a high level of investments. A lot will depend, however, on how demand will pick up during the year.
Demand Dependent
K&H Bank head analyst Dávid Németh agrees that how this year’s industrial production performs will mainly depend on demand, and due to base effects,
April and May might see outstanding expansion. Based on the latest data, industrial production might expand by 5-10% on an annual basis this year, following a more than 6% setback in 2020. As to when the economy might fully recover, some say that the growing public debt, caused by expenditures related to the virus and the crisis, will undermine the recovery after the crisis. Having stood at 65% in 2019, by the end of 2020 Hungary’s debt ratio had increased to 80% of the annual GDP. Others think that Hungary’s tackling of the crisis was a success story, mainly because the government has been able to save a large number of jobs since the outbreak of the pandemic. According to Prime Minister Viktor Orbán, the success is mainly due to the fact that the government “resisted the temptation to revert to a subsidy-based economy.” Speaking at the annual opening meeting of the Hungarian Chamber of Commerce and Industry, Orbán detailed the government’s new three-phase action plan to restart the economy. The first phase began on January 1, he said, and would conclude on April 1, with VAT on new home constructions slashed to 5%, a
HUF
6 million
loan for home renovations half of which is non-refundable, and the phasing in of the 13-month pension. The government has also decided to exempt people below the age of 25 from paying any personal income tax. The aim of the home construction program is for 40,000 homes to be built each year, Orbán said. The second phase will take place from April 1 to July 1, focusing on higher education. Minister of Finance Mihály Varga has allocated HUF 1.5 trillion for developments, Orbán said, adding “hopefully” that can go up to HUF 2 tln. Universities that indicate their intention to take part in the transformation will have enough time to take that step by April 1, he said. The third and final phase, between July and October, will see “big developments” focusing on green energy, developing a circular economy and full digitalization.
Numbers to Watch in the Coming Weeks On February 15, December construction figures will be released by the Central Statistical Office, followed by a flash estimate of fourth quarter GDP data on February 16.
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Budapest Business Journal | February 12 – February 25, 2021
Hungary and CEE Remain Attractive for Investors More investment is moving towards cost effective locations such as Central and Eastern Europe, Andreas Ridder, managing director for CEE and Austria, has told the CBRE Real Estate Market Outlook 2021 conference. GARY J. MORRELL
The region is seen as offering a significant yield premium on Western Europe as CEE has not been hit as severely as was the case in the 20092012 financial crisis. Total investment volume for the so-called CE-5 (the Czech Republic, Hungary Poland, Romania and Slovakia) for 2020 was put at EUR 10 billion, representing a 31% fall on the previous year’s EUR 14 bln. With attractive yields, investors are looking to invest in the strong development pipeline in Hungary for 2021, commented Lóránt Varga, managing director of CBRE Hungary.
Váci Greens by Atenor: the final phase has been sold to private Hungarian investors. Vaccination rollout is key for an improvement in GDP as finance is available on favorable terms, interest rates are low and yields are attractive, he said. After four years of historically high investment activity in Hungary, with annual turnover volumes consistently exceeding EUR 1.5 bln, the COVID-19 pandemic and the resulting economic turbulence caused a dip in activity last year, according to CBRE. The 2020 investment volume totaled EUR 1 bln, showing a 40% correction year-on-year, reflecting a decrease both in the number of deals and the average ticket size. Nevertheless, the annual volume remained above the cyclical average since 2010. Tim O’Sullivan, head of investment properties at CBRE Hungary, estimates that the total investment volume for 2021 will be EUR 1.2 bln-1.4 bln. Last
year was dominated by office, which is stable, followed by industrial, which has momentum. With regard to the significant role of Hungarian investors in the investment market, HUF 1.5 bln has been invested by Hungarian investors over the last two years. The annual investment volume for last year was split equally between domestic and foreign purchasers.
CEE Deals
Although the proportion of deals concluded by domestic investors fell for Hungary, they are concluding more transaction elsewhere in the CEE region. “Interestingly, despite the travel ban and business restrictions, the share
Politicians Argue Over Lifting Restrictions as More Vaccines Arrive Hungary’s government will extend pandemic restrictions now in place until March 1, Gergely Gulyás, the head of the Prime Minister’s Office, said at a weekly press briefing on January 28. coronavirus and those who have been registered as recovering from COVID-19 will reach one million by early March, Prime Gulyás said the government agreed with Minister Viktor Orbán said in his weekly experts that “any easing” of restrictions interview on Kossuth Rádió on February 5. would bring a new wave of infections and During his interview the week prior, lead to stricter measures. the Prime Minister had said that the However, several opposition parties inoculation of healthcare workers had have expressed discontent with the been completed and the inoculation of government’s plan to ease restrictions, nursing home residents and staff would and have suggested roadmaps of finish by January 31, also noting that their own. One such from the centrist vaccination on the basis of registration Momentum Movement includes would start from the beginning of extending the start of the curfew to the following week, according to the 10 p.m., allowing shops to remain established order that gives the elderly open until 9 p.m., partially opening and those with chronic illnesses priority. outdoor restaurants and terraces to 50% By early April, Orbán said, the number capacity, allowing domestic tourism and of inoculated people and the number exempting those who are vaccinated of those who can certify recovery from from all restrictions, according to news COVID-19 in the previous six months website Magyar Hang (Hungarian Voice). “will approach two million,” and if the The combined number of Hungarians Chinese COVID-19 vaccine can be used, who have been inoculated against the that number “will exceed 2 million.” NICHOLAS PONGRATZ
of foreign investors increased, and the share of domestic investors fell considerably from the preceding year’s record dominance,” says Gábor Borbély, head of research and consultancy at CBRE Hungary. According to O’Sullivan, a record EUR 560 million was invested by Hungarian investors in CEE with the target countries being Poland, Romania and Serbia. Hungary is seen as providing a prime office yield gap on top of Munich at 320 basis points and a 310-yield gap on top of state bonds. CBRE put office yields for Hungary at 5.75% and stable, prime industrial at 7% and strong overall, and retail at 6.25%. The consultancy has traced 475,000 sqm of office space under construction and a further 455,000 sqm planned in the Budapest office market. From the 200,000 sqm pipeline scheduled for completion this year, 54% is preleased. Out of the 300,000 sqm due for delivery in 2022, 33% is preleased. However, some shifts in handoves can be expected. Vacancy rates are expected to increase to low double-digit figures and headline rents are expected to remain stable with sustained pressure on effective rents. Industrial has seen a significant rise in its development pipeline to 300,000 sqm, with several new players entering the market. Vacancy is expected to increase from the current record low of about 3%, although rental pressure is not expected in the near term.
Coronavirus ///roundup
medical officer Dr. Cecília Müller said at a daily press briefing the following day, according to koronavirus.gov.hu. Müller said 560 GPs in the capital would each be asked to select five patients, without any underlying health conditions, to get the Sputnik V jab. She said 2,800 doses of the Russian vaccine were available at present. Hungary also received its first delivery of the AstraZeneca COVID-19 vaccine on February 6, according to TV news channel M1. The shipment of the vaccine, developed in the United Kingdom with the assistance of scientists from Oxford University, contains enough doses to inoculate more than 20,000 people, M1 said. Sputnik Lands Hungary has ordered 6.54 million doses The first delivery of an order of Russia’s of the vaccine, enough to inoculate 3.27 Sputnik V COVID-19 vaccine arrived million people. Additionally, half a million in Hungary on February 2, Szijjártó also doses of the COVID-19 vaccine developed announced via his Facebook page. Szijjártó by U.S.-based Pfizer and Germany’s noted that under an agreement reached BioNTech arrived in Hungary on February with Moscow, Hungary will get two million 9. Hungary has a contract for delivery of doses of the vaccine, enough to inoculate one 6.6 million doses by the end of 2021. million people, over three months. He said Finally, Bangladesh sent 5,000 doses the shipment contained 40,000 ampoules, of vaccine manufactured under an enough to inoculate 20,000 people. Oxford license to Hungary as thanks Inoculation against the coronavirus using for 500 free burn and restorative plastic the Sputnik V vaccine started in Budapest surgeries performed by Hungarian on Monday, February 8, Hungary’s chief doctors, reported Blikk. Hungary’s National Institute of Pharmacy and Nutrition (OGYÉI) has approved the COVID-19 vaccine developed by China’s Sinopharm, the country’s chief medical officer Dr. Cecília Müller said at a daily press briefing on January 29, according to official government website koronavirus.gov.hu. That same day, Minister of Foreign Affairs and Trade Péter Szijjártó announced in a post on Facebook that Hungary would buy five million doses of the Sinopharm vaccine, enough to inoculate 2.5 million people. The deliveries of the vaccine will take place in four phases over four months, he said.
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3rd Policy Agenda to Help AmCham ‘Lead the way’ to Recovery In the face of the COVID-19 pandemic, the American Chamber of Commerce in Hungary has pledged to foster a business community that is responsible for shaping a healthy, sustainable, and competitive Hungary. In its most recent Policy Agenda publication, AmCham aims to prioritize educating future generations, sustainability, industry cooperation and promoting a responsible and transparent business culture. CHRISTIAN KESZTHELYI
Policy Agenda, the strategic outline for AmCham’s advocacy work for the 2021-2025 period, has just been published for the third time since its launch in 2015. The document is based on input from a community of more than 300 companies, representing 200,000 employees in diverse sectors, as well as on the economic analysis of the country and assessment of the impact of COVID-19. “Since 2015, the policy agendas have provided the foundation of our work, outlining our priorities and commitments. [….] We are very proud of the progress we have achieved over the years, the partnerships we have built, the projects we have started and the series of flagship events we organize every year,” AmCham CEO Írisz Lippai-Nagy said during the online launch of the latest Policy Agenda on
January
26.
To reassert and improve Hungary’s competitiveness, AmCham Hungary emphasized it is committed to working with the business community and government stakeholders, as well as to marshal the organization’s resources, to make an impact in three vital areas.
News | 5
pandemic economy. Palotai added that crisis legacies need to be addressed and financial stability has to be maintained, while international cooperation needs further enhancement. Based on the latest Article IV consultation with Hungary in 2019, the IMF concluded that Hungary was one of the fastest-growing economies in Europe, largely driven by domestic demand, including record-high EU funds-related investment. While the IMF took a positive view of Hungarian economic activity
in
2019,
it also encouraged the authorities to advance structural reforms. Policies have reduced vulnerabilities substantially; however, measures to support the targeted fiscal consolidation could be more ambitious to ensure that room for fiscal policy maneuver is rebuilt.
Firstly, enabling smart growth in Hungary is essential to maximize the potential of digital transformation, foster innovation and increase productivity, while working on creating a more sustainable economy. Secondly, the country must invest in human capital by transforming education to establish a highly-skilled, well-educated and resilient workforce. At the same time, labor law and market regulations need to be made more flexible. Thirdly, the local business environment must become more stable. A transparent regulatory environment, a predictable and competitive tax system, and simpler administrative processes need to be applied, while adopting best practice governance and compliance.
Recovery
AmCham’s Policy Agenda 2021-2025 elaborates on these three pillars in 70 policy recommendations, all of which advocate for policies and regulations that support the recovery and growth of businesses and the creation of a more sustainable and competitive economy in Hungary. Zoltán Szabó, the President of AmCham, said that while Hungary is facing the biggest crisis of recent history that disrupts businesses worldwide, the current situation also provides many opportunities and possibilities. “It forces us to become more flexible and resilient. The pandemic accelerates the use of technology, the application of flexible working forms, innovation, digitalization and pure progress in other areas,” Szabó added. He said that 2021 will be a year of transition. “For more than nine months, we learned and adapted. Now it is time
to use the knowledge we learnt from the pandemic to start shaping the future.” The president also promised that AmCham would continue to provide a platform for professionals and companies who are ready to lead toward recovery and growth. After a dark pandemic winter, light has started flickering at the end of the tunnel, according to Dániel Palotai, executive director of the International Monetary Fund (IMF). Palotai, the first Hungarian economist to be elected to the IMF’s decision-making body, connected to the online event from Washington D.C. The lockdown of March and April and voluntary social distancing led to a fall in Europe’s GDP three times deeper than that during the global financial crisis of 20072008; however, the rebound in activity in Q3 brought positive surprises in almost all European countries, Palotai said. He reminded that while more vaccine successes and additional fiscal support will positively affect global economies, delays in vaccination programs, possible mutations of the virus, stronger lockdown measures and tighter fiscal conditions are all possible scenarios that must be taken into consideration. Additionally, geopolitical tensions and social unrest may further escalate in the coming months. The pandemic could pose long-term challenges in the labor markets and the crisis may leave persistent scarring effects, which policies will need to mitigate, Palotai said.
Effective
In such an uncertain environment, effective policies need to be established, offering more targeted support to achieve a resilient and equitable post-
“We believe that the timing is perfect for a new strategic plan because, now more than ever, the business community must work together to recover from one of the biggest economic setbacks of all times. AmCham Hungary must be, and will be with your support, at the forefront of this process.” Wages outstripping labor productivity growth, slower export growth, and shortcomings in the business environment for SMEs call for invigorating structural reform efforts, Palotai added “The Policy Agenda is also a reinforcement of our commitment to make this country more competitive,” Lippai-Nagy stressed. “We believe that the timing is perfect for a new strategic plan because, now more than ever, the business community must work together to recover from one of the biggest economic setbacks of all times. AmCham Hungary must be, and will be with your support, at the forefront of this process,” she added. Szabó added, “We stand for U.S., international and Hungarian businesses that drive our economy. We advocate for their ability to invest, employ, grow, and succeed. We are optimistic that Hungary will emerge stronger after these challenging times and businesses will help lead the way.”
See also AmCham Sets out Policy Priorities to ‘Work with Government’, page 7
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Business
BBJ: How competitive is your market? Who are your biggest competitors and why would I choose you?
Budapest-based Broker Comparison Firm Harbors Global Ambitions
BrokerChooser has ambitious plans. The fast-growing Budapest-based broker comparison platform wants to evolve from a small startup to the first globally successful Eastern European fintech company. Its product is popular and the company has already outperformed the market in terms of customer growth. CEO and co-founder Tibor Bedő spoke to the Budapest Business Journal about how the firm wants to continue its expansion worldwide and what the main challenges are in this journey. GABRIELLA LOVAS
BBJ: What are your plans for this year?
Tibor Bedő: We want to reach EUR 3 million revenue in 2021 based on a huge growth in session numbers. According to our best case scenario, we will reach one million sessions per month in December this year. In the next five to 10 years, we look to grow exponentially. Our mid-term vision is to reach EUR 10 mln revenue by 2025. As a comparison, our revenue jumped to EUR 1.4 mln from EUR 400,000 last year. If we look at our competitors, we can see that even annual revenue of EUR 400 mln is feasible in the long run. Only boring markets are bad for BrokerChooser. And I don’t foresee boring markets in 2021. In an optimistic scenario, the COVID crisis will slowly be over, while government support remains strong and
TB: Very competitive. Our main competitors are stockbroker.com, NerdWallet and some big British online comparison sites, such as MoneySuperMarket. We are better than them in that we are global. It means that a German investor, for instance, can compare not only the best German brokers, but the best brokers from all over the world on our site. The big question at the beginning was whether the same product would be suitable for potential traders in, let’s say, Oslo and Lisbon? What we have seen is that traders are similar no matter where they are. They all speak good English and they read the same news sources. Having said that, the Germanlanguage comparison sites are still a lot stronger than our site in Germany. So we are about to start testing local language products. We plan to hire local talent in several countries, who we call ambassadors. Beside global services, we provide a more detailed and deeper broker analysis than our competitors. BBJ: What is your secret sauce?
TB: Our team. It is a like a super toolbox with a wide range of expertise, including programmers, marketing experts, content writers and designers. The team is highly adaptable and flexible. As they had already been used to working remotely before the pandemic, they easily embraced the challenges of the COVID crisis. They don’t shy away from change, because everything has been constantly changing at the company. Open group communication and clear norms are key in our corporate culture. BBJ: How difficult it is to find good people?
Tibor Bedő sources and we want to continue doing interest rates stay low worldwide. This so. Although we are not actively looking would allow capital markets to reach new for investors, we are always open to highs even after so many record years and attractive quality offers. Several venture that will surely interest investors. We are capital funds have already approached not worried about a potential correction, us, mainly from Hungary and the either. Most traders see attractive entry Central European region. points in turbulent markets. This is exactly what happened last March, when BBJ: What is the current value of the uncertainty, anxiety and boredom in company? lockdown translated into new broker account openings and high trading activity. TB: That’s not public. The rising revenues will be invested BBJ: Do you plan an IPO at some time in growth. We plan a serious increase in the future? the size of our team from the current 35 members. We want to hire mainly juniors TB: I wouldn’t rule it out in the long run, now, young people fresh out of university but it is not our goal. Lots of big tech companies remain in private ownership. with up to two years’ experience. Workplace chat app Slack, for instance, We also seek to expand our product was never listed on any exchange and it range beyond broker comparison to be was recently sold for almost USD 28 billion. one step closer to our vision of helping But if we decide to go public one day, people invest. We have some exciting we won’t do it in Budapest. I see parallels products in the pipeline. between us and Wizz Air in that it was BBJ: How do you want to finance growth? a big Hungarian story on the London TB: I am very proud that we’ve always Stock Exchange. Who knows, we might financed our growth from our own even be the next Wizz Air!
TB: That’s a huge problem. There are no developers in the market. Financial analysts have a traditional way of thinking so they prefer to work in a bank and not at a fintech startup. Content writers cannot commit to a team because of their freelancer mindset. We work hard on company culture to make BrokerChooser a great place to work and I hope that these efforts will eventually pay off in recruitment. BBJ: What is the biggest challenge for you now as a CEO?
TB: Our team is growing fast and I have never managed such a big team. The biggest challenge for me is improving my own leadership skills as well as that of the management team. BBJ: How have you responded to the battle between retail investors and hedge funds that has been prominent in the news recently?
TB: In response to the GameStop frenzy we created an Uptime Monitor to help customers track affected brokers, like Robinhood, and find alternatives. We saw a more than fivefold (+425%) increase in reader searches for content on alternative brokerage services in just one week at the end of January. Demand for secondary or alternative broker accounts will probably further increase.
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Budapest Business Journal | February 12 – February 25, 2021
Photo by Lázár Todoroff / AmCham
AmCham Sets out Policy Priorities to ‘Work With Government’ In his first interview with the Budapest Business Journal since he was elected president of the American Chamber of Commerce in Hungary, Zoltán Szabó tells us what sets apart the latest Policy Agenda from its predecessors, where progress needs to be made, and why sustainability is so important to the Hungarian economy.
BBJ: This is the third iteration of Policy Agenda. What is the biggest change in this version compared to its two predecessors?
BBJ: How successful were the previous two publications in terms of achieving AmCham’s goals?
ZS: With the first policy agenda, we basically overhauled our entire advocacy work by introducing the advocacy cycle which to this day determines our way of working. This system coordinates the efforts of our working groups, our annual recommendation package, the agendas of our events as well as our consultations with the government, all based on the principles of the Policy Agenda. As a result, our chamber has become more effective, achieved tangible results, and made a bigger impact in the
in spending to launch a reform to adapt our education system to the demands of the new and future economy and labor market. We must equip younger generations with the future-proof skills they need to succeed in the market and help teachers with professional and financial support. Productivity is another area where we see untapped potential. It is probably the most effective way to increase per capita GDP, but it poses a complex challenge as it spans across several fields from resource allocation, the use of EU funds through the competitiveness of SMEs to investments in innovation, R&D, process optimization and new technologies. One cannot solve all this at the stroke of a pen; we need a mindset change across the board.
“With a growing number of legal requirements and an increasing demand from consumers and even employees, sustainability has become a cornerstone of modern business, a value that is already championed by several of our member companies; therefore, we are dedicated to lead on this issue.”
ROBIN MARSHALL
Zoltán Szabó: Since 2015, Policy Agenda has been the roadmap to our advocacy work, outlining our commitments and highlighting areas where improvements must be made to increase the competitiveness of the Hungarian economy. For this third agenda, we reviewed our priorities after consulting with the members and pinpointed new issues our organization must address in addition to the areas where we have not yet accomplished all our goals. These subjects and challenges were categorized in three areas (smart growth, human capital, and business environment) and addressed with 70 propositions. Based on this new direction, we are planning to introduce a new structure for our working groups with a more project-based approach that allows us more flexibility and gives members an increased role.
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BBJ: All the suggestions are important, otherwise they would not have been included in Policy Agenda, but if you were forced to pick just one, which would it be and why?
Zoltán Szabó business community since 2015. We were involved in achieving the decrease in the corporate income tax to 9% and the decrease of labor taxes; the launch of several new OKJ training programs as per corporate need; incentivizing workforce mobility; shifting to a more innovation-based national economy, and a new grant system for corporate R&D activities, just to mention a few examples. Moreover, we launched several industry corporations and member driven initiatives such as BSS Hungary for the promotion of the business service sector which entered a partnership with the Hungarian Investment Promotion Agency last year. We also have a unique U.S. Financial Institutes project and a Healthcare working group who work for reforms in the sector, the Career Orientation Program which continued last year despite the pandemic, the digital signature and paperless HR process projects and our labor code group which drafted proposals to amend the regulation to support flexible working schemes. Since the COVID-19 outbreak, we have posted several recommendations regarding the kurzarbeit (short-time working) subsidy scheme, taxation and
even staff canteens that were implemented in the government’s economy protection action plan and relief measures. We are here to work with the government to aid the recovery of the economy. BBJ: What are the areas in the new publication where you expect to make most progress and which do you envisage being more of an uphill struggle?
ZS: Hungary has a pro-business government which prioritizes attracting investors and encouraging expansion and reinvestments. Based on the track record of our cooperation, it is reasonable to believe we could see favorable developments in the general business environment through a more optimized regulatory framework, a more efficient and user-friendly administration, a favorable tax system and a strengthened domestic supply chain. However, education is an area where we have struggled to step forward. As the country is looking to shift toward higher value-added activities, new challenges emerge, and the supply of a highly skilled workforce remains number one. AmCham has advocated for a new education strategy and drastic increase
ZS: Sustainability which has become an overarching principle in our Policy Agenda. The COVID-19 pandemic made it evident that sustainability is a competitive advantage as economies and businesses with advanced sustainability programs were more resilient in the face of the crisis. We are not just talking about environment protection and renewable resources here. It is about creating value with innovative solutions that withstand environmental and economic impacts. Sustainability should be the guiding principle in our economic policy from smart and green investments, infrastructure development and the promotion of circular economy through new technologies, disruptive innovation to future-proof education and healthcare, all supported by sustainable financing and tax systems as well as a transparent regulatory environment. With a growing number of legal requirements and an increasing demand from consumers and even employees, sustainability has become a cornerstone of modern business, a value that is already championed by several of our member companies; therefore, we are dedicated to lead on this issue with all decision makers in business and government for a modern, resourceefficient and competitive economy.
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Business
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Budapest Business Journal | February 12 – February 25, 2021
GameStop and Silver: Failure in Exit Strategy The events of the past month have created something of a paradigm shift in financial markets. Les Nemethy looks at what caused the surge in prices of GameStop, silver, etc., why a lack of an exit strategy caused the surges to fizzle out and what might be the positive effects or lessons learned from this phenomenon? Let me describe events leading up to the surge, (which I acknowledge is oversimplified). One might start by ascribing responsibility to the “loose money” policies of central banks and helicopter money from governments. Excess liquidity provided a fertile environment. The trigger was provided by social media activities of Wallstreetbets, a subgroup of the Reddit internet platform; the later silver surge was driven mostly via Twitter. The coordination of a large number of retail investors via social media to move markets to this extent was unprecedented and revolutionary. Retail investors had cleverly discovered a highly unstable situation in GameStop ownership: short sellers had sold 140% of the shares, many of them naked shorts (e.g. where they sold shares they did not own). This made short sellers extremely vulnerable, as they tried to buy shares
The Corporate Finance Column
Posters on the Wallstreetbets group on the Reddit platform helped shares in GameStop soar. Photo by mundissima / Shutterstock.com to eventually cover their positions; this served to further drive up prices. In theory, prices could have moved to infinity. GameStop shares, which a month prior had been trading in single digits, reached USD 347 on January 27, 2021, at least a tenfold multiple of what the shares were really worth.
The Collapse
Share prices collapsed shortly thereafter, reaching USD 54.50 on February 4. Why did the surge fizzled out? Ever since my 2011 book, Business Exit Planning, I admit to a bias of looking at investments from the perspective of an exit strategy. In the case of GameStop, there is not a shred of evidence that the retail investors had any exit strategy. Emotion (either greed or anger at the financial establishment) is not a strategy. Some large investors who jumped on the bandwagon may have also been guilty of “pump and dump” techniques, further charging the emotional atmosphere. Any student of exit strategies would predict that the way to make money in these kinds of situations would be “First In, First Out” (FIFO). The earlier you invest, and the earlier you exit (presumably just
before or after peak price was reached), the more money you made. It was fully predictable that once prices started to decline, a total collapse was inevitable. If there was no leader, no coordination on the way down, everyone would simultaneously run for the exits. The surge on GameStop lost its focus when retail investors started targeting other shares like AMC, and even the silver market (vastly larger than the capitalization of GameStop, with much less shorting, hence driving silver to USD 100, a much talked about objective on Twitter, was a pipe dream). When is the best time to engage in exit planning? Before you buy the asset you are considering. Ironically, if a large hedge fund had decided to squeeze GameStop shorts, chances of success would have been higher. A single buyer could have maintained prices, forcing naked shorts to accept their terms.
Lessons learned?
First and foremost, laws on short-selling should be enforced. One of the reasons the Securities and Exchange Commission was created back in the 1930s was precisely to stop naked short selling, that had been rampant in the ’20s. These
laws are on the books; U.S. regulatory authorities should be held accountable for not enforcing them. Doing so could help to prevent bubbles in future. Second, hedge funds may be less inclined to do naked short selling, or any type of short-selling in future, as the whole equation of risk pertaining to short selling has changed, given the new found power of retail investors. We should not expect a complete cessation of shortselling, but perhaps a moderation. Third, events serve as a warning to retail investors to invest less out of emotion and to be more rational, with attention to strategy and underlying value. As Warren Buffet has said, you shouldn’t own a stock for 10 minutes if you aren’t prepared to own it for 10 years. Fourth, events of the past month have created a new awareness of how manipulated markets are; not just short sellers manipulating prices of individual company shares down, but that in the case of silver and bullion markets there seems to be a pervasive manipulation of markets, as pointed out in a recent article on adamseconomics.com. Buyers of physical silver did not get nearly as hurt as buyers of GameStop. Whereas most GameStop investors went way above intrinsic value, arguably silver was below intrinsic value, even at the highest recent values. I plan to own silver for 10 years. As the saying goes, it’s a shame to waste a good crisis. Investors and regulators can each learn lessons and draw conclusions that should improve the investing experience and make markets better in future. Les Nemethy is CEO of EuroPhoenix Financial Advisers Ltd. (www.europhoenix.com), a Central European corporate finance firm. A former World Banker, he is author of Business Exit Planning (www. businessexitplanningbook.com) and a former president of the American Chamber of Commerce in Hungary.
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Budapest Business Journal | February 12 – February 25, 2021
PRESENTED CONTENT
Network Investment, Sustainable Operation in Focus at Vodafone As previously reported in the Budapest Business Journal, there has been a significant change in the leadership at Vodafone Hungary: from January 4, Anita Orbán has held been External Affairs Director. We talked with her about the change, Vodafone’s goals for 2021 and the current situation of the Hungarian telecommunications sector. ROBIN MARSHALL
BBJ: You didn’t work in the telecommunications sector previously. What is your background?
Anita Orbán: Actually, at the very beginning I did: I graduated from the Budapest University of Economics and started my career at Magyar Telekom, then called Matáv, as a financial controller. But then I moved to the United States, where I first studied history and then continued at the Fletcher School of Law and Diplomacy, where I earned a master’s degree in diplomacy and also earned my PhD. Energy has been a focus of my interest from the very start and in 2008 my book on the geopolitics of energy in Central Europe was published in the United States. I then worked at the Ministry of Foreign Affairs in Hungary for five years, as ambassador-at-large for energy security and chairman of the energy cooperation committee of the Danube countries. Switching from the state sector to the private, I continued my career as chief consultant at Cheniere Marketing Ltd. in London. I came to Vodafone Hungary from a London-based energy company, Tellurian LNG; as vice-president for international relations, I was responsible for commercial and corporate relations in several countries. BBJ How do you find the atmosphere and organizational culture at Vodafone Hungary? Is there much contrast to what you’ve experienced overseas?
AO: Although Vodafone Hungary has a British parent company, I have also experienced certain novelties and cultural differences. One of the reasons behind that is Tellurian, where I was before, has American roots, so the London subsidiary also had something of an American corporate culture.
Anita Orbán I was able to experience the dynamic and supportive environment of Vodafone Hungary as soon as I arrived. This is extremely positive, especially since the open and flexible attitude that characterizes employees is not at the expense of quality; in fact, quite the contrary. This is due to a significant proportion of young colleagues, which shows that Vodafone believes in young talent and in their positive attitudeforming effect. I particularly like the sharing of knowledge and experience between younger and more experienced colleagues. I believe that you can learn from colleagues in their 20s in the same way as you can learn from seniors, and I believe that companies who believe in age diversification will be successful. I also really like the agile operation of Vodafone. I believe that this approach is essential in the telecommunication industry, because the only way to be market leaders is to be open to change. As part of this, we must constantly develop our products and services, but also the organization as a whole, alongside our colleagues separately. Vodafone offers many opportunities to do so, giving room to experiment with new things. It is natural to make mistakes along such a road, but at Vodafone this is seen more as a learning process than as a failure. This is a very positive approach for both colleagues and future successes.
It is also evident from the outset that Vodafone Hungary places a great deal of emphasis on creating a work/life balance for all of its colleagues. As a mother of three, I know exactly how much depends on a job being supportive of this and not expecting a compromise or a choice between career, professional development and personal life. BBJ: In professional terms, how do you see the current situation of Vodafone Hungary?
AO: In recent years, domestic telecommunications and infocommunication have undergone a rapid development. Vodafone has played a very important role in this process; just think about the introduction of the most important technology of today, 5G, where Vodafone is at the forefront not only in our country, but also internationally. In addition, Vodafone Hungary became a convergent service provider through the UPC acquisition. Although the legal merger of the two companies has already taken place, integration is still ongoing. We are doing everything we can to ensure that customers feel as little about integration processes as possible, can remain in constant contact with their loved ones, work and learn with our networks. Vodafone Hungary has made several billion forints of investments in order to eliminate the formerly experienced periodical outages in fixed line services in the future.
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BBJ: Speaking of which, what are Vodafone’s 2021 goals?
AO: Vodafone is expected to have a major corporate renewal at global level this year. This will allow for a simpler, more transparent and more efficient operation. We want to become a new generation telecommunications company; to be precise, a technology communication company with a wide range of products, providing better and more innovative services and providing digital solutions that go beyond mere communication. The development of common platforms and their use on as many markets as possible is essential in order for us to provide the best customer experience everywhere. For Vodafone Hungary, one of the most important strategic projects in 2021 will be the further development of the 5G network. We want to achieve an even wider spread by developing networks in additional county capitals and establishing private networks for corporate customers. We will pay particular attention to the relaunch of the economy, and support for digital education also remains central to our operation. Some of our services already launched include a heat camera solution to support workplace safety, or the Digital Classroom product package that allows both virtual and classroom education, and associated license-based services that are becoming ever more popular with domestic educational institutions. But Vodafone is more than a simple telco service provider. We pay extremely close attention, for example, to the digitization of healthcare and education, and through the activities of Vodafone Foundation, we extend the opportunities offered by digitization to tens of thousands of students and teachers living in disadvantaged areas. It is part of our corporate responsibility to act in a sustainable manner in all activities, including network development and investment. In recent years, Vodafone has taken significant steps in this area, at group level and at home. Vodafone has set several sustainability goals that were first achieved in Europe by Vodafone Hungary. An example is the commitment related to energy use, according to which the company will operate its networks with 100% renewable energy use only from July 2021; this was fulfilled by Vodafone Hungary in November 2020. As an energy expert, I can say that this is an amazing achievement. In the future, our aim is to extend this approach to our customers and corporate partners, helping them to create sustainable digital operations. BBJ: At the end of January, the National Media and Telecommunication Authority (NMHH) conducted a new frequency tender. How do you evaluate the results?
AO: At the frequency auction on January 28, the three largest domestic operators, including Vodafone, could bid on the 900 MHz and 1800 MHz bands. At the auction carried out by the NMHH, we renewed our existing frequencies in these bands, totaling HUF 49.1 billion. With the frequencies re-acquired we can ensure the continuity of our services used by our customers and with capacity extensions we can provide even faster internet and better voice quality.
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Budapest Business Journal | February 12 – February 25, 2021
Special Report Language & Translation
Coronavirus Ravages Language Education Sector
In terms of foreign language skills, Hungary scores badly. While many individuals boast excellent linguistic prowess, in the latest EU statistics (2016), only 42% of Hungarians claimed to know one or more foreign languages, making Hungary the third worst performer in the Union. Various governments over the years have sought to address this issue, invariably with little success. Naturally, the arrival of the coronavirus pandemic has exacerbated challenges in the sector. KESTER EDDY
In January 2020, Zoltán Siklósi was hoping for a good year. As head of the Budapest branch of the Debrecen Summer Language School, arguably the best known institution in the country for teaching Hungarian as a foreign language, the outlook was bright: then came coronavirus.
Beatrix Olgyay “Our Budapest school was closed basically at the start of the first wave. With almost no income and a pretty high rent, we had to give up our school premises in [prestigious] Váci utca by the end of July,” he told the Budapest Business Journal. Siklósi declined to offer more detail on the school’s demise, except to stress that
the “mother” institution in Debrecen was “alive and well.” But having founded and nurtured the Budapest operation
since
2002,
closure must have been a bitter blow. While an extreme example, and in this case based on the niche Hungarian
training contracts, in which it has a track record, but, as she notes: “The rest is uncertain.” Though non-representative, a survey by the Association of Hungarian Language Schools (NYESZE) last year backed up the experience of these individual schools. It revealed that half of respondent schools lost 30-60% of their courses, and one quarter lost even more.
Cutting Costs
Zoltán Rozgonyi segment, the initial fall out of the COVID19 pandemic on the language education sector was “an absolute disaster,” Zoltán Rozgonyi, chairman of Nyelvtudásért, an association of language teaching and testing professionals, tells the BBJ. “It literally stopped, for more than two months, people going to language schools,” he says. “A surprisingly large number of schools did manage to take their courses online, but equally, a surprisingly low number of students took the offer and joined those online courses.” At International House, a long established Budapest-based school, the number of students in each group typically halved, dropping “from an average of around 10 to between three and six due to the pandemic,” says director of studies, Lucia Iván.
Sharp Downturn
In the prosperous western city of Győr, the Oxford Language School (OLS), a leading regional player with more than 50 teachers on its books, suffered a sharp initial downturn, with vitally important company courses hit particularly badly. “By the end of April, we had only about 40% of the former courses still running,” says school head Beatrix Olgyay. Although OLS, as most others, was quick to launch online lessons, some clients remained loyal to the traditional classroom setting and rejected the new format. However, work picked up from June, resulting in 2020 revenues declining
some
40%
on 2019. Olgyay hopes to reach 70% of the 2019 total this year, especially if the school can win military language
Despite the many, much publicized financial support programs launched by the government, these seemed unavailable to language schools, or they lacked the staff to look into and progress any potential aid available. “Language schools are not good at lobbying,” says Nyelvtudásért’s Rozgonyi. Yet, while almost all schools shed staff to cut costs, and some smaller ones closed altogether, not one member of the
NYESZE folded, and the association lost just one member while gaining another, leaving it with a total of
56
schools
across Hungary. Another indicator of the pandemic’s impact is reflected in the number of candidates taking state-accredited language exams. In 2018-2019, an average of 122,000 students sat such exams. Last year, this total fell to a little more than 85,000, equating to a 30% drop. The cause was not, however, just the virus, as the regulations regarding university entry and degree conditions were also changed. (See story on page 11.) “I would say about 15-20 [percentage points] of that drop was the result of the pandemic,” said Rozgonyi, “and the other 10-15 were due to regulatory changes.”
I N H E R O W N W O R D S : B U D A P E S T S T U D E N T E N I KŐ H O R VÁT H
We Must Seize Linguistic Opportunities
Although we often hear that language learning is very important for success in life, many times we only become conscious of this when we miss an otherwise excellent opportunity due to our lack of language knowledge. Today, language skills are ever more important because of globalization and international mobility. Therefore, in the labor market, certainly at professional levels, it is almost expected that you speak at least one foreign language fluently, if not two or three. Enikő Horváth Although we are most receptive as children, and ideally before high-school we Hungarians need to speak other graduation everybody has studied two languages to reach out internationally. languages, students in primary and Fortunately, there are various secondary education are often unable possibilities to improve language skills to assess the value of this and, for later in life. One such is the Erasmus+ various reasons, often neglect their program for university students. Yet, studies, much to their later regret. I’ve seen many times that even these This may be caused by a bad opportunities attract limited interest. experience. In my case, when I was in I fear the neglect of languageelementary school, my English teacher learning opportunities is influenced made a sarcastic remark about my by our mentality. We often think pronunciation. This was not a onenegatively about the possible outcome, off event, and for a while I became and then opt to not even try. (Again, I unmotivated to study English. am possibly influenced by a negative I felt bad about this situation, yet I also school experience.) wanted to learn Spanish. With my parents’ My wish for 2021 is for Hungarian support, I opted to move to a Spanish students to recognize the importance bilingual high-school. This proved to be of language learning and to seize the a great decision, and I have since happily opportunities provided. learned three foreign languages, namely Spanish, Portuguese and English. Enikő Horváth, 22, is a third-year student Put simply, with our mother tongue of International Business at Budapest little known outside the country, University of Technology and Economics.
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Budapest Business Journal | February 12 – February 25, 2021
The B2 Language Exam Requirement That (Mostly) Won’t go Away The B2-level language exam is the most popular state-accredited exam taken in Hungary, and for good reason. According to the country’s Law on Higher Education, university students can only receive their degrees when they hold a B2 level qualification in at least one foreign language. KESTER EDDY
This legal requirement has led to problems. But first, what does a B2 represent? According to the Council of Europe, the body behind the CEFR grading system, a level B2 certificate means the holder “Can understand the main ideas of complex text on both concrete and abstract topics, including technical discussions in his/her field of specialization. Can interact with a degree of fluency and spontaneity that makes regular interaction with native speakers quite possible without strain for either party. Can produce clear, detailed text on a wide range of subjects and explain a viewpoint on a topical issue giving the advantages and disadvantages of various options.” What are the issues in Hungary? First and foremost, critics say the state school system does not educate enough children to B2 level in a foreign language. Judit Enczi, managing partner at executive search firm Hill International Hungary, says this affects her both professionally and personally. While her recruitment work is within Hungary, when she meets foreign newcomers within the Hill network, “be they graduates, trainees or seniors, they all speak much better English than most of my colleagues in Hungary,” she says. Meanwhile, her 10-year-old son has only just started learning English at a state school. “They used to begin teaching languages at the
age of
6-7,
but the school does not have enough teachers. Hungary needs both better and more language education,” she argues, although
she does believe that between the ages of 10-18, teachers “do a good job”. Zoltán Rozgonyi, managing director of Euroexam International and chairman of Nyelvtudásért, an association of language teaching and testing professionals, says only 15-20% of secondary schools manage to educate students up to the B2 level. “It’s only the real cream at the top of the secondary school segment that consistently manage to take willing students, obviously those willing to learn, to this level,” he says. This results in 45% of university students starting their undergraduate courses without any foreign language qualification.
Language Requirement
The government attempted to address this issue with a move in 2015 requiring all university entrants from 2020 to attain a B2 language exam, but according to Rozgonyi, then did “absolutely nothing about it” by way of preparing schools to meet the requirement. As a result, in the fall of 2019, it was suddenly rescinded, thus removing a major incentive for serious language study. (The Ministry of Human Capacities failed to respond when requested by the Budapest Business Journal to comment on this for this story.) Moreover, once the students begin their degree studies, in the vast majority of cases, the universities make no attempt to teach, or even help students fix the linguistic hole. “The universities don’t think it’s their problem: they have zillions of problems as it is, and they don’t care about this,” says Rozgonyi. This has resulted in some
7,000-8,000 students
graduating every year in their main subject, but unable to receive their
MOST POPULAR FOREIGN LANGUAGE EXAMS English
65%
German
26%
Esperanto
3%
French
2%
All other
4%
Judit Enczi degree certificate for lack of a B2 language qualification. While some of these went on to achieve the B2 level language qualification, many did not. The issue was “solved” last summer, when the government, under the cloak of the COVID pandemic, again suddenly lifted this requirement. “There was absolutely no logic to this. There had been a 6-7 week [hiatus] in examinations in the spring, but after this, exams were once again being set,” says Rozgonyi.
Decade Wait
Whatever, degree certificates were then “dished out” to nearly 100,000 very relieved graduates, some of whom had been waiting over a decade for the piece of paper. However, unlike the B2 entry requirement for universities, dropped permanently the previous fall, the decision to lift the B2 qualification for graduates to receive degrees was only temporary. “We learned from the media, when a journalist got an answer to his questions, that from this year the B2 language certificate will still be needed to get your degree,” says Rozgonyi. Hence, from this summer, unless the government again changes its mind, the problem of graduates lacking their final degrees, will build up again. “This is a long term problem, requiring a long-term solution,” says Rozgonyi, “Unfortunately, politicians, not just in Hungary, don’t think in the long-term.”
Special Report | 11 Hungary’s Most Popular Foreign Languages Examined English and German together are by far the most popular languages to study in Hungary, at least with regards to recognized qualifications. Together they account for an astonishing 91% of all candidates sitting stateaccredited examinations. Indeed, English alone takes a two-thirds slice of the linguistic pie, according to an analysis of data over 15 years, says Zoltán Rozgonyi, chairman of Nyelvtudásért, an association of language teaching and testing professionals. Equally surprising, the third most popular language exam is Esperanto. However, Rozgonyi argues this is an anomaly, based on false beliefs. “Esperanto being third biggest is a joke; it’s simply the result of most universities accepting it to fulfil the degree requirement, along with a myth many believe that it is much faster to get to the B2 level in Esperanto,” he told the BBJ. In 2019, the last year before the pandemic struck, the only other languages with more than 1,000 exam candidates were Spanish and Lovári (Romani). Given that the average price to take a B2 level examination (by far the most popular exam) is HUF 35,000, not an inconsequential sum for most, it is important to achieve success. Of almost 124,500 candidates in 2019, 82,367 (66% of the total) achieved pass grades. Close study of the statistics also reveals the “worst language” in terms of number of failed candidates as a percentage of the total. Last year, 18,868 failed their English exams, a seemingly large number, but with 65,000 candidates in total it equates to a 29% failure rate, i.e. better than the 34% average. (More positively, it represents a 71% pass rate.) German appears a bit tougher, with a 36% failure rate. But, to underline Rozgonyi’s “myth” theory about the ease of passing Esperanto, a shocking 1,121 failed exams in the invented language in 2019, equating to a failure rate of 60%. Last year, while the overall numbers were smaller, the results were even worse, with 70% of candidates missing the target. The message couldn’t be clearer: learning Esperanto is definitely not the easy way to a B2 language qualification.
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Special Report
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Budapest Business Journal | February 12 – February 25, 2021
The pandemic forced language learners, just like most of us, to stay at home and continue to study via online platforms. Most schools have adopted an online agenda and hold classes online, even though they have the option to teach face-to-face as well. Whether this will continue in the post-virus era is yet to be seen, nor is it yet clear how such a change would affect the language teaching industry globally. ZSÓFIA VÉGH
Photo by fizkes / Shutterstock.com
Taking Language Learning Online has Pros and Cons
ability to learn from the mistakes of the others, or questions arising from what classmates say; all these are lost online,” Tamás Légrádi, vice president of the Association of Hungarian Language Schools (NYESZE) tells the Budapest Business Journal. As a skill, a language can perfectly easily be learnt and taught online as well as off. But, as is with other activities, most people need a schedule and also some peer pressure to commit to learning. The proportion of those who can acquire a language without any help is very small.
One of the major benefits of online teaching lies in convenience; teachers and students can save time on commuting, and can participate from the comfort of their homes. This however, won’t suit all; some chose face-to-face classes specifically to get away from the Highly Committed distractions of their homes, and to fully “These highly motivated and immerse in the class. committed people with one or more Another benefit lost to shifting other languages under their belt teaching onto a virtual platform make up less than 5% of students,” is the ability to interact with their groupmates. For some, the nuances of a says Légrádi. The rest needs some supervision, a study plan, and the live class can never be reproduced in a occasional push they usually get from a group class or teacher, he adds. “Like working out, one could do environment. it yourself; however, many opt for a “Interaction between students, the personal trainer to have that extra language learning experience, the push,” he explains. Though there are
2D
Taking Tech to Boost Language Learning Online language learning is not reduced to video chatrooms. Apps have been around for a long time, and are gaining ever more popularity. They are definitely not the best way to study a language from zero, unless someone has a lot time of time and a knack for languages, but they are a handy addition to other learning regimes. The most popular ones use repetition as a method
to memorize words, the more sophisticated ones cut scenes from popular TV shows, subtitle them and add a few exercises after each segment. Many of these apps, including one Hungarian-based company, Xeropan, have seen a surge in their downloads since the outbreak of the pandemic, but they are thought likely to continue to rise in the post-pandemic
no official figures, Légrádi estimates that today there are about
20-30% less
teaching activity than before the pandemic started. “Initially, some schools were reluctant to switch to online teaching, but eventually many did,” he says. The more technology-savvy transitioned more easily, and overall, with success, at least that is the feedback NYESZE has received from several schools. Organizing one-on-ones or group chat might have been difficult at first, but most overcame these obstacles. The only thing that did not prove feasible is a mix of face-to-face and online teaching, that is, when a teacher is holding a class in the school and also online – simultaneously. When the first lockdown was lifted, many returned to the classrooms but they then again had to continue to study online from mid-fall. (Under the government restrictions aimed at combatting COVID, language schools do have the option to teach face-to-face, but a lot chose to hold online courses only today.)
era as they have proved themselves very convenient. They do have their downsides, though: most are international and have no Hungarian version or, and the translations are often flawed. But what they most lack is the “human touch”: even if you filled the gaps correctly, or translated (or guessed) a sentence correctly, you will remain somewhat uncertain as your answers are not confirmed or explained by a teacher, users say.
Quality Guarantee
“Good language teachers continue to work in reputable schools, so whether it is faceto-face or online, people know the quality is guaranteed,” Légrádi notes. The expert believes that online teaching will stay with us after pandemic as well, but faceto-face sessions won’t disappear either.
“These highly motivated and committed people with one or more other languages under their belt make up less than 5% of students. Like working out, one could do it yourself; however, many opt for a personal trainer to have that extra push.” “One class of a two-a-week course may be face-to-face, the other may be held online,” Légrádi thinks. Student feedback is also positive: Those asked by the BBJ mentioned time-saving, the abundance of digital tools and materials teachers can share more easily, although they add that internet connections can sometimes be tricky and that for teachers, holding a class online is definitely more challenging (or at least requires more attention). Overall, they don’t think that learning a language online is made more difficult than doing it face-to-face, though the experience is certainly different. When it comes to oneon-one classes, the difference is marginal. Here, just as in a group session, the teacher can share materials and, crucially, their attention is not divided. Some say they may be more motivated to study if they actually meet a teacher, but apart from that, the difference is hardly noticeable.
3
www.bbj.hu
Budapest Business Journal | February 12 – February 25, 2021
Special Report | 13
New Rules Make Language School Licensing Easier New rules have increased administration, but have also brought progress for teachers and security for students. Some private instructors may still opt to operate in the grey economy, though, refusing to license their activities, despite the new system making it significantly easier to register as a language school in Hungary than previously. CHRISTIAN KESZTHELYI
Under a 2020 modification to the 2013 regulations around adult education, licensing and registration of language schools in Hungary have seen some changes. Any company that wants to do business in language instruction has to register in a system called Felnőttképzési Adatszolgáltatási Rendszer, which translates as Adult Education Reporting System, or as it is often referred to: FAR. There are two registration options, registration by notification and registration by acquiring accreditation. “The first option has less strict measures; the company only has to announce to public authorities the intention to do business in the field of language instruction,” Michal Nadzon, managing director of Berlitz Czech Republic and Berlitz Hungary, tells the Budapest Business Journal. “The second option has stricter requirements, however. Any new language program or course needs to be accredited separately, and a qualityassurance system must be put in place, and a cash deposit must be put down,” Nadzon adds. While both registration options are subject to a fee, the latter also requires additional fees for each newly-accredited program. Either way, administration, paperwork and data collection from students have radically increased with the introduction of these new types of registration. The new system also comes with new requirements. “The institution needs to possess a certain amount of property
(the demand for corporate courses has plummeted as companies need to cut costs); in the market of private instruction, the uncertainty is the biggest issue,” he adds. In Czech Republic and Slovakia, the language school business is less bureaucratic; it is considered a service, just like any other business, according to the managing director of Berlitz, which is internationally present in
70
countries,
Michal Nadzon security; should the school not be able to provide the announced courses students have already paid for, the school must pay students a refund against the asset security,” Benjámin Berczi, marketing and sales manager of International House Budapest, tells the BBJ. The courses also require detailed administration, such as attendance sheets and a register, and they need to comply with reporting obligations via the reporting scheme, according to Berczi.
Registration
students. A further advantage is that, in accordance with the VAT law, the school can provide courses VAT free for clients,” he adds. The new data-collection system is similar to the one used prior to the
2020
modification,
although the present system is less strict than the previous ones; course schedules, for example, need not to be reported anymore. “Nevertheless, it is still very administratively demanding. Lots of personal data has to be collected from the students; in that respect, the current rules in Hungary seem to be going in the opposite direction than those in other EU countries,” Nadzon of Berlitz opines.
In the case of the first registration option, registration by notification, the only requirement is to register in the FAR system and have a trade license for language training. “This implies paying the registration fee, as well as commitment to data Background Check collection from students and storage There is still room for further of that data for a certain period of time improvement, he reckons. “One would and entering data into the FAR system regularly,” adds Nadzon. Other than that, expect the registration obligation would be reflected in the quality of the there are no formal requirements. language school landscape. However, For the second option, registration by this is not the case because the previous acquiring accreditation, the company background of the company is not registering “has to have a pedagogical investigated, nor professional qualities manager, with a degree and experience evaluated, including teaching method, defined by the law, who is employed by materials used during the lessons and the company. The quality management instructors’ erudition,” Nadzon warns. system is also specified by the law. It As registration by notification is fairly is not ‘good enough’ to have an ISO certificate for example,” Nadzon explains. easy, the new system has not made a major impact on the market generally. A quality control system and customer “On the other hand, some of the service function are also necessary private instructors might decide to stop under this option. Beyond the requirements, however, the delivering services or move to the ‘black market’ rather than fulfilling all the new system does deliver benefits to the administrative tasks brought by this market. “The school needs to provide change,” Nadzon says. teachers with proper qualifications and “COVID-19 has had a much greater continuous professional development for impact in terms of language school both registered and authorized courses,” landscape in both positive (a faster Berczi of IH Budapest says. move to new technologies and online “Participating in these courses means instruction) and negative connotations there is a quality assurance for the
including most of the EU and V4 countries. The two Visegrád Four peers have no central data collection system and education ministry accreditation is only required for specific language programs, a very marginal segment of the market, which does not give the establishments much of an advantage. Most language schools operate without this accreditation. “An important long-term trend can be seen is all V4 countries: Customers who would like to learn a new language (both B2B and B2C) look more at the quality and less at the price than some 10 to 15 years ago. They tend to value their time and wish to get faster progress and real results. They look for flexibility, options to study online and fully-customized programs,” Nadzon concludes.
NYESZE Quality Trademark The Association of Hungarian Language Schools (NYESZE) has developed its qualification system in the past three decades to control and to improve the operation and to raise the professional standards of language schools, the association told the BBJ. Based on more than 50 aspects, the qualification requirements examine and evaluate the activities of language schools with the involvement of independent language teaching professionals, with special regard to the school’s lessons. Schools that joined the association and identified themselves with the goals of the organization can voluntarily apply to obtain the qualification. NYESZE-certified schools differentiate themselves from other institutions by wearing the “quality trademark.” The Q mark means professional recognition, reliability and high standards, so it has advertising and PR value, according to NYESZE. Out of the approximately 250 institutions operating as language schools in Hungary, 55 are members of the association and 15 are currently eligible to hold the title of “Qualified Language School”.
14 | 3
Special Report
www.bbj.hu
Budapest Business Journal | February 12 – February 25, 2021
Remote interpreting has been growing since COVID came into our lives, but the market cake is so small as a result of the epidemic that interpreters who have lost their regular jobs due to the collapse of tourism and conference markets can hardly make a living.
Photo credit: Photo by Anze Furlan / Shutterstock.com
Interpretation Harder hit Than Translation Market
presence events, there has been much less upheaval among the largest translation clients.
solutions are expected to come to the fore, with international events attended in the future both in person and online, and that may mean more scope for remote interpreting.
GERGELY SEBESTYÉN
According to the spring survey of the Association of Hungarian Translators and Interpreters (MFTE), epidemiological constraints were felt much less by translators than interpreters. Eighty-five percent of the latter say they have not received a job offer since mid-March. In the interests of such unemployed entrepreneurs, professional associations, as in the case of income-free tour guides, have in vain asked the government to waive the obligation to pay KATA (the flat rate tax system aimed at the self-employed and small businesses) dues. According to Zsuzsanna LakatosBáldy, president of the MFTE, those who do not have diversified income sources are in the most difficult position. Some interpreters have been able to take a step forward and bought specialized software, without which it is now very difficult to enter the translation industry. It seems it is the young professionals who are benefiting the most. “It is those who can flexibly adapt to new conditions, customer needs, use new technologies well and happily; there is a generational change in the translation industry,” says Miklós Bán, president of the Association of Professional Translation Services, and VP of the European Umbrella Organization of Translation Agencies. While interpreters have suffered greatly from the lack of personal
Sector Dependent
Tourism and, for a period at the start of the first lockdown, the automotive industry came to an almost complete halt, while the turnover of two of the largest markets, the IT sector and the pharmaceutical industry, increased. Translation agencies working for companies in these sectors can still expect to close a good year. That said, it will only become clear in the first and second quarters of 2021 how much large clients will be prepared to devote to translation in the next business year. A “healthy” customer base has proved vital: those who have built up the right customer mix have not felt the downturn as much. The decline was minimal overall, and larger translation agencies were much less battered by COVID than the others. One reason is that the profession is already built on the home office; the freelance translators working for offices are often digital nomads, and may not even be in the same country as the firms they work for. The translation industry is technologically highly advanced, evolving rapidly, and an increasing proportion of workers are young people, who can more easily adapt to new situations. However, the world of interpreters, relying on personal contact capital, has been thoroughly shaken by the epidemic. Hybrid
“It is those who can flexibly adapt to new conditions, customer needs, use new technologies well and happily; there is a generational change in the translation industry.” “I dared to embark on developments right now because, during my last six years as a freelance professional translator, I have managed to build a secure client background from whom I get continuous work,” says Andrea Zdenkó Turiné who has a traditional translation agency at Százhalombatta, just 30 km southwest of central Budapest.
Self-improvement
“While continuing to maintain these relationships, I have embarked on this development to continue to serve my clients. Also, I had a period when my work orders definitely decreased, about twoto-three weeks, when I had time to think about the future and even do some things I had been planning for a long time,” she tells the Budapest Business Journal.
“For example, I have had a [company] logo ready for a long time, and an address for my website, but I haven’t gotten round yet to putting together the website itself. Now I’ve written a letter to myself about what’s happened to me so far, what I want to achieve, and so on. If I’m going to do it, it is now or never,” Zdenkó Turiné says. As to COVID, she says that it’s not such a big problem for her. “I didn’t mind that I now had a breather to think. Of course, the drop in orders was not so good, but I’m the kind of person who tries to get the best out of everything. At least, that’s what I consciously strive for. That’s why I’m trying to improve now, instead of complaining.” While she has her own translation agency, she also takes on work for other, bigger companies. “As a translator, I work with several agencies, so I was able to gain insight into their structure, how they work. Of course, this will also help you get started. I also took part in the PROFORD two-day lecturer’s master course, where the internal structure and operation of the translation agencies were discussed.” According to Zdenkó Turiné , confident, professional language skills remain the basic requirement. “Fortunately, I know many such professionals. I think that, not only in the field of translation, but for all service sectors, the following are true for the ideal professional: being honest, keeping deadlines, responding quickly to inquiries (even if the answer is ‘No’), and communicating throughout the project. In the course of my transport management activities, I have found that it is really possible to work effectively with such suppliers.”
3
www.bbj.hu
Budapest Business Journal | February 12 – February 25, 2021
Adding a Local Flavor to Global Success Most Hungarian localization professionals adapt English language international video gaming products into the steadily expanding Hungarian market, characterized by the business model of continuous content delivery. Besides machine translation, high quality localization of story-driven video games is still based on the simultaneous teamwork of human language experts and hardcore gamers, market players tell the Budapest Business Journal. ÉVA KASZAP
The global video gaming industry is showing marked growth, especially during the present coronavirus-induced shutdown, according to leading provider of games and esports analytics Newzoo. The research company estimates the 2020 worldwide market revenue reached USD 159.3 billion, a 9.3% increase compared to the previous year. The main driver of the growth besides the lockdown is the launch of nextgeneration consoles on the market, Newzoo says. Asia-Pacific generated 49% of game revenues with USD 78.4 bln. North America is the second largest region with USD 40 bln, while Europe is the slowest-growing, producing USD 29.6 bln in revenues in 2020. In order to capitalize on these intensely growing markets, game developers and publishers have to find
Special Report | 15 the first-person shooter game “CounterStrike: Global Offensive” (CS:GO) by Valve and Hidden Path Entertainment.
Adaptation
Localization is a vital element of the success of video games such as regional hit “The Witcher” by Poland’s CD PROJEKT RED. Photo by charnsitr / Shutterstock.com a way to adapt the linguistic and visual aspects of their products into a variety of different target languages, meaning that game localization outperforms most other language industry segments since the start of the pandemic, according to Latvian translation and localization firm Adverbum. The main goal is to keep the tone, feel, style and experience the game conveys to its users. There are a variety of different fields that require translation in a game: UI information including location, map and non-player characters’ (NPCs) names, in-game dialogue, quest texts, instructions in multiplayer games, subtitles or dialogue in cut-scenes. Bad translations, or inadequate contents, usually leads to a low-quality user experience (UX) and destroys players’ immersion into the game, professionals say. Looking at the European video game market in terms of languages, the main translation set is usually FIGS (French, Italian, German and Spanish), accounting for some 40-45% of the total word count, says Adverbum. Last year, however, saw a drop in the share of these languages due to reduced demand in Italy and Spain, as these countries were badly affected by the economic downturn that came with restrictions that aim to stop the spread of COVID-19. On the other hand, the rising star of European game localization platform is Poland, with a growing number of development ventures, studios and exporters. From a translation point of view, an positive example is Polish video game maker CD PROJEKT RED, which built its reputation on its medieval fantasy world game “The Witcher.” The game had sold more than 40 million copies worldwide up to the beginning of 2020, Reuters says.
Slavic Idioms
Localization director of CD PROJEKT RED, Mikołaj Szwed, says the company usually develops its games at all target languages simultaneously, with no set
language. “The Witcher,” however, was a little bit different, showcasing a variety of Slavic idioms and cultural references. Here, the task of the language professionals was to make these references relevant to all gamers, no matter where they are playing it, Szwed says. The company’s main goal is to provide its players with the feeling that the game was originally developed in their own language. One of the best examples of this is a character in the game called “the Peller,” originally coming from “Dziady,” a Polish drama which has a great importance in Polish and Slavic folklore and culture. The character evokes something deeply rooted in the Polish language and translators had to find its equivalents in other target cultures such as Chinese or Arabic. Szwed adds that localization goes far beyond languages, however; visual assets need to be adopted to target countries as well. The Hungarian gaming and esport market is also continuously expanding. Its base counted some 540,000 gamers, generating HUF 42 bln turnover in 2020, according to a survey compiled by online research firm eNet. Hungarian customers spent HUF 10.5 bln on purchasing video games, while hardware shopping accounted for some HUF 23.2 bln, in-app purchases were at HUF 6.5 mln and related goods such as branded T-shirts or mugs generated a revenue of HUF 1.6 mln last year. Some 61% of the total Hungarian adult population, roughly 3.8 million people, play video games regularly, according to eNet. Hardcore gamers spend an average of three and a half hours gaming on weekdays, which can reach six hours or more during weekends. When it comes to platforms, 84% play on PCs, 27% on laptops, 24% on smartphones and 20% on consoles. The most popular games in Hungary include the multiplayer online battle arena (MOBA) called “League of Legends,” published by Riot Games, and
Hungarian language professionals specialized in video game localization usually translate from English to Hungarian, adapting multinational products into the Hungarian market, head of TEK Localization, László Kovács tells the BBJ. The most common approach in Hungary are Massively Multiplayer Online games, often referred to as MMOs, featuring open platforms where players can cooperate, interact, and compete each other. The MMO business model requires tremendous investment in developing constantly updated contents, thus generating steady revenues, Kovács explains. Over a certain company size, game makers usually employ an in-house localization team; however, cultural adaptation often requires the involvement of contracted nativespeaker professionals too. Good translators are not always gamers, yet it is strongly advised that someone in the localization team who is immersed in the gaming subculture serves as language manager for the project, Kovács says.
Hungarian customers spent HUF 10.5 bln on purchasing video games, while hardware shopping accounted for some HUF 23.2 bln, in-app purchases were at HUF 6.5 mln and related goods such as branded T-shirts or mugs generated a revenue of HUF 1.6 mln last year. Some 61% of the total Hungarian adult population, roughly 3.8 million people, play video games regularly, according to eNet. Similar to the global trends, the Hungarian industry is moving towards continuous content delivery as businesses can hardly rely on one-off projects, he predicts. Machine translation (MT) shows increasing popularity in the localization market, professional translator Attila Kosik tells the BBJ. Due to its financial efficiency, an increasing number of translation agencies use some sort of machine learning algorithm, condemning the role of human translators to crafting enjoyable localized content simply to proofreading. This works for most IT related translations in Hungary as well, but when it comes to story-driven video games such as “The Witcher,” human translation remains irreplaceable, Kosik says.
16 | 3
Special Report
www.bbj.hu
Budapest Business Journal | February 12 – February 25, 2021
Translation Agencies
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1989 5 250
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1114 Budapest, Móricz Zsigmond körtér 3/A (1) 209-6386 ils@ils.hu
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Budapest Business Journal | February 12 – February 25, 2021
Socialite Musician István Bergendy and his Place in Hungarian pop Culture Oddly enough, the first Hungarian I knowingly ever met was a guy named Steve Bergendy, a popular bass player on Mallorca’s jazz scene. When my Hungarian partner saw him, she was surprised. “That’s István Bergendy’s son,” she told me. DAVID HOLZER
At the time, I had no idea who István Bergendy was. I do now. He was perhaps Hungary’s best-loved popular musician, a clarinet player, band leader, songwriter and mentor to many of the country’s stars. It is claimed that his band was the longest-lived in Hungarian popular music. Sadly, Bergendy passed away on December 14, 2020 aged 81, a victim of COVID-19. To give you some idea of how fondly Bergendy is regarded by Hungarians of a certain age, a friend of mine in his mid-50s who left this country long ago told me Bergendy’s song “De Nehéz Az Iskolatáska”, roughly translated as “My Schoolbag is too Heavy,” is stuck in his brain forever. I mentioned this to my partner and she immediately began singing the song. “Everyone knows that,” she said.
Long life in music István Bergendy was born in 1939. He was taught classical music and learned to play accordion and clarinet. While at high school in Szolnok (11 km southeast of the capital, in the middle of the country), he fell in love with jazz. In 1958 he founded the youth jazz ensemble of the Károly Marx University of Economics with his brother Péter who played tenor sax and flute. István gained a degree in clarinet from the Béla Bartók Conservatory, graduating in 1964. From 1962, the Bergendy Ensemble was the permanent band at the Buda Youth Park playing jazz, Dixieland
it the longest running Hungarian band ever, according to some.This longevity and Bergendy’s skill at picking musicians for his band will most likely be his legacy, according to László Kovács of Hungarian specialist reissue label Moiras Records. “He was important both as a band leader and as a mentor. His taste in choosing music to play and musicians to work with was refined. Having such a long career, he had a huge and positive imprint on the music scene of Hungary,” Kovács says.
Sarolta Zalatnay For me, Sarolta Zalatnay is the greatest of all the Hungarian singers who came of age in the 1960s. There’s a clip of her winning a TV talent show on YouTube (search for “Zalatnay Sarolta - Omega - Nem várok holnapig – 1967”) that I’ve watched over and over again. “Nem Várok Holnapig,” the song’s title, translates as “I’m not Waiting Till Tomorrow.” Omega is the band backing Zalatnay, and went on to be the most successful rock band in Hungarian history. Zalatnay is so popular she’s called out on stage to sing her song, a number with a Beatles-style guitar intro, three times. She’s taken aback by the audience’s response to her but overjoyed. Each time, her delivery becomes more powerful, her voice gets more of a rasp. This voice sounded even more soulful after Zalatnay had vocal cord surgery, giving it a similar quality to that of Janis Joplin, who it’s said she saw in Europe in 1969. On Bergendy’s passing, Zalatnay acknowledged him as her first real mentor, the man who encouraged her to enter the 1966 Hungarian Dance Festival TV show. She sang a song by Bergendy pianist Ede Edh. István Bergendy. Photo by Fortepan / Tamás Urbán Since then, Zalatnay has had a long career and is somewhat known in the West. Her cult 1973 album “Hadd and traditional dance music. The band and contains a song for every one of Mondjam El” (“Let Me Tell You”) is a mix also accompanied many well-known the 24 hours of Monday. As the 1970s of psychedelic rock and jazz funk. Its Hungarian singers, including the great progressed, Bergendy embraced jazz rock. intro was sampled by Portuguese star female singer Sarolta Zalatnay. Gal Costa, making Zalatnay unknown in Tonsorial Style In 1964, Bergendy shifted styles to Portugal, but hugely popular. become part of the Hungarian beat boom After 1977, István formed a band called I’ve yet to get my hands on Zalatnay’s New Bergendy which played everything and stayed with this until 1969 when he autobiography “Nem Vagyok Én Apáca” from jazz to funk to pop. Around this switched back to jazz. His place in the (“I’m No Nun”). The friend of mine time, he pioneered a tonsorial style that Hungarian heart was secured when, in who told me about “My Schoolbag involved shaving the hair off one side of 1970, his band performed on New Year’s is too Heavy” says it’s rumored she his face while sporting a full beard and Eve on the only TV channel at the time. had a fling with Jimi Hendrix while hair on the other The last show before midnight ended touring the United Kingdom in 1968/69. The band also supplied the music for a three minutes early and the director told According to Wikipedia, she had a brief number of children’s shows for Hungarian personal relationship with Maurice Gibb Bergendy to play something, anything. television. Of these, “Süsü the Dragon” The band played “Always the Same,” of the Bee Gees on the same tour. It was most popular and is still fondly which became a huge hit. would appear “I’m No Nun” is a highly remembered by my partner’s generation. Throughout the 1970s, Bergendy and appropriate book title. In 1982, Bergendy switched styles the band made a series of successful again with the Bergendy Salon Orchestra, albums and singles, beginning with For the biographical detail of this returning to his pre-beat boom roots their second album, the eponymous article, I’m indebted to Zoltán Fehér’s and throwing some Latin dance music “Bergendy,” regarded as among the best superb account of Bergendy’s life and classical into the mix. The Bergendy Hungarian albums ever. at rockologia.blog.hu, the Chronicle The 1973 concept album “Monday” was Salon Orchestra was to continue through of Hungarian Rock Music. various lineup changes until 2017, making the first ever Hungarian double album,
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Budapest Business Journal | February 12 – February 25, 2021
Socialite | 19
Going in Search of Generosa and Nailing Néró
ROBERT SMYTH
The Szentpéteri Borpince works with a host of indigenous grape varieties, including Irsai Olivér, Cserszegi fűszeres, Pozsonyi Fehér, Olaszrizling, Kadarka and Kékfrankos, grown from the sand around the town of Kiskőrös (137 km south of Budapest), in the Kunság wine region, on the Great Plain. However, on the winery’s remarkably lengthy tasting list, it is the white Generosa and black Néró grapes that catch the eye, and also to a large extent the palate too, due to the distinctive nature of the wines made from them. The Néró is used to make mainly rosé, a skill at which this winery is particularly adept, something also apparent in its rosés from the Kadarka and Kékfrankos varieties, which have bagged plenty of medals in international competitions. Attila Szentpéteri says that Kunság is the home of reductively made fresh and fruity fresh wines in the first case, but asserts that bigger wines can be made when the right combination of vineyard site (with some vineyards also containing smatterings of limestone to supplement the ubiquitous sand) and vinification method is found. Generosa, a crossing of Ezerjó (a Hungarian grape associated with the Great Plain and Mór) and Red Traminer (Sauvignon rose) is a relatively new crossing in the grand scheme of things, created by grape breeder Károly Bíró in 1951, then further developed by Edit Hajdú at the Kecskemét Research Institute in the 1970s. It has only really
Attila Szentpéteri. Photo by Or Szucs been rolled out to a limited degree in the last couple of decades. Creating a good crossing is no mean feat and an arduous, decades-long process of selection and experimentation. Master of Wine Stephen Skelton nicely puts it in simple terms in “Viticulture: An Introduction to Commercial Grape Growing for Wine Production” (revised and updated for its second edition in 2020) by referring to when Irish playwright George Bernard Shaw, who was respected for his stellar brain though certainly not his looks, was approached by the beautiful actress Mrs. PatrickCampbell, who remarked how nice it would be for them to have a child together – with his brains and her beauty. “Well yes my dear, but think of the consequences should it turn out to have my beauty and your brains!” quipped Shaw.
Real Promise
Be that as it may, Generosa shows real promise and appears to succeed in capturing the zesty acidity of the former grape and aromatic appeal of the latter and fortunately not the restrained aromas of the Ezerjó and flabby acidity of the Red Traminer. Szentpéteri’s Generosa 2020 (HUF 1,590 from borhalo.com) is fresh and light- to medium-bodied, exuding fresh green aromas, as well as tropical fruit (pineapple) and green herbs; a little like a Sauvignon Blanc but not quite, and with enough of its own character to make it rather interesting and appealing. The 2019 Szentpéteri Generosa came in 36th place in Top 100 Magyar bor 2020, not bad for a wine that costs just HUF 1,290 (from Pannonborbolt. hu). The grape can also be found a few kilometers to the south in Soltvadkert at the Frittmann winery, which has also had success with this fledgling variety. Over in the Mór wine region, the Paulus winery makes an Asti-method sparkling wine from Generosa, which displays an appealing floral fragrance. Incidentally, Hungarian Generosa has nothing to do with the Portuguese grape of the same name.
Similarly, Néró is not related to the Sicilian black Nero d’Avola grape. While Generosa is a crossing of two Vitis vinefera grape varieties, meaning they both come from the family of grapes that are typically used to make wine, Néró is a hybrid variety that also incorporates other species of vines, often made to combat certain adverse growing conditions. Néró was created in 1965 by József Csizmazia, who coupled Eger 2 (also known as Villard Blanc) with Gárdonyi Géza. It is early ripening and disease resistant, requiring little in the way of spraying. It was established at the Szentpéteri winery by Attila’s father, in early 2000s. Attila Snr’s background is in agriculture, and he runs an agricultural goods shop across the road from the tasting room, while also helping his son out at the winery.
All of Szentpéteri’s rosés are characterized by their airiness, lightness of touch and pale color, due to just a couple of hours of skin contact between crushing and pressing. The featherlight yet spicy Kadarka rosé 2019 claimed fourth spot in the best rosé category of Winelovers 100 legjobb Magyar Bor.
The winery also makes an oaked rosé and the much darker Néró siller, a cross between a rosé and a red wine, which undergoes a couple of days of skin contact. Béla Hamvas, in “The Philosophy of Sexy Néró Wine,” a classic of Hungarian wine writing, Hybrid varieties are often dismissed says the best time to drink the Kiskőrös as inferior and lightweight, but (the light, fruity wines that have typically there’s something sexy about Néró. come from here) is from May to August. Szentpéteri’s Néró Valogotás rosé 2020 However, Szentpéteri is keen to show (HUF 1,350 from the winery) is light and the versatility of Generosa and is soon to elegant with a pleasant pale salmon color, release an exciting and more intense latethen peach, watermelon, grapefruit and harvest dry wine (priced at a minimum of redcurrant aromas and flavors. It is fairly HUF 3,000) from the variety that ramps up rare for Néró to have such a broad range the concentration and is aged in oak, and of aromas and flavors. also makes a sweet version. Photo by Or Szucs
The promise of rare grape varieties from an upcoming winery is enough to get any serious wine writer out of bed on a cold winter’s morning, so the chance to check out two lesserknown varietals made a sociallydistanced visit to a Great Plain winery a no-brainer on a late, gray January day.
Szekszárd vintner Gábor Merfelsz is another pioneer of Néró. On visiting Szentpéteri, in an act of friendship, the charismatic Merfelsz, who also makes a red wine from the variety, mixed the two rosés together. Merfelsz has sold a Néró plot to the Eszterbauer winery, which now also makes a deep colored, intense and very tasty rosé from the variety. All of Szentpéteri’s rosés are characterized by their airiness, lightness of touch and pale color, due to just a couple of hours of skin contact between crushing and pressing. The featherlight yet spicy Kadarka rosé 2019 claimed fourth spot in the best rosé category of Winelovers 100 legjobb Magyar Bor (a different 100 best Hungarian wines listing to the aforementioned one).
, T R A T S H S E R F
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budgetflotta.hu/en budgetflotta@budget.hu +36 1 700 4864 Fuel consumption: 1,6-1,4 l/100 km, CO2 emissions: 41-38 g/km, current consumption: 18,0-15,7 kWh/100 km.
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