Diplomacy & Trade 2015 June

JUNE 2015 HUF 1710 EUR 6

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HIGH HOPES, LOW EXPECTATIONS Two major forecasts were published on the Hungarian economy in the early days of May. Both the European Commission and GKI Economic Research Co. shaped similar possible scenarios which said that decelerating of the GDP growth is imminent. The main reason behind this is that EU-funded investments will fade in the upcoming 2-3 years. Investments are expected to stagnate in 2015 but consumption may increase slightly. SEE OUR COVER STORY

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REGIONAL FOCUS

Africa

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In this issue we publish interviews with representatives of two countries of the African continent. Ambassador Johann Marx (Republic of South Africa) and Ambassador Lizeth Nawanga Satumbo Pena (Angola) speak abouth the way they think bilateral political, economical and cultural relations can be strenghtened. Both diplomats appreciate the renewed attention of the current Hungarian government to open to the South and develop closer ties with African countries. see articles on pages 8-13

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letter from the publisher

Budapest attracts mor students then before

'Money makes the world go 'round – Liza Minnelli sang it in the famous film Cabaret. And she was absolutely right. Nothing seems to be more important than money. At least when it comes to shaping ones budget – individual, corporate or governmental. This month we concentrated on the latter. As always, our mission is to provide our readers with a broad picture. To help readers understand the main perspectives of Hungary's economy for the next two years, we offer special coverage in this issue, compiling the pros and cons. Exporting goods and services is one of the key elements in this budget. Not only to Europe, America and Asia, but to Africa as well. In our Regional Focus we look at how Hungary is developing its diplomatic, economic and cultural ties with the leading countries of the African continent, such as the Republic of South Africa (RSA), Ghana, Angola, Egypt. We also introduce the new offices set up by the Hungarian National Trade House in several African capitals which help Hungarian and African enterprises to grow their mutual business. There are separate interviews with Ambassador of RSA and Angolaon on bilateral trade and business cooperation. Possible future steps of the reelected UK-leader are analyzed by our expert as the EU is anxious to know London's intentions towards our common union. In the meantime transatlantic trade talks are underway between the EU and the US but – as you will read – there are still an array of issues. Diplomacy is not only about protocol and trade. Diplomats broaden their knowledge regularly getting to know Hungary on private tours as well.. This month the Chargé D'Affaires of Argentina shares his experience in our Witty leaks section. Finally, we present interesting exhibitions of Indonesian and Korean masters and an interview with the head of Budapest Summer Festival. No D&T issue is complete without exploring fine new restaurants and hospitality possibilities; several are presented in this month’s issue. These are really value for money. Which is surely what makes the world go 'round.

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­­ contents Developments after the general elections in UK

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REGIONAL FOCUS Ambassadors of South Africa, Angola on political, economical cooperation with African countries

14-17 DIPLOMACY

Peter Freed

Talks on transatlantic trade WITTY LEAKS: The Argentinean ambassador's trip to Tokaj

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18-19 EDUCATION AND DON’T FORGET

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International schools in Budapest

20-21 COVER STORY

Will Budapest listen to Brussels?

22-23 BUSINESS

Indonesian companies to explore Hungary, Changes in Electronic Trade Control System

24 REAL ESTATE

Rent your office. Now!

25 BUSINESS INTERVIEW

Orbis-leader: Budapest has the future

26 SCIENCE

The year of Light

28-29CULTURE

Indonesian days in Budapest Interview with Teodóra Bán on summer festival experience

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07POLITICAL ANALYSIS

EU-US talks on Transatlantic Trade Agreement page 14

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Enjoy reading our magazine.

Plenty of cultural events in the upcoming month page 27

news

news.

CONVERGENCE and NATIONAL REFORM PROGRAM SENT to BRUSSELS Hungary’s Convergence Program for the period between 2015-2018 is based on the targets of keeping the budget deficit low, reducing the sovereign debt, and making inflation predictable. The government also sent the 2015 National Reform Program to the European Commission. This document outlines major central measures that have been implemented in order to meet the growth and employment objectives of the Europe2020 strategy and comply with the countryspecific recommendations of the previous year.

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AGRICULTURAL COOPERATION with BRAZIL

COMMON STRATEGY AGAINST VAT FRAUD Five countries from Central and Eastern Europe (Hungary, Austria, Czech Republic, Slovakia, Bulgaria) are urging joint action against VAT fraud, such as the extension of the reverse-charge VAT mechanism. As they indicated in a recent conference in Vienna VAT evasion and fraud cause huge problems in the region. The so-called “carousel-fraud” and “missing trader fraud” schemes are uniform practices within the entire EU, as there are no inner borders and fraudsters can easily make money by transporting goods between countries. In Hungary, the loss in fiscal revenues due to VAT fraud is estimated at EUR 1.5-2bn per year. The main objective of the conference was to promote common action based on mutual agreement and to introduce reverse-charge VAT. This mechanism has already been introduced in Hungary for cereals, and that has made the sector substantially more transparent and the measure has resulted in higher fiscal revenues. However there are some differences in positions of individual countries, as for example the Czech and Bulgarian proposal recommends reverse-charge VAT to be applied for certain types of goods above a given value limit, either EUR 5,000 or EUR 10,000.

The Ministry of Agriculture’s Deputy State Secretary for Agricultural Development and Hungaricums, István Loránd Szakáli, held talks in Brasília on strengthening Brazilian-Hungarian cooperation in agriculture, sharing experiences within the field of organic farming and importing GMO-free soy. The meeting was held to assess concrete areas of cooperation and the opportunities raised by the Hungarian government’s policy of “Southward Opening”, which also aims at increased trade with the South American country. Brazil, which is the world’s seventh largest economy and has a population of over 200 million, represents an excellent opportunity for economic cooperation.

PRIME MINISTER VIKTOR ORBÁN RECEIVES QATARI MINISTER of ECONOMY

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Prime Minister Viktor Orbán held talks with Qatari Minister of Economy and Trade Mohammed Al Thani. The Qatari minister, who was on a working visit to Budapest, also held talks with Minister of Foreign Affairs and Trade Péter Szijjártó. Qatar has the world’s highest GDP per capita, and it has the world’s third largest natural gas reserves. Hungary is therefore interested in developing bilateral investment and energy cooperation with the emirate. Companies from this Arab state are interested in making investments into the Hungarian market and Qatar Airways has recently opened a direct daily flight between Doha and Budapest. During the visit a joint economic committee was set up and held its first official meeting. Representatives of the two countries held talks on close cooperation in different fields such as food processing, environmental protection, construction industry, energy and water supply, infrastrucural developments, healthcare, education and sport.

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THE HUNGARIAN 'FATHER OF THE EURO' PASSES AWAY

Alexandre Lamfalussy, the Hungarian-born economist and banker known as one of the fathers of the common European currency, the Euro, and the head of the predecessor of the the European Central Bank, passed away less than a month after his 86th birthday. Alexandre Lámfalussy, the Hungarian-born economist and banker known as the “father of the euro”, has died aged 87, his family has disclosed. Born as Sándor Lámfalussy on April 26, 1929 in Kapuvár, western Hungary, the world-renowned economist had been living in Belgium since 1949 and he had Belgian citizenship. He was one of the economists - as a member of the Delors Commission (1988-89) - participating in devising the plan for the European Monetary Union to introduce the common European currency, the Euro. From 1994 to 1997, he was the first president of the Frankfurt-based European Monetary Institute, the predecessor of the European Central Bank. Several European and Hungarian leaders have expressed their condolences on his death. The European Central Bank called him "one of the Euro's founding fathers" while a statemen by the Hungarian Ministry of National Economy said "we have lost a determining figure of economics."

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­­company news company news.

SUPPORT PROGRAM FOR LARGE CORPORATIONS

The government of Hungary is planning to create a support program for large corporations which will provide an incentive for them to embark on further developments, Nándor Csepreghy, Deputy State Secretary for Development Policy Communication at the Prime Minister’s Office told MTI, the Hungarian News Agency.The new system specifically targets 100 large Hungarian corporations with regard to the fact that these businesses are not eligible for EU funds reserved for small and medium-sized enterprises. He drew attention to the fact that while these developments directly emerge at the given large companies themselves, they indirectly also reinforce the small and medium-sized businesses which are in contact with them. "There is no list yet which contains 100 specific large corporations; we are merely talking about a number in this magnitude", Nándor Csepreghy said. He added that the companies in question will also include businesses with which the government has already concluded strategic cooperation agreements, while there will also be others.

FORD TOPS NEW CAR SALES INCREASE last month were by companies. Taking a look at the most popular models, the website points out that “we can still be sure that re-export continues to play a key role in how the statistics turn out.” Although, most new cars are registered in Hungary by businesses, some of the manufacturers keep faring well in terms of sales to private buyers, too. One of these was Suzuki which had 54% of its newly sold cars were bought by private buyers (thanks to three popular models, Swift, SX4 S-Cross and recent addition Vitara). In this "category" Opel and Dacia also performed well earlier, and Vitara’s increased popularity is expected to take its toll mostly on the latter (as one of Dacia’s flagship model Duster is now facing a tough rival).

A brand new consultancy firm, Global Opening Ltd. (GO) has opened its doors some weeks ago in Hungary. It offers consultancy, assists in developing business, providing match-making, creating real estate choices. Apart from this GO offers training and education of executives, helps to improve board communication and leadership capabilities. The firm was established at the end of 2014 by two partners: former Ambassador Balázs Bokor and finance and real estate expert József Kuller. Both of them have long and proven international, governmental and business experience.

MAN BOOKER INTERNATIONAL PRIZE WON BY HUNGARIAN AUTHOR Innovative Hungarian writer László Krasznahorkai was chosen as the winner of the sixth Man Booker International Prize awarded for an achievement in fiction on the world stage. Krasznahorkai was chosen from a list of ten eminent contenders from around the world. The Man Booker International Prize, worth GBP 60,000, is presented once every two years to a living author for a body of work published either originally in English or available in translation in the English language. It has previously been awarded to Ismail Kadaré in 2005, Chinua Achebe in 2007, Alice Munro in 2009, Philip Roth in 2011, and Lydia Davis in 2013. Born in 1954, László Krasznahorkai gained considerable recognition in 1985 when he published ‘Satan Tango’, which he later adapted for the cinema in collaboration with the filmmaker Béla Tarr. In 1993, he received the German Bestenliste Prize for the best literary work of the year for ‘The Melancholy of Resistance’ and has since been honored with numerous literary prizes, among them the highest award of the Hungarian state, the Kossuth Prize. Krasznahorkai and his translator George Szirtes were long-listed for the 2013 Independent Foreign Fiction Prize for Satan Tango and Krasznahorkai won the Best Translated Book Award in the United States two years in a row, in 2013 for Satan Tango and in 2014 for ‘Seiobo There Below’. Last year, Krasznahorkai, the author of 16 books, was the 2014 recipient of the America Awards – considered by many as the ‘Alternative Nobel Prize for Literature’ – for a lifetime contribution to international writing.

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The number of new car registrations jumped in Hungary by 21% year on year in April 2015, the financial website portfolio.hu quotes JATO Dynamics. The top-selling brand was Ford, as it once more took the lead in sales to businesses. Suzuki, however, was the top pick among individuals, surpassing Opel and Dacia that were the ‘kings’ of this category earlier. A total of 6,752 new passenger cars and 1,332 small utility vehicles (of 3.5 tons or less) were registered in Hungary in April 2015. Ford sold 1,083 vehicles (passenger cars and SUVs combined), 87% of which were purchased by businesses. This ensured the brand a 13.2% market share. On the market of passenger cars only, Opel grabbed first place with 738 new cars registered giving it a 10.9% market share. The runnersup were Ford, with 720 new cars sold and Skoda with 712 cars sold. The most popular model was Skoda Octavia, of which 393 were sold. The runners-up were Opel Astra (306), Ford Focus (238), Suzuki Vitara (212), Suzuki Swift (202), Volkswagen Golf (193) and Suzuki SX4 S-Cross (183). Portfolio.hu notes that growth continues to be ensured by the demand from businesses, adding that in Hungary, many people purchase cars for themselves via their company. 77% of new car registrations

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analysis

political analysis.

A GIANT LEAP FOR THE CONSERVATIVES…

… A SMALL STEP (BACKWARDS) FOR EUROPE?

nationalize a number of authorities and push the EU towards a free trade area with less social and political strings attached. In reality, the chance is rather slim: nobody really wants or dares to start a debate on changing EU treaties in the core countries of the EU; the French and Dutch referenda a few years ago provided a cautionary tale to the ‘federalists’ in Europe about the unpredictability and risks of asking the citizens of the EU and leaving decisions for them. Although, the majority of the British people wish to stay inside the EU, the performance of the pollsters at the latest parliamentary elections (in which they predicted a neck-and-neck competition between the Conservatives and the Labour Party) may not be an overly reliable guidance in this question. Rejecting the British demands will result in a referendum – possibly even before 2017, which would dispel a lot of economic and political uncertainties. In case of a ‘yes’ vote, the EU would lose one of the three biggest economies, a net payer into the EUtreasury, an indispensable country for the EU’s security and defense policy (ESDP), and a large chunk of power in the world in general. If the ‘Brexit’ was to go hand in hand with the ‘Grexit’, the actual consequences and the message of losing two members of the Union would be potentially devastating to the EU. The ‘Scottish’ question is equally controversial. On the one hand, Nicola Sturgeon’s SNP indirectly and unintentionally helped the Conservatives, who were able to play on the fears of the voters outside of Scotland that the SNP would dictate if the Labour won the elections and the SNP supported it from outside. (The other ‘fear factor’ used by the Tories against the Labour Party was the latter’s economic record during their governance.) On the other one, if the referendum on EU-membership is held, the large majority of the Scottish voters are likely to vote for continued membership, and if defeated, they would demand another referendum on Scotland’s own membership within the U.K.

BY TAMÁS MAGYARICS

The parliamentary election in the United Kingdom on May 7, 2015 may go down in the history of the country as a ‘critical one’, that is, an election that brings about a major party alignment. The balance sheet for the parties shows that the Conservatives retained their dominance in England, the Labour Party has become for all intents and purposes an English party (very much like the Tories) and will face an uphill battle to compete with the Conservatives here. The Scottish National Party (SNP) emerged as the party in Scotland, which is a bit of a surprise after it lost the referendum on independence last year. It is true, though, that an SNP-voter at the parliamentary election is not necessarily someone who is for breaking away from the Union with Great Britain. The Liberal Democrats were almost totally wiped out, while the Eurosceptic United Kingdom Independence Party (UKIP) has climbed to be the third strongest party in the UK in terms of popular support. This rather radical shift in the electoral support has not really translated into similar parliamentary strengths because of the ‘first-by-the-post’ single-member electoral system. Thus, while the UKIP received more votes than the Lib Dems and the SNP combined, it sends only one member to the British Parliament in contrast to the 8 and 56 members respectively of the other two parties.

illustration by TAMÁS KÜLKEY

Failed promises The election was also without precedent in terms of the immediate resignations of three party leaders. While the departure of Nigel Farage as the leader of UKIP is not final, Nick Clegg’s, who presided over arguably the greatest collapse of the Liberal Democrats since their birth, seems to be an irreversible one. The poor showing of the liberals in the U.K. underlines the crisis of the liberal policies in Europe as a whole; the other big liberal party, the German FDP suffered a similar fate at the latest Bundestag¬ election, while elsewhere in Europe, the liberal parties have also seemed to lose their political clout to a large extent. The defeat of the Labour Party is instructive from several points of view. First, the attempt to revert to a quasi-Marxist ideology has spectacularly failed. Ed Miliband won the leadership contest in the Labour Party in 2010 against his brother, David Miliband on a leftist platform and with a strong support of the unions. The centrist ‘Blairities’ were pushed into the background and the left wing of the Labour Party took over leadership. Second, Ed Miliband has never been able to get himself accepted by the former Labour grandees (e.g., Peter Mandelson) and the British people at large; he always trailed David Cameron as a potential Prime Minister. Third, the Labour Party revived a sort of class warfare in its campaign by pitting the ‘rich’ against the ‘poor’, and by not being able to offer a vision for the w w w . d t e u r o p e . c o m

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middle class, either. In Scotland, one of its former strongholds, the SNP edged the Labour Party out by stressing Labour’s commitment to the Union, the British deterrence force, and a perceived continuance of Chancellor George Osborne’s ‘austerity’ program in a slightly different way. A number of commentators compare Labour’s defeat to the party’s decline in the 1980s, especially under the radical leftist leadership of Michael Foot, and some prominent Labour Party have-beens (such as Lord Mandelson) or would-be leaders (for instance, Chuka Umunna),

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call for a return to a revitalized and modernized New Labour.

Victors faced by challenges The victorious David Cameron is facing a number of pressing questions; the two most important ones being the ‘Scottish’ question and the ‘EU’ question. The two, in fact, may be linked at one point. The Tory leader promised to call a referendum on the U.K.’s membership in the EU if his demands to reform the Union are not met. The wish-list practically intends to re-

The Cameron Government will be in an easier and more difficult situation at the same time than it was in the past five years. It does not have to coordinate with the Lib Dems, who are overall to the left of the Conservative mainstream, but the Tories will have only a razor-thin majority – and they themselves are divided along several lines, arguably most importantly on the question of the EU. Euro-skeptic backbenchers have already caused some headache to Prime Minister Cameron, and in case of a referendum the hidden division lines within the Conservatives are bound to become even more pronounced that they are now. The same holds true with regard to Europe, as well: a debate over the British demands, some of which touch basic principles in the current political, economic, and legal edifice of the EU may as well expose cracks within the European integration.

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Angola

Trade houses

Ghana

Leshoto

Dreher Breweries

The ambassador of Angola in Hungary describes the investment climate in this country.

The National Trade House of Hungary has opened representative offices in seven African countries to boost trade.

The Honorary Consul General for the Republic of Ghana is deeply involved in bilateral relations.

Lesotho is anxious to attract foreign investments which will create jobs.

Dreher Breweries has been Hungary’s leading brewer. Thanks to this South African investment its market leader position has been strenghtened . . . . . . . . . . . . . . . . PAGE 14

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BY SÁNDOR LACZKÓ

"One of my most important missions here is to strengthen this basis of partnership between our two countries"

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“Prior to the establishment of full diplomatic relations in the early 1990s, Hungary and South Africa had very similar experiences during the preceding forty year period. Whereas Hungary was to a large extent isolated from the international community behind the physical Soviet ‘Iron Curtain’, South Africa was similarly isolated, due to its ideological ‘Iron Curtain’ of apartheid. Following the collapse of both ‘Iron Curtains’, Hungary and South Africa had

to re-integrate their countries and their economies into the global community, which presented similar challenges to both countries. In the years that followed, diplomatic ties enabled both countries to learn from each other’s experiences in dealing with these issues,” Ambassador Marx recalls of these almost two and a half decades to Diplomacy & Trade. He adds that this brought about a growing realization that a more structured mechanism was needed to engage in a focused manner with each other. This resulted in the establishment of a Joint Economic Commission, following Hungary’s J U N E

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earlier accession to the 1999 European UnionSouth African Trade and Development Cooperation Agreement after it joined the EU in 2004. As for political relations, recent bilateral high-level visits included a visit to Hungary by a South African Deputy Minister of International Relations and Cooperation in 2012 and two visits by Hungarian Deputy Prime Minister Semjén to South Africa the following year, the second of which was to attend the state funeral of former President Mandela, the Ambassador adds. The Hungarian diaspora community, which settled in South Africa mainly after 1956, also

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photo by DÁVID HARANGOZÓ

INTERVIEW WITH SOUTH AFRICAN AMBASSADOR JOHANN MARX

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photos by COURTESY OF THE EMBASSY OF SOUTH AFRICA

COOPERATION FOR THE BENEFIT OF AFRICA

african focus

regional focus.

play a significant role in bilateral relations. The Ambassador points out that “as a result of Hungary’s world renowned reputation for academic excellence and technological achievement, some members of the Hungarian diaspora who emigrated to South Africa after 1956, rose to high academic positions in our country, contributing to a much needed skills transfer to South African citizens and also creating awareness of Hungary and its challenges at the time.”

here, I really felt at home in Hungary. Of course, your language is quite a challenge for nonHungarians, but it is a fascinating one because it is very logical. I think that is one reason why Hungarians are so good at mathematics and why so many people of Hungarian origin have received Nobel prizes over the years. I keep studying the language and I constantly try to improve my ability to express myself in Hungarian as much as possible.” His favorite local drink is Hungarian wine. “At home, when I’m not entertaining official guests, I drink Hungarian wine most of the time: red or white – both are really excellent. I also like pálinka in small quantities as an aperitif. As for Hungarian food, I’m very fond of paprika, the not so spicy type – I like to have it in a salad every day, it is very healthy, very enjoyable. Of course, you have all sorts of excellent restaurants available in Budapest: I enjoy a wide variety of local cuisine, from pizzas to duckling.”

Economic relations

photos by COURTESY OF THE EMBASSY OF SOUTH AFRICA

Ambassador Marx notes that South Africa is said to be Hungary’s largest trading partner on the African continent, “although, bilateral trade volumes are not as extensive as we at the Embassy would like to see. At present, some 60% of Hungary’s exports consist of vehicles and associated transport equipment, machinery and mechanical appliances, but the closure of the local Nokia manufacturing plant, which had previously exported a considerable quantity of mobile phones manufactured in Hungary to South Africa, unfortunately resulted in a substantial drop in Hungarian export figures to our country.” South Africa’s current exports to Hungary include mainly machinery and mechanical appliances, electrical equipment, as well as leather, raw hides and skins, which together make up 92% of our exports. “What emerges from these statistics is that our bilateral trade is quite diversified,” he stresses. As to bilateral investments, one of the most prominent South African companies which has a notable presence in Hungary is South African Breweries/Miller, one of the largest brewery enterprises in the world, of which the Dreher Beer Company is its local subsidiary. Other South African companies present are involved in road development and management; paper manufacturing; courier services; as well as furniture manufacturing and retail sales. Hungarian investments in South Africa, on the other hand – as far as the Embassy in Budapest is aware – are limited at present to a motor vehicle tire recycling company. Two years ago, a Hungarian-South-African Economic Joint Committee held its inaugural session. “As already indicated, the establishment of a Joint Economic Committee, which had its first session in South Africa during May 2013, helped create a structured framework for future engagement between Hungary and South Africa, which, no doubt, contributed to Hungary’s decision to establish a Trading House in our country in December last year,” the Ambassador says.

Opening to the South The latest direction of the current Hungarian government’s economic opening is to the South. As to how much progress he expects from this initiative in African relations with Hungary, Ambassador Marx points out that “as an Embassy representing an African country, we greatly appreciate the renewed attention by the current

▶ T H E I C O NI C TA B L E M O U NTA I N A ND T H E GRE E N PO I NT S TA D I U M I N C A PE TO W N Hungarian government to, among others, the African continent, in terms of its announced policy of an ‘Opening to the South’. This follows the holding of the June 2013 Budapest Africa Forum, which did much to develop closer ties between Hungary and our continent, notably in the field of education. Through its generous scholarship offers for African countries, Hungary continues to make a significant contribution to essential skill transfers to citizens of various African countries, which can greatly contribute to the creation of decent employment opportunities on the continent, at a time when Africa’s leaders are giving priority attention to infrastructure development and industrialization as a means of ensuring a better life for all their peoples.”

Culture and expertise The Ambassador says his Embassy is very much involved in encouraging increased contact and exchanges between Hungarian universities and their South African counterparts, inter alia, “in order to bring about closer interaction between the youth of our two countries, who represent our future, which will in turn insure a better understanding of our respective cultures.” As for the future of bilateral relations, he believes that increased cooperation and even joint ventures between Hungarian and South African companies, especially on the African continent, could be very advantageous to both our countries. “Over the last 21 years, since South Africa’s democratic transformation, our companies have established an extensive presence across the rest of the African continent, from areas such as mobile telecommunication to mining and food outlets. The market expertise relating to other

African countries which these companies have developed over two decades, might be very useful to Hungarian enterprises wishing to operate in Africa and who – in turn – could perhaps provide much needed technological expertise in various fields, thus making a significant contribution to continued economic growth in both our countries, as well as elsewhere on the African continent.” Homey feeling and language challenge Ambassador Johann Marx presented his credentials to the Hungarian President in May 2013. He says that over these past two years he has been traveling quite a lot in the country, “especially when my wife – who spends a lot of time back in South Africa with our daughter who goes to university there – comes to visit me. She works for our Department (Ministry) of International Relations and Cooperation back home. Last year, I took her on visits to Pécs and Szeged and we also went to Sopron. I think Hungary is a beautiful country, it has a lot to offer tourists and we always greatly enjoy our visits across the country.” He adds that his favorite place is Lake Balaton “because I like water. That is also one reason why I’m very attached to Budapest. When my daughter comes here on university holidays, she and I go walking for kilometers along the banks of the River Danube and across the bridges to see the beauty of the river.” The Ambassador finds people here very friendly, very welcoming. “From the first day I arrived

Posted to a peaceful place As an experienced diplomat, Ambassador Marx notes that each posting offers its unique experience. “To me, being a diplomat in a country is to really experience that country in every sense of the word. So, while I’m here, I want to enjoy Hungarian food and Hungarian wine.” He says that he has also greatly enjoyed reading extensively about the thousand years very fascinating history of the country. His previous posting was in Israel during the second Palestinian uprising in the first few years of the current millennium, “when suicide bombings were unfortunately quite a regular occurrence.” Fortunately, in Hungary, we don’t face that kind of situation. I find this one of the nicest places any diplomat could wish for. Hungary is a very enjoyable working environment. We have easy access to important office holders, both in and outside the government. So, for diplomats, operating in Hungary is real pleasure,” he concludes.

FACTS COMPARED

HUNGARY REPUBLIC OF SOUTH AFRICA 93,028 sq km 1,219,090 sq km AREA 110 25 country comparison to the world: 9,919,128 (July 2014 est.) 48,375,645 (July 2014 est.) POPULATION 90 28 country comparison to the world: -0.21% (2014 est.) -0.48% (2014 est.) POPULATION GROWTH RATE 214 222 country comparison to the world 9.26 births/1,000 population 18.94 births/1,000 population BIRTH RATE 214 93 country comparison to the world 75.46 years 49.56 years LIFE EXPECTANCY AT BIRTH 93 223 country comparison to the world 1.34 migrant(s)/1,000 population -6.27 migrant(s)/1,000 population NET MIGRATION RATE 55 200 country comparison to the world $24,300 (2014 est.) $12,700 (2014 est.) GDP - PER CAPITA (PPP) 73 115 country comparison to the world 7,1% (2014 est.) 25% (2014 est.) UNEMPLOYMENT RATE 77 173 country comparison to the world 11,580,000 (2012) 68,400,000 (2012) TELEPHONES - MOBILE/CELLULAR 67 19 country comparison to the world 41 (2013) 566 (2013) AIRPORTS 104 11 country comparison to the world Source: World Factbook

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MANAGING MUTUALLY ADVANTAGEOUS RELATIONS INTERVIEW WITH ANGOLAN AMBASSADOR LIZETH NAWANGA SATUMBO PENA This year, Angola celebrates the 40th anniversary of independence from Portugal. Diplomacy & Trade asked the country’s ambassador to Hungary, Lizeth Nawanga Satumbo Pena what evidence four centuries of colonial rule left on her country. “Angola is a mosaic of cultures and people, manifested in rich multiethnical, multi-linguistic and multiracial variety. Colonialism's one remaining heritage is the Portuguese language. Officially, we have 64 different indigenous languages, Portuguese being the official language linking the various nationalities of our country. There have been enormous changes since colonial times. The main achievement is the sovereignty of our country and the liberty the people of Angola have acquired by it. Liberty is the basis for our development, both individual and national,” she points out.

New reality In 1977, when diplomatic relations with Hungary were established, it was a different world order. At that time, Hungarian politicians formed relations with Angola due to the African country’s strategic location and several cooperation agreements were signed in the field of trade, culture, technology, etc. that still have ramifications today. “Bilateral relations between Angola and Hungary were initiated immediately after our independence. All the agreements with Hungary signed since 1977 are still valid, as neither country cancelled them, despite the period which we can call ‘dead’ – that is, without any contact – after the fall of the Berlin Wall. New realities both in

Hungary and in Angola have lead both governments to revise and update all these existing agreements in the fields of healthcare, economy, agriculture, etc. Nowadays, Hungary’s new reality is being member of the European Union, which means there are common rules it must adhere to. Angola also revises and adapts these agreements to fit her new reality. All these factors have to be taken into consideration when outlining new mechanisms and concepts for a mutually advantageous new agreement,” the Ambassador adds. She says her country has taken some positive steps to secure qualified training of professionals through its relations with Hungary. Last year, certain agreements were signed between the Ministry of Higher Education of Angola and the Ministry of Human resources of Hungary, thanks to which Angola benefits from the ‘Stipendium Hungaricum’ Grants Program offered by the Hungarian government. Angola is planning to send 30-50 students per year to Hungarian universities to be qualified as engineers, top level technicians, doctors, etc. “At this moment, we are in the final stage of the implementation of the signing of this agreement between the Hungarian Rectors' Conference and the Instituto Nacional de Gestao de Bolsas Estudo de Angola (INAGB) National Institute of Angola for Grants Management (INAGB). The aim is to bring more Angolan students to Hungary for the 2015/2016 study term.” The second Angolan ambassador Lizeth Nawanga Satumbo Pena is the second Ambassador of the Republic of Angola, with residence in Budapest after Joao Vahekeni who opened the office almost 12 years ago.

FROM STUDENTS TO AFRICA DAY According to the Ambassador, the Angolan Embassy here in Budapest is working like an enterprise where there are people for each type of job required in the different divisions – “if the organization of work is not right, the desired goals are not achieved.” As for the main responsibilities of the Embassy, she points out that “we do everything here at the Embassy – on the diplomatic level, on the administrative level, even on a social level as we have a community of Angolans here.

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Currently, this community numbers over a hundred people but, she says, “there will be many more in two or three years because we are waiting for new students to come. It will be similar to the 1970s and ‘80s when students from Angola came to study in Hungary, completed their courses

most expensive capitals of the world. “It being so, why is it that other investors have had success? As a matter of fact, I am convinced that those Hungarians who decide to invest in Angola will not regret it.” Again, economy is one of the fields where Angola would prefer increased activity. “Except for a few businessmen on site, we do not yet have much Hungarian representation in this field. For the time being, there is a very active enterprise, DESPAN, which equips nearly all the media technology firms in Angola, shipping from Debrecen, E Hungary to Angola. The oil company MOL is also actively present in our country. The Hungarian government has recently submitted to the Angolan government a draft for an Economic and Technical Cooperation project. The Parties are studying it and we hope that this agreement will be signed in the near future,” she adds.

Cultural relations

She says the bilateral political and diplomatic relations between Angola and Hungary have always been good. Angola’s first resident ambassador came to Hungary only in 2003. Although Hungary has always been a priority to the Angolan Government, it was covered by the Ambassador of Angola to Belgrade. Until 1992, Hungary also had an Embassy in Angola, now it is the

and took their expertise back to their home country.” Ambassador Satumbo Pena mentions that she has recently visited the north-eastern Hungarian city of Miskolc. She led a five-member delegation, which was received by Rector Prof. Dr. András Torma and was escorted and introduced to the university by Prof. Dr. Thomas Kékesi, vice-rector of science and international affairs. In an informal conversation, the parties discussed the possibility that the southwest African country, rich in oil, precious metals and other minerals, would like to send students to the University of Miskolc – mainly for training at its

technical faculties. The Ambassador and her entourage also made a short walk on campus and – among others – visited the laboratories of the Faculty of Materials Science and Engineering. The Angolan Embassy is also active in organizing the annual Africa Day (see page XX for our picture compilation). “It is a day when we can show that the peoples of Africa can get together as one. We remember the founding fathers with the Organization of African Union (OAU) who started the celebration of this day in 1963. We have so many issues to discuss on the African continent: we know that we have the problems

Embassy of Hungary to Pretoria, which covers Angola.

Business ties Ambassador Satumbo Pena says that from the economic point of view, there is a certain reticence on the part of Hungarian businessmen to invest in Angola. One of the reasons might be that Luanda is considered one of the

of terrorism, water management, AIDS and many more. I believe these can only be tackled if we, Africans join forces to find solutions to make Africa the ‘Continent of the Future’ as we like to call it,” the Ambassador points out.

The Ambassador believes there has been a good interaction with regard to Angolan students who have studied in Hungary. “Language is a very important cultural factor. When we learn a language, we gain quite a lot of cultural information, therefore, after finishing their studies they also take with them many cultural aspects. The truth is that many of them end up settling down and establishing a family in Hungary.” She also recalls the story of László Magyar, the explorer, who lived in Bié, in the center of Angola, in the 19th century, and even married into the royal family of that region. “In his time, there was also much cultural interaction between the peoples of the two countries,” the Ambassador concludes.

Lizeth Nawanga Satumbo Pena was accredited in Budapest as the Extraordinary and Plenipotentiary Ambassador of the Republic of Angola to Hungary in October 2011. “Since I came to Hungary, I have tried to get to know as much of the country as

possible, whenever I have time. I have wonderful souvenirs from the Tokay region, where I first went with a vintage and wine-tasting excursion organized by the Ministry of Foreign Affairs. It's a most pleasant, calm and welcoming region.” She visited major cities such as Debrecen, Pécs, Szeged and Miskolc several times. “I went officially, seeing to tasks within my diplomatic activities, but I also went on my own initiative, to get to know Hungary more profoundly. Each city is an experience of its own. I quite adore them.”

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With her family, she prefers to go to the Balaton on her leisure days. “This is a region which I am especially fond of. Normally, with my family, we like tasting Hungarian food. Gulyásleves is one of our favorites. As to the drinks, pálinka is way too strong for me. I generally like Hungarian wine, e.g. Tokaji, Villányi, Bikavér.” She only remembers these brands, however, the wine topic reminds her that “I would like to invite Hungarian wine producers to explore the Angolan market, they would not regret it. Hungary has a valuable know-how is this field, which would be quite useful to our country.”

photos by DÁVID HARANGOZÓ, ATTILA LENGYEL

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TRADE HOUSES MAY BOOST HUNGARIAN EXPORT SMALL AND MEDIUM SIZED COMPANIES MAY BENEFIT FROM THE ACTIONS The National Trade House of Hungary has opened representative offices in seven African countries. A substantial increase in bilateral trade with each of these countries is expected. Experts say Hungarian agricultural firms and manufacturers may benefit from the widening cooperation. Trade houses serve as an engine to boost bilateral trade with countries of great potential in Africa. They can help attain access to certain markets for small and medium sized Hungarian companies. There are seven centers already open and more may follow. Ghana was the first to host a Hungarian trade house, then Botswana, South Africa, Morocco and Egypt followed suit. Most recently,

in April this year, offices in Zambia and Namibia were opened simultaneously. Each country deserves a special approach but some sectors are targeted in all them: healthcare, infrastructures, construction, agricultural machinery,

water supply management, food processing and pharmaceuticals. Seeking closer cooperation with the countries in Sub-Saharan Africa is one of the important drives of the government of Hungary since these countries are becoming the new growth

center of the world economy. Just some examples of the growing importance of this region: Zambia has been developing rapidly due to its huge mining assets, highdemand agricultural products and large underground water reserves. This country wants to benefit from integrating Hungarian know-how on hunting and related services. Talks are under way on setting up a special meat processing complex and starting a program for community developments. Namibia welcomes any kind of touristic investment. Apart from tourism, this country also wants to obtain large amounts of modern agricultural products, cooling equipment, and agricultural technology from Hungary. Experts of Namibia have suggested buying grain elevators, (silos), and constructing a fertilizer factory using Hungarian technology. On top of that, a commercial and industrial park is to be built in the city of Nakonde. As for the Arab countries of the African

continent, Egypt serves as a gateway for Hungary to the Northern part of Africa and also to the Middle East. Hungarian companies may use their existing Egyptian ties to go further both in Africa and in the Arab World. New investors in tourism, real estate, construction and wholesale products are much welcomed from Hungary. The capital of Morocco has also joined the club. This country is the fifth trade partner of Hungary in Africa and treated as a headquarters for Hungarian companies in the North-West of the continent. Trade missions will be held on a regular basis and, according to the latest information, Rabat wants to buy mainly industrial machines and equipment for transportation. Besides traditionally developed sectors (food processing and chemical industry), the automotive industry may soon be involved as the new Renault plant in Morocco has expressed interest in communicating with some suppliers in Hungary.

REPRESENTING A PEACEFUL, DEVELOPING COUNTRY

photos by VIOLETKAIPA/SHUTTERSTOCK.COM, DÁVID HARANGOZÓ, ESZTER SZALAI/IFAT

HONORARY CONSUL OF GHANA DEEPLY INVOLVED IN BILATERAL RELATIONS From Africa, 14 countries have consulates headed by honorary consuls in Hungary. The Honorary Consul General for the Republic of Ghana here is Boldizsár Péter Entz. “In the 1960s, my parents worked in Ghana as biologists at Lake Volta, the first major manmade lake. I attended the Ghana International School there,” he recalls to Diplomacy and Trade. Later, one his classmates from that school became the country’s interior minister. “It was he who asked me to be Ghana’s consul here in Hungary. He said there wouldn’t be much to do but I believe if you undertake something you must do it properly. I did not only want a title but also some content behind it,” he adds. Representing Ghanaians in Hungary did not seem a strange idea as he already knew many of them and is familiar with the habits of African people. “When

I saw a black person walking on the street here in Budapest, I began a conversation as most people in Africa would do. They didn’t mind as those coming from Africa still have this indirect attitude.” Entz has officially been the head of the Ghanaian consulate since 1997. His job does not only include dealing with Ghanaians here but “there are increasing numbers of travelers to Ghana to whom I issue visas, not only Hungarians but also people from the

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neighboring countries. Also, more and more international organizations send their experts to Ghana, which can be characterized as a country of peace and democracy with an economy that functions relatively well.” He adds that the recent appointment to the region of a commercial attaché, Dr. Péter Kondricz, is likely to help the development of economic relations substantially. Regarding educational ties, Entz notes that

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Ghanaians who have studied in Hungary are likely to send their children to conduct studies in Hungary. From Hungary, there is an increasing number of people visiting Ghana to gain experience, for instance, in the field of tropical diseases. “Since more and more Hungarians travel to tropical areas as tourists, Hungarian professionals need this sort of experience,” he points out. As regards remuneration, the Honorary Consul says he is not paid for his work but given a contribution as compensation for expenses. To make a living, Entz is involved in different business ventures. Based on experience gained in Ghana and West Africa, he helps mediate legally secured gold, bauxite, iron ore concessions and the transfer of oil mining, waste management, construction and other professionals Ghana is in need of.

HUNGARIAN-BORN MINISTER VISITS HUNGARY

During her visit this February to Hungary, Ghanaian Foreign Minister Hanna Serwaa Tetteh and her Hungarian counterpart Péter Szijjártó voiced mutual interest in building economic ties and in opening embassies in each other's country. Addressing a joint news conference in Budapest, Szijjártó said that Hungary, which has had a trading center operating in Ghana since last year, would open an embassy in the Ghanaian capital, Accra in 2016. In addition, he said, Hungary’s Eximbank has provided a USD 50 million line of credit for Hungarian businesses wanting to enter the Ghanaian market and is currently hosting ten Ghanaian students attending Hungarian universities. Hanna Serwaa Tetteh said Ghana would like to upgrade ties with Hungary, and qualified the current meeting as an opportunity to do so. She voiced the hope that Ghana would reciprocate Hungary's initiative to open an embassy in Accra and would open a similar mission in Hungary at a future date. The Ghanaian Foreign Minister called her country one of the best developing countries in West Africa and pointed out that it has been a stable democracy for the past 20 years. In addition, it has a diversified economy. Ghana is a major producer of oil and natural gas and is also a significant gold and diamond producer. It is expected to be the world's leading producer of cocoa in 2015. For Hanna Serwaa Tetteh, Hungary is not unknown territory. In fact, she was born in the southeastern Hungarian city of Szeged and lived there with her parents, both physicians, before they moved to London when she was two and half years old. Her mother is Hungarian; her father was a medical student in Szeged when her parents met. Therefore, Hanna Serwaa Tetteh’s mother tongue is, in fact, Hungarian which she still speaks well. She has been Minister of Foreign Affairs since January 2013 and she is also member of her country’s national assembly.

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EDF-FUNDS MAY ENCOURAGE INVESTMENTS in KINGDOM of LESOTHO THOROUGH MARKET RESEARCH IS VITAL Lesotho is anxious to attract foreign investments which will create jobs in this tiny country. European companies who consider doing business there may benefit from using financial funds of the European Development Fund (EDF). Lesotho is totally integrated economically with its big neighbor, South Africa. The economy is based on fresh water, agriculture, livestock, manufacturing and mining, especially diamond mining, and depends heavily on the inflow of workers’ remittances and receipts from the Southern African Customs Union (SACU). Almost 50% of the population earns income through informal crop cultivation or animal husbandry with nearly two-thirds of the country's income comes from the agricultural sector. Lesotho has taken advantage of

the African Growth and Opportunity Act (AGOA) to become the largest exporter of garments to the US from subSaharan Africa. The country has progressed in moving from a predominantly subsistenceoriented economy to a lower middle income economy exporting natural resources and manufactured goods. The exporting sectors have brought higher and more secure incomes to a significant portion of the population. Water is the „main currency” and is used through the 21-year, multibillion-dollar Lesotho Highlands Water Project (LHWP), under the authority of the Lesotho Highlands Development Authority. The high quality drinking water is bottled and exported to South Africa and other countries but the

majority is transferred through large tunnels and used for irrigation in the surrounding territories of South Africa. „There are really good business opportunities in the Kingdom of Lesotho as the government encourages investors who create jobs. But a thorough market research is vital,

otherwise you may fail” - said Péter Morenth, Honorary Consul of Lesotho in Hungary. He welcomed the resent efforts of the Hungarian government to increase trade with African countries and encouraged Hungarian

companies and entrepreneurs to use financial instruments of the European Development Fund (EDF). Morenth – a long time Africa expert – has a good network in many African countries, including Lesotho. He is convinced that „brain export from Hungary” can work there as Hungarians have a lot to offer in this respect. „Managing new local ventures is one way of doing business there and Hungarians are very good at this. But forget sitting in Budapest and using the telephone or internet only. Your firm has to be permanently present in Africa, otherwise you waste both time and money” - ha added. Experts agree that the global economic crisis hit the economy hard: the loss of textile exports and jobs in the sector was due largely to the economic slowdown in the US market which is a major export destination. Diamond export was reduced significantly thanks to weak market prices. Due to the economic slowdown in South Africa, workers from Lesotho have been able to transfer much less money to their families at home.

Ambassador Balazs Bokor`s newest book, „My Africa” has just been published. The author served 35 years in the Hungarian diplomatic service dealing mostly with Africa and the Arab World. Bokor was the chief coordinator of the Budapest Africa Forum in 2013, so he witnessed from inside how the attention of the Hungarian government, the civil organizations and companies improved towards Africa. The book shares a lot of information on the vast continent, speaks about the intention of the major stakeholders concerning Africa and introduces several events of international importance. Ambassador Bokor`s „My Africa” is a personal approach to the socalled „global opening” policy declared in 2011 by the Government of Hungary. It`s an informative publication with the goal of focusing even more on a continent which is very close to us with all of its problems and perspectives. It can be „my Africa” to all of us.

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AFRICA DAY IN BUDAPEST The African continent is a priority for Hungary - this was emphasized in this year's Africa Day held in the Vajdahunyad Castle, in the Museum of Hungarian Agriculture. Ambassadors, dancing and art groups took part in the event. Minister of Justice László Trocsányi also represented the Government on Africas most important event in Hungary. J U N E

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DYNAMIC RESPONSE to a CHANGING MARKET

PRODUCT DEVELOPMENT AS DRIVING FORCE

DREHER, THE MARKET LEADING BEER PRODUCER IN HUNGARY Since 2010, Dreher Breweries has been Hungary’s leading brewer thanks to more than 160-years of tradition and international background. As the company’s Director of Finance and Administration as well as acting CEO, Tamás Glattfelder explains to Diplomacy & Trade, “We bring joy to our consumers’ lives by providing them with 440 million mugs of beer annually and contribute to the lively hood of 8,000 families through direct and indirect employment – principally in the areas of HoReCa, commerce, and marketing. 95% of our suppliers are Hungarian SMEs and we purchase products and services from them for nearly HUF 14 billion (currently close to EUR 45 million) per year. Our contribution to state revenues is HUF 25 billion through excise duty, VAT, product fee and other taxes.” Dreher’s brew house was built over a hundred years ago, the Zsolnay porcelain tiles still shine on the wall and the company’s production site in Budapest’s 10th District and it features the only Brewery Museum in the country. “Our parent company, South Africa’s SABMiller is the second biggest brewer in the world. They support us with an international portfolio of great brands like Pilsner Urquell, Miller Genuine Draft, Kozel and Hofbräu while we produce our traditional Hungarian brands Dreher, Arany Ászok and Kőbányai. We plan on the Hungarian market on a long-term basis and we believe we can grow together with the Hungarian economy. We are committed to invest in the development of the beer market, to our employees, our operational environment and technologies,” Glattfelder points out.

"Our parent company, South Africa’s SABMiller is the second biggest brewer in the world"

photos by DÁVID HARANGOZÓ, COURTESY OF DREHER

Sustainable development Tamás Glattfelder is convinced that the key elements to success are a strong team, a consistent strategy and the right brand portfolio. “It is important to think long-term, and for this reason, we continuously grow efficiency through investments in our business. In the last financial year, we implemented investments for a total value of HUF 2 billion. One of the most important investments is the new warehouse buildings, 4,400 square meters altogether, capable of storing 35,000 hectoliters of beer. This is a dynamic response to the w w w . d t e u r o p e . c o m

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changing market needs so that we are able to serve our partners and customers more efficiently and in a more flexible way.” Alcohol Responsibility Program After the successful years of the ‘Csendkirály’ (Silence King’) campaign to promote responsible behavior among late night drinkers so as not to disturb people living in the neighborhood, and the cooperation with 2007 motorcycle racing 125cc world champion Gábor Talmácsi in a campaign about responsible alcohol consumption, Dreher launched its new sustainability program, Prosper, in which, the acting CEO says, “we decided to rethink our alcohol responsibility program. Last year, we began D I P L O M A C Y

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a partnership with Veszprém County Police to grow awareness during the summer season in the Balaton area on the importance of responsible drinking when driving. This year, we integrate responsible consumption messages into our Brewery Tour opening up a discussion with over 3,500 people who come to visit and we are also looking into a new partnership with experts in the areas of drinking while pregnant and underage consumption.”

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communities where it is brewed and consumed. Our parent company, SABMiller set ambitious new sustainability targets last year with the new ‘Prosper’ program in the framework of which, we commit to supporting half a million small businesses all around the world (mainly our retail partners), improving our already world-class water efficiency and cutting our total carbon footprint. Prosper is the latest evolution of the company’s approach to sustainable development, which is a key element of our business strategy. At its heart is supporting the role small businesses play around the world in generating economic growth and reducing poverty. By 2020, we are pledged to directly support over 9,000 small businesses in Hungary to help them grow, improve their livelihoods and drive local development; to achieve a really world-class water efficiency target of just three liters per every liter of beer produced and secure the water supplies shared with local communities; as well as reduce carbon footprint of the entire value chain from grain to glass by 25% per liter of beer; and to encourage moderate and responsible alcohol consumption. Concerning the benefits to consumers arising from Dreher belonging to a major international company, Tamás Glattfelder, who is spending his seventh year with the company, stresses that “our parent company, SABMiller has South African roots and it is present in over 80 countries on 6 continents, which provides us with an amazing amount of knowledge and intelligence about beer and the beer industry from all around the world. Within the SABMiller Group, we own over 200 local brands and produce 140,000 bottles of beer per minute globally.” SABMiller believes that beer is a truly local product with a connection with its local consumers and supports the subsidiaries to brew their own beer and develop their own local brands. “At the same time, we leverage the advantages of the global scale through international national brands like the first pilsner type beer Pilsner Urquell. We have global programs such as Prosper and global systems to share best practices,” Dreher Breweries acting CEO Tamás Glattfelder concludes.

Last fiscal year in the April to March period, despite the unfavorable weather conditions for consumption, the beer market delivered a slight growth of 1% which Dreher was able to outgrow by 0.3%, resulting in a growth of its market share that currently stands around 37-38%. In 2014, the company sold 2.2 million hectoliters of beer with sales driven mainly by the premium and economy segments. 11% of the total volume of Dreher’s production goes to export which means a 6% growth compared to last season – a dynamically growing segment. Today, the main export destinations are neighboring Slovakia and Romania, but other export markets are also being considered. Despite beer being a traditional product with a 4-000-year history, it is also a very innovative and exciting product. “As market leaders and owners of strong brands, such as Hungary’s favorite premium beer, Dreher, we focus our innovations on the core category, the lager beers. We cannot influence cold summers, but we can compensate their effect with product development. For example, we made Pilsner Urquell more interesting by serving an unfiltered version in wooden barrels at the thematic beer festivals, and with tank beer, we bring the experience of unpasteurized, freshly brewed beer to the consumer at two pubs in Budapest and we plan to grow their number this year. This June, we introduce Dreher Dry Hop which enables the hop flavor to be more characteristic and it is a beer premiere in Hungary,” Tamás Glattfelder highlights. He also believes there is a potential in the non-alcoholic flavored beer category, Dreher 24 Ginger, Lime-Raspberry and Pomelo-Grapefruit found a new consumer segment, those who like to embrace an active lifestyle, which fits the brand very well. “Also, ladies start to play a more and more important role when we think about new consumer groups. And, as of May 1, with our Kingswood brand, we stepped into a new category, the ciders,” he adds.

THE ASSOCIATION OF HUNGARIAN BREWERS

The Association of Hungarian Brewers (AHB) is the leading organization representing the interests of domestic brewers. Member companies include the Borsod Brewery, Dreher Breweries and Heineken Hungária. In 2014, the four Hungarian brew houses of these three members produced a total of 6.2 million hectoliters of beer. The brewers employ nearly 1,700 people and a further 25,000 jobs are maintained at their suppliers. The AHB member companies in 2014 contributed HUF 66.2 billion to the Hungarian state budget in different taxes, duties and other public burdens. The Association, founded in 1992, is a social organization with its three members engaged in fierce competition in the domestic beer market. At the same time, as Tamás Glattfelder points out, they cooperate to represent their common interests, express their social responsibility and promote beer culture. Dreher Breweries’ acting CEO proudly mentions that he was one of the initiators of the recollection of used aluminum beer cans in order to protect the environment. Lobbying is also a common interest. “We would all like to see the government reduce – or at least not to increase further – the public burdens on beer consumption. The combined amount of excise duties, VAT, product fee, etc. is by far the highest in the East Central European region. Lowering these would be in the interest of the industry and consumers alike,” he stresses.

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EU-US: STILL PLENTY of WORK AHEAD

TRANSATLANTIC TRADE AGREEMENT INCHES TO ITS FINAL SHAPE Negotiations between the EU and the US on a Transatlantic Trade and Investment Partnership (TTIP) could lead to the world's largest free-trade area. Politicians, economist and legal experts have been working hard to shape the agreement. Some of them took part in an international forum in Budapest which focused on the possible positive and negativ impact of the deal.

Participants of the forum in Budapest

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same time, other parliamentary committees are also organising hearings on the areas that would be affected by the agreement. Meanwhile in Budapest, Professor Harm Schepel from the University of Kent in Brussels spoke about the main impacts of the agreement. As he pointed out investment in general could increase, investors protection could be more effective from the discriminative actions of states, nine bilateral agreements could be replaced by a single one and finally, this agreement could serve as a good example to the negotiations with China on trade issues. But he critisized sharply the mechanism of ISDS saying that this could lead to a legal regime which contradicts too many of the legal values

and laws within the EU. Werner Raza, director of the Austrian Foundation for Development Research indtroduced some of the findings of their latest survey on the possible impact of TTIP. As a one-time effect, a half percent growth of GDP is expected in the EU but, as he stated, it would take ten years to feel other important impacts on the European economy. According to the survey EU unemployment will either remain unchanged or will be reduced by up to 0.42 % points, i.e. roughly 1.3 million, which appears unrealistic. EU exports will increase by 5–10 %. All of these changes are long-term, i.e. will be present only over a transition period of 10 to 20 years. With average tariff rates already at very low J U N E

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levels (less than 5%), roughly 80 % of TTIP gains are derived from the elimination or alignment of Non-Tariff- Measures (NTMs), such as laws, regulations and standards. Assumptions on actionable NTM reductions are overly optimistic. On the basis of more realistic assumptions, the economic gains from TTIP would become even smaller. The social costs of regulatory change might be substantial: NTM reductions entail both short term adjustment and long term social costs. Most importantly, the elimination of NTMs would result in a potential welfare loss to society, to the extent that this elimination threatens public policy goals (e.g. consumer safety, public health, environmental safety).

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photos by XTOCK/SHUTTERSTOCK.COM, CSILLA HORTOBÁGYI

Although the agreement could help to boost economic growth and create jobs on both sides of the Atlantic, there are concerns about the consequences the deal could have. This is why the European Parliament is following the talks very closely to ensure the agreement's benefits do not come at an unacceptable cost.Issues that still need to be worked out include public health, European small and medium-sized enterprises' access to the public procurement market in the US, financial or maritime services and the so-called Investor-State Dispute Settlement (ISDS) clause, a mechanism to help solve disputes between investors and countries. The European Parliament has asked for more transparency on the negotiations to enable it and others to better follow the process. This was emphasized during the recent forum in Budapest by Tamás Meszerics, MEP. He also said that the agreement needs to be approved by the EP and without its consent, it cannot enter into force. „Every MEP sould have the access to the documents and be aware of the consequencies” - he added. The Parliament is preparing some recommendations to send a clear message to the Commission and the Council on whether the talks are going in the right direction. Bernd Lange, from the trade committee, is the MEP in charge of drafting the Parliament's recommendations. At the

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diplomacy diplomacy

CLOSE TIES RECONFIRMED and STRENGTHENED

AMBASSADOR OF JAPAN ON EXCELLENT BILATERAL RELATIONSHIP WITH HUNGARY BY AMBASSADOR JUNICHI KOSUGE

Despite the enormous geographical distance between the two countries, we are bound by universal values such as democracy, rule of law and market economy. Japan and Hungary are partners not only in a bilateral context, but also in a global one, linked by the aforementioned universal values for the purpose of the stability and prosperity of the international community. This was the key message articulated in the Joint Statement of the two countries entitled ‘New Partnership in the 21st Century’, issued after the summit meeting between the two Prime Ministers, Shinzo Abe and Viktor Orbán in Japan in November, 2013. I am pleased to observe the further deepening of our excellent bilateral relationship in both a regional and a global context based upon this joint statement.

The V4 and Japan Japan and Hungary have also been working closely within the framework of ‘V4 plus Japan’ cooperation since

2004. Japan, in recognition of the accomplishment of democratization in the V4 countries and of our relationship rooted in universal values, became the first Asian partner country to the V4. The V4 and Japan have been working together, as equal partners, on a range of regional, international and global issues which include security, economy, science and technology, and innovation. In addition to the regular dialogues at Foreign Ministers’ and working levels, there have been

concrete cooperation programs undertaken in various fields, including development cooperation, investment promotion and tourism, just to mention some significant examples. During the Hungarian Presidency of the V4, between 2013 and 2014, the ‘V4 plus Japan’ relationship grew significantly. It also had a very positive impact on Japan-Hungary bilateral relations. One of the most recent examples is our joint undertaking of the ‘V4 plus Japan Exchange Year of 2014’, which marked the 10th anniversary of the V4 plus Japan cooperation. The mutual understanding between the two countries was further advanced through a number of joint cultural and other events.

Maintaining a strong economic presence

SUMITOMO ON THE MOVE

Realizing the growing demand, Sumitomo launched its new logistics services to provide knowhow and human resources that can function as part of the production process of their customers. "We are now comprehensively supporting overseas production by Japanese companies in transportation and distribution, by offering these new services in addition to to our traditional transportation services that cover land, sea, and air transportation—our original global logistics business" - the company said in a statement.

photos by DÁVID HARANGOZÓ, SEAN PAVONE/SHUTTERSTOCK.COM, MAGYAR SUZUKI CORP.

HUNDREDS OF JAPANESE COMPANIES IN THE CE REGION

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larger Japanese companies and today new areas of investment are being studied. Hungary has also been very attractive for the automotive sector, hosting several huge investments, such as Suzuki and Denso. Ibiden has just finalized a special contract with the Hungarian government on strategic partnership. According to the hungarian government, the number of Japanese affiliated companies operating in Hungary is 149. JETRO assisted many of these businesses in finding Hungarian partners such as parts/ materials suppliers.There has been a shift from

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since its establishment in 1990, has supported the Central and Eastern European countries in the field of environment during their transition to democracy and market economy. Japan, as one of the original Signatories of the REC Charter, has played a vital role in supporting and implementing REC’s objectives to address environmental issues of the region. It is my strong desire that Japan and Hungary will continue to act as close partners in order to respond in an appropriate manner to emerging global issues, as confirmed in the Joint Statement mentioned above, which will contribute to further enhancement of our excellent relationship in both a bilateral and a global context to achieve a new partnership in the 21st Century.

Our bilateral economic relationship also continues to be strengthened. Although, the stock of direct investment from Japan has been rather flat in recent years and the number of Japanese companies in Hungary remains unchanged (around 150), we continue

EXPANSION Japanese companies have entered Central Europe in great numbers since the middle of the 1990s, with plans to advance into the broader European market. The automotive and electronics industries dominate their presence and the majority of them consider further investment. At the beginning, advancement into Hungary attracted much attention, while some companies later launched into the Czech Republic, Poland, and Slovakia. Currently more than 200 Japanese companies have a business arm in these four Central European countries. The Czech Republic’s highly skilled labor force has enabled it to position itself as one of the leaders in the region. Czechs are known as great craftsmen and engineers. Recognizing these benefits, Japanese investors have become the second-largest source of foreign direct investment into the Czech Republic. There are currently 231 Japanese-affiliated companies in the Czech Republic. With huge investments by Toyota and Denso, the automotive industry remains the dominant sector for Japanese investment in the Czech Republic. Most of the “greenfield” projects have been established by

to observe the expansion of business activities of Japanese companies already based in Hungary. The signing of eight strategic partnership agreements between Japanese companies and the Hungarian government also demonstrates our strong and successful bilateral economic ties. Needless to say, we appreciate the kind cooperation extended by the Hungarian Government to Japanese companies. Regarding regional and global issues, Japan and Hungary have also been partners in tackling environmental problems in the Central and Eastern European region. An important example of this partnership is the cooperation through the Regional Environmental Center for Central and Eastern Europe (REC), whose headquarters are in Szentendre, north of Budapest. REC,

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manufacturing to research and development (R&D) in recent years, To encourage investment in R&D, technology centers and high-value added products, the governments are offering incentives and carrying out strategies to attract further investment. Japanese companies face many problems in Europe; the need for improved production efficiency is a major one. Even companies that have established some of the most effective production systems in Japan face great difficulties in getting similar systems to work in other countries due to the differences

of languages and cultures. Despite all this most Japanese corporations plan further expansion in Europe, including the CE region. According to a survey, conducted by JETRO and published in March 2014, the percentage of Japaneseaffiliated manufacturers in Europe reporting future outlooks of “Expansion” in the next one or two years came to 49.9%, representing a 2.6 point increase from the 47.3% in 2012. However, this has not yet returned to the levels from before the outbreak of the global financial crisis precipitated by the collapse of Lehman Brothers and the European debt crisis (this was 52.7% in 2007) When Japanese affiliates who responded that they expected business “Expansion” over the next one or two years were asked about specific details, in all industry categories the highest percentage of companies reported an expansion in “Sales functions.” In manufacturing industries, the highest percentage, at over 50%, answered an expansion in “Production functions (high value-added products).”When asked about the reasons for business expansion in the next one or two years, across all industry categories an overwhelmingly high percentage of anywhere from just under 80% to just under 90% of respondents answered “Sales increase.” The second most commonly cited reason in all industries was“High growth potential.” In manufacturing industries the third highest percentage of respondents reported “High receptivity for high value-added products,” which drew attention.

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society society.

THE CLUB

CROATIAN FOCUS PRESENTED AT THE AMBASSADOR'S RESIDENCE

DIPLOMA CY & TRADE presented its recent Focus on Croatia at the residence of the Croatian Ambassador in Budapest. Apart from diplomats, leading Croatian firms also attended the event. A cultural program of an exciting dance show and a fantastic mini concert of Croatian singers was followed by a reception featuring Croation specialties and wines.

Hungarian Polo Club Event

Constitution Day of Poland AMBASSADOR ROM AN KO WAL SKI hosted a reception on the occasion of the Constitution day in Poland. The event was held at the newly renovated Várkert Bazár. Minister of Defence Csaba Hende represented the Hungarian government.

Victory day

UK Election Night

V I C TO R Y D AY R E C E PTION was held at the Russian embassy to commemorate the anniversary of the end of the Second World War in Europe. Ambassadors and other members of the diplomatic community and Hungarian personalities attended the event.

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Chargé d'Affaires Theresa Bubbear hosted the special event in the great hall of the British Embassy to wait for the results of the general elections in UK. The British community came together and witnessed the landslide victory of the governing party.

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photos by DÁVID HARANGOZÓ, EUGENE NAZAROV, COURTESY OF EMBASSY OF THE UK

THE DIPLOMATS CHALLENGE CUP, organized by the Hungarian Polo Club and patroned by Minister of National Development Miklós Seszták was held last month. The event raffle supported "Tabajdi Oktatásért és Ifjúságért" Foundation.

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diplomacy & life diplomacy & life.

WITTY

LE A K S

IN OUR SERIES, DIPLOMATS GIVE THEIR PERSONAL ACCOUNT OF THE EXPERIENCES OF THEIR “EXCURSIONS”

to Hungarian culture, art, gastronomy & landscape.

THE SAINT AND THE PRINCE SÁROSPATAK AND TOKAJ: HOME FOR SERENITY AND WINE

▶ Lajos Kun (left), Claudio Giacomino (in the middle), his son,

BY CLAUDIO GIACOMINO, CHARGÉ D’AFFAIRES, EMBASSY OF THE REPUBLIC OF ARGENTINA

Fabrizio and Attila Kocsis of the Ministry of Administration

photos by COURTESY OF EMBASSY OF ARGENTINA

Sárospatak is a small town of about 15,000 inhabitants located in northeastern Hungary. However, its importance is much greater than its size and the serenity of its streets inspires reflection. Two buildings stand out on the horizon: the Church of St. Elizabeth and the Rákóczi Castle. Both can be seen from the banks of the small Bodrog river, where I can alternatively look at any of them and ask myself: What could have been more important in the formation and development of the Hungarian people? The spirit or the matter? Which one is the chisel carving deeper into the stone of history? Is it the sacred communion or the sword; love or war; the Saint or the Prince? It was in Sárospatak that Elizabeth, a descenden from the Árpád dynasty and daughter of King Andrew II of Hungary was born in 1207. At the age of 4, she was already betrothed to Louis IV, Landgrave of Thuringia. They married when she was only 14 and had three children. She was sensitive to the pain of the weak and poor, so, she – with the consent of her husband – passed much of his fortune to the needy. Her self-sacrifice reached a heroic degree when, in times of plague, she personally took care of the sick and fed the hungry. She was widowed at age 20 and died when she was 24. In her deathbed, she received a letter of consolation from St. Francis of Assisi. Four years after her death, she was canonized. Soon, basically, every second baby girl in Germany, Italy and Spain was named Elizabeth. The veneration of St. Elizabeth quickly spread throughout Europe. The Basilica named after her was originally built in the 15th century but was renovated in the 18th century when it was enriched with the imposing baroque altarpiece one can admire today in the main altar. Outside the church stands a bronze group of statues, by Imre Varga, depicting Elizabeth riding beside her beloved husband. A few steps away, you can find a small museum with documents illustrating her exemplary life and her legacy. After ten minutes of quiet walk, you reach the Rákóczi Castle. In the late 17th century, 350 years after the death of Elizabeth, much of Hungary’s territory was occupied by the Habsburgs, while certain parts w w w . d t e u r o p e . c o m

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were threatened by the Sultan of Turkey and other foreign powers. The Rákóczi family had more than one million hectares of land, and – as the most powerful family in Hungary –, they were the great hope of nobles and peasants alike who dreamed of the nation regaining independence. A small corner of the castle, with its famous dome ceiling centered on a rose, witnessed the independence conspiracies of Francis I. (The Following the defeat of the war of independence in 1711, Rákóczi was deprived of his vast estate and many of his family members were executed. The Habsburgs had decided the name ‘Rákóczi’ was to be erased from the face of the earth. After spending years first in Poland and then in France, Rákóczi lived the last 18 years of his life in Rodosto, dedicated to woodworking and writing. Perhaps in that corner of the Ottoman Empire, while talking and working with his old comrades in arms, the teachings of Elizabeth the Saint might have come to his mind. There, during his long walks through the woods, Rákóczi had an opportunity to reflect on the vanity of wealth, political friendships and palace life. Perhaps, in those gloomy evenings of exile, the passion for his ideals of Hungarian independence and the sorrow for not achieving them exorcised the abyss of time and belief that separated him from the Saint. In this contemplation, their souls must have come closer and united forever by their love for the Hungarian people. Just like the Basilica and the Castle of Sárospatak - or love and war in world history. D I P L O M A C Y

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THE WISDOM OF TOKAJ In addition to being a land of knowledge, exemplary women and immortal warriors, Sárospatak is located in the heart of the Tokaj region, that is ... one of the most renowned winegrowing areas on the planet. My guide was Lajos Kun, a lifetime wine maker who kindly opened the doors of his own winery equipped with the latest technical developments. In many other regions, small wineries are often taken over by big companies making good craft traditions disappear. None of this happens in Tokaj. Lajos Kun personally oversees the harvest, and only prepares wines with grapes from his own vineyards, which are located a few kilometers from the town. After enlightening me about winemaking processes, materials and times of aging, the winemaker felt that we were ready for the moment of truth. In the Castle area, behind a heavy iron gate, a downward staircase of 85 steps leads to the great treasure: the cellars of the winery. A central corridor with eight crudely dug tunnels, 25 meters each, and a constant temperature of about 14 degrees Celsius assure the best conditions to the bottled resting wines. Under the candlelight, Lajos exposed his products to me and the tasting began with a softer dry white wine followed by the legendary sweet Tokaj wines (called ’Aszú’) with increasing concentrations – 1, 2, 3 ‘puttony’ ... until the ‘Aszú’ of 6 ‘puttony’, a wine of dense amber that seems to sum up all the perfumes of the region. (A wine’s ‘puttony’ level is determined by the amount of residual sugar in the finished wine, thus, the key factor in the production of Tokaj Aszú wines is the proportion of aszú berries added to the base wine.)

ASZÚ MAY 1972 In an unexpected moment, all the harmony of the evening was about to disappear. "And this wine, what do you think?" my host asked. "Fantastic ... reminds me of Sauternes," I said without any hesitation. (A wine can be compared to the perfume of a flower, dried fruit, the skin of a wild animal or even the shadow of a redheaded teenager on an autumn afternoon but ... how did it occur to me to compare it with other wine ?!?). For a moment, my host’s eyes scanned me with

surprise and dismay. Then, he began to explain the following: "Yes ... indeed, some French came here thinking the same thing ... then they realized that we use other methods and that the wines we get are, therefore, very different." I nodded contrite and a bit ashamed but also reassured: our friendship would no longer be in danger. In order to seal this, Lajos Kun decided to honor me with a rare gesture: he uncorked a bottle of ‘Aszú 5’ of 1972 (1972! That was the year when I was learning to write!). The feelings

and words fail me to describe that unforgettable glass of wine… The next morning, my new friend invited me to a family lunch. "I am 70 years of age and today is the first time I got to know someone from your country. Perhaps, there will be no such occasion again in my life, therefore, you cannot deny me the pleasure of welcoming

you to my home, "he argued conclusively. Family photos, the kind small gestures and taste of each homemade dish helped me to better understand the legendary generosity of these lands and the nobility of their wines. When I started my way back to Budapest, in the rearview mirror of the car, I kept seeing the noble figure of Lajos Kun saluting with his right arm, until he disappeared on the horizon.better understand the legendary generosity of these lands and the nobility of their wines.

RÁKÓCZI, THE TALENTED PATRIOT Francis (Ferenc) II, was the most prominent figure of all the Rákóczis. Folk hero, political strategist and man of arms, Rákóczi’s life was full of incredible events. Once, he survived when, in the heat of a bloody combat, his soldiers thought he was dead and left him abandoned on the battlefield. Rákóczi ordered the coining of a large amount of copper money not only for financing his army but also for supporting culture on the basis of religious tolerance. However, the efforts of the talented patriot were not crowned with success: in 1711, the Habsburgs came to a compromise peace with the nobles of the region and the dreams of Rákóczi hopelessly distanced from reality. In Poland, he met with the Tsar of Russia and in Paris with the King of France. Both of them gave him a warm welcome and promised personal protection but refused him what he wanted most: political and military support for the war of independence in Hungary. In 1717, Rákóczi travelled to Constantinople with the expectation of making an alliance with the Sultan. However, his hopes were vain. All he got was a refuge in Rodosto, a small town on the Sea of Marmara. 2 0 1 5

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education education.

BUDAPEST ATTRACTS MORE STUDENTS RELATIVELY CHEAP LIVING IS ALSO ENCOURAGING YOUNG FOREIGNERS TO STAY FOR LONG It is not an unusual thing to come across a Nigerian, a Turkish or an Indian student in many of the universities in Hungary. The high level of education in Semmelweis or Corvinus (both in Budapest) has been attracting thousands of young people from five continents for decades. In the last two-three years hundreds of students from developing countries appeared in BKF University of Applied Sciences too. On top of that practically every prestigious university has established long cooperation with some of the leading counterparts worldwide. BKF for instance has just signed an agreement with Missouri State University. Apart from high standards of education, relatively cheap living costs are also in favor of the decision to stay for a longer period in Hungary. When asked about other factors, students also mention the friendly and professional approach from officials and staff of universities. Just one example: The University of Szeged has received an „Outstanding

International Student Satisfaction Award 2014” by Study Portals, the International Study Choice platform. Universities are not the only place where young foreigners gather every day. A bunch of privately owned international primary and secondary schools and even kindergartens make this special educational picture more diverse. Americans, British, Japanese, Russians or Arabs are able to find a suitable schools. As a result of an agreement between the two states, a Hungarian- Chinese Bilingual Primary School was established 11 years ago in Budapest. To make it more international, the British Council joined as one of the main partners in providing more professional knowledge of English language. Most of the schools are bilingual and provide an international based education in a caring environment to children from 5 to 18 years old. They also run programs, encompassing the Hungarian National Curriculum. Teachers are well qualified and experienced, including Hungarians who have up to date knowledge and methods and many years of experience.

FRIENDLY AND PROFESSIONAL ATMOSPHERE AT ISB IT IS NOT JUST A SCHOOL, IT IS A REALLY GOOD COMMUNITY

- Csillebérc is really a wonderful place as it is not in the hectic city with huge traffic and noise, etc. You just walk out and find yourself in the forest. Large playgrounds and a sport pitch are available to us. The small size of our classes is also an advantage; we keep the number of students low: there is approximately a 12-15 student/ teacher ratio and that makes it easier to focus on developing individual skills. We also have a lot of extra staff involved for cultural, IT and sport activities. We have a wonderful theater in our main building where we can host all sorts of performances and programs. We offer a range of clubs, for example, judo, dance, arts, chess. We do a lot of camps and field trips during the year. So it is not just a school, it is a community. For the younger ones we organize „Forest school” and for the older ones we do an end-of-the-year trip to a foreign destination. This year we go to Slovenia.

Timothy Helmick is not a newcomer at International School of Budapest (ISB). He spent a number of years teaching there and he still holds lectures at the school. As a new Principal, he has an ambitious plan to expand ISB and its facilities in the upcoming period. - ISB is not the only school offering international education in Hungary. What makes it different from the other, mainly English language institutions for primary and secondary education?

- Our school is an international bilingual school. We have an advanced and a standard bilingual program and a separate international program taught solely in English. However, we strongly believe in maintaining both the international and the Hungarian

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curricula at the same level. What sets us apart from other international schools in Hungary is our increased emphasis on our Hungarian curriculum. We have two types of staff: international staff from all over the world, they teach all courses in English and we have many Hungarian teachers for the Hungarian curriculum. Both are very professional and qualified and tend to stay for a longer time than their initial contract period.

- So this is a community which is growing year by year. How can you manage to accommodate so many students?

- We plan to have over 200 students next year. To accommodate all of the students, and of course, the bigger staff, we will rent two nearby buildings and move some of the classes there. We are also looking to open a high school within the next four to five years because parents want children to continue their studies at a higher level with us. The high school will not necessarily be started in our current facility or on our campus. We are constantly looking for a suitable place. We also want to increase our professionalism here. After a trial year, we will start an official Cambridge Curriculum for our English side. It will give children a certificate (which accurately J U N E

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tells their English level) when they leave school. We would also like to update our current facility which takes plenty of time and money. So these are our main goals for the near future and we are working very hard to make these to happen.

OPEN DAY PROGRAM

If you wish to learn more about our school, our modern teaching principles, qualified and kind teachers and the homely atmosphere of our school, pay a visit to ISB. Explore for yourself what a difference ISB makes compared to other schools. Our Open Day programme held twice a year offers an excellent opportunity for enquiring parents to get an inside view of the school’s life on the occasion of an introductory presentation and optional lesson visits. In addition, an opportunity naturally presents itself to meet the teachers and heads of the school and to ask questions personally. Our next Open Day programme will be held in November. PREPARATION STARTING FROM AGE 5 Learn and play in English and in Hungarian, the ideal bridge between kindergarten and school. On the Open Day visitors will have the opportunity to have an insight into the life of our International and Bilingual Prep classes.

CONTACTS

INTERNATIONAL SCHOOL OF BUDAPEST (Budapesti Nemzetközi Iskola – International School of Budapest és Magyar-Angol Két Tanítási Nyelvű Általános Iskola H-1121 Budapest, Konkoly-Thege Miklós út 21. +36 1 395 6543 info@isb.hu; contact@isb.hu Office hours of the school secreteriat Monday – Friday from 8:15 a.m to 15:00 p.m GPS coordinates 47.495109, 18.961889 Take Bus No. 21 from Széll Kálmán square (terminus at KFKI Research Institute). You need to get off at "Csillebérc, Gyermekvasút" stop, at Csilleberc Leisure Camp (Csillebérci Szabadidőközpont)

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photos by HXDBZXY/SHUTTERSTOCK.COM, DÁVID HARANGOZÓ

- You may benefit from the location of ISB. What is the advantage of being in the former pioneer camp?

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education

education

HUNGARIAN-LANGUAGE VOCATIONAL TRAINING IN CROATIA QUALIFIED YOUNG PEOPLE MAY FIND JOBS MUCH EASIER

the program. HMPF President Nándor Csapó stressed in the context of the agreement that the purpose of this cooperation is to promote the economy and to create new jobs through the operation of family farms and the establishment of social farms. The agreement signed primarily concerns the field of agriculture, and relates to the development of apprenticeship workshops, further training, and the modernization and enlargement of vocational schools.

PUBLIC EDUCATION IN CROATIA

“I would like to draw attention to our ‘flexible transfers’ scholarship. The essence of this program is that a senior teacher and five students may come to Hungary to study in

a vocational institution and to do apprentice work”, the State Secretary said, adding that he was hoping that students will also come to Hungary from Croatia within the framework of

Public education in Croatia is free from kindergarten until the end of secondary education, as it is subsidised by the Ministry of Education. Critiques point out that the Croatian government only spends 4% of its GDP on education, well below the European average. Therefore, teachers are underpaid and schools understaffed. There are approximately 450 kindergartens, although not all are public. Many are also linked to primary schools. Primary education is compulsory and starts at the age of 6. There are nearly a thousand public primary schools, directed by the municipalities themselves. The most common foreign languages are English, German and Italian, but Spanish, French and Russian are also taught in some schools. Secondary schooling is optional, although there is a strong movement to make it compulsory. There are different types of secondary education: Gimnazija, Vocational schools and Art schools. Vocational schools can last between one and four years, and offer a practical education, at the end of which students are awarded a vocational qualification. Art schools last four years and students are taught music, dance, visual art and design. Source: justlanded.com

photos by ÚJ MAGYAR KÉPES ÚJSÁG

In mid-April, Árpád János Potápi, State Secretary for National Policy of the Hungarian Prime Minister’s Office, István Román, Deputy State Secretary of the Hungarian Ministry of Agriculture and Nándor Csapó, President of the Forum of Hungarian Teachers in Croatia (HMPF) signed a theoretical agreement in the NE Croatian town of Osijek on the development of Hungarian vocational training in Croatia. As part of the Hungarian government’s series of programs ‘2015 Year of Hungarian Vocational Training Beyond the Borders’, the parties conducted talks regarding the opportunities of vocational training in Croatia. As Árpád János Potápi told the Hungarian news agency MTI, at present, the focus of Hungary’s education policy is being shifted increasingly towards vocational training. He added that “we talk a great deal about the significance of dual vocational training, and believe that we may only boost economic growth further if we also develop this segment of education, on the one hand, with a view to ensuring the availability of qualified work force and, on the other hand, in order to provide young people with qualifications which enable them to find jobs”. The State Secretary highlighted that, based on the proposal by HMPF, educational institutions will also be supported in Croatia, and the Hungarian government will allocate some HUF 12.5 million (close to EUR 42,000) for development purposes. He pointed out that HUF 500 million (nearly EUR 1,7 million) will be available this year for the implementation of the program throughout the Carpathian Basin.

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cover story cover story.

WILL BUDAPEST LISTEN TO BRUSSELS? NO SIGNIFICANT SIGN OF A COMPROMISE FROM THE GOVERNMENT The European Commission (EC) adopted country-specific economic policy recommendations for 2015 and 2016 in mid May, asking for national action to create jobs and stimulate growth. However it is still unclear whether Hungary will act by neglecting those proposals or this time – changing its habit - listen to Brussels and abandon some of its unorthodox methods of economic policy.

RECOMMENDATIONS TO HUNGARY

1. Achieve a fiscal adjustment of 0.5% of GDP towards the medium-term objective in 2015 and of 0.6% of GDP in 2016. 2. Take measures to restore normal lending to the real economy and remove obstacles to marketbased portfolio cleaning; considerably reduce the contingent liability risks linked to increased state ownership in the banking sector. 3. Reduce distorted sector-specific taxes; remove

OPINION LEADERS the unjustified entry barriers in the service sector, including the retail sector; reduce the tax wedge for low-income earners, including shifting taxation to areas less condusive to growth; continue to fight tax evasion, reduce compliance costs and improve the efficiency of tax collection. Strengthen structures in public procurement that promote competition and transparency and farther improve the anti-corruption framework. 4. Reorient budget resources allocated to the public work scheme to active labor market measures to foster integration into the primary labour market and improve the adequacy and coverage of social assistance and unemployment benefits. 5. Increase the participation of disadvantaged groups, in particular Roma, in inclusive mainstream education and improve the support offered to these groups through targeted teacher training; strengthen measures to ease the transition among different stages of education and the labor market and improve the teaching of essential competence.

There has been no official answer to the proposals but hardly anyone believes Budapest is willing to step back significantly from its present stand. However, the plans of next years budget, submitted to the Parliament in mid May seems to have some points of compromise. The document is expected to be adopted in the last week of June. The key priorities of the government are to maintain fiscal stability, keep the general government debt level on an ascending path, farther reduce budget deficit, improve employment and underpin improving economic performance. Next year, the personal income tax rate will fall from 16 percent to 15 percent, VAT on pork will drop from 27 percent to 5 percent, several duties and fees will be lowered or abolished and the bank tax rate will also be cut. Opposition parties and unions want more sub-sectors in food industry to be involved in decreasing VAT-rate and doubt there will be less levy on banks. The amount of family tax allowance will increase for those who have two children next year, and this incentive is set to double by the end of the decade.

1. Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialog, said: "Strengthening the European economic recovery requires further policy efforts. Many Member States face challenges such as high public and private debt, low productivity and lack of investment, which result in high unemployment and worsening social conditions. Addressing these challenges are what today's country-specific recommendations are about. 2. Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labor Mobility, said: "We need to make full use of the opportunity of this nascent economic recovery and bring Europeans back to work. Member States should profit from the momentum and deliver on structural reforms. Special focus must be on those who have been left behind during the crisis. 3. Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: "We ask Member States to ensure that the ongoing economic recovery is more than a seasonal phenomenon. Since the Juncker Commission's first day in office, our economic priorities have been to boost investment, support structural reforms and ensure the pursuit of responsible fiscal policies. These recommendations are not about Brussels lecturing governments. They are about encouraging national efforts to deliver the jobs and growth that we collectively need."

EUROPEAN DEBATE on HUNGARY

There has been a heavy debate once again in the European Parliament concerning Hungary following Prime Minister Viktor Orbán’s suggestion of the possibility of reinstating the death penalty and his government’s launch of a so-called „public consultation” on immigration. The Hungarian PM was criticized heavily not only by socialist and liberal fractions but from his fellow EPP group as well. Speaking for the Council Presidency, Latvian State Secretary for European Affairs Zanda Kalniņa-Lukaševica reiterated that the European Union is not just an economic and political union, but also a union of shared fundamental values. Commission Vice-President Frans Timmermans pointed out that reinstating the death penalty would be contrary to EU fundamental values and could trigger EU Treaty Article 7, which foresees the possibility of depriving a member state of its voting rights in

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the Council. However, Hungary does not have "concrete plans" to reinstate the death penalty, he said, adding that if it were to take steps to do so, then the Commission “would not hesitate to act”. As to the public consultation on migration, "framing it in the context of terrorism is malicious and wrong" and will feed prejudice, he said.

As an important fact Manfred Weber, a German member of Mr. Orbán's fellow EPP group also cirticized the Hungarian politician. He called any talk of reintroducing the death penalty "dangerous" and "damaging" and thanked Orbán for clarifying that this will not happen. On the immigration consultation, the German MEP said that J U N E

it is good to ask the people, but that "the words used create an atmosphere that we don't like in our group". Social-democrat leader Gianni Pittella from Italy went even further by saying the seriousness of Orbán’s statements should not be underestimated. They went too far and were „weapons of mass distraction", he said, adding that 2 0 1 5

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"the real issue here is not an attack on democracy, but emptying democracy and making it banal". Reacting on critical comments from MEPs Orbán said: "We Hungarians like to speak frankly. Therefore we say that we want Europe to stay European, and we would like to preserve Hungary for Hungarians". He added that he found the Commission’s proposals "absurd, almost crazy". On the death penalty he stressed that we "must not shy away from discussing a problem" and that "Hungary stands by the freedom of speech". Zoltán Balczó, a right wing politician from Hungary, also MEP, wondered whether public debate on immigration was a taboo subject. "You here in Parliament want to define what we can even talk about. I can reassure you: the Orbán government is fully on the track defined by the Lisbon Treaty, complying with your expectations, despite its rhetoric”, he said.

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photos by DÁVID HARANGOZÓ, SZILÁRD KOSZTICSÁK/MTI, FRED MARVAUX/EP

The recommendations reflect the Commission’s economic and social agenda. Since President Juncker’s Commission took office in November 2014 and published its Annual Growth Survey 2015, this agenda has focused on three mutually reinforcing pillars: boosting investment, carying out structural reforms and pursuing fiscal responsibility. The successful implementation of the 2015 country-specific recommendations will be key to Europe’s return to jobs and growth sustainable and less dependence on the external, cyclical factors that currently support the recovery – said the EC in a press release.

The children food program will be continued, as the Government does not want to see starving children in Hungary. Through the extension of the public work scheme, more people will be taken off welfare and returned to work. EU funding will be used mainly for economic development and job creation, while a significant amount will be allocated for social and educational purposes. The 2016 Budget Bill is based on 2.5 percent GDP growth and 2 percent fiscal deficit. The general government debt-to-GDP ratio is projected to fall to 73.3 percent next year.

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STEAM IS LEAKING FROM THE ENGINE

EUROPEAN COMMISSION EXPECTS A SWITCH FROM INVESTMENT TO CONSUMPTION IN HUNGARY IN 2016 Hungary’s real GDP grew by an impressive 3.6% in 2014, but is set to slow down to more sustainable levels of 2.8% in 2015 and 2.2% in 2016 as growth -supporting factors, such as a record EU funds absorption, lose strength. Unemployment is expected to continue decreasing, while inflation is forecast to bottom out this year. The general government deficit will remain firmly below 3% of GDP over the forecast horizon. wages are projected to increase throughout the forecast horizon. From 2016, only the structural funds from the new Multiannual Financial Framework period will be available, implying a significant drop in EU fund inflows, weighing on investment activity. Export growth is forecast to increase and net exports will contribute to growth in 2015 and even more in 2016. The country's current account surplus is expected to increase further throughout the forecast horizon. In 2014, the unemployment rate decreased to a low of 7.7% and is forecast to decline further. With real growth being high, private sector job creation was significant in 2014 and this is set to continue, albeit to a lesser extent. The employment rate is expected to continue growing, and so will the activity rate. Employment gains should also be supported by public works, which are planned to be further increased. Inflation in 2014 turned out to be 0%, and stood at -0.6% in March 2015. This is due to subdued imported inflation, low food prices, regulated energy price cuts and while inflation expectations were declining. In the second half of 2015, inflation is expected to turn positive as these effects diminish and the inflation for the year as a whole will be close to zero. As the output

photos by DÁVID HARANGOZÓ, KATALIN VÁRADI/GKI

In 2014, the Hungarian economy grew by 3.6%, well above government and market expectations thanks to domestic demand, which contributed 4.0 pps. to growth, while net exports weighed it down by 0.4 pps. Within domestic demand, gross capital formation was the main contributor. The surge in both public and private investment was supported by the accelerated absorption of EU funds and the central bank’s Funding for Growth Scheme of subsidised loans to SMEs. On the production side, all sectors contributed to growth: industrial production (which contributed 1.5 pps.), the service sector (1.1 pps.) and agriculture (0.5 pps.). Signs of a slowdown in GDP were already visible in the second half of 2014. The deceleration in growth is projected to continue throughout the forecast horizon as the impact of high EU fund inflows (see below) and of the subsidised loan scheme fade away. GDP is set to expand by 2.8% in 2015 and 2.2% in 2016. Domestic demand is expected to remain the main driver of economic growth, but with a shift from investment to private consumption. New mortgage rules are expected to raise households' real disposable income as banks will have to reimburse revenues considered to have been unfairly collected. In addition, in a context of low inflation, real

SLOWER AND SLOWER

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gap closes, inflationary pressures from the real economy will drive up inflation to 2.5% in 2016. Improved confidence stemming from the current strong growth and investments could lead to higher gross fixed capital formation and consumption. Lending flows and investments could be further supported by a full take-up of the Funding for Growth Scheme (recently extended to cover riskier SMEs) as well as by the full implementation of the announced policy commitments towards the financial sector. Sunday closure of retail stores could lower consumption for a short period. The general government deficit reached 2.6% of GDP in 2014, i.e. 0.3 pp. below the government target. Tax and social security receipts as a whole exceeded the budgeted number by 0.9% of GDP thanks to the strong economic recovery and improvements in tax administration. The extra revenues were partly absorbed by additional spending, while the switch to ESA2010 accounting resulted in a deterioration of the headline figure. Expenditure increases incorporated in the April amendment of the budget are projected to be more than offset by the improved revenue outlook since the winter forecast due to the more favourable base effects and higher consumption growth. Compared to the previous year, interest outlays are expected to decrease considerably, but it is largely counterbalanced by the deterioration in the primary balance. This also reflects the deficitincreasing impact stemming from the assumed shortfall of budgeted one-off revenues from asset sales, a measure which remains unspecified by the authorities. The government deficit is projected to decrease to 2.2% of GDP in 2016, which is based on a no-policy change assumption as the new convergence programme was not released by the cut-off date of the forecast. The phasing-out of temporary expenditure items, the projected savings in social transfers and a further reduction in interest outlays would contribute to the lowering of the deficit. This is expected to be partly offset by revenue-decreasing measures amounting to some 0.3% of GDP, of which two-thirds are linked to the reduction of the bank levy. Overall, budgetary risks are rather tilted towards

Two major forecasts were published on the Hungarian economy in the early days of May. Both the European Commission and GKI Economic Research Co.(GKI) shaped similar possible scenarios which said that decelerating of the GDP growth is imminent. The main reason behind this is that EU-funded investments will fade in the upcoming 2-3 years. However as András Vértes, Chairman of GKI told Diplomacy&Trade, the pace of decline in growth is viewed differently: GKI expects a quicker and sharper slowdown in the upcoming 18 months. According to their research, the growth rate of GDP in 2015 will likely be smaller (around 2,5 per cent) than the EC-s 2.8 per cent. Moreover, the next year is seen even gloomier as GKI expects a 1.5 per cent growth only. (versus EC 2.2 per cent) Mr. Vértes added that although investments are expected only to stagnate in 2015, consumption and the export surplus can contribute to GDP growth to a greater extent than in 2014. Developments on Hungary's main export markets will dominate the general mood. In 2015, in line with faded inflation, wage increases are slowing down; the growth rate of real earnings will fall from 3.2 per cent in 2014 (election year) to 2-2.5 per cent in 2015. As a result of the increase in real incomes that has been under way for three years and the fall of credit burdens due to the settlement of FX loans by banks, consumption is predicted to grow by 2.5 per cent in 2015, despite the fact that wage increases are slowing down. As the head of GKI pointed out, the gloomy outlook will be persistent as long as the government maintains its stand on so called non conventional methods which resulted in nearly total isolation within the EU and a worsening business climate in general. Investors are still reluctant as regulations continue to be unpredictible. The government seems to be selective in changing certain laws. Those regulations positively affect only a handful of local companies and do not have an impact on the whole particular sector as one would think originally - he described the situation. a lower deficit over the forecast horizon, which is related to potential favourable developments on the revenue side. The outturn data for the first quarter of 2015 point to an upward risk in tax receipts, while further revenue gains may also arise from recent measures combatting VAT avoidance. On the negative side, EU-funded projects should be mentioned as both the pending financial corrections and the domestic financing requirements (linked to the overbooking of the available envelopes to ensure maximum absorption) may turn out higher than currently planned.

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economy economy.

GARUDA AIRLINE MAY STOP in BUDAPEST SOON

DIGITAL DEVELOPMENT

EUCHAM PUBLISHES MONTHLY CHARTS ON EUROPE-WIDE ISSUES

INDONESIAN COMPANIES WANT TO EXPLORE MAJOR HUNGARIAN HUBS Indonesian companies are targeting Central and Eastern Europe more actively than ever before. Part of that effort is a series of trade missions supported by the Indonesian government. A relatively large group of businessmen were included in the latest mission to Hungary in the first week of May.

EuCham - European Chamber lists the European countries according to their Digital Development, in order to individuate the countries with the most favorable environment to start a business in IT related fields. Finland is leading the transition toward digitization by virtue of the wide availability of digital technologies and contents, which boost the developing of new products, services and organizational models. With Sweden (2nd), Norway (6th) and Denmark (in the 7th place), the Scandinavian region can be considered the main hub for digital businesses. Despite positive results of Europe on a global perspective, the digital divide in the region is still pronounced. Albania, Serbia and Moldova, suffering from a business environment with less innovation impulse, occupy the last positions of the chart. The EU is currently tackling the problem through the “Digital Agenda for Europe”, an initiative aiming to harmonize the digital ecosystem of the region.

BY NÁNDOR MESTER

During the visit substantial development was achieved in various sectors, such as agricultural machinery, food processing, water and waste management. Two Memorandums of Understanding were signed, one on palm oil export and the second on coffee export. The second document was signed between IndoTatiS UG and a Hungarian company, Central Impex Ltd. Ari Satria, director of Market Development and Export Information of the National Export Development of Indonesia (DJPEN) told Diplomacy&Trade that Indonesia considers Hungary as an important gateway to CEE markets as it has developed a good logistic infrastructure. Currently Indonesia exports its products through Rotterdam to mainland Europe but other hubs will join soon as Indonesian companies want to explore Hungarian transportation centers, specially Budapest. As he put it, Indonesia is interested not only in exporting goods (coffee, palm oil, etc.) but in receiving state-of-the-art technology from European countries. Hungary can offer a lot of high-standard machinery and has first class experience in agricultural and other sectors. Hungarian companies from the construction industry have also shown interest in investing in big Indonesian infrastructural projects. This was reassured by the Ambassador of Indonesia, Wening Esthyprobo Fatandri who has

recently started her mission in Hungary. In an exclusive interview to Diplomacy&Trade she said that the embassy makes every effort to facilitate the economic, cultural and scientific cooperation between the two countries. Trade missions are regularly held and there is a developing cooperation among several universities. From Hungary, the Semmelweis University and universities in Szeged and Pécs take part in this work.

- Finland offers the most prosperous digital environment, performing an overall score of 8.54 - Albania, at an earlier stage of its digitization process, occupies the last position

Speaking about the next possible advance toward Hungary, she informed us about the plans of Garuda Indonesia, the national air carrier of the country. "The management of the carrier is considering a stopover in Budapest when a direct flight starts between Jakarta and Warsaw. Usually it depends on the deepening of bilateral business and touristic relations, and as I see, they are improving so you might witness a Garuda airplane landing in Liszt Ferenc International Airport soon." - she added. The ambassador also pointed out that the President of Indonesia has asked all the ambassadors of that country to be not only a leading diplomat but a sales representative of Indonesia as well. So she wants to do her job and try to eliminate any kind of hurdle in increasing bilateral trade. One hurdle is a lack of information and if business leaders can make direct contacts by exchanging visits then important deals will definitely be realized – she said. See more on Hungarian-Indonesian cooperation in our cultural section, page 29.

- There is a visible asymmetry between Northern and South-Eastern countries SOURCE: eucham.eu/charts

It was 65 years ago – on May 7, 1950 – that the new airport of the Hungarian capital commenced operation when an Li-2 passenger aircraft flew to Ferihegy from nearby Budaörs Airport. This marked the beginning of civil aviation at Budapest Airport. In the first year of its operation, the airport handled 7,133 passengers. In 2014, this number exceeded 9 million. A summary by Budapest Airport says the history of Ferenc Liszt International Airport, previously called Ferihegy, stretches back even further than 1950. The area was zoned as a dual use, civil and military airport as early as 1938, but the Second World War intervened. Although, the construction of a unique, Bauhaus-style passenger terminal, designed by architect Károly Dávid Jr., was started, focus shifted to the hangars of the Hungarian Air Force and the Aviation Experimentation Institute as there was hardly any civilian traffic. The airport was bombed by the Allied forces several times in 1944. It was only rebuilt and reopened to commercial traffic in 1950 (according to the original designs). It welcomed the first Li-2 passenger aircraft (a Soviet version of the American Douglas DC-3 Dakota, built under license) on May 7, 1950. At the time, the concrete runway at the airport was only 1,500 meters long, which was gradually extended to accommodate jet aircraft. Runway I was completed, with its current length of 3,000 meters, in 1958. By 1974, the annual passenger number exceeded 1 million, and Terminal 1 was no longer able to handle the traffic. As a result, in 1977, the design and construction of a new control tower, a parallel runway II (3,700 m) and a new technical base with aircraft repair hangars commenced. Terminal 2A, which today handles Schengen passengers, was completed in 1985. Due to the continuous traffic growth, further developments were necessary, and Terminal 2B was opened in 1998. Developments have continued as investments by operators HOCHTIEF AirPort – and its current owner PSP Investments – have been until now in excess of EUR 320 million.

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EUCHAM CHART APRIL 2015 DIGITAL DEVELOPMENT INDEX

1 FINLAND . . . . . . . . . . . . . . . . . . . . . . . . 8.54 2 SWEDEN. . . . . . . . . . . . . . . . . . . . . . . . . 8.49 3 SWITZERLAND . . . . . . . . . . . . . . . . . . . 8.33 4 NETHERLANDS. . . . . . . . . . . . . . . . . . . 8.12 5 GERMANY. . . . . . . . . . . . . . . . . . . . . . . . 7.84 ... 44 ALBANIA. . . . . . . . . . . . . . . . . . . . . . . . . 4.67

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photos by DÁVID HARANGOZÓ, BUDAPEST AIRPORT

BUDAPEST AIRPORT: 65TH ANNIVERSARY

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SIGNIFICANT CHANGES TO the NEW TRADE CONTROL SYSTEM The Ministerial decree introducing changes to the Electronic Trade Control System (EKÁER) rules was published on February 27. The majority of the changes came into force on March 1. The changes are meant to clarify several points of the system and to introduce numerous simplifications. Still, many questions remain unanswered - consultancy company KPMG pointed out.

What are the key changes?

• Transportation of goods subject to excise duty or customs control is exempt from EKÁER reporting. The new rules introduce further exemptions for goods subject to other regulations which currently govern deliveries (e.g. for the transport of waste material and certain metal products, also postal services). • An EKÁER exemption may be requested from the Tax Authority for deliveries over short nonborder-crossing distances (up to 20 km) under certain conditions. The Hungarian Tax Authority

decides on a case-by-case basis. • Taxpayers may opt to report transports in the EKÁER that are not subject to EKÁER legislation • The value of non-high risk goods is not required to be declared by taxpayers when arranging for an EKÁER number. For high risk goods, providing information on the value is required but only a maximum of 10 percent difference between the reported and actual values would be acceptable. A 10 percent difference is acceptable for gross weight information as well.

• Definitions such as ‘sender’ and ‘receiver’ help the interpretation of the rules. The definitions often refer to the VAT Act. Therefore, the EKÁER rules are generally harmonized with the VAT Act. • Thresholds for the volume of deliveries to be reported in the EKÁER have been changed. In the case of non-high risk goods, deliveries above HUF 5 million net value or 2.5 tons gross weight should be reported. In the case of high risk goods, deliveries above HUF 1 million net value or 500 kg gross weight should be reported. The thresholds for high risk food products and other high risk goods have now been aligned. • An option for simplified reporting has been introduced for companies and consolidated companies reaching or exceeding the thresholds of HUF 50 billion net sales revenue and HUF 40 billion net sales revenue originating from sales of goods produced by the company itself (the thresholds in the published draft regulations has decreased). The simplification is applicable from April 1 2015.

• If the customer picks up non-high risk goods at the premises of the seller, the customer is obliged to report the transport in the EKÁER (from 1 April 2015). • The arrival of goods should be reported within 3 working days but at the latest within the validity of the EKÁER number (15 days). • The decree contains specific rules relating to chain transactions which partly change the EKÁER obligation in connection with those transactions. If the middleman arranges for the transport, then, according to the decree, it is assumed that the middleman arranges for the transport with sender status. • The regulation contains a simplification with respect to security deposits. The base period of deposit calculations is now reduced from 60 to 45 days. Security deposits should be provided as of March 11 2015.

Questions still emerge • Do security deposit obligations arise in the case of voluntary reporting? • Will the Hungarian Tax Authority use EKÁER information for tax audit purposes? • What are the risks to an entity accepting deliveries not reported in the EKÁER? • How should certain chain transactions be treated? • What are the risks that consolidated freights may include both goods subject to EKÁER and goods not subject to EKÁER?

WATER PRESENTS HIGH RISK TO BUSINESS At the current pace, demand for water will increase by 55% globally by 2050, projects the Organisation for Economic Cooperation and Development (OECD). This means that water has moved to the top of the business risk agenda - according to the World Economic Forum’s Global Risks Report 2015 - and is a major concern for society as a whole.

photos by NIGHTMAN 1965/SHUTTERSTOCK.COM, DÁVID HARANGOZÓ

The increase will mainly come from manufacturing (+400%), electricity (+140%) and domestic use (+130%). In fact, the World Bank has cited a 40% global shortfall between forecast demand and available supply of water by 2030. Add in competition from agriculture to feed growing populations, and the gap between supply and demand results in very challenging consequences. With business sharing water with communities, industry, farmers and other users, securing the right quality and quantity of water at the right time is set to become a serious production and reputational issue. The good news is that there are steps that businesses can take today to reduce their water footprint. To help businesses think about the implementation of a water strategy, the Corporate Water Disclosure Guidelines: Toward a Common Approach to Reporting Water Issues (October 2014) proposes a seven step approach: w w w . d t e u r o p e . c o m

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HOW MUCH DO WE VALUE WATER?

Water is a vastly under-valued resource. However, finding common ground on how to value it to give a true price of water to users is complex and global agreement hard to secure. As users, few think about the cost of extracting, transporting, chemically treating and providing water. And then there’s the cost to our ecosystems of removing water from nature, the cost of polluting rivers and so on. All of this has a price, but access to water is a basic human right, so prices are kept low, compared to the real cost. While prices are kept low, it’s taken for granted and consumption patterns are difficult to change as there is little incentive.

SEVEN STEPS Water management isn’t an isolated activity, but sits within a community or a business district or an industrial area or an agricultural area, that ultimately sits within a shared water basin. Step 7 reflects this neatly. Engaging in collective action can take many forms (for example, information sharing, community engagement and basin-restoration projects; or working with local and regional governments). It all helps to ensure the longterm continuity of access and supply. So once all internal avenues are exhausted and the water footprint managed as far as possible by changing process and behavior under the control of the business, what happens when there is still an issue?

1. Provide, and properly maintain, drinking water, sanitation, and hygiene services in the workplace for the health and well-being of a company’s workers. 2. Measure and monitor water management practices. Track the extent to which direct operations use and affect water resources. 3. Drive operational efficiency and reduce pollution. Implement water efficiency and pollution reduction measures that improve performance and begin to manage risks and negative impacts. 4. Identify and understand water-stressed and high-risk basins. Identify and investigate those areas that are experiencing water stress or are considered high-risk. 5. Integrate water management into business strategy. Think strategically about developing policies and programs to address top water priorities. 6. Leverage improved practices throughout the value chain. Address water risks and negative impacts in the value chain. 7. Advance sustainable water management and engage in collective action. Engage externally to ensure long-term business continuity by contributing to the sustainable management of shared water resources on which the company relies.

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RENT YOUR OFFICE! NOW! LANDLORDS ARE GETTING TOUGHER AND PROVIDE LESS INCENTIVES It is high time to close office rental deals. Otherwise you would find less available and suitable space and what is more important: higher fees and less allowances.

STABLE DEMAND

BY NANDOR MESTER

Finding a suitable office space was never so easy some 2-3 years ago: you just dropped in to one of the big international property agencies and were served as a king. That is no longer the case these days in Budapest. The office market is getting healthier which means you face higher headline rents and less available space in central locations. Landlords have realized they are no longer in losing position and are reluctant to give discounts and special allowances like they did some 2-3 years ago. That means companies are advised to hurry to get deals ASAP, otherwise would pay at least 10-15% more than they had expected in their medium term business plan. Where to go for a good deal? It depends. Being an international company seeking large space on the same floor or searching for a HQ means you should really work very hard to find a suitable office building. Agents admit it takes at least 5-6 months to do the job. Jones Lang LaSalle, an international property agency says landlords of modern, “A” class offices might see their negotiation position strengthens permanently, driven by the quick absorption of high quality vacant office units. Due to the low number of new developments the number of large contiguous areas is getting lower and lower, in certain sub-markets to handle even a small, 1,000 m² request is problematic. Multinationals still prefer so called Váci út corridor, which is the most significant sub-market of Budapest. But if you are not stickled to that area I would advise to monitor South-Buda or CentralBuda. There are good buildings in both areas and rents are reasonable, closer to 10 EUR/m2/month. Walking through Andrassy Boulevard might

also be a good option to get a quick picture on what type of representative offices are available. There are plenty of lovely old, renovated building alongside. Many of them are half empty, so good deals are achievable. But please: do not enter a deal without verifying the real landlord and cross-check all available documents. In the 70's and 80's small or medium size foreign companies preferred offices in large villas on Buda side of the capital. Some of the firms moved from their HQ but the majority remained. Due to the latest financial and economic crackdown private individuals who erected big houses or new villas in the early years of the

new millennium were forced to abandon their property. These large houses either were sold or rented out. You would still find good options as owners (sometimes banks) are no longer willing to hold those properties. Obviously companies will continue to concentrate on lowering costs, specially rental fees. In this context they can be happy – but not for long. Pricing differences are getting stronger in case of well located buildings handed over in recent years. Rental levels are stable, the growth of rental levels has already been started on certain sub-markets. Prime rent stands at EUR 20.0/m2/month. This

OFFICE RENTS IN BUDAPEST (effective rents, Q4, 2014, EUR/month/m2)

THE LATEST PICTURE OF THE MARKET:

SUB-MARKET RENT CBD 12-18 Central-Pest 10-13 Central-Buda 11-15 North-Buda 9-12 South-Buda 11-13 Váci út corridor 9-13

1. you know how difficult is to find a suitable office 2. you know where are the attractive sub-markets in Budapest 3. you know the price range of headline and effective rents 4. and you even know how to bargain for discounts What is your job than now? It is simple: you have to act. As soon as possible.

SOURCE: ROBERTSON HUNGARY

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level is only achievable in a few, selected prime properties in the CBD for the best office units within the building. Average asking or headline rents range from EUR 11.0-14.0/m2/month for “A”class offices with generous incentive packages. Effective average rents (after tough negotiations) are usually between 9 and 12 EUR/ m2/month. In 2014 green office area continued to grow rapidly, now green offices are exceeding 23% of the entire stock. Taking into consideration the size of offices currently being under certification, this portion will grow to 30% by the end of 2015. Green certified buildings can be found outside the capital as well. The first green office building which was built in Hungary outside Budapest is National Instruments’ Science Park in Debrecen, it achieved LEED Gold certification two years ago. Two years after Henkel’s factory in Körösladány received certification under the DGNB system, a new green industrial building was also completed - Procter & Gamble’s manufacturing building at Gyöngyös, which achieved LEED Silver certification.

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In the first quarter of 2015, the total demand amounted to 64,005 m² that is a 11% reduction compared to the same period in 2014, but it represents a 5% reduction if the 5 year average of Q1 values are compared. Looking at the take up without renewals Q1 demand increased with 6% comparedto Q1 2014. Net take up represents 61% of total demand,which is the same value as the one measured in the first quarter of 2014. The ratio of renewals decreased by 6% in the quarterly level,165 new lease agreements were registered in the first quarter of 2015, and 17 agreements were concluded for an area above 1,000 m². Only one renewal was recorded for an area above 5,000 m². The average size of transactions is 388 m², which is the same as the Q1 value of the previous 3 years.31% of net take up was realized on the Váci Street corridor, the largest transactions were concluded here. The Vaci Street was followed by the Central Pest sub market with 20% share.

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interview business interview.

DIGITAL IS THE GREATEST CHALLENGE INTERVIEW WITH GILLES CLAVIE, PRESIDENT AND CEO OF ORBIS HOTEL GROUP Accor, the world’s leading hotel operator is the major shareholder of Orbis. What was the motivation for Orbis to buy-out the French company’s Eastern European assets?

run this service in a profitable way, meeting the newest guest expectations by not just serving food and drinks but entertainment as well. While nowadays at the lounge type restaurants clients are not only having lunch but socializing and even working at the same time, our target is then to offer first of all a moment of conviviality experience. Within Orbis we developed and introduced brand new F&B concepts with great success in Poland last year and we are now deploying these in Eastern Europe. Winestone our F&B midscale concept, Novo2 at Novotel and ibis Kitchen i-Burgers at ibis have the same objectives: conviviality, well-being and great experience.

Orbis is a Polish company listed on the Warsaw Stock Exchange, with a majority ownership by Accor. Orbis has a strong position as the leading hotel group having more than 60 hotels in Poland and 5 hotels in the Baltic countries. In recent years we have rationalized our portfolio, improved the assets quality, sold some of our hotels and bought back some leased ones. We saw that there were no major result improvement options in Poland – of course we continue developing of our network in Poland and in the Baltic States but in a more selective approach – so the regional expansion came in. The closer regional management and the barriers of development options in Poland moved us into the buying. Through the recent transaction with Accor, completed in January this year, we acquired 38 hotels in the Eastern European region, including the 17 hotels in Hungary (Sofitel, MGallery, Novotel, Mercure, ibis). Through this transaction, Orbis has become the sole licensor of all Accor brands in Eastern Europe, including more than 100 hotels in 9 countries where we are already operating as well as 7 further countries where we are not yet present.

Following the take-over of the Eastern European hotels and visits to the hotels and teams in Budapest what were your first impressions? I have come to Budapest several times since last fall; I have already visited all the hotels in this beautiful city and now I’m coming back once a month at least. We are very well represented in Budapest having a decent coverage in the different segments. Overall I’m very confident seeing the performance of our hotels, the matured products, services, as well as the professionalism and commitment of the local teams. With the local teams, we have defined an action plan for improving and/ or developing the network. We are identifying hotels where modernization and some product improvement could be made. This is crucial to continue strengthening our leading position in the market.

What is the added value that Orbis can bring into the 38 hotels’ operation?

photo by COURTESY OF ORBIS/ACCOR GROUP

Considering all these networks are comparable to ours, we have identified synergy axis which are already under rollout, I’m talking about procurement, food & beverage concepts, asset management actions, etc. … which will deliver value creation for the Entire Group. Furthermore, we are planning to implement new and innovative product and service related projects that will increase guest satisfaction; we will constantly increase our operational excellence lifting up operational margins of hotels and of the entire Group. As it was done during previous years in Poland when we modernized and renovated all Orbis’ hotels, our financial discipline represents an additional value, helping us to increase and optimize our performance. What are the greatest challenges you are facing or that you think you will face in the region? We are facing challenges that are global. The greatest challenge is digitalization. Accor has its global plan and responses to digital challenges that we are also implementing in Eastern Europe, in a market defined by the accelerated pace of technological change and the fast w w w . d t e u r o p e . c o m

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What are the plans for Orbis with the Hungarian market? What are you planning to do with the Hungarian hotels?

evolution of customer usage. Our goal is to rethink and incorporate digital technology throughout the customer journey. We do already have existing robust tools like the Accor Reservation System, a powerful distribution tool centralizing over five million inquiries per day; accorhotels.com, the Group's multi-brand booking portal managing an average of 45,000 reservations per day, and Le Club Accorhotels, the Group's multi-brand loyalty program which is the only hotel loyalty program in the world that allows customers to redeem points with no time or availability restrictions. For all our loyalty program members as well as customers booking directly through Accor platforms, we are in the full implementation of a

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new exclusive digital service, called “Welcome by Le Club Accorhotels”, offering an unprecedented, personalized welcome in our hotels. It is also important to highlight that Accor took over Wipolo and Fastbooking, cutting-edge digital service providers to further strengthen our digital expertise and ensure a better service to our hotels. Orbis Group is definitively proactive within the frame of the Accor digital plan. Do you also have challenges you try to face with a local / regional solution? Yes, a very good example of this is food & beverage. F&B represents an important part of our revenue within the Group and everywhere we are facing the challenge to

In the case of Hungary, we have a strategy which is mostly based on asset management. We have identified properties where modernization and product improvement will be the most profitable; we are analyzing buy back options for all leased properties as well as potential disposals in order to take the most of our capital employed. I’m talking about those hotels that are important for the Group to improve our profits in sustainable way. There can also be an option for completely new developments as well, though we have our backbone network in Budapest and we have already a decent coverage. Last but not least, we can’t exclude the option of franchising some hotels. If we could speak five years from now, what would be your best case scenario for the Hungarian hotels? What do you want to achieve in five years’ time? The Hungarian market will benefit from an improved and very comprehensive Orbis Group offer answering to all client segment expectations, taking care of the whole customer journey. Budapest has a great future and our network as well!

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science science.

INTERNATIONAL YEAR OF LIGHT HUNGARY JOINS RESEARCH IN ATTOSECOND PHYSICS

MAJOR SCIENTIFIC ANNIVERSARIES CELEBRATED IN 2015

• Ibn Al-Haytham's works on optics (1015); • notion of light as a wave (Fresnel, 1815); • electromagnetic theory of light propagation (Maxwell, 1865); • Einstein's theory of the photoelectric effect (1905) and of the embedding of light in cosmology through general relativity (1915); • discovery of the cosmic microwave background by Penzias and Wilson (1965); • Charles Kao's achievements concerning the transmission of light in fibres for optical communication (1965).

RENOWNED ATTOSECOND PHYSICIST IN HUNGARY

Professor of attosecond physics Joachim Burgdoerfer is spending six months at MTA Institute for Nuclear Research under the Academy's Visiting Scientist Program. The researcher of a new field of science contributed to the work of Hungarian physicists, and hopes his visit will foster close collaboration between Hungarian and Austrian ultrafast science communities. The Hungarian Academy of Sciences first announced its Visiting Scientist Program in 2012 in order to give an opportunity to prominent researchers from all over the world to contribute to the work of MTA research centers and institutes. The initiative means to advance further connections and promising joint research between MTA research groups and the home institutions of the visiting scientists. Director of the Institute of Theoretical Physics at the Vienna University of Technology, Joachim Burgdoerfer is one of the 19 outstanding scientists to have won this grant so far. Talking of his motivation to come to Hungary, the researcher said: "Hungary has the opportunity and the potential to become one of the centers of attosecond science research in Europe with the construction of the new Extreme Light Infrastructure (ELI) facility in Szeged to be completed by 2017. Even more so, since the first attosecond initiative was born in the Central Research Institute of Physics of the Hungarian Academy of Sciences in 1991, about a decade ahead of the rest of the world. Along with this facility, an active community of researchers and users is about to develop. It is exciting to become part of this effort at an early stage."

aspects of the global society.” Hungarian participation is coordinated by the Hungarian Academy of Sciences (MTA), where a program committee has been set up, led by former MTA General Secretary Professor Norbert Kroó who has been a MTA member (since 1972), President from 1993 to 1995 of the European Physical Society and was one of the initiators of the Year of Light. Professor Kroó stresses that the program committee’s goal is to draw the attention of the Hungarian public to the pivotal role of light in sciences, education, technology, arts, and all areas of life by organizing a wide range of events. As he put it at the launch of the series of events, the main pillars of celebrating this international initiative in Hungary are science, education, industry, arts and international relations. Of the programs, he highlighted the nationwide tour and lectures by the ‘Bus of Multicolored Physics’, a light symposium at the opening of the exhibition ‘Light Road’ (open from March 7) by Attila Csáji in the Art Hall in Budapest, a conference with public lectures at the headquarters of the Hungarian Academy of Sciences on June 9 and the World Science Forum that will be held again in the Hungarian capital this November (4-7) and that will feature a special symposium on light.

WORLD-CLASS LASER CENTER IN SZEGED WITH EU SUPPORT

Up until 2020, a significant amount of EU funds – a total of HUF 750 billion – is expected to be directly available for innovation, research and development in Hungary. This April, the President of the National Research, Development and Innovation Office, József Pálinkás announced that the call for proposals for the EU tender that is to finance HUF 36 billion (some EUR 120 mn) second phase of the implementation of the ELI-ALPS (Extreme Light Infrastructure-Attosecond Light Pulse Source) project in Szeged, SE Hungary, was announced this April, as part of the Economic Development and Innovation Operational Program (EDIOP). The ELI-ALPS center to be built in Szeged will be a world-class international science facility that will not only play a significant role in the Hungarian research and development sector, but will be an important player in R&D activities for the whole Central European region (with two other legs near Prague and Bucharest). The primary mission of the ELI-ALPS research facility is to make a wide range of ultra-fast light sources accessible to user groups in the international scientific community, with special emphasis on coherent extreme ultraviolet (XUV) and X-ray radiation, and attosecond pulses. ( An attosecond is a billionth of a billionth of a second, that is, 0.000 000 000 000 000 001 sec) The facility will be able to produce ultra-short laser pulses, which will allow researchers to conduct analyses which could not have been attempted earlier. Professor Pálinkás went on to say that the performance capacity of the laser project will be higher than that of all other similar projects.

SECLUSION OR GLOBALIZATION?

MTA PRESIDENT: FREEDOM IN PRACTICING SCIENCE IS ALSO AN OBLIGATION

The Hungarian Academy of Sciences (MTA) held its 186th General Assembly this May. Greeting the participants, the President of the Academy, László Lovász called on them to make efforts “in order to make sure that our nation presents itself as not simply Hungarian, but as literate

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and civilized at the same time, and as such, it should find itself equally ranked to many European nations that have more inhabitants and more powerful assets", quoting the words of a famous former president of MTA, Loránd Eötvös. He added that the questions raised by Loránd Eötvös over a hundred years ago are still burning: how can we fit into the world of science created by countries that are bigger and richer than us, how can we cooperate and compete, how can we enjoy and enrich

the shared values of humankind, namely knowledge and literacy? Speaking about "scientists living and science practiced in an ivory tower", he said that if the ivory tower syndrome is equal to keeping daily political influences , interpersonal conflicts, and the pressures of crazy business interests away, then we had better go for it. And such seclusion should mean that those in the ivory tower should not bow to false and pseudo-scientific arguments, let alone manipulate results to fit customer J U N E

dictated specifics, nor should they set bogus aims, allow counterfeit, hostility and stupidity, regardless of how difficult it may be to exclude those traits from their daily lives. "We started to use the phrase a ‘globalised world' some decades ago even though the world had been operating as a global venue for centuries, with certain nations deciding to live within confines that were either forced upon them or were chosen voluntarily", the MTA President said. 2 0 1 5

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He recalled: at one time an apprentice at home became a craftsman or journeyman by taking a three-year study trip abroad and after acquiring the skills required by his trade he had to produce a qualifying piece of work so that he could be admitted to a particular guild. "A majority of the young researchers today would also go on a ‘voyage' outside this country; we should do everything possible for them to be able to do their qualifying piece of work back at home", he added.

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photos by ATTILA CSÁJI, BALÁZS MOHAI/MTI, COURTESY PICTURES

2015 has been declared by the UNESCO the International Year of Light and Light-Based Technologies at the initiative of a large consortium of scientific bodies together with UNESCO, and will bring together many different stakeholders including scientific societies and unions, educational institutions, technology platforms, non-profit organizations and private sector partners. Hungary has also joined the worldwide initiative. The programs of the International Year of Light are centered around four topics: the science of light; light technology; light in nature; and light and culture. In proclaiming an International Year focusing on the topic of light science and its applications, the United Nations has recognized the importance of raising global awareness about how light-based technologies promote sustainable development and provide solutions to global challenges in energy, education, agriculture and health. A UNESCO statement says “light plays a vital role in our daily lives and is an imperative cross-cutting discipline of science in the 21st century. It has revolutionized medicine, opened up international communication via the Internet, and continues to be central to linking cultural, economic and political

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6/2/15 2:12 PM

what's on what's on.

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VOLT FESTIVAL JULY 1-4 IN SOPRON

The Volt Festival, in which both foreign and Hungarian groups participate, is one of Hungary's largest annual summer music festivals, organized by the same company as Sziget and Balaton Sound. Hosted by the town of Sopron, the event has been held in the first week of July every year since 1993. Hungarian performers this year include Ivan and the Parazol, Odett, Anima Sound System and Honey Beast, while Parov Stelar, David Guetta, John Newman and Fatboy Slim will add to the international stars’ list. www.sziget.hu/volt

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NIGHT OF THE MUSEUMS 2015 ALL OVER BUDAPEST ON JUNE 20

photos by SÁNDOR CSUDAI, ANDRÁS BRAUN, BÉLA KANYÓ

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JUNE 10-14 IN ALSÓÖRS

Harley-Davidson is more than a brand of motorcycles; it is a lifestyle. This year the company celebrates its 112th anniversary and the 16th year of the popular Open Road Fest. Organizers believe that there is a little Harley in everyone, so they expect even those who don’t ride to join the party. The venue for the annual motocraze is again Alsóörs, a little village beside Lake Balaton. The five-day program will include rider and stunt shows, all day games and entertainment, a great parade and a musical line-up of up to 30 bands, including Swedish legend Europe as the headliner (they will surely perform their biggest hit ‘The Final Countdown’). www.openroadfest.hu

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JUNE 6-21, DIFFERENT VENUES IN BUDAPEST

This summer welcomes the 20th ‘Jubilee’ production of the Danube Carnival that is “traditionally all about traditions.” The most spectacular part of the carnival is the procession of both Hungarian and foreign folk ensembles, held this year on June 21. During this program, the Danube Promenade is crowded with youngsters, women dressed in traditional costumes of swaying, gathered skirts, starched blouses, and fitted bodices with ribbons in their hair and men in britches and brimmed, round, felt hats. The procession moves through town to Pesti Vigadó, where it ends with a gala event. Plus, for this year’s jubilee program, an additional international gala will crown the event series, hosted by the Open-Air Theatre in Margaret Island, with 400 artists on stage. www.dunakarneval.hu

Have a sleepover with history and spend the night in museums! On June 20, museums open their doors to visitors until 2:30 am for this annual event which celebrates its 13th anniversary this year. There will be more than 1,000 programs offered at some 100 locations within the capital, all of which can be visited with one single ticket in the form of an armband. In addition, visitors with an armband are entitled to use the Museum Bus. www.muzej.hu

16TH HARLEY-DAVIDSON OPEN ROAD FEST

DANUBE CARNIVAL / DUNA KARNEVÁL

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HERE AND NOW.

FINE ARTS. NATIONAL SALON 2015 UNTIL JULY 19 AT THE ART HALL

Following the 2014 ‘Architecture Salon’ program series at the Art Hall (Műcsarnok), which attracted over twenty thousand visitors, the exhibition ‘Here and Now’ is designed to show characteristic artworks of the more traditional fields of Hungarian art since the millennium. The show interprets the notion of progressivity on a broader scale than radically new artistic invention and expansion, focusing on the innovative gestures of the individual creative strategies that define the internal processes of fine art. The exhibition explores the special characteristics – e.g. individual creative methods, indirect intellectual performance, unique artistic thinking, approach and/or vision, exceptional treatment of specific subjects, extraordinary formal, technical, material features, technological innovation, divergent language patterns, new language or bilingualism, etc. – of new artworks that manifest new artistic strategies, fresh thoughts, innovative ideas and original critical reflections. The exhibition is accompanied by an open online show called Tár.hely (Art.site). More than 700 artists have uploaded their CVs and digital images onto Műcsarnok’s website. www.mucsarnok.hu

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DAWN UNTIL JUNE 20 AT TRAFÓ

The joint exhibition which concludes the spring-summer season of Trafó Gallery is the first major presentation for two young artists in Hungary. The careers of Romanian-born Adrian Kiss (1990) and Slovakian-born Nik Timková (1986) are typical of their highly mobile generation, who despite their Central-Eastern European roots, both graduated at the Central Saint Martins College of Art & Design, University of the Arts London. Kiss and Timková are representatives of Generation Y on the contemporary art scene, which has been dubbed the post internet generation in international art circles. Generally, we can say that their visual language comprises all forms of technical imagery, they have faith in abstract patterns and they tend to avoid historical references, while articulating their own individual instinctive practices which do not shy away from the precision of design and the professional functionalism of fashion. Their works are the utopian repositories of a new universal and global visual language. The installations of the exhibition can be characterized by a kind of occult, mystic dawn, hence the name of the exhibition. Furthermore, both artists’ set of timeless forms attempt to find a joint, hybrid streamlined shape of organic and industrial elements. www.trafo.hu

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culture culture.

BEYOND THEATER; AN EXPERIENCE!

MORE THAN ONE HUNDRED PROGRAMS AT THE BUDAPEST SUMMER FESTIVAL

A cornucopia of the most different productions in all genres, Budapest Summer Festival offers opera, music, dance staged at two open-air theatres - one on Margaret Island and one in Városmajor Park.

opera Queen of Sheba, Tosca, the Night Revue Circus, an Edward Maya Symphonic world premiere, Chico & the Gypsies and Vive la France! Musical fans can look forward to Jesus Christ Superstar. The stories of two famous world travelers, Móric Benyovszky and Marco Polo will be presented in dance, the former by the Hungarian National Dance Ensemble (Magyar Nemzeti Táncegyüttes), the latter by an ensemble from Inner Mongolia. The Szeged Contemporary Ballet and the Dohnányi Orchestra will present a special production of the Catulli Carmina and Carmina Burana, a ballet with a grand orchestral accompaniment.

Unique venues According to Bán, the Margaret Island Openair Stage is the only permanent open-air stage in Hungary and can accommodate approximately 3,000 people. “We are proud that in recent years it has been renewed,

along with the 104-year-old water tower in its garden and has become the most beautiful summer playground in Central Europe.” The managing director adds that the event series, which offer spectacular productions with the best artists and star performers, welcomes a growing number of foreigners. “We offer 12 summer weekend getaways of exclusive cultural and tourist packages at a significant discount. We have introduced our ‘Sleep in Budapest with a theatre ticket!’ tourist package that includes first class tickets to Summer Festival performances, hotel room with breakfast, roundtrip boat transfer and Water Tower admission,” Bán continues, adding that their ‘Early Bird Promotion Campaign’ was also popular. “This is not only a sounds good, raise awareness tool, but in our case, the symbol is associated with the summer. The bird represents happiness, music, freedom, and the anticipation of summer.

The promotion started in February offering a 40% discount, with decreasing discounts month by month, and closes as we speak.” True to the Festival slogan of ‘Beyond theater; an experience!’ this year the ‘Theatre pleasureboat’ will again operate chartered boats for travel to the performances, which arrive at the private dock of the Open Air Theatre and Water Tower five times daily. “In addition to the more than one hundred theatrical performances and concerts, exhibitions, free family programs, children’s theatre will make this year’s Summer fest a the country's most colorful cultural festival,” the managing director notes. “We also introduce a summer camp for kids – I hope that will be a great success. We are always looking forward to welcome a new generation of culture-enthusiasts, and I believe it’s best to start “training” as early as possible,” Bán smiles. “It worked pretty well for the greatest musicians in history.” photos by GÁBOR KOTSCHY, GÁBOR KLINSZKY, DÁVID HARANGOZÓ

Budapest's annual open-air summer festival kicks off with a Franz Liszt concert this year, on June 12, taking the audience on tour to hell, purgatory and paradise, literally. “Classical music lovers will surely enjoy this masterpiece,” says Teodóra Bán, the managing director of the Szabad Tér Színház Nonprofit Kft, the company behind the festival that is, in fact, the longest in Hungary. “Entitled ‘Liszt and Dante,’ the concert will be performed by the National Philharmonic Orchestra and conducted by the devilishly virtuosic conductor Tibor Kocsis.” According to the director, the festival chose this piece to commemorate the 750th birth anniversary of Dante Alighieri. “But that’s not the only anniversary to celebrate in 2015. Carl Orff, Frank Sinatra and Edit Piaf tribute shows will be also staged during this three-month fest.” The varied repertoire of this year’s 12th fest includes Károly Goldmark’s monumental

INDONESIAN DAYS TIn order to promote Indonesian tourism, food, handicraft, dance and music, an interesting charity bazaar was organized by the Indonesian Embassy and the Indonesian Trade Promotion Organization in Millenaris Park of Budapest on May 7-9. Some of the finest Indonesian goods (textiles, food, etc.) were presented by Indonesian enterprises and a leading designer showed the audience how she shapes her fantastic fabric designs from batik. In addition to the bazaar, there were two fantastic performances of Indonesian dancers held in Pécs and Szeged, by representatives of Ahmad Dahlan University. The best pieces of Indonesian music and performing arts were concentrated in a 3 hour show. Apart from cultural contacts, zoos from both countries are cooperating. As a result of their joint efforts, the Zoo in Nyíregyháza was given a comodo dragon to look after. The management of the zoos try to find other ways to cooperate such as exchanges of experts, etc.

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culture

culture

HUNGARIAN FILM WINS CANNES GRAND PRIX

The Holocaust drama ‘Son of Saul’ won the Grand Prix, the second most prestigious award, at the Cannes Film Festival this year. It is the highest ever recognition of a Hungarian movie at Europe’s most prestigious film event. The movie, directed by László Nemes, also collected three other prizes. It was named best film by FIPRESCI, the International Federation of Film Critics; received the Francois Chalais Prize awarded to a film dedicated to the values of life affirmation and of journalism; and won the Vulcan Award for Technical Artist that rewards the work of a technician for his collaboration in the creation of a film from the official selection of the Cannes Film Festival. The ‘Son of Saul’ depicts two days in the life of a Hungarian prisoner working as a member of the Sonderkommando at one of the crematoriums in the Auschwitz-Birkenau concentration camp in October 1944. In order to bury the corpse of a boy he takes for his son, he tries to carry out an impossible deed: salvage the body and find a rabbi to bury it. As the movie website indiewire. com puts it, this Hungarian movie is a genuine discovery on several fronts, it "illustrates the potential for cinema to push its linguistic and interpretive boundaries into new arenas. Such radical approaches are more valuable than ever, particularly as those of us buried in the Cannes mayhem wake up in the real world." According to thewrap.com, Saul’s world is “tight and claustrophobic and chaotic; we might see dead bodies or Nazi guards in quick flashes in the corners of the frame, but mostly what we’re looking at is Saul’s impassive face, drained of humanity because to be human would be unbearable.”

THE FUTURE IS NOW EXCITING EXHIBITION OF KOREAN MASTERS

The Korean Cultural Center in Budapest hosts a special exhibition of contemporary arts and video installations of Korean masters. Visitors are welcomed until August 19. The exhibition under the title of „The future is now!” was organized by the MMCA-National Museum of Modern and Contemporary Art, Korea and co-produced with the Korean Cultural Center. The exhibition presents more than 30 works and video installations from the MMCA’s collection and a wide range of audio-visual materials that give an account of the Korean art scene of New Media Art from 1897 to the present. The title of the exhibition is derived from Paik Namjune’s definition of future. He is an artist whose life seems to proceed along with his work. As an artist who lived in the present moment in the truest sense, Paik’s definition was full of significance. It is a paradox that when we dream about the future, we must focus entirely on the present, since the choices and actions of the present moment determine our future. The aim of the MMCA is to reflect on the „futures” that the museum has envisaged for new media art since its foundation in 1987 in Gwacheon. The museum has passionately promoted Paik Namjune’s art in Korea, stimulating interest in new media art by organizing exhibitions that introduced international artistic trends to the Korean public. photos by TAMÁS KOVÁCS/MTI, DÁVID HARANGOZÓ

BELATED BLOOMSDAY

There is a great interest in Irish writer James Joyce in Hungary, probably because a main character in his novel 'Ulysses,' is of Hungarian extraction. In Ireland, Bloomsday is a commemoration observed annually on June 16 in Dublin and elsewhere to celebrate the life of James Joyce and 'relive' the events in Ulysses. In the past couple of years, the Irish Embassy in Budapest and the Hungarian James Joyce Society has jointly organized a series of events to celebrate the novel and so they do this year, on June 20, in Ráday Street. Entitled ‘Belated Bloomsday’, the program will be organized as part of the Nights of the Museums event series, and will feature readings, film, and theatre programs topped with a fine art exhibition.

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gastronomy gastronomy.

DUNAPARK RESTAURANT & CAFÉ RECOMMENDATIONS • • • • • •

VOGUE - COME DOWN TO THE RIVERSIDE! OTHER FEATURES

Mooring opposite Margaret Island on the Pest side, Vogue has many features. There is a range of seasonal deals, special menus and events running throughout the year, mild jazz concerts and brunches for „little pirates”. The iconic ship is a frequented eventvenue, hosting corporate events, trainings and press conferences on a regular basis, so we advise you to book your table. Following a recent re-design, the interior is updated and fitted with wood paneling, and lots of glass surfaces, for a contemporary look. The multiple function and event spaces can now accommodate up to 240 people, or seat 130.

From its source in Donaueschingen to its mouth at the Black Sea, the mighty Danube cascades through ten countries. In fact, there is no other river which connects so many different cultures – no wonder it has inspired musicians, poets, writers and artists throughout the centuries. It has also inspired chefs and restaurateurs – and to experience a real culinary journey along the Danube, the best place to visit is Vogue. Permanently located at the Carl Lutz quay – the riverbank on the Pest side, the ship-restaurant offers a menu card that is unique in Budapest. Its four sections introduce the cuisines from the countries that line the Danube banks, with Austrian, Hungarian, Mediterranean and South-Slavic dishes. Chef Róbert Somodi’s approach to this challenge isn’t experimental – he sticks with traditional, authentic recipes and caters to those who appreciate a decent, hearty meal with maximum flavor. As for the ingredients: even the all-time favorites are subject to change a little with the seasons. On my visit, the menu clearly reflected the late spring with fresh strawberries and zesty greens on the plate. Due to its superlative location, Vogue is a great place to meet and unwind: although you are in the heart of the city, you don’t hear the noise of the traffic – it is an intimate zone where you can sip a cocktail with friends and admire the sun set over Buda castle. I find these relaxed moments enlightening: watching the runners doing their rounds on Margaret Island, I feel an instant rush to start a healthier life. The wine selection is something Vogue is particularly proud of, and with good reason. There’s an ample repertoire of reds and whites, carefully selected from the best cellars in Hungary and neighboring countries – to suit all the dishes on the menu. My goose liver terrine that came with strawberry- rhubarb sauce was paired with a Sole Rosé from the Transylvanian winery Recas – and they worked beautifully together. The knowledge of the wines, the attentive and prompt service, the unusual Slavic flavors, the laid-back atmosphere and the gorgeous panorama – this combo won’t leave you disappointed.

Home marinated salmon tartare Duck liver pâté with pistachio Grilled and smoked halloumi cheese with pomegranate salad Cold sour cherry soup Fresh pasta with spinach and grilled duck breast Cottage cheese dumplings

A café and restaurant which evokes the spirit of the 1930’s while offering the quality of the 21st century – this is the motto of Dunapark where indeed, history is touchable. Designed by Béla Hofstatter and Ferenc Domány on the commission of Lord Lajos Hatvany, the restaurant and café was inaugurated in 1938, as the most significant modern style café in Budapest of the time. In accordance with architectural trend at the time, this corner building and its interior was designed in flawless Art Deco. Well preserved today, any fan of this particular style will fall in love with this magnificent building instantly. Located adjacent to a leafy green park (Szent István Park), a few steps from the bank of the Danube, Dunapark has always welcomed a good mix of visitors: politicians from the Parliament, lawyers and art dealers who work in the neighborhood and 13th District residents alike. This has not

the Grassalkovich Gamay rosé wine-cocktail. The only thing better than getting a table inside this restaurant is getting one outside at their spacious terrace (that seats 120 people), where the vibe is laid-back and the air is breezy. The ambiance (with live jazz music in the background every day) creates a nice setting for a long, relaxed dinner. Service is invariably warm and sunny, even if the weather isn’t. The globetrotting bill of fare lines up the specialties of the Gault Millau Chef, Viktor Ekler, who follows his heart and his grandmother’s recipes, along with the good old French cookbooks, in the kitchen. Creative, new compositions dominate the international and Hungarian menu, but you can also feast on classic ‘Wiener Schnitzel’ from veal with potato salad or another Hungarian favorite, ‘Lecsó’ (the Hungarian version of Ratatouille). These items, according to the chef, are not 1137 Budapest, Pozsonyi út 38. TEL: +36 1 786 1009 E-MAIL: dunaparkkavehaz@dunaparkkavehaz.com www.dunaparkkavehaz.com

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Goose liver terrine with strawberry sauce, enriched with rhubarb, served with breaded milk Chevabchichi / Pljesakvica with baked jacked potatoes with ajvar

changed a bit. A well-established circle of regulars still come here for hearty breakfasts (the widest selection in town without doubt) and business lunches. The in-house bakery, where the most tempting cakes are prepared, is the place where you want to take your beloved aunt for some fun in the afternoon. This time of the day is also perfect to sip a great cocktail - Dunapark serves classics as well as their own creations such as J U N E

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to be removed from the menu. The so-called ‘főzelék’ (sort of a vegetable stew), a mystery to foreigners, is also on offer, and so are a handful of Jewish dishes. “Regulars insist on ordering them, any time of the day,” he explains. “As for the rest of the menu, I’d like to look at it as my playground, where ingredients change with the season, and where textures and flavors fall into harmony for the best culinary experience.”

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photos by IVÁN JAKSITY, BOOGEE PHOTOGRAPHY

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hospitality

hospitality.

CANVAS PROJECT BUDAPEST MARRIOTT HOTEL MAKES AN OFFER WORTH USD 40,000

Budapest Marriott Hotel announces a unique competition on which an entrepreneur with the best catering concept wins the chance of his life: the opening of a restaurant, bar or any other type of catering venue on the Danube promenade, relying on the decade-long experience in hospitality and the USD 40,000 fund of the hotel without adding own capital.

▶ Gastroblogger Zsófia Mautner (left), General Manager Rick Enders (middle) and chef of Bock Bisztró Lajos Biró

In order to fill one of its premises currently standing empty on the Danube promenade, Budapest Marriott Hotel launched the ‘Cut into the business of your life!’ competition on 28 May. The so-called CANVAS contest of Marriott is open to candidates with minimal experience in hospitality who were unable to open their dream place by now adding new colors to Budapest due the lack of funding. The business model named CANVAS concentrates on the unique experience and the person who brings it to life – the hotel provides everything for him: a 110 m2 space with plenty of opportunities, financial support and the hotel chain’s priceless knowledge base. ‘With the CANVAS project, which is open to everyone, not just for Marriott employees for

the business plan, the menu and the design ideas. The best five entries will be chosen by the management of Budapest Marriott Hotel and the representatives of the parent company judged by the originality of the concept, the business potential they offer and the overall feasibility of the idea, and will be then taken to the jury consisting of well-known Hungarian experts in gastronomy and the General Manager of Budapest Marriott Hotel. Finalists will have to prove their worth in front of Rick Enders, gastrobloggers Zsófia Mautner and András Jókuti, as well as Lajos Bíró, the chef of Bock Bisztró, on cook-off events to be held on June 23-24 in the future catering place. During the two days, finalists will have to present their concepts and have to cook a chosen meal from the place they envisioned. These will be

the first time, Budapest Marriott Hotel starts out on a new road. Our aim is to make the hotel the most attractive for both the youngest generation of travelers and those living in town. There have already been a lot of trend-setting new ideas leaving their marks on the atmosphere of Budapest, think about the trademark ruin bars, for example. Here, at Marriott, we are ready to embrace innovation, we are ready to be pioneers, and for that reason we launched the ‘Cut into the business of your life!’ competition’ – said Rick Enders, General Manager of Budapest Marriott Hotel. Candidates who may enter on their own or as a member of a team have three weeks starting with May 28 to set up and upload their detailed catering place concept to the contest website covering

RITZ-CARLTON TO BE OPENED IN BUDAPEST

photos by ÁRPÁD FÖLDHÁZI/FOLDHAZI.HU, STEFANOLUNARDI/SHUTTERSTOCK.COM

The Ritz-Carlton Hotel Company and Al Habtoor Group, the UAE based conglomerate, signed an agreement for opening of the first property from the luxury brand in the Hungarian capital. The 192 room Le Meridien hotel will undergo an extensive renovation set to commence at the beginning of 2016 and is due for completion in the second quarter. “We are delighted to be partner with the Ritz-Carlton for such an exquisite property to build on our unique portfolio of hotels. We are bringing two of the best names in the business, both dedicated to offer world-class luxury and hospitality, said Mohammed Al Habtoor, Vice-Chairman and CEO, Al Habtoor Group.“Hungary represents the next great international expansion opportunity for Ritz-Carlton,” Herve Humler, President and Chief Operating Officer of the hotel company added.

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evaluated by the jury on spot until they announce the winner on 25 July. As Budapest Marriott Hotel has already started the preparation for opening with the works on the infrastructure of the place before announcing the competition, the realization of the winning project shall not take longer than three weeks. The basic infrastructure that can be paired up with different sorts of catering place costs USD 30,000 for Marriott while there is a neat sum of USD 10,000 left to the winner who can use this amount (around HUF 3,000,000) to convert the space into the place he imagined. The winner of the competition will become a Budapest Marriott Hotel employee as the manager of the place whose opening is expected around mid-July and will receive profit share.

BUDAPEST PERFORMED AS THE BEST IN CEE OCCUPANCY AND ROOM RATES ARE MUCH HIGHER THAN EARLIER European hotel investment has reached EUR 3.74 billion in the first quarter (Q1) of 2015, more than double Q1 2014 volumes of EUR 1.73 billion, according to the latest data from commercial property advisor CBRE. Budapest ranked the best in Central and Eastern Europe. (CEE) European hotel investment has seen year-on-year growth of 116% reflecting the strength in hotels as a growing commercial property asset class, this has been led by a number of factors including high investor appetite for consumer driven real estate asset classes in a time of low inflation and rising consumer spending. Hotel investment activity in nearly all European countries was significantly higher in the first quarter (Q1) of 2015 compared to Q1 2014. The UK, France and Germany presented strong growth in Q1 2015 with investment volumes increasing by 38%, 90% and 225% respectively year-on-year. Central and Eastern Europe (CEE) and Austria has also seen a sizable increase in hotel transactions hitting EUR 160 million in Q1 2015. This is mainly due to a spill-over of capital previously looking at assets in Western Europe, based on attractive yields and healthy trading performance data. J U N E

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The surge in hotel investment volumes indicates the continuing investor appetite in hotels as an asset class. The opportunity for strong returns across the hotel space, coupled with high levels of liquidity will continue to drive transaction levels for the next 12 months in most European markets. "The hotel market performed outstandingly in Budapest last year." analysed Gábor Borbély, Head of Research and Consulting at CBRE in Hungary. "The

average hotel occupancy rate in the capital rose to 75%, and the average room price was 7% higher than in the previous period. The improvement in hotel profitability indicators was even more striking, for example the gross operating profit per room increased by 20%, which was the best performance in Europe." Most of guests in the capital’s hotels still came from abroad, but the benefits of the domestic tourist boom could be felt in the country's other tourist destinations. For the first time since 2009, the turnover of the hotels in the countryside rose faster than those of the capital, the increase in the number of visitors was particularly intense in the Mátra-Bükk tourist region. At the national level it is remarkable that more and more visitors arrive from Asia (South Korea and China) and the Visegrád countries, but the number of tourists from the traditional sending countries (Germany and Austria) did not decrease either.

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