Issuu

APRIL 2019 HUF 1710

THE VALUE OF DATA

EUR 6

THE MAJORITY OF GLOBAL AND HUNGARIAN CEOS AGREE THAT ARTIFICIAL INTELLIGENCE (AI) WILL DRAMATICALLY CHANGE THEIR BUSINESS OVER THE NEXT FIVE YEARS.

SEE MORE on page 27

Diplomacy-n-Trade.ai 1 2017. 02. 27. 11:22:30

Czech Republic

country

FOCUS

The words “we consider ourselves honorary neighbors” by Czech Ambassador Juraj Chmiel tell a lot about the amicable relationship between the Czech Republic and Hungary. These ties are also profitable as the volume of bilateral trade reached its highest level in 2018. There is, of course, always room to develop ties further – the next step in the process is the visit to Budapest by the Czech President this May.

see articles on pages 10-25 CY

United in Diversity in the EU

CMY

“For a society to last, you need to balance the economic and social aspects. That is reflected in the Charter of Fundamental Rights of the European Union… Our job at the Court is to carry out a very delicate balancing exercise between all those concerns of EU citizens and the interests of economic and public law actors, most of which also serve those same citizens,” says Koen Lenaerts, President of the see interview on page 9 Court of Justice of the European Union.

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AIRLINES

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MIDDLE EAST

TOP 10

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The majority of Hungarian CEOs, and their colleagues worldwide, agree that Artificial Intelligence will dramatically change their businesses in the next five years. That is one of the findings of the recent survey conducted among corporate leaders who – as you can read in our summary – are optimistic despite the prospect of subdued growth in the upcoming years. The Czech Republic is in focus in this issue ahead of the visit in May to Hungary by its President, Miloš Zeman and the upcoming Czech Presidency of the Visegrád Four (V4) cooperation. The two countries are fellow members in the nearly three-decade-old V4 as well as in EU, NATO and other organizations, and have extensive political, economic and cultural ties that will be the subject of our interview with the Czech Ambassador to Hungary, Juraj Chmiel. Our focus will also present Czech business and cultural organizations in this country, the Czech vehicle industry’s role in Hungary and the world of Czech beers from an expert’s view to importers and local brewers. “Our job at the Court is to carry out a very delicate balancing exercise between … citizens’ concerns and the interests of the economic actors, most of which also serve the citizens.” That is the view shared with our readers in an interview with the President of the Court of Justice of the European Union, Koen Lenaerts. As the long-lasting Kashmir crisis flared up early this year again, our international analyst draws the bitter conclusion that people in Jammu and Kashmir should brace for more violence and hostilities for some time to come. Our business page features environmental topics including the challenges present and would-be solar park operators face in this country and the global issue of water supply in the future. The WittyLeaks column is authored by the Ambassador of Belgium who recalls two historical examples of Belgians caring for Hungarians. Our gastronomy and wine pages feature the upcoming annual Gourmet Festival and the VinCE Wine Show, while our program guide calls your attention to the upcoming Budapest Book Festival and an innovative AVATAR exhibition. We can all now feel and see the start of spring. Open-air terraces are coming to life so go out and enjoy all that Hungary has to offer!

Budapest100 and other events to attend

PUBLISHER

AND DON’T FORGET

monthly in print - daily on the web

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05 ON THE RECORD 06-07 COMPANY BRIEFS 08 ANALYSIS

Indian-Pakistani conflict in/over Kashmir

09 EUROPEAN UNION

Interview with Dr. Koen Lenaerts, President of the Court of Justice of the European Union

Interview with Ambassador Juraj Chmiel; CzechTrade; Business Club; Škoda; Dreher Breweries; Škoda-JS; The Czech beer; Czech Center; Movie subsidies

26-27 BUSINESS

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29 CULTURE Inca Gold

30 SOCIETY 31 WITTYLEAKS

by the Ambassador of Belgium

32-33 WHAT’S ON

Concerts, festivals, events and exhibitions in and out of Budapest

34 GASTRONOMY Gourmet Fest

35 WINE

VinCE Wine show; Blue Fox Bar

Diplomacy&Trade is preparing a special Focus section on Irish-Hungarian relations following this month’s publication of the Ireland Hungary Business Directory on Irish companies in Hungary. Relations between Ireland and Hungary date back over half a millennium to two Hungarian pilgrims visiting the famous Sanctuary of St. Patrick in Lough Derg. Their experience contributed to a deeper insight into Irish life of that time. We discuss political, economic and even literary relations with the Irish Ambassador to Hungary, Pat Kelly as well as with Enterprise Ireland and the Irish Hungarian Business Circle. Of course, we also provide the opportunity to Irish firms operating in – or exporting to – Hungary to present their activities and their corporate responsibility programs.

Airport, Colliers International Hungary, Submarine007/Wikipedia, Czech-Hungarian Business Club, Porsche Hungaria, ŠKODA JS, Péter Fáth, Z. László Nagy, Mátyás D. Nagy, Inca Gold World Exhibition, Andrew Stuart, Gergely Botár, Live Nation, Avatar: Discover Pandora The Exhibition, KADOC-KU Leuven, Géruzet frères, Kata Major, VinCE, Adam Bertalan/www.adambertalan.com, MTI Photos: Noémi Bruzák, Márton Mónus

crisis; PwC CEO survey

IRISH FOCUS – COMING SOON

CONTRIBUTORS: Sándor Laczkó, Tamás Magyarics, Réka A. Francisck, Marie-France André PHOTO CONTRIBUTORS: Depositphotos.com (Cover), www.boldogsagora.hu, Bence Szemerey, Grupo Segura, Hamburger Hungária, Depositphotos.com, Budapest

TELEPHONE [+36-70] 320-3051 | FAX [+36-1] 350-5660 E-MAIL editor@dteurope.com | ADVERTISING adsales@dteurope.com

page 29

Solar park day; On the verge of a water

PUBLISHER: Peter Freed EDITOR: Sándor Laczkó COPY EDITOR: Joyce Freed PHOTO EDITOR: Dávid Harangozó SALES & MARKETING DIRECTOR: Tamás Varga DISTRIBUTION MANAGER: Tibor Ocsenás ADMINISTRATION: Judit Ludányi ASSISTANT: Ágnes Rapaport

annual fee of EUR 72 in Hungary, or EUR 90 to all other destinations. SEND REQUESTS AND INQUIRIES TO DUAX KFT. H-1034 Budapest, Bécsi út 60.

page 34

Inca Gold from Peru on display in Budapest

10-25 CZECH FOCUS

NEWSSTAND PRICE: HUF 1,710 or EUR 6 - Subscriptions are a vailable for an

The 9th Gourmet Festival coming up in May

contents

Peter Freed

COPIES ARE AVAILABLE AT SELECTED RELAY AND INMEDIO OUTLETS IN MAJOR HUNGARIAN CITIES.

pages 32-33

We welcome inquires for advertising in this issue. PLEASE CALL TAMÁS VARGA FOR FURTHER INFORMATION +36 209350250 - tvarga@budapestweek.com A P R I L

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photos by KATA MAJOR, INCA GOLD WORLD EXHIBITION, DEPOSITPHOTOS.COM

letter from the publisher

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on the record

photos by NOÉMI BRUZÁK/MTI, DEPOSITPHOTOS.COM, WWW.BOLDOGSAGORA.HU, BENCE SZEMEREY

THE 20TH ANNIVERSARY OF HUNGARY’S ACCESSION TO NATO “NATO has not lost its raison d’être, on the contrary, it still plays a vital role in maintaining the security of the trans-Atlantic region today,” Hungarian Minister of Defense Tibor Benkő stressed at the ‘Hungary 20 Years in NATO’ conference in Budapest this March. He highlighted that Europe is surrounded by unstable regions on the east and south. “The Arab Spring, the crisis in Ukraine, the increase in European acts of terrorism and mass illegal migration represent new challenges and threats. In Hungary’s immediate vicinity, the security situation in the Western Balkans remains fragile. In our unstable world, the chances of the development of conflicts has increased,” he explained. During the conference, held in the Parliament Building, NATO Assistant Secretary General for Defense Policy and Planning, Patrick Turner passed on the congratulations of Secretary General Jens Stoltenberg. From among the challenges of recent years, he highlighted the Russian threat and recalled that five years ago, Russia had annexed the Ukrainian peninsula. U.S. Ambassador David B. Cornstein recalled that “20 years ago, Hungary chose to defend and solidify the choice for liberty by joining NATO, after 85% of Hungarians who participated in a national referendum said yes to joining the alliance. We recognize that the last 20 years have not been without hardship and challenge, but there is no doubt that these events were ‘wins’ for Hungary. Hungarians are safer, freer, more prosperous and have more opportunities because of these choices. And the United States and other NATO members are better and stronger because we have Hungary as an ally.”

CLOSE TO TEN MILLION INTERNET SUBSCRIPTIONS IN HUNGARY The dynamic expansion of the internet market continued in Hungary, the number of subscriptions was more than 9.9 million at the end of the 4th quarter of w w w . d t e u r o p e . c o m

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2018, surpassing by 4.8% the 4th quarter of 2017 data. Data published this March by the Central Statistical Office states that market concentration is high: more than 96% of subscriptions were contracted with 10 providers. 80% of internet subscriptions were individual, 20% were business contracts. Ten years ago, the number of internet-subscriptions was 2.3 million; the increase of 7.6 million meant a quarterly 3.7% growth on average. Within that, the number of mobile internet subscriptions grew on a larger scale, quarterly by 6.4% on average, and they began to represent the larger part of internet subscriptions from the 1st quarter of 2012. The rapid adaptation of providers to technological changes, the spreading of mobile phones and the continuous price competition stands behind the continual dynamic growth for years. The wireless segment was larger by 4.3% at the end of the 4th quarter of 2018 than a year before, mainly as a result of the corresponding increase of more affordable mobile internet subscriptions. 69% of total internet subscriptions were represented by mobile internet. At the end of 2018, fixed internet subscriptions stock (3.0 million) exceeded the previous year’s data by 6.1%. Within that, the most significant technology, cable network subscriptions that represent half of the fixed line subscriptions, increased by 4.8%, optical network subscriptions grew by 18%, and xDSL subscriptions fell by 1.6%. In the 4th quarter of 2018, subscribers’ fixed line internet based download traffic (678 petabyte) and upload traffic (236 petabyte) increased by 4.5% year-on-year.

UPCOMING NATIONAL DAYS April

May

June

Syria

Independence day

Zimbabwe

Independence day

South Africa

Freedom Day

Netherlands

National day

Poland

National day

Norway

National day

Jordan

Independence day

Georgia

National day

Italy

National day

Denmark

National day

Sweden

National day

Portugal

National day

Russia

National day

Philippines

National day

Iceland

National day

Luxembourg

National day

Slovenia

Independence day

Croatia

Independence day

IMPROVEMENT IN HAPPINESS RANKING As it is now a tradition every March, the Positive Psychology Research Group of Budapest’s Eötvös Lóránd University and the ‘The World is Better with You’ Foundation published Hungary’s happiness map, coinciding with the publication of the World Happiness Report. Based on 6,770 questionnaires completed online by men and women aged 17 to 89 years, the happiest town in Hungary is Tatabánya (the seat of Komárom-Esztergom County), located some 50 kilometers west of Budapest. Generally, it is people in the more industrialized northwestern counties who consider themselves the happiest in the country, which may have a lot to do with higher-than-the-national-average wages in that region. The 2019 survey also revealed that women are happier in all regions and are better off than their male counterparts in mental health and psychological immunity. This year's survey also confirmed that those are significantly happier who claim to be wealthy, have more children, are educated or married. The combination of these is just an icing on the cake. The level of happiness among those aged 36-50 is still the highest, but it is interesting that men over the age of 65 are more positive about their physical condition and are happier than women. The survey included the assessment of life satisfaction, emotional, psychological, social and spiritual well-being and mental health. Test data provided a comparison of the level of happiness, life satisfaction, global well-being and mental health of men and women of different age groups, of different family status, at different degrees of material well-being with different levels of education and employment. According to the World Happiness Report, Hungary moved up from the 69th to the 62nd position – ahead of Paraguay and behind Bolivia – in the international ranking of 156 countries in total.

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HUNGARIAN MOVIE WINS IN MONTE CARLO The award for best film at the Montecarlo Film Festival de la Comédie this March was handed over to the Hungarian movie 'Bad Poems', directed by Gábor Reisz. The film tells the inner journey of the young Tamás, disillusioned by love after the end of his long relationship with Anna. The top prize at the end of the 16th annual festival was presented to Gábor Reisz by the President of the Jury, Serbian movie director Emir Kusturica, an award-winning world-renowned filmmaker. Other members of the jury included the icon of Fellini's cinema, Sandra Milo, the French actress Mathilda May and the director, screenwriter and actor Edoardo Leo. 'Bad Poems' is about 33-years old Tamás Merthner who is heartbroken after his girlfriend Anna, who is on a scholarship in Paris, breaks up with him. While wallowing in self-pity, Tamás takes a trip down memory lane to figure out if love only exists when it is practically gone. As he trys to pick up the pieces, he begins to realize what makes this current society so confused, which gives us a highly subjective view of Hungary's present.

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company briefs PRINZHORN GROUP FURTHER DEVELOPS ITS PAPER PROCESSING BUSINESS IN HUNGARY

Hamburger Hungária implements a series of technology-intensive investments worth more than EUR 45 million in its state-of-the-art paper factory in Dunaújváros, south of Budapest. Enhancing competitiveness and aiming at the completion of the sustainable circular economy, these investments will result in the increase of the volume of corrugated basic paper of high quality, which is now 700,000 tons annually produced at this site. Furthermore, automation and logistics systems are going to be modernized, as well. Hamburger Hungária belongs to the Prinzhorn Group, a predominant corporation of European paper and packaging industry, employing 7,000 people in 15 countries with an annual price revenue of EUR 1.6 billion. This Group has been operating in Hungary since 1990.

F. SEGURA CAPACITY EXPANSION IN SZOLNOK

GMD GROUP LAUNCHES MANUFACTURING ACTIVITY IN DOROG

According to the Hungarian Investment Promotion Agency (HIPA), activities of its three companies are unique examples of the realization of circular economy, creating value from waste: Duparec Ltd. collects paper waste, Hamburger Hungária Ltd. recycles it, manufacturing corrugated basic paper of high quality from it, and then Dunapack Magyarország Ltd. produces attractive, innovative and tailor-made corrugated paper packaging means from it. Hungarian affiliates of the Prinzhorn Group employ a total of 1,120 people, and its total price revenue exceeded HUF 153 billion in 2018. Hamburger Hungária is a leading manufacturer of brown corrugated basic paper in Europe, producing 700,000 tons of corrugated basic paper of high quality from 100% recycled paper waste at its Dunaújváros site. This is approximately 80% of the total paper volume produced in Hungary.

TESCO BUSINESS SERVICES CENTER TO BE SET UP IN BUDAPEST Tesco has chosen Budapest to host its new business services center (BSC) supporting its operations in the Central European region. The new Center of Excellence facility of the British retail trade company that will fulfill IT technology, financial and HR-related functions is expected to begin operation in April. As the CEO of Tesco Central Europe, Matt Simister said at the announcement of the BSC opening “Our commitment to the Central European and Hungarian market is indicated by the fact that the new business and technological service center is being established in Hungary”, he added. The first supermarket of Tesco, a company celebrating the 100th anniversary this year, opened

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in London in 1929. Today, the Tesco Group is present in eight countries of Europe and Asia as a dominant player in retail trade, operating more than 6,800 outlets. Tesco's revenues amounted to

GBP 51 billion in the 2017/18 business year and it employed a total of 440,000 people worldwide. The first Hungarian store of the Hungarian subsidiary Tesco-Globál Áruházak was opened in 1995, and today, Tesco is the biggest player in the Hungarian retail sector, with about 800 Hungarian suppliers. The company's revenues amounted to HUF 623 billion in the 2017/18 business year and it employed approximately 16,000 people. According to the latest business data available, Tesco is currently operating 112 hypermarkets, 35 supermarkets and 59 express outlets in Hungary. With this brand new investment, the UK-based company enters another sector in Hungary. The unified regional business services center (BSC) will create 800 new positions, in the upcoming years in the fields of payroll accounting, labor administration, product sales administration, customer service and supporting functions related to the IT area. A P R I L

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The transformation of a previously acquired manufacturing hall has been completed and production has begun in the Hungarian plant of the GMD Group. The aluminum casting plant of the French automotive supplier, established in Dorog, west of Budapest by an investment worth EUR 47 million (20% of which the Hungarian government provides as non-refundable) will attain its full capacity in 2019 and further developments are envisaged for the future. It is the most modern and most efficient European plant of the company. The GMD Group (whose President and owner, Alain Martineau, was present in Budapest at the announcement of the start of production) manufactures metal and plastic parts and components mainly for the automotive industry but also for other sectors. They are engaged in pressing, injection molding, thermoforming, aluminum melting and metal casting operations but they manufacture seals, as well. In addition to manufacturing, their business portfolio also includes the design and development of automobile and other engineering components, primarily in relation to steering gear, switches and engine components. The France-based Group currently employs some 5,500 people worldwide and its turnover is expected to exceed EUR 1 billion this year. GMD Cast Hungary was founded in 2017 and acquired the manufacturing hall located in the Industrial Park of Dorog, which was formerly used by the Japanese companies Sanyo and Panasonic. The transformation of the building has been completed this year; the manufacturing lines and the casting facilities are joining in the production in a continuous manner. Thanks to the investment amounting to more than EUR 47 million, 240 new jobs will be created, mainly for highly qualified specialized professionals and technicians.

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photos by GRUPO SEGURA, HAMBURGER HUNGÁRIA, DEPOSITPHOTOS.COM, NOÉMI BRUZÁK/MTI

The Spanish company, F. Segura started its activities in Hungary in 2005 and is now ready to start another expansion at its Szolnok site in the eastern part of the country. The automotive supplier plans to install Industry 4.0 technology worth more than EUR 13.4 million at its only European plant outside of Spain. The investment will increase productivity and create 80 jobs, including some high added value positions. Segura Group was established in 1970 and designs, develops and manufactures metal parts for vehicles – interiors, exhaust systems, seats, body and engine parts. It offers planning, prototyping and mold construction services, with activities also including extrusion, welding, surface treatment and foaming. The Spanish company serves the brands of the PSA and Volkswagen groups, Mercedes-Benz and Mazda. F. Segura’s Szolnok plant is part of the global manufacturing structure of the company, integrated with its production network in Spain and China. During the last 14 years, F. Segura Hungary expanded its plant and manufacturing capacities continuously, doubling the area of the site. According to the Hungarian Investment Promotion Agency, the high-tech productivity improvement investment of the Spanish company is an excellent example of moving from the ‘Made in Hungary’ era of the relatively simple manufacturing jobs towards what the Hungarian government calls ‘Invented in Hungary’ projects requiring a higher technology level and added value.

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c ompany briefs LEED CERTIFICATION FIRSTS FOR FOREST OFFICES DEBRECEN

Forest Offices in Debrecen, Eastern Hungary is the first LEED Gold certified office in Hungary outside Budapest, and the first new office building in this country certified under LEED version 4 – LEED’s most stringent green building standard ever. The building with 22,000-sqm leasable space was handed over in the final quarter of 2018 as the largest speculative office development in Debrecen, Hungary. Forest Offices was designed to meet and exceed the requirements of the rapidly expanding number of international investors in Debrecen. According to a press statement, the LEED certification of Forest Offices guarantees that the project has been designed and built to minimize its environmental impact. With the selection of a previously developed site integrated into an established neighborhood with excellent public transportation and bicycle access, the incorporation of green, open space around the building and rooftop gardens designed to minimize irrigation requirements and a demonstrated commitment to reduce and recycle construction waste, Forest Offices Debrecen are doing everything possible to assure the health and well-being of future generations. Perhaps most importantly, the LEED certification program for Forest Offices Debrecen placed a significant focus on features which will improve occupant productivity and well-being. Forest Offices Debrecen has full height windows to maximize natural light and assure all occupants have the highest quality views, while the air-handling systems provide an abundance of fresh air at all times and in all weather conditions. Forest Offices Debrecen was designed by BORD Architectural Studio, and constructed by HUNÉP Ltd. The LEED certification process was handled by Colliers International Hungary.

photos by BUDAPEST AIRPORT, MÁRTON MÓNUS/MTI, COLLIERS INTERNATIONAL HUNGARY, SUBMARINE007/WIKIPEDIA

NEW AWARDS FOR BUDAPEST AIRPORT Budapest Airport has received two awards at this year’s CEESAR Aviation Awards in Poznań, Poland: ‘Highlight of the Year in CEE – The Dynamic Development of Budapest Airport’ and ‘Most Remarkable Airport Expansion’, as well as being an integral player in the ‘Route of the Year Award – Budapest to New York JFK’, awarded to LOT Polish Airlines. The awards are uniquely voted for by passengers assessing airlines and airports in Central and Eastern Europe, as Budapest beat off competition from gateways to countries like Bulgaria, Croatia, Czech Republic, Montenegro, Poland, Romania and Slovenia. Having achieved excellence in air service development in the region, the Hungarian capital city airport was recognized following intense progression, which has resulted in more than 60 consecutive months of growth – the previous record being 44. At the Gala Awards, Balázs Bogáts, Head of Airline Development at Budapest Airport, said: “The last five years have seen Budapest Airport go through immense growth and development. Such progression, of course, brings about new challenges, one of which is ensuring customer satisfaction throughout. To be voted for by our passengers is a huge acknowledgement of our continued commitment to all services within our airport and we’re delighted to receive these honors.” In pursuit of satisfaction and excellence in all areas of the passenger experience, Budapest Airport is midway through a five-year development program which includes the newly opened 12,000-sqm passenger pier; check-in capacity expansion; introduction of the latest body scanning equipment; car park capacity expansions; VIP lounge; multiple upgrades to the retail and food offer; as well as finalizing the conceptual development of a brand new terminal building.

FLOWSERVE OPENS ITS R&D CENTER IN BUDAPEST Texas-based Flowserve, an industrial and service-providing corporation will establish a new R&D center in Budapest, following its already existing business service center in Debrecen, building on the skills of Hungarian engineers. Investing over EUR 10 million, the company will establish an engineering Center of Excellence, which will provide for product development, product testing and engineering service functions in the future. Established in 1997, Flowserve designs and produces w w w . d t e u r o p e . c o m

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systems of industrial pumping, industrial fittings, control valves, nuclear valves and precision mechanical sealings, and provides various related management services targeting mainly the processing industry. In order to provide professional services for its clients, the Texas-based company employs some 18,000 people at 245 locations in 55 countries worldwide. The Hungarian Investment Promotion Agency (HIPA) recalls that in 2016, Flowserve opened its business service center in Debrecen where it employs

MOL GROUP AND HUNGARIAN EXIMBANK INVEST IN SLOVAKIABASED DRILLING VENTURE

GA Drilling signed a EUR 4.2 million funding agreement with Lead Ventures and a service agreement with MOL Group. Lead Ventures, a Budapest based venture capital firm, invested funds provided by MOL Group, and Hungarian Eximbank. The deal gives GA Drilling access to onshore production wells to test its disruptive PLASMABIT plug & abandonment (P&A) technology in real field conditions. The agreement is a major step in enabling the commercialization of the PLASMABIT technology, which can bring positive environmental impact, and significant cost and time reductions when compared to conventional methods of decommissioning unused oil wells. GA Drilling is a world pioneer in developing innovative technology for contactless drilling and P&A milling, using its proprietary electric plasma disintegration process. The technology opens opportunities within multiple sectors with the initial focus being the environmental plug and abandonment of old wells, slot recovery and other decommissioning services. In parallel, the company continues to develop further applications for hard rock drilling, enabling access to deep geothermal energy as well as tunneling and the mining of raw minerals. As the CEO of Lead Ventures Ábel Galácz pointed out, “the novel solution developed by GA Drilling has the potential to positively disrupt a very traditional segment of the energy markets. In our view, this is one of the most promising energy innovations in the Central European region. Lead Ventures is committed to support those innovative companies that require substantial funding to further their development and have the potential to be the next success story in Central Eastern Europe.”

some 200 associates to provide financial and accounting services in seven languages for countries of the North American and EMEA (Europe, Middle-East and Africa) region. The new Budapest center of the company is going to serve as a key resource in researching and developing innovative product solutions, by applying cutting edge technologies. The unit will begin operations with 30 engineers and plans to steadily increase its workforce, which may exceed a 100 people in the future. This team of engineers will focus on incorporating leading edge technologies in fluid dynamics, tribology, rotodynamics and mechatronics into their products, while applying best practices for manufacturability and assembly.

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analysis

A NEVER ENDING STORY? THE INDIAN-PAKISTANI CONFLICT IN/OVER KASHMIR

The cavalier treatment of nations and peoples by great powers has had a rather bitter legacy on different continents, most notably in Asia and Africa. Post-World War I peace settlements set the stage for ethnic and sectarian conflicts predominantly in the Middle East. The Second World War precipitated the disintegration of the colonial empires of Great Britain and France in the first place. The process resulted in, among others, rearguard fights by the French in Vietnam and Algeria between 1945 and the early 1960s; while the British engaged in bloody local wars in, for instance, Malaya, Palestine and East Africa. The ‘crown jewel’ of the British Empire (called the British Commonwealth after the acceptance of the Statute of Westminster in 1931), India, gained independence without a shot being fired in 1947. However, what happened later, claimed the lives of millions of people on the Indian subcontinent, and the area continues to be one of the most volatile hotspots in the world today.

Post-colonial conflict The India Independence Act conveniently carved up British India into three entities: the predominantly Hindu India, the overwhelmingly Muslim Pakistan, and Jammu and Kashmir with mixed populations, but with a clear Muslim majority population except in Jammu (where the population ration favors roughly 2 to 1 the Hindus over the Muslims). The most hotly debated area, the Kashmir Valley is 95% Muslim, and only 4% Hindu. The maharaja in Jammu and Kashmir, Hari Singh moved closer to India, and fights broke out between the two communities, in which millions died or fled or were expelled from their place of residence – a textbook

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case of ethnic cleansing if there was one. The war between India and Pakistan was only the first one between the two countries after the British left: to date, three or four major conflicts between New Delhi and Islamabad qualify as wars, while the number of minor clashes and terrorist acts are unknown. Things were calmed down – sort of – after the war in 1971. The Shimla Agreement the following year acknowledged the independence of former Eastern Pakistan, Bangladesh, which was supported by India in its struggles to break from Pakistan proper. The ceasefire line – the Line of Control – cuts Jammu and Kashmir into two, but border clashes have almost become a daily routine for both sides.

Claims and alliances Matters are even morelicated with the territorial claims by China, which regards the northeastern part of Kashmir, Aksai Chin as its own. If the northwestern borders of India are disputed, so are the northeastern ones, where India faces a Chinese challenge. The territorial disputes are defining of the strategic alliances in the region: the People’s Republic of China and Pakistan work together in a number of fields, from the cooperation in nuclear technology to the construction of parts of the ’One Belt One Road’ (’Silk Way’) initiative in Pakistan. (It goes almost without saying that the U.S.-Indian relations have been changing for the better in the past few years, especially since the nuclear agreement between the two countries under President George W. Bush. Recently, President Trump has been speaking about an Indo-Pacific region, emphasizing India’s importance in counterbalancing China’s ambitions in the region.) India and the U.S. are more or less on the same page concerning the

understanding of transnational terrorism and its network of supporters.

Fresh conflict The recent attack by allegedly a member of the Jaish-e-Mohammed, a Kashmir separatist group against a busload of Indian troops in February 2019, and the subsequent bombing of the training camp of the group in Kashmir’s Pakistancontrolled territory a few days later heightened the tensions on both sides of the border. India has long accused Islamabad of providing safe haven to Muslim terrorists and training them; thus, India claimed, with justification, that the attackers of Taj Mahal Palace Hotel in Mumbai in November 2008 were activists of the Lashkare-Taiba, another terrorist group with links in Pakistan. Moreover, together with Washington, New Delhi more than suspects that Pakistan’s Inter-Services Intelligence (ISI) have actually worked hand in glove with elements of al-Qaeda and the Taliban. The rivalry between India and Pakistan for regional dominance is not restricted to Jammu and Kashmir; they are waging a quasi proxy war against each other in Afghanistan, where India supports the Northern Alliance, while Pakistan sides with the Taliban for all practical purposes. In fact, Osama bin Laden in one his messages in 2002 claimed that one of the reasons he was fighting the Americans was Washington’s support of India on the Kashmir issue.

Nuclear powers The ongoing conflicts and the resulting casualties are bad enough, but the potential escalation of hostilities is downright scary. Both countries possess nuclear weapons – though neither is a signatory of the Non-proliferation Treaty (NPT). They developed their ’doomsday’ weapons in violation of the NPT in the 1990s, A P R I L

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and currently each owns in excess of a hundred such weapons. Their possession, at least in the context of the Indian-Pakistani relations, is more important for Islamabad than for New Delhi because India enjoys a clear superiority in conventional weapons (not to mention the huge difference in the number of populations). As a result, Pakistan has not excluded the so-called first use of nuclear weapons in case of a serious conflict with India, while the later has ruled out using nuclear weapons first in a conflict.

Domestic purposes Talking tough in both capitals usually yields political gains in the respective countries. At the moment, it is the Indian Prime Minister, Narendra Modi who is relatively hard pressed at home: his Bharatiya Janata Party faces a tough challenge from the Indian National Congress, and its leader, Rahul Gandhi in the upcoming elections. Playing out the Pakistancard is usually a winning tactic, especially for the allegedly more conservative and nationalistic Bharatiya Janata Party. In point of fact, the successive Pakistani governments also take advantage of the Indian-Pakistani conflicts to score points in domestic politics, as well. Unfortunately, it seems that lowintensity conflicts come at handy for Indian and Pakistani leaders alike for domestic political purposes; while the great power brokers in the region do not take a real interest in the dispute over Kashmir so long as it is limited in scope, and its repercussions do not affect regional balance of power. The people in Jammu and Kashmir should brace themselves for more violence and the perpetuation of hostilities for some time to come. Tamás Magyarics is a foreign policy analyst

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BY TAMÁS MAGYARICS

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UNITED IN DIVERSITY IN THE EUROPEAN UNION EU CITIZENS’ INDIVIDUAL INTERESTS ARE AT THE FOREFRONT IN THE EU COURT OF JUSTICE

or ’by analogy’ if you prefer. It is my conviction that the EU is not a nation State, and it does not intend to become one. The value added by the EU is precisely that it is not a State, but rather a common structure for governance. As such, it has its own fundamental rules of play, which amount to a ‘constitution’ governing the operation of that common governance structure. I am thus using the word ’constitutional’ in a practical, purely descriptive sense. I also anticipate that more questions concerning fundamental rights will have to be dealt with at the Court. D&T Would you also include the Brexit case in this constitutional framework?

Koen Lenaerts, President of the Court of Justice of the European Union talks to Dr. Bálint Bassola in an exclusive interview for Diplomacy&Trade. D&T How do you see the role of the EU’s Court of Justice in ten years?

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KOEN LENAERTS I believe that the Court’s role will be more constitutional. This aspect of its role will become ever more important in the coming years as I expect that many political issues will give rise to high-profile litigation at the Court. D&T Could you give an example? KOEN LENAERTS One interesting example concerns the so-called CETA, the recently-negotiated trade and investment agreement between Canada and the EU. In that connection, there was a great deal of political tension between the Walloon regional government and the Belgian federal government. This tension arose from the constitutional structure of Belgium, which is respected by the w w w . d t e u r o p e . c o m

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European Union. The Walloon government did not agree with certain parts of CETA, which prevented the federal government from signing it on behalf of Belgium as a whole. Wallonia contested, in particular, the dispute settlement mechanism provided for by CETA, under which investors can sue an EU Member State, or the EU itself, whenever they feel that measures taken by that State, or by the EU, have negatively impacted their investments. As no political solution could be found, Belgium turned to the Court of Justice to resolve the matter, which is now set to decide whether CETA is compatible with the autonomy of the Union’s legal order, with the competence of the Court of Justice of the EU and with EU fundamental rights protection. That case is most certainly of constitutional importance.

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D&T When can we expect the judgment of the EU Court of Justice on this issue?

KOEN LENAERTS In this specific procedure, our decision is known as an ’Opinion’, but irrespective of its name, it will be binding. We will deliver it on April 30, 2019. D&T And the opinion will be delivered by the full court… KOEN LENAERTS …yes, this issue is of such constitutional importance that we have exceptionally referred it to the full court. Following our decision, the Member States will be called upon to determine their political position in the view of our ruling. D&T What do you mean by ‘constitutional’ in the context of the Court of Justice of the EU? KOEN LENAERTS When I say the word ‘constitutional’, I mean it in a figurative sense,

KOEN LENAERTS Very much so. If you take the recent case-law, there were two judgments delivered by our court in 2018, which I consider to be paradigm-shifting. One is the Juízes Portugueses ruling and the other is the Wightman case. The former touched upon the principle of judicial independence and in the latter, we clarified the fundamental principle that Member States belong to the European Union as a result of their own sovereign decision taken in a democratic way according to their respective constitutional requirements. In the same manner, if you decide not to be a member any more and you take an equally democratic decision to pull out, then, you are free to do so. Of course, when you accede, you agree to adhere to the fundamental rules of play governing the constitutional structure of the organization you join and, from then on, you must play by the rules of the club, wherever those rules are relevant. I believe that a particularly attractive feature of the EU is that we are united in our diversity. D&T What do you think EU citizens expect from the Court of Justice of the EU? KOEN LENAERTS It is very hard for us to know what citizens expect in general. But of course, I may say that we have many cases where citizens’ individual interests are at the forefront. Indeed, it is true that European Union laws often confer rights on individuals, as workers, consumers, environmentalists – all the values that require protection vis-à-vis organized, globalized businesses. For a society to last, you need to balance the economic and social aspects. That is reflected in the Charter of Fundamental Rights of the European Union which was established as primary law by the Lisbon Treaty that will have its tenth anniversary in December this year. Our job at the Court is to carry out a very delicate balancing exercise between all those concerns of EU citizens and the interests of economic and public law actors, most of which also serve those same citizens, of course.

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HISTORICAL RECORD IN BUSINESS EXCHANGE

formats,” Ambassador Chmiel gives a short overview of bilateral relations.

BY SÁNDOR LACZKÓ

“We consider ourselves honorary neighbors. There are no open issues and both official and informal contacts are continually developing in many fields. The V4, including the International Visegrád Fund (IVF) contributes to experts, academics, NGOs and students exchanges, and people to people contacts. Our countries cooperate in the EU where they often find themselves in the same like-minded groups. Last autumn, we hosted in Prague PM Viktor Orbán and twice FM Péter Szijjártó. Their visits reflected a high-quality relation and will be followed up by our President coming to Budapest mid-May. Miloš Zeman has warm ties with János Áder and Viktor Orbán. Apart from its symbolic value, the visit will be highly practical as the President is to be accompanied by one or two Czech Ministers and by a large group of businessmen. Last year, trade between our countries reached its highest level, exceeding the value of Czech trade with Russia or the USA. This year, we commemorate the revolutionary 1989 and the following accession of our countries to the

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Developing relations even further

EU (15 years ago) and NATO (20 years ago). Czechs, Hungarians, Poles and Slovaks marked our NATO anniversary together in Prague (Presidents, Foreign and Defense Ministers) and there have been high level celebrations also in Warsaw and Washington. In Budapest, the Czech Embassy will celebrate the event, along with the Armed Forces Day, in June. The Czech Republic will take over the Presidency of the Visegrád Group (V4) from Slovakia. As always, this will mean an intensive program of meetings and talks from the highest to the expert levels within V4 as well as between V4 and other countries in so-called V4+

Regarding President Zeman’s visit, the Ambassador expects the bilateral/trade agenda to be the most significant during the meetings. “That is because, although our bilateral relations are rich and deep, our presidents and governments want to develop them even further. Our president is a keen supporter of economic diplomacy, so, the business program – including a Business Forum – will be a key part of the visit. There will also be issues of cultural or educational cooperation, and themes of our shared past – for example, the Battle of Mohács (1526) – to give impetus to expert projects. The current EU topics will be discussed as well as security,” he says.

The V4 cooperation “For my country, the Visegrád group bears a strategic value, together with our relations with Austria and Germany. In the EU, the V4 framework has proved highly useful in the areas where we have common A P R I L

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views. The appropriate experts know about these issues, while the public is familiar with V4 cooperation in migration,” Ambassador Chmiel points out. However, he adds that there are many more issues where the V4 alone, or together with like-minded partners, has influenced the EU policy following the interests of our countries. “It does not mean that V4 members always agree on everything. None of them has ever had such ambition. V4 has become a traditional format for forward-looking and open dialogue about Central Europe, current topics of the EU and broader. In the EU, be it in everyday business or in most robust negotiations, the Czech Republic endeavors to refrain from hard confrontations. We want the V4 not to divide but to unite for the EU to become more efficient and stronger in current uncertain times. In our upcoming V4 Presidency, we intend to focus on the EU’s Multiannual Financial Framework (to advance the economic and social convergence), deepening the EU internal market, and cooperation in science, research and innovations. We will direct our efforts towards the EU enlargement and Eastern Partnership. In these areas, we will hold talks

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INTERVIEW WITH JURAJ CHMIEL, CZECH AMBASSADOR TO HUNGARY

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between the V4 and relevant EU partners including Germany, Austria, Benelux and the Nordic-Baltic countries (NB8).”

Economic relations

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the Hungarian agricultural and food industry. On the other hand, Hungary’s MOL operates over 300 petrol stations in the Czech Republic. In economic matters, the Czech Embassy closely cooperates with the CzechTrade office in Budapest. The Czech auto industry is enjoying a boom, Škoda Auto is doing well, producing records in 2018. Škoda auto cars are popular in Hungary, and there are also Škoda Transportation trams and Škoda/Solaris trolleybuses in Hungary with more of the latter put into circulation this spring in Budapest. The Ambassador says he is glad to see Škoda trams in Miskolc and w w w . d t e u r o p e . c o m

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that Czech-Hungarian cooperation in public transport is nothing new; it has a very long tradition. “You can still find a lot of old Czech trams ČKD/Tatra in Budapest and many Czech cities used to run a fleet of Hungarian Ikarus buses. Regarding passenger cars, Škoda Car sold 13,800 vehicles to Hungary last year. It was only a small part of the Škoda global sales (1,253,700 vehicles), but for me, the important fact is that the popularity of Škoda Auto in Hungary is growing, as the number of sold vehicles increased by more than 9% in 2018. Besides, according to autocar. co.uk, Škoda Octavia was the second most popular car in Hungary in 2018. The automotive sector is the backbone of our economy. The history of the Czech Automotive Industry dates back to the 19th century when Czech companies started producing the first passenger cars. In 2018, The Czech Republic hit the historical record with the production of 1.44 million cars. In order to maintain this trend, the most important task is to focus on innovation and new trends such as electric vehicles, or autonomous driving or artificial intelligence.” Last December, guns and other firearms, manufactured in Hungary under Czech license, were handed over to Hungarian soldiers. As Ambassador Chmiel notes, the licensing agreement for the manufacture and assembly of weapons produced by Česká Zbrojovka was signed last March. Regarding the scope of the production, I think we’re talking about some 200,000 firearms, at least in the first phase, but everything is, of course, up to the contracting parties. The Hungarian defense forces are undergoing a significant modernization within the Zrínyi 2026 plan, and I am sure that Czech defense industry companies have a lot to offer in this respect.”

Leaving the city of birth Ambassador Chmiel is scheduled to leave his post in Budapest this summer after nearly five years. “In Hungary, the basis for Czech diplomacy is inspiring and motivating. Political connections are friendly, expert

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contacts intensive, interest in cooperation is mutual and reaching across the society, while the potential is not yet fully utilized. In other words, a lot of work can be done, if you are active and have ideas. I travel a lot around Hungary and combine activities of various fields to expand and strengthen bilateral contacts, for example, the twinning of Czech and Hungarian towns and municipalities covering business, public and political relations, education, NGOs, people to people contacts, V4 contacts, EU funding expertise etc. Last September, our Embassy and the Embassy of Hungary in Prague organized in Budapest a gathering of about fifty twinning towns or those in search of a partner. They exchanged good practice and learned about V4 and EU financial instruments to support their projects. They will meet again this September. The trade statistics speak for themselves. I am glad that the value of business exchange reached a historical record and I hope that this trend will continue. If I should choose one particular Czech business success, it would likely be the conclusion of the licensing agreement for the manufacture and assembly of weapons. Last, but not least – I was born in Budapest, my mother was Hungarian, so I feel here like being home.” FACTS COMPARED AREA country comparison to the world POPULATION country comparison to the world POPULATION GROWTH RATE country comparison to the world BIRTH RATE country comparison to the world LIFE EXPECTANCY AT BIRTH country comparison to the world NET MIGRATION RATE country comparison to the world GDP - PER CAPITA (PPP) country comparison to the world UNEMPLOYMENT RATE country comparison to the world TELEPHONES - MOBILE/CELLULAR country comparison to the world AIRPORTS country comparison to the world

HUNGARY

CZECH REPUBLIC

93,028 sq km 111 9,825,704 (July 2018 est.) 92 -0.26% (2018 est.) 214 8.9 births/1,000 population (2018 est.) 206 76.3 years (2018 est.) 88 1.3 migrant(s)/1,000 population (2017 est.) 54 USD 29,600 (2017 est.) 68 4.2% (2017 est.) 54 12,030,940 (2017 est.) 75 41 (2013) 103

78,867 sq km 117 10,686,269 (July 2018 est.) 85 0.1% (2018 est.) 186 9.2 births/1,000 population (2018 est.) 203 78.9 years (2018 est.) 57 2.3 migrant(s)/1,000 population (2017 est.) 40 USD 35,500 (2017 est.) 57 2.9% (2017 est.) 33 12,634,937 (2017 est.) 73 128 (2013) 46

Source: The CIA World Factbook

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The volume of bilateral trade has grown over the last few years from EUR 5.4 billion in 2012 to EUR 8.8 billion in 2018 when it reached its highest level. Besides, the pace of growth is significant: 7% from 2017 to 2018. Hungary is the 10th most important trade partner for the Czech Republic whose exports to Hungary rose by 6% to EUR 5.1 billion last year, and exports in the other direction increased almost by 9% to EUR 3.7 billion. There is also a significant level of investments between the two countries, including PPF group having purchased Telenor Hungary and Czech Agrofert having made several investments into

Škoda/Solaris trolleybuses in Budapest but stresses

“I could talk for hours about bilateral cultural relations. You know Hrabal´s pub in Pest, and lot of others, don´t you,” the Ambassador winks with a smile. Czech-Hungarian cultural contacts are traditionally rich. “Our Embassy and the Czech Centre in Budapest strengthen these ties and promote Czech culture. Every year, our program is filled up with impressive cultural performances, while many events are organized independently of us. Annually, we hold a Film Carnival at the Toldy Cinema. We frequently organize symphonic concerts at our Embassy or at the Ferenc Liszt Academy of Music with which we have fruitful cooperation. You might have heard of the Czech Image Project; Hungarian students competed on the topic: ‘How do you perceive the Czech Republic?’ Their posters were subsequently exhibited at the Hungarian Cultural Institute in Prague.” He stresses that the Czech language draws attention in Hungary. There are Czech language and literature desks at two Hungarian Universities, in Budapest and Szeged, and around 180 students attend courses run by the Czech Centre. “Besides learning Czech, they become familiar with Czech life and culture. They also learn about personalities that unite our countries such as the philosopher and pedagogue J. A. Comenius, the writer Božena Němcová or Saint John of Nepomuk. Not everyone knows that the Battle of Mohács in 1526 was equally significant to our countries; we lost our king, Louis Jagellon there. We would like to engage historians in research of the battle. Speaking of our shared history, we have a permanent exhibition in the basement of the Embassy dedicated to two Czech heroes who stayed in Budapest after they saved the lives of thirteen Jewish Hungarians in 1944. Currently, we commemorate Jan Palach through another exhibition at the Embassy and through debates at Hungarian grammar schools. It was 50 years ago that Jan set himself on fire in protest against the Russian occupation of Czechoslovakia in 1969 and the prevailing apathy of Czech and Slovaks. His action influenced a student in Budapest, Sándor Bauer, who died the same way, only a few days after Palach. Twenty years later, students in Czechoslovakia, referring to Jan Palach, succeeded in bringing the society to their side in the Velvet Revolution. Marking the victory over the Communist regimes in 1989, we are preparing an international songwriting event, inspired by a Czech folk singer and poet, who left Czechoslovakia in 1969 and returned in 1989. The Karel Kryl Protest Song Contest will take place between June and November. I must also mention, among many others, people such as the church reformer Jan Hus, and Jan Ámos Komenský (Comenius), known as the ‘teacher of the nations’, who lived and worked for several years in Sárospatak, NE Hungary, and the Czech soldiers who defended the castle of Eger against the Turks in the 16th century. All of them left a deep impact in the Hungarian history and unfortunately, the lack of space doses not allow me to continue with other names.”

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THE CZECH BUSINESS CONTACT PARTNER

at the Embassy is great, allowing us to achieve great efficiency,” Tibor Bial points out.

Strong, stable cooperation

CZECH-HUNGARIAN TRADE GREW BY 63% BETWEEN 2012 AND 2018

CzechTrade is the state trade promotion agency of the Czech Republic, part of the Ministry of Industry and Trade. Its main purpose is to support international trade and cooperation between the Czech Republic and foreign companies. Its Budapest off ice was re-opened in 2010. The head of this off ice, Regional Center Director Tibor Bial talks to Diplomacy&Trade about its role in bilateral economic relations.

He stresses that “after the economies of both countries regained momentum and started to grow following the setback caused by the financial crisis, correspondingly, companies became stronger, more stable and more venturesome. We see examples from classical producer-distributor partnerships and subsidiary formation to cases where companies cooperate together to succeed on projects in new, often third markets. We believe that this is the future.” One fine example is the cooperation in the defense industry that dates back to the times of the Soviet bloc but the present prime ministers of the two countries also see great opportunities in this field. The Director stresses that the Czech Republic and Hungary are both member states of the EU, NATO and the V4. In many cases they follow the same goals and they share the same interests. “It is more than important to preserve a strong and mutual trust between our countries. Actually, it is one of the most crucial factors from the perspective of a long term partnership in the defense sector. The most significant recent collaboration has been in the field of arms production. We do share the conviction that there are many more opportunities to exploit in this field and that strengthening of these bonds can result in satisfaction to both parties.”

Room for improvement

A successful office He adds that the re-opening of the Budapest office in 2010 was not a coincidence; trade relations between the Czech Republic and Hungary were traditionally very strong. “The re-opening of the office (that operated between 2003 and 2008 before) was not easy because the financial crisis hit Hungary quite severely and the economy needed to be built up step

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by step - as did the trust of foreign investors. Nowadays, Hungary can boast a record-high GDP growth in 2018, low unemployment and flourishing business opportunities in several segments. Last year, the volume of trade between the Czech Republic and Hungary reached the highest level ever by surpassing EUR 8.8 billion. We can proudly say that the Budapest office has become one of the most sought after foreign offices. We have already helped many companies of different sizes (from SMEs to big groups and subsidiaries) and diverse fields of activity. I am also very happy to say that we have registered a number of success stories, testifying that there is a wide scope for cooperation between Czech and Hungarian entrepreneurs. Compared to 2010, international trade between the two countries has more than doubled. We believe we have at least partly contributed to that success.” There is close cooperation between the Commercial and Economic Department of the Embassy and the Czech Trade office. “Although, we organizationally belong to two different ministries, we are working for one goal: we strive to strengthen and to develop CzechHungarian trade relations. We cooperate with the other departments of the Embassy on a daily basis, on various projects: for instance, we have already co-organized an exclusive exhibition opening ceremony, several press conferences or company presentations and also a comprehensive B2G and B2B event for

the representatives of the Czech and Hungarian twin cities, which proved to be a huge success, so we are already preparing the second such event, which will take place in September 2019. This year, we will also collaborate closely on the organization of the official visit to Hungary of the Czech president who will be accompanied by a large trade delegation. The energy sector globally and the ITU World Summit are also key topics on which we join forces. Fortunately, the work environment here

CZECH INVESTORS IN HUNGARY As the Director highlights, one of the most significant investors is Škoda Transportation a.s. that in the previous year won the competition to supply trolleybuses for public transport in Budapest. Besides that, their trolleybuses and trams are present in several major Hungarian cities and the Czech automotive industry is also present in Hungary with passenger cars. As for the ‘secret of success’, Tibor Bial believes the secret lies in the perfect combination of tradition and quality. “Czech means of transportation have been used in Hungary for decades. They are well known, Hungarians like them and most importantly have trust in them. Those technologies do not only follow the world trends but they often tend to set the pace in international terms. Thus, it is safe to say that high quality Czech transport facilities will continue to ensure the safety of Hungarian customers in the future.” He adds that “in the sector of agriculture and food processing, we have to mention Agrofert Group, the leading agricultural food company of the Czech Republic and Slovakia that owns significant stakes in several Hungarian producers like Ceres Sütőipari Zrt., Devecseri Agrokémiai Zrt., IKR Agrár Zrt. or NT Élelmiszertermelő Zrt. In 2015, a powerful mineral water producer from the western region of the Czech Republic, Karlovarské minerální vody (KMV), founded – in conjunction with Szentkirályi Ásványvíz – a holding company, ‘Central Europe Mineral Water Holding’ (CEMWH), which, by acquiring Kékkúti Ásványvíz, became the biggest mineral water bottling company in the East Central European region. The holding company has recently been expanded by the Hungarian subsidiary of PepsiCo (along with the Czech and the Slovak plants). When speaking about power engineering, we have to mention EP Holding a.s. the owner of the Budapesti Erőmű Zrt. Regarding renewable sources of energy, a dynamically growing provider of solar energy solutions originally from Prague, Photon Energy Group stands out. It came on the Hungarian market in 2017 and has already made great progress, in a short period of time.” The Director says it is important to mention two well-established companies in Hungary, Alukov a.s. (swimming pool and terrace enclosures) and Ravak a.s (leading manufacturer of bathroom ware and sanitary equipment) with their very own production and logistical centers in Hungary. CPI Group is a notable owner of commercial real estates in Budapest, i.e. hotels MaMaison and Campona Shopping mall. The biggest player in the telecommunication sector is PPF Group, which last year purchased the assets of the telecommunication giant Telenor in Hungary and other Balkan states. A P R I L

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“Our agency is the official contact partner for companies looking for qualified Czech-based manufacturers and service providers. It has a strong regional presence throughout the Czech Republic. Specialists at our headquarters in Prague support a worldwide network of foreign offices in over 50 countries. We are there for exporters since the very first moment they consider crossing our borders. We offer them specific information and pragmatic guidance on how to accurately export to foreign markets, how to find a business partner, build or scale up their business. The advice of an experienced specialist who has thorough knowledge about the given market can be very useful regardless of whether the local business culture seems to be similar or happens to be very different. There are always particularities that are good to be prepared for – or beware of – and one can save a lot of time, money and effort which are important when it comes to business,” the Director explains.

There is a constant increase in the volume of bilateral trade – growing by 63% between 2012 and 2018 – and investment but there is always room for improvement. Regarding the possibilities of further improvement, Tibor Bial concludes that “first of all, I see favorable tendencies in the area of machine production and the automotive industry (the first and the second biggest import commodity from the Czech Republic to Hungary in terms of trade volume) followed by agriculture and food industry (there is a constant influx of new food products to Hungary mainly in the field of healthy food, meat products and dairy). Furthermore, we can speak about power engineering, renewable energies, industrial development and modern braches of industry with high added value.”

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BUSINESS IN A PLEASANT ATMOSPHERE

MEMBERSHIP IN THE CZECH-HUNGARIAN BUSINESS CLUB COVERS MAJOR BRANCHES OF THE ECONOMY Moravian regions and learned about the art of beer brewing – I would call art the experience that the Czechs have accumulated over many centuries in beer production, brewing this drink in a lot of flavors. This is, of course, part of the Czech culture as you can see it in brilliant literary pieces and movies. One of the places we visited was the venue where the deservedly popular film ‘Cutting it short’ (the Hungarian title is more telling: Brewery Capriccio) was shot in the little town of Dalešice. We had a beer tasting there and watched the movie on the bus. During the professional seminars, we also consume primarily Czech food and drinks."

Trying to be not too big

Mutual help The Club facilitates the business connections of its members among themselves and with outside partners, the President (who is the managing director of Ravak Hungary, the local subsidiary of the Czech bathtub and shower enclosure maker Ravak) stresses that “since we have members from different spheres of the economy – like the automotive, construction and food industries – with different fields and

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levels of experience, we can provide, within the Club, professional advice in several fields (management, tax, legal environment, etc.). Several members have great knowledge of the Hungarian as well as the Czech market and thus, they are able to explain the differences to other members. Sometimes, we also have lecturers from outside the Club, which, by the way, have contributed to the growth in our membership as several guests speakers – experiencing the great atmosphere – decided to join us. This was a good decision from the professional point of view, as well, since they acquired clients from within the Club. If Czech companies entering the Hungarian market wish to establish business contacts here, we can provide initial help free of charge. If the issue to be solved goes beyond what we can do or more information is needed, we usually suggest they contact CzechTrade, which can explore the possibilities for the newcomers. We also propose market players – first from among our members – who can be of help.” He adds that last year, the Czech-Hungarian Chamber of Commerce was re-established in Prague and that organization is now ready assist Hungarian firms to do business in the Czech Republic.

Relevant issues “At club meetings, we always try to adjust the topics discussed to the relevant issues arising in the business environment at the given time. These subjects change, of course, from time

to time. One of them is well-known to most employers in Hungary: the difficulties of hiring and maintaining skilled labor. This has recently been the topic of discussion at our professional seminars with the participation of HR and other relevant experts. Another timely topic nowadays concerning basically all spheres of the economy is online marketing, online communication. Our members are not of the Y generation but we would like to understand them and their purchasing habits, therefore, we also invite experts from this field. Be it an industrial product or a consumer product, it needs to be communicated effectively to clients and customers,” he highlights.

photos by DÁVID HARANGOZÓ, CZECH-HUNGARIAN BUSINESS CLUB

The Cseh-Magyar Üzleti Klub (Czech-Hungarian Business Club) celebrates the 15th anniversary of its establishment this year. As the President of the Club, László Vajányi points out to Diplomacy&Trade, he considers the membership, itself as the greatest success of this period. “We have 29 members – all of them are active! We have three professional events a year and each member shows up for at least one of these. Our members also attend events organized by the European Chambers of Commerce in Hungary (EU Chambers) that we are a member of (since 2010), despite not being an actual chamber. Although, earlier, there was talk about the possibility of the Czech-Hungarian Business Club evolving into a Visegrád Four (V4) Chamber of Commerce in Hungary, we have given up on that because there is no Polish-Hungarian or SlovakHungarian chamber or business club in this country,” he explains.

Membership is growing, which is a welcome development but the President says they do not want to grow too big. “Our goal is to have membership that covers all important spheres of the economy so that the focus would not be narrowed down to a certain branch because then, the Club would not be attractive for its members. However, we would not like a size of over 50 members because that would not be a club anymore. We would like to keep this friendly atmosphere what we have now. We wish to continue to hold three professional events a year: in January, May and October. Also, the beer festival in June is attended by most of our members individually." He stresses that the job of the Club is to create professional but pleasant surroundings and then “it is up to the individual members to forge business contacts and proactively take advantage of the opportunities we provide at the events of the Czech-Hungarian Business Club.”

Not just business Events at the Czech-Hungarian Business Club are held in a relaxed atmosphere complimented by fine Czech food and beers, contributing to bilateral relations outside the business sphere, deepening cultural and human ties. In this respect, László Vajányi, who has been the President of the Club since 2011, notes that their members include catering firms active in the field of Czech gastronomy like beer importers. “A publisher of guidebooks about Prague and the different regions of the Czech Republic is another member in the Club. All these can help spread – or introduce, for that matter – Czech culture. In 2018, the Club organized a Czech beer tour during which we visited craft beers workshops in several A P R I L

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THE CZECH COMPANY CAR ŠKODA STANDS FOR SPACIOUSNESS, PRACTICALITY AND GOOD VALUE FOR MONEY

Delivering 1,253,700 vehicles, ŠKODA Auto set another record in 2018, recording a growth of 4.4% compared to the previous year. Sales revenue also increased by 4.4% and achieved the best result in the company’s history at EUR 17.3 billion. Sales numbers in Hungary also look good, showing an increase of 11.8% last year. ŠKODA KAMIQ

It is because there may be a competitor in the market who offers its product at lower prices, but all in all (the product itself, the purchase price, financing, depreciation, i.e. resale value, service costs, insurance), ŠKODA is today one of the best alternatives in the fleet market. Salespeople highlight the nationwide service network coverage (currently 64 members) where quality and professional repair can be ensured. Thanks to geographical proximity to the Czech factories and to the central location of Porsche Hungaria's Budaörs parts center, service work in unexpected repairs (e.g. breakage) can also be done quickly.

SCALA and KAMIQ In May this year, ŠKODA will introduce its latest model, SCALA, which is also a new category for the brand in the compact class. It carries ŠKODA design features inspired by characteristic Czech crystal art, and also brings about many new developments. The automaker hopes that it will be very popular with both individuals and business users. In the summer, there comes a facelift of the brand’s flagship, the SUPERB, and then a crossover, KAMIQ in the fall. While the SUPERB is clearly a fleet car but the crossover will be chosen primarily by individuals, as it is one of the most popular categories for private clients today.

E-mobility The company says “the introduction to the Hungarian market of the KAROQ model (SUV), which our customers grew to like within a short time, has clearly contributed to the growth in sales, but we have also been able to gain customers with special promotions for private buyers: we have expanded the Relax private lease program (where the monthly fee includes, in addition to financing, insurance fees and the costs of service visits required by the manufacturer as well as, where appropriate, the replacement of winter-summer tires), and our car offsetting programs were popular, also. The OCTAVIA model turned out to be the best selling car in Hungary in fleet last year.”

photos by PORSCHE HUNGARIA

Anniversary This year, ŠKODA celebrates the 55th anniversary of its first serial production car, the 1000 MB, which was a cornerstone in the history of the Czech auto maker. It is the third oldest car manufacturer in the world, founded by two Czech engineers, Vaclav Laurin and Vaclav Klement who were producing bicycles in 1895. Since then, lots of cars have rolled off the production line and the image of the brand has changed with them, too. Today, ŠKODA stands for spaciousness, practicality, good value for money and design inspired by the Czech crystal art. Most of the ŠKODA models have the biggest luggage compartments in their category. “Beside the spaciousness, our models are outstanding in terms of safety because all of the models have rated five stars during crash tests (EURO NCAP). Practicality is provided by our ‘Simply Clever’ solutions, which aims to make everyday life easier. We have Simply Clever solutions like the parking w w w . d t e u r o p e . c o m

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ticket holder behind the windscreen, the ice scraper hidden in the fuel flap and the bag holder in the trunk which can be useful after a weekend grocery shopping,” company officials note.

German contribution ŠKODA is a member of the Volkswagen Group for almost three decades. As for the German contribution to the success ŠKODA enjoys today, the company states that after acquiring the Czech automaker, Volkswagen completely rebuilt the ŠKODA brand, which is now a key member of the VW Group. They independently carry out development projects for the entire group. In addition to providing technological and financial backdrop for ŠKODA, while, at the same time, giving them the independence to develop their own image and brands.

very important for fleet operators: it provides all this with low operating and maintenance costs.

The company car It is cars purchased by the corporate and public sector in Hungary that account for most of the ŠKODA sales, making the Czech manufacturer a market leader in this category. One of the most important considerations for fleet operators is the total cost of ownership (TCO) for the entire lifetime (which may be that of lease, as well).

The automotive industry is going through a substantial transformation. Just like the VW Group, ŠKODA is also a serious participant in e-mobility: at the end of this year, the SUPERB plug-in hybrid drive will be introduced, capable of running as many as 70 kilometers on purely electric power. Next year will see the premiere of fully electric models (with no combustion engine): the eCITIGO at the beginning of the year, and then, an almost KODIAQsized SUV in the second half of 2020.

ŠKODA SCALA

Popularity The ŠKODA OCTAVIA is the second most popular car in Hungary in new car sales. Regarding the features that have put it to the podium of bestselling models, company officials point out that since its appearance on the market, OCTAVIA has been the most important model in the brand and the one sold in the largest volume. It has so many advantageous features that they are difficult to list. For instance, it has one of the most spacious passenger and luggage compartments in its category (that is why it is especially popular in the ‘user-chooser’ system, meaning that within a company, individual users decide which brand and type they select within a category). Besides, it is ergonomic, modern (with the most up-to-date safety and technology systems, including infotainment) and what is

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czech focus INCREASING PRODUCTION

According to the 2018 annual report of the Association of Hungarian Brewers (Magyar Sörgyártók Szövetsége), the combined domestic sales of the five most important beer producers present in Hungary last year exceeded the previous year’s figures by more than 15 million bottles, which is an increase of over 1.2%. In terms of the units commonly used in the industry, the volume of beer sold in Hungary by these five producers was 6.29 million hectoliters in 2018, compared to 6.22 million hectoliters in 2017. The indicator of the total commercial performance of the evaluated companies – that is, the total volume of beers sold in Hungary last year and exported from the country – also increased. The total sales calculated this way amounted to 6.79 million hectoliters, which was about 33,000 hectoliters more than in the previous year. At the same time, the proportion and volume of imports have also increased. The volume of imports increased by about 220,000 hectoliters in 2018 compared to 2017. This reached 698,000 hectoliters last year, 11% of total domestic sales, while in the previous year, the volume of imported beer was only 478,000 hectoliters.

GOING PREMIUM

friendliness, the Czech rural feeling of relaxed atmosphere reflected in many popular Czech movies,” she notes.

DREHER BREWERIES TAKES ITS SHARE OF THE ‘BEER REVOLUTION’

Balanced taste

“Beer revolution has broken out over the last few years across the world, including Europe. Consumers have also opened up to innovative ideas in brewing and demand has noticeably increased for premium category beer. They like the diverse flavors, the high quality products and the place of origin of the drinks is also important. Czech beers are clearly the winners of these trends as they meet the changing needs in every respect. Consumers are willing to devote more money to quality products, so, the prestige and super premium products of the Czech breweries are conquering the market. I believe that Hungarian consumers are attracted by the stronger, full-bodied, bittersweet taste of Czech beers.” That is according to Rita Hruska, Marketing Manager for the International brands portfolio at Dreher Breweries.

Innovative ideas

She explains to Diplomacy&Trade that “in response to the changing and clearly noticeable consumer needs pointing to higher quality beers, one of the cornerstones of the strategy of Dreher Breweries, a member of the Asahi Group, is the expansion of the premium portfolio. Renewing Kozel's brand and raising it into a premium category is also an important part of this strategy.” From January this year, the product became available on the Hungarian market under the name Kozel Premium lager. By the 2010s, Kozel had become the most popular Czech beer brand outside its homeland. This is well demonstrated by the multitude of prizes it has won in the past decades. It is so much in demand that it is also

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TRADITIONAL PILSNER URQUELL TAPPING

In the Czech Republic, Pilsner Urquell has traditionally been tapped in many ways. The different methods of pouring result in surprisingly different taste experiences. NA DVAKRÁT (CRISP)

Na Dvakrát tapping maintains the carbonation of the beer for a longer time, which makes the drink perfectly suitable for slower consumption – when accompanying meals, for instance. The golden liquid is tapped first and closed with the foam at the end. HLADINKA (SMOOTH)

First, pour a small amount of foam into the glass by turning the tap on slowly, then open the tap for maximum flow and let the beer run onto the glass wall, creating the so-called 'beer glass pole', which is beer without turbulence, completely transparent. The whole process is completed by shutting the tap elegantly and quickly. A little beer may occasionally flow over the rim of the glass. MLIKO (MILKY)

Mliko is a full pitcher of wet foam with a surprisingly sweet taste. Open the tap by turning it 10-20 degrees and fill the pitcher with creamy foam! A bit like a dessert, this is basically a foam made of beer, and is often served after a meal in the Czech Republic. No bubbles, just a sweet nice beer. A P R I L

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“We see innovation and new ideas as one of the engines of market growth, which means that, in addition to traditional brands and traditional flavors, consumers are willing to try new tastes and are able to spend more on quality beer. We, here at Dreher Breweries, do not only wish to satisfy this demand but also generate it further. This growing demand does not only include the alcoholic beer segment but also the nonalcoholic, and the non-alcoholic flavored beer segments, as well. We take into consideration these consumer needs and market trends in the development of our premium portfolio, which actively involves Czech beers, too. Dreher Breweries will continue to ‘listen’ to the market and act accordingly as far as new ideas and their implementation are concerned,” Rita Hruska concludes.

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Kozel Premium lager

Speaking of Pilsner Urquell, the Czech beer imported by Dreher, she stresses traditions and craftsmanship. “Pilsner Urquell is the world’s first Pilsner-style lager, first brewed by Bavarian brew master Josef Groll on October 5, 1842 in Plzeň, the Czech Republic. Now, Pilsner is the most popular style of beer in the world – of the 500 billion or so pints of lager that are drunk every year, 70% are in this pilsner style. It has been produced with the same technology since 1842, from the same four ingredients: Moravian barley, hops from the Saaz region as well as H-yeast and soft clear water from Plzeň. Pilsner Urquell competes with more easily consumable craft beers and premium import beers. It has a pleasantly balanced taste between humble bitterness and malt.”

produced abroad – since 2005 by Dreher Breweries in Hungary, based on Czech license. “Our brew master was educated in the Czech factory in Velké Popovice, near Prague and Czech experts often visit the Dreher plant here,” she adds. The Marketing Manager also finds it important to mention the special tapping technique. “As the saying goes ‘The brew master is brewing the beer, the tapster is making it’. Our tapsters also undergo regular training in the Czech Republic.” The Kozel brand has been renewed not only by giving it a more premium brand look but also the product, itself has undergone changes. It has a higher alcohol content (4.6%) and an extract content (11.25 B°), making Kozel Premium lager more bulky, foamy and darker. “The consumer experiences a richer, more characteristic taste. There is also a playfulness and humor that characterize this brand, vivifying a village life of

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He adds that “we have been participating in the development of nuclear energy for more than 60 years now, keeping the traditions and high quality, while constantly developing our techniques, technologies and knowledge. We not only follow the progress in the nuclear field, but we also make a significant contribution to it. Despite the fact that the companies using the brand of Škoda are not linked via owners or structures, Škoda JS has good relations and is often cooperating with those that work in power engineering.”

Modernizing the Paks plant Škoda JS won the job of modernizing the safety system of the Paks nuclear plant in Hungary in 2015. “The job covered the full replacement of the Reactor Rod Control System and the Reactor Power Control System for all four operating units of the Paks nuclear power plant, including simulator modification. The work activities included design, production, installation, testing and commissioning. These works were performed with our sub-suppliers ZAT (system equipment) from the Czech Republic, Konkoly és Kis Mérnöki Iroda (design works) and MVM OVIT (installation works) from Hungary. The installation and commissioning was successfully completed at all four units, with the last one finished at the beginning of April 2019,” the Director explains. “We are very proud to say that according to the recent feedback from the Paks nuclear power plant management, the cooperation between the Czech and the Hungarian companies was impressively smooth and effective during the four years of the project,” he points out.

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In the 1970s and ‘80s, all four VVER reactors of the Paks nuclear plant (vessels and all internal equipment, necessary for future operation) were manufactured in Plzeň and installed by Škoda. The present Hungarian government passed a resolution to expand the nuclear facility. The Director highlights that “as one of the most experienced European nuclear company, Škoda JS is committed to participate in projects related to nuclear facilities in the neighboring countries – and in Hungary in the first place. It is not a coincidence that we opened our Business Representative Office in Budapest, which is now the main channel for finding the essential cooperation points with Hungarian companies wishing to work in nuclear field. Based on our talks with different Hungarian entities and also with the Russian supplier, we strongly believe that the nuclear experience, knowledge and technology that Škoda JS has gained during decades of work in the field, will be extremely useful for our partners in Hungary. With regard to this, we are also ready to cooperate with local companies in reaching the 40% share of Hungarian participation in the building of the two new units of the ‘Paks 2’ project.”

Solid structure Škoda JS began work as a manufacturing company, with its main direction on the domestic energy market and today, our activity is based on three strong pillars of engineering, services and manufacturing. Vladimir Novak points out that “this solid structure gives us the opportunity to provide complex services and supplies, to guarantee high quality and to present to our customers with a team that works on all stages of the project throughout the entire project time, starting from the first idea and continuing until the end of the power plant lifecycle. Last year, the engineering field share in our company revenues was 67%, and at the same time, we sold 68% of our goods and services in foreign markets.”

Not just nuclear Regarding his plans as the new head of the Hungarian Business Representative Office of Škoda JS,

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ŠKODA JS WISHES TO TAKE PART IN THE EXPANSION OF THE PAKS POWER STATION

Working with Hungarian partners

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ŠKODA WITH NUCLEAR EXPERIENCE

The history of industrial machine and equipment manufacturing in Pilsen in the Czech Republic began in the first half of the 19th century. “In 1956, our predecessors (Škoda ZES) began to work on the first project in the nuclear energy field. This happened three years after the commissioning of the first nuclear power plant in the world, and also two years after commissioning of the first commercial nuclear power plant. Currently, Škoda JS is the only successor of the original concern of Škoda Pilsen, through the former Škoda ZES,” the Director of Škoda JS a.s. BRO in Hungary, Vladimir Novak tells Diplomacy&Trade.

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Director Novak stresses that “as we are mainly an engineering company, we would like to participate not only in the Paks 2 project, but also to conduct modernization works at the existing units of the Paks nuclear power plant. Last, but not least, activities should be directed to the engineering and coordination work in non-nuclear industrial projects in Hungary, as well as in cooperation with relevant Hungarian companies in neighboring countries. Relating to the Paks 2 project, Škoda JS is willing to take part in what we know best: engineering and coordination works, as well as supply of selected part of nuclear equipment.”

photos by ŠKODA JS

Practical experience Concerning the building of the two new units of Paks nuclear power plant, Vladimir Novak says he wishes to underline the importance of highly strict nuclear standards. “It is a crucial point in the preparation of the project, as well as for the construction and commissioning phase, taking into consideration that the main designs are made under Russian standards, which are also extremely strict (as it should be in nuclear field), but follow somewhat different lines. Škoda JS has not only practical experience with nuclear facilities designed and built by Russian companies, but also has fresh insider experience in construction of nuclear power plant units within the European Union. Our experience is based on the international project of completion of NPP Mochovce (units 3 and 4) in Slovakia. Škoda JS is not only supplier of equipment for the primary circuit, but also supplier of professional engineering works for the investor. Approximately 200 highly qualified experts of our company provide high quality coordination and engineering services in all fields of the project, starting from design works and up to commissioning. We are sure that the engineering experience that Škoda JS has gained from Mochovce project could be useful for preparation and realization of Paks 2 project.” w w w . d t e u r o p e . c o m

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czech focus A BEER SUPERPOWER CZECH BEER POPULAR IN HUNGARY SINCE THE END OF THE 19TH CENTURY

A beer superpower In the Czech Republic, some 20 million hectoliters of beer are brewed every year, which is more than three times as much as the production in Hungary. About a quarter of the Czech production is exported, some of it to Hungary. In the Czech Republic, there are about 480 breweries, 440-450 of which are very small, that is, they are not brewing more than 10,000 hectoliters, many of them producing just 1,000-2,000 hectoliters annually. A lot

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of these are brew pubs, as the beer is sold where it is produced. The small breweries account for only about 2.5% of the entire production of the country. Pilsner Urquell and the related breweries/brands produce half of the amount brewed nationally. By comparison, in Hungary, there are four big production companies and about 40 of mediumsize. Most Czech brands are imported by big multinational companies, such as Pilsner Urquell (and related brands like Gambrinus, Radegast, etc.) by Dreher, Staropramen by Borsodi,

Krušovice by Heineken and Budvar by Carlsberg. Kozel and Staropramen are brewed in Hungary under license by Asahi-Dreher and Borsodi, respectively. As the expert adds, smaller brands are also imported by 4-5 companies and big supermarket chains. He stresses that Czech beer has very serious ‘brand value’. The sale of premium products is on the rise, fueled by the fashion of craft beer, which ‘forces’ big and not so big breweries to produce beer they have not produced before in order to serve the newly rising customer needs. The top quality beers and big varieties are produced by the small breweries but it is like that everywhere in the world.

‘The’ beer

THE DIVINE DRINK: BEER

beer production, with origins dating back as early as the 9th century C.E., was a real teamwork. The monks checked the quality of their product almost daily, and always discussed how they could make brew of even higher quality. As a result of this, by the 15th century, monks developed an immense amount of expertise in the art of brewing. They could brew several types of beer specialties in such quantities that they could provide enough for the surrounding area, and soon enough, a flourishing business developed with many beer houses. Home brewing of beer could still be found in some countries up until the 19th century when mass production rendered it unnecessary.

Often referred to as liquid bread, beer is as old as civilization. It is possible that mankind took a sip from this brew of fermented grain sooner than from wine. Historians even speculate that prehistoric nomads may have made beer from grain and water before learning to make bread. The modern anthropologist Alan Eames believes that "beer was the driving force that led nomadic mankind into village life. Chemical tests of ancient pottery jars reveal that beer was produced 7,000 years ago in what is present day Iran. The Sumerians in Mesopotamia called it ‘Divine Drink’ and offered it to their gods. In 2100 B.C.E., Hammurabi, the 6th King of Babylonia, decreed the first written laws and he included a daily beer ration based on the individual’s established social standing. During this time, beer was never sold, it was used for trade. There is a specific hieroglyph for ‘brewer’ in Egypt indicating the importance of beer in the Egyptian culture. It is believed that the Egyptians taught the Greeks how to brew beer, who then taught the Romans, who in turn taught those ‘savage tribes’ in Europe. Monasteries and women In Europe, up until the 14th century, beer was usually made at home. In those days, as most household tasks, beer production was the job of women. A good beer qualified the woman of the house as well as a good bread or meal. György Vétek notes that Martin Luther’s wife regularly brewed beer for her husband and company. Nonetheless, little by little, it became the job of men, as enough beer had to be provided for the monasteries, abbeys and episcopacies. Monastery A P R I L

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The production of classic Pilsner lager beer, named after the city of Plzen, dates back to 1842. It was around the middle of the 19th century, the era of the industrial revolution, when this type of beer spread in Europe (with the help of the more extensive railway lines) and it was the first mass-produced beer, as well, driven by the need created by the growing urban population while cooling technology was also spreading. This type of lager beer proved to be very successful, it became ‘the’ beer and determined the concept of beer for about a century for much of Europe – vendible to most consumers.

What is beer made of? As almost any substance containing certain sugars that can undergo spontaneous fermentation due to wild yeasts in the air, beer-like beverages were probably invented independently on different continents. Nearly every culture developed their own version using different grains. Africans used millet, maize and cassava, the Chinese used wheat, the Japanese used rice, the Egyptians used barley. Desperate early American colonists with a shortage of barley and hops in the new world made beer from corn, molasses, wheat bran, pumpkins, and even persimmons. Agave was used in Mexico and sweet potatoes in Brazil. Pasteur In 1876, Louis Pasteur unraveled the secrets of yeast in the fermentation process and developed pasteurization to stabilize beers 22 years before the process was applied to milk.

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One might think that the popularity of the Czech beer culture in Hungary is due to the works of Bohumil Hrabal (and their excellent and popular film adaptations) and works of literature like Švejk by Jaroslav Hasek. However, it is a much older story. Around the turn of the 19th and 20th centuries, a large amount of Czech beer was brought to Hungary – over half a million hectoliters in less than two decades preceding World War I. As author and beer expert György Vétek explains, it was not really international trade as both Hungary and Bohemia belonged to the same state, the Austro-Hungarian Monarchy. There were several Pilsner beer halls in Budapest and Czech beer was tapped in many other places, as well. Despite historical and political differences, the import of Czech beer was substantial between the two world wars, too. After World War II, towards the end of the 1950s, trade picked up between the members of the Soviet Bloc and Czech beer was among the first import commodities in Hungary. So, one can say that several generations of Hungarians grew up on Czech beer, the expert points out to Diplomacy&Trade.

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“HUNGARIAN RESPONSE TOWARDS CZECH CULTURE IS INCREDIBLY POSITIVE”

The cultural institute of the Czech Republic in Budapest, the Czech Center celebrated its 25th anniversary last year. The Director of the Center, Lucie Orbók tells Diplomacy&Trade about the widespread activities of the institute and its plans for the rest of the year.

When asked what she considers the greatest success of the institute in the past quarter of a century, the Director says she is sure that all the past heads of the Center would underline something else as the greatest success: the Alfons Mucha exhibition in Museum Fine Arts, the Czech Edition of Bridging Europe in Müpa or the Czech presence at major festivals such as Sziget, Budapest Spring Festival and MITEM at the National Theater. “What I would call the greatest success is not one single event but the fact that the Czech Center has maintained high quality cultural programs, presenting the most respectable artists and experts from the Czech Republic and strong partnership with Hungarian institutions for over two decades. In the last five years, under my leadership, next to cultural programming, we have developed our language courses and the number of students is growing year by year. For us, it is not about business but more like about building a community around the Czech Center.”

Celebrating the 25th anniversary As Lucie Orbók recalls the anniversary was unforgettable. “In January last year, we organized a celebration in the Czech Center which is located in the building of the Embassy of the Czech Republic. Next to the retrospective exhibition full of archival materials and

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artefacts, a debate was held with all the former directors present. It was very interesting to see the different points of view and how the institute has been transforming within that period time. All former employees were invited as well as all the partners from Hungarian institutions and cultural organizations. Last year was also special because it was the celebration of the 100th anniversary of the establishment of Czechoslovakia. Together with Czech and Slovak Embassy in Hungary and the Slovak Institute, we organized many events to celebrate this centenary.”

A variety of genres The Czech Center portrays the Czech culture to the Hungarian public. Regarding the main areas, themes and methods of presentation, the Director notes that when she arrived to the Czech Center in 2015, she set several goals for herself: “next to the development of the language courses, I focused on the promotion of contemporary art from all the genres. The Hungarian response towards Czech culture is incredibly positive but, at the same time, it is quite limited to adoring the art poetics of the Czech masters Bohumil Hrabal and Jiří Menzel. Since 2015, together with my wonderful team, we have put most of our energy into presenting contemporary filmmakers (every year, we present the ‘Czech Film Carnival’ in Toldi

Cinema), contemporary theater (bi-annually the ‘Csekkold! Theater Festival’ in Katona József Theater). Last but not least, our big passion is literature. Since 2016, we are present at the Budapest Book Fair under the name of #nemcsakhrabal or #nemcsakkisvakond. Despite the slightly controversial title of our stands, the interest towards contemporary Czech literature has risen from both visitors and Hungarian publishers. In the field of Czech children’s literature, we established our own publisher: Csirimojó. It has only existed a year but two books we published last year have just been listed among the Best 25 children’s foreign books in Hungary in 2018!”

Not just Budapest The actual building of the Czech Center in Budapest is not the only venue for the activities of the institute. “As mentioned before, the Czech Center has long term partnerships with the most important cultural institutions in the country. The majority of our events are organized outside the building, in cooperation with these partners. Under my leadership, we fully focus on fostering international cultural cooperation, so, the Czech Center does not organize just bilateral events, but also those in which up to 20 countries participate, such as the flagship project of EUNIC Hungary – Literature Night that features public readings A P R I L

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A EUNIC member The Czech Center is a member of EUNIC, the European Union National Institutes for Culture, which is a network of European national institutes of culture and national bodies engaged in cultural and related activities beyond their national borders, bringing together organizations from all 28 EU member states. The Director stresses that “it is not exaggerated to say that the Czech Center has always been an active and dedicated member of the network. I personally consider the cooperation on the level of national cultural institutes as crucial and mutually enriching. This year, the Czech Center holds the presidency of EUNIC Hungary, which is even more demanding, considering that we should work out a new strategy for the next three years. It is a challenge and privilege in the same time. In the past, EUNIC Hungary implemented two events per year, but now, our cluster´s activity is rapidly growing. This year, our plan includes eight events in and outside Budapest. The Hungarian EUNIC cluster is also positively evaluated on EU level in Brussels and we were able to draw funds last year for implementing the largest project in our history, which focused on innovation and inclusion through cultural heritage. A series of more than 20 events organized in cooperation of 18 countries was a real success and we aim to follow up.”

And the year goes on… As regards other programs for the rest of the year, Lucie Orbók says it is hard to pick just a few of the many ahead of them. “What is surely special for this year is that we commemorate the 30th anniversary of the fall of Iron Curtain. Also, in cooperation with the Embassy of Czech Republic, we prepare several projects: from an interactive exhibition to a song contest, inspired by the famous Czech singer Karel Kryl. Together with the book publisher Csirimojó, we will publish another three Czech children’s books this year. One of them is an award-wining autobiography ‘The Wall’ about a boy in a Communist country by famous Czech-American writer Petr Sís. This season will end with the 4th Czech Theater festival ‘Csekkold!’ in November, when the Hungarian audience will have opportunity to see the best Czech performances of last year. Literally the best because one of the chosen performances – Shakespeare´s ‘Measure for Measure’, directed by famous Polish director Jan Klata – has just obtained the Czech critics’ prize for Best performance of 2018. I would suggest following us on social media so you don´t miss any of the programs we have this year.”

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BUILDING A CULTURAL COMMUNITY

of contemporary world literature by famous actors at different venues. Since 2016, this event is more and more popular, we have about 4,000 visitors per year. When we evaluated the project last year and we asked our visitors for their opinion, the majority of the answers were incredibly positive and enthusiastic about event. There were a few who said: ‘Please, do it every month!’ For that, we don´t have the capacity, unfortunately, but this year for the first time, it will be organized also outside Budapest – in the eastern city of Debrecen,” she points out.

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COMPETITIVE ATTRACTION CZECH-HUNGARIAN CONTEST TO LURE FOREIGN FILM PRODUCTIONS

Foreign filmmakers and TV crews spent nearly CZK 5 billion (close to EUR 200 million) last year in the Czech Republic, a jump of nearly CZK two billion compared to 2017. With the state having paid out some CZK 800 million (over EUR 31 million) through an incentives scheme, the return on investment is solid, Radio Prague reports. But competition is fierce and heating up – with Hungary being one of the main competitors.

A boom in Hungary, too According to a summary by OrienTax, the rapid growth of the Hungarian film industry over the past 15 years can be attributed to several factors. On the one hand, the recovery is due to the favorable provisions of the Film Act, which entered into force in 2004, specifically designed to make the Hungarian film culture and film industry internationally competitive. In accordance with this law, movie production companies in Hungary enjoy automatic indirect state support in order to create the proper financial background. From June 11, 2018, the previous 25% rate of support increased to 30%. The increased subsidy may be claimed for all cinematographic works submitted on or after that date. In addition, other factors contribute to the success of the Hungarian film industry: the existing film infrastructure, that is, modern, well-equipped film studios, staff with expertise and international experience, as well as the availability of diverse shooting locations – all these also help to make the country an attractive shooting venue for Hungarian and foreign film producers.

photo by DEPOSITPHOTOS.COM

The report says that in 2016, the Czech Republic tweaked its incentives scheme, governed by the Act on Audiovisual Works and Support for Cinematography, to better lure foreign producers. And the move seems to have paid off. For over two years now, the scheme has offered film and TV productions cash rebates for Czech productions (20%) and international productions (10%) that qualify. Foreign productions spent twice as much in the Czech Republic in 2018 as they did in 2017, but the incentives may not be enough because regional competitors offer more. As Minister of Culture Antonín Staněk said on Czech Radio, “as the market evolves, of course, it will be necessary to address this issue. If we were to consider a change in the future, we would, of course, have to find the financial resources to fund it.” Competition to attract international audiovisual productions has always been fierce. Many countries have long offered more attractive

investment incentives. Hungary, for example, offers a rebate of up to 30% of the total cost.

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business

OPENING TO THE SUN

PROFESSIONAL DAY ORGANIZED TO HELP CURRENT AND FUTURE INVESTORS

The emerging domestic solar PV (photovoltaic) power plant market is a constantly changing and dynamically expanding system, both in terms of regulation and involved companies. Recognizing the growing importance of this f ield, a professional day for solar park investors has been organized recently by TÜV Rheinland, RENA Solar and Solar Check Energetics.

The event set the goal of helping solar investors to navigate the Hungarian solar market and to highlight which areas of the solar power plant market deserve special attention. The program included the management of risks associated with solar parks, the screening of power plants with

inadequate production and repair options, the operation and maintenance of solar power plants and instrumental diagnostic capabilities.

fundamentally influenced by the expertise of the design engineer, the quality of the materials used (solar module, PV inverter, connectors, PV cables) and the experience and knowledge of the project implementation team. When selecting these and considering the value for money, it is worth checking whether the selected contractor has the necessary experience and tools/machine park background and the right reference in building industrial solar parks. In all respects, professional project work requires many years of experience in the solar industry. The operation and maintenance of an industrial PV power plant is a long-term task for both project owner and operator of the plant. For the long-term satisfaction of the investor and stake holders, the completed solar power plant has to deliver properly: i.e. operate permanently at the maximum predicted and expected production capacity.

Expertise in design

Possible problems

As experts at the event pointed out, the construction of a solar power plant is

If the photovoltaic plant continuously underperforms, it may cause a significant

loss of revenue for the investor, even in midterm, so, it is advised to check this carefully and take actions to eliminate the root causes. Failures may occur due to construction problems such as electrical installation mistakes, installation negligence or incorrect use of materials; quality problems of the components, materials used, manufacturing failures; and faults resulting from external impact. It is possible to fix almost all of the failures afterwards, but it all takes extra cost and time, so it is important to focus on prevention, the lecturers pointed out. As a means of prevention, a full range of technical and mechanical inspection as well as thermographic inspection diagnostics of PV plants are offered, giving the investor a clear picture of their solar power plant’s performance.

ON THE VERGE OF A WATER CRISIS UNESCO EXPERT HOLDS LECTURE ON WHAT COMPANIES CAN DO

There is no question that there will be a water crisis in the 21st century because its effects are already occurring in Hungary. Also, there is no question as to whether it will affect companies, "the answer is clear: it will," Prof. Dr. András Szöllősi-Nagy pointed out at the BCSDH Business Breakfast and Action 2020 Professional Forum in Budapest this March.

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Security of supply

patterns, institutions and values have been identified and are available. These can prevent the destruction of natural resources, or at least substantially slow down the process.”

Climate change and water According to a forecast by the OECD, by 2050, global water use will increase by 55%. Most

of this growth will be due to an increase in the demand for water from manufacturing, the energy sector and households. “Most of the effects of climate change will become visible through changes in water, thus, all businesses must prepare to use water more efficiently. Climate-change and water-related problems should not be approached from an engineering A P R I L

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BCSDH President Attila Chikán pointed out that “although, Hungary is, for now, in a favorable position from the perspective of water supply, it is crucial that we sustain this beneficial situation in the long term. The business sector has a role to play in achieving this. CEOs have the primary responsibility of recognizing the importance of adaptation and starting the process of adapting. The issue of increasing water efficiency partly involves market competition as well – a fact, which cannot be separated from the issue of security of supply. Additionally, ensuring a supply of suitable quality water will also prove to be increasingly challenging for companies. This year, through our Action 2020 program, we aim to support the efforts of companies in these areas.”

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photos by DEPOSITPHOTOS.COM, PÉTER FÁTH, Z. LÁSZLÓ NAGY

Prof. Dr. András Szöllősi-Nagy, Deputy Chairman of the Intergovernmental Council of the UNESCO International Hydrological Program and Doctor of the Hungarian Academy of Sciences delivered a successful and thought-provoking lecture at the Business Breakfast of the Hungarian Business Council for Sustainable Development (BCSDH), an organization with 87 member companies that produce 30% of the Hungarian GDP. It was followed by an Action 2020 workshop, with the participation of CEOs and experts, aimed at helping the business sector to make real improvements in the area of water. In his introductory thoughts, Dr. Gábor Bartus, Secretary General of the National Sustainable Development Council (NFFT), highlighted that “despite previous efforts, Earth's natural capital continues to decline at a very fast pace. Today's poor sustainability performance means tomorrow's weaker socio-economic well-being. Fortunately, for humanity, remedial technologies,

perspective only, as water use has important economic, sociological and political implications, as well. In the next ten years, the biggest risk factor will be ignoring water-related problems, extreme weather, climate change and the social consequences of these phenomena. Only 0.007% of Earth’s water resources are available for direct human consumption. We are on the verge of a water crisis,” András Szöllősi-Nagy explained.

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FOCUS ON INTERNAL INITIATIVES SURVEY SHOWS CORPORATE LEADERS ARE OPTIMISTIC DESPITE THE PROSPECT OF SUBDUED GROWTH Value of data

This is the eighth year that PwC Hungary has gauged the opinions of Hungarian CEOs. The survey was conducted in cooperation with the Confederation of Hungarian Employers and Industrialists (MGYOSZ). In parallel with the Hungarian survey, which was based on in-person interviews, PwC conducted nearly 1,400 interviews with CEOs worldwide. These concurrent interviews allowed for international comparison with the thinking and strategic direction of Hungarian CEOs. As Dr. Barbara Koncz, Director at PwC Hungary’s Tax and Legal Services points out, “the findings of our survey conducted at the end of 2018 show that, both globally and in Hungary, CEOs are optimistic about their own organizations’ revenue prospects, but their confidence has declined regarding global and local economic growth prospects for 2019.”

Plans for 2019

photo by DEPOSITPHOTOS.COM

photos by DÁVID HARANGOZÓ, ANDRÁS JÓKUTI, ARVALICOM

CEOs’ conf idence in global and Hungarian economic growth is subdued compared to last year. Despite this, they are still conf ident about their own organizations’ success, which they aim to ensure by focusing on operational eff iciencies, innovation and human capital. Both globally and in Hungary, there is consensus on the key role data plays in decisionmaking. Even though, few CEOs are satisf ied with the quality and scope of their data, the majority of global and Hungarian CEOs agree that artif icial intelligence (AI) will dramatically change their business over the next f ive years.

The survey finds that the overwhelming majority of both Hungarian (87%) and global CEOs (77%) are planning operational efficiencies to drive revenue growth. The next two items on global CEOs’ list of activities are organic growth (72%) and launching a new product or service (62%). In Hungary, launching a new product (56%) precede organic growth (51%). “CEOs’ confidence about their own organizations’ performance appears to be based on process optimization, innovation, and human capital expansion. I think the current period of prosperity is w w w . d t e u r o p e . c o m

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encouraging for CEOs, and affords them excellent opportunities to take action towards concrete goals. Although, clouds are gathering over the horizon, there is still time to act in order to prepare and bolster companies,” according to Dr. Tamás Lőcsei, PwC Hungary’s CEO since July 2018. The effect of trade conflicts is already being felt globally: 70% of global CEOs expressed concern about the impact of trade conflicts on their businesses. The turn away from the US market and shift in Chinese investment to other countries are reactions to those conflicts. Changes regarding top markets for growth are not felt as strongly in Hungary: Germany, Romania and the United States continue to top the list, with no significant drop in the rankings.

Concerns Hardly any business or political factors have increased in ranking on global CEOs’ list of top concerns compared to last year. Globally, CEOs’ top concern is the availability of key skills (79%), followed by geopolitical uncertainty (75%) and overregulation (73%). In Hungary, the top concern is the availability of key skills, followed by changing workforce demographics (83%), rising employee benefits (72%), and over-regulation (71%). The most significant change has been in the level of concern about exchange rate volatility: 63% of Hungarian CEOs report they are affected by it, compared

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to 46% last year. Concern about climate change among CEOs has risen by 16%, while concern about volatile energy costs has also increased by 15%. 92% of Hungarian CEOs reported that finding the right talent has become increasingly difficult over the past year. The most frequently cited solution to the skills gap – selected by every fourth CEO (27%) – is establishing a strong direct pipeline from education. 23% see significant retraining/upskilling as the answer, while every fifth CEO (19%) considers hiring from competitors as an as option. Globally, the results were less scattered: nearly every second company (46%) sees retraining/upskilling as the solution. As Dr. Péter Futó, President of the Confederation of Hungarian Employers and Industrialists, notes, “a comprehensive reform of the vocational training system is called for at this time and is crucially important as it would have a major impact on labor market trends and contribute to the sustainability of competitiveness.” He adds that his confederation has become familiar with the position of recognized experts in vocational training, developed recommendations, and conducted consultations at county seats throughout Hungary, with business leaders as well as heads of vocational training institutions and their students. “These consultations have allowed us to discuss issues specific to local conditions and gather a wide range of experience for moving forward.”

CEOs seem to be in agreement on the value of data: nearly all respondents indicated a willingness to use data to ensure the long-term success and durability of their business. Despite massive investments in IT infrastructure over the past decade, CEOs report that they still do not receive the comprehensive data they need to make key decisions. The only exception is financial information, with 51% of Hungarian CEOs saying they receive comprehensive data in that area. For all other data types, less than 50% of respondents reported receiving comprehensive data. 50% of CEOs globally and 41% in Hungary said that their organization’s ability to make decisions based on data and analytics was ahead of their competitors, with 37% saying they were at about the same level, and only 12% indicating globally and in Hungary that they were behind in this respect. “Leaders’ expectations have certainly risen as technology advances, but decision-makers are aware that their analytical capabilities have not kept pace with the volume of data, which has expanded exponentially. The information gap is also alarming in one of the most critical areas: customer needs. This needs to change as soon as possible in order for companies to play a successful and sustainable role in business and society,” Tamás Lőcsei adds.

AI: solution or problem? The majority of global (85%) and Hungarian CEOs (60%) agree that AI will dramatically change their businesses over the next five years. Globally, 69% (while in Hungary, 71%) of CEOs agree that AI will have a larger impact on the world than the Internet revolution, and the majority also agree that AI is good for society. However, the overwhelming sentiment among CEOs is of distrust in AI: 85% of Hungarian CEOs and 84% of global CEOs agree with the statement that AI-based decisions need to be transparent and explainable in order to be trusted. Chief executives are divided on AI’s job displacement effect: 54% of Hungary’s CEOs and 48% of global CEOs believe AI will displace more jobs than it creates in the long run.

THE SURVEY

The eighth Hungarian CEO Survey was conducted – in parallel with and – based on PwC’s Annual Global CEO Survey. The aim of the research was to gain a more comprehensive picture of what Hungarian senior executives think, how they see the market, and what expectations and growth opportunities they have. In the Hungarian survey, data was collected through inperson interviews: PwC’s experts interviewed the CEOs of 236 Hungarian companies between October and December 2018. During the interviews, quantitative data was collected by means of questionnaires. The companies contacted were selected by PwC industry groups from the automotive, pharmaceutical and health, energy and utilities, retail and consumer industries, financial services, the technology, information, communications and entertainment sectors, the public sector, and manufacturing. PwC’s partner in conducting the survey was the Confederation of Hungarian Employers and Industrialists (MGYOSZ) that represents more than 60% of the private sector in terms of invested capital, turnover and number of employees.

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THE GOLD OF THE INCAS BUDAPEST EXHIBITION TAKES VISITORS TO PRE-COLUMBIAN TIMES

A century before the arrival of the Spanish conquerors in the 1530s, the Inca Empire occupied a wide stretch of land on the Pacif ic coastline of South America from present-day northern Chile to what is now Venezuela. On viewing the treasures on display at the exhibition ‘1000 years of Inca Gold’ in downtown Budapest, visitors will f ind themselves immersed in this imperial time. The gold objects (100 of them) of the exhibition are from two museums, ‘Museo Oro del Perú’ (Gold Museum of Peru) and ‘Armas del Mundo’ (Arms of the World), that are managed by the Foundation Miguel Mujica Gallo whose directors, Camila Pérez Palacio Mujica (pictured on the left) and Lara Mujica Freundt, granddaughters of the founders of the museums, Miguel Mujica Gallo, accompanied the treasures to Budapest. As Camila Pérez Palacio Mujica explains to Diplomacy&Trade, “Christoph Rahofer, the President & CEO of EMS Entertainment, the organizers of the exhibition in the Hungarian capital, contacted me and then, he came to visit us and chose the pieces to be displayed. The whole process started about six months ago. Even though, it is a private museum, these pieces belong to the state of Peru, they are ancient antiques, from pre-Columbian times. Therefore, the government is always involved in the process of loaning the pieces abroad.”

Historical perspective The Inca Empire (1438-1533) stretched from what is now the northern part of Argentina and Chile to present-day Venezuela, using conquest and peaceful assimilation, among other methods of expansion. Before that, Peruvian pre-Columbian cultures of small individual tribes existed along the Pacific coast of South America and stretched into the Andes and the jungle, as well. She points out that “many exhibited pieces are items that people in pre-Columbian culture traded with each other. Since there were a lot of wars and restlessness between the tribes of this period, such as the Mochica, Chimú, Lambayeque, Frías, Vicus

and others, many weapons are on display, as well.” Items of textile and wood exhibited are from collections in Hungary as – for logistical purposes – it is customary to have a selection from local collections of pre-Columbian items on the world tour of Inca treasures.

Theme Lara Mujica Freundt highlights that “we have over 7,000 gold pieces in the Museo Oro del Perú, but also silver and copper as well as wood. In the planning phase, the organizers of various exhibitions throughout the world go to Lima to pick the pieces they would like to put on display and create a theme about the chosen pieces with the help of museologists and

marketing experts. This way, each country’s exhibition is different. The local organizers have a better understanding of the public that will view the exhibition. In this particular case, what we have here in Budapest are among the biggest and most spectacular pieces that we have in our gold museum.”

Presentation Camila Pérez Palacio Mujica explains that “the exhibition in the Hungarian capital starts with an introduction to the world of pre-Columbian Peruvian culture, and how people migrated there from Asia across the Bering Strait to North and then Central and South America. The exhibitors present, with a little bit of magic and

mysticism, the history that surrounds these golden pieces as the rooms are black with the gold pieces shining in the light.” Adding to that, Lara Mujica Freundt stresses that the exhibition has been created to welcome families, with special attention given to children: games, 3D pictures, etc. “We are very glad to be here in this cultural city and it is a pleasant surprise for us to see how much effort has been put into organizing this exhibition.”

The early days of collection The museum started in the 1950s in their grandmother’s house. The oldest pieces of the collection are ceramic and copper items that date back to some 3,000 years. Camila Pérez Palacio Mujica points out that “most of our pre-Columbian objects come from the northern part of Peru where they were found under the ground. The soil is not so humid there, so, these objects were preserved in a better condition, the loose soil conserved the wooden and textile objects. In the 1950s, my grandfather started collecting things, among them arms made by these pre-Columbian tribes. He was an avid hunter, qualified to hunt the five big games. When he acquired the first Tumi, a gold ceremonial knife from the Lambayeque culture, he was already married to my grandmother. This is, by the way, a piece that never leaves the museum. He bought it because it was a weapon. The person who sold this to my grandfather said to him that if he wanted to buy this piece, he would have to buy all 100 burial items and he did that on the advice of my grandmother. In those times, nobody really cared about such relics of early Peruvian cultures. When he started collecting these, it was easy to acquire them. It was not very cheap because it was gold but obviously, did not have the same value it does today. The government was not involved; it was an activity of private interest. With no relevant legal regulations, whatever you found was yours.” Lara Mujica Freundt finds it important to add that the government also supervises the loaning of objects from the gold museum. “For instance, there is a person from the Ministry of Culture who came here to Budapest to check how these pieces were handled. Also, the Ministry issues legal documents to accompany these pieces.”

Out of context

photos by MÁTYÁS D. NAGY, INCA GOLD WORLD EXHIBITION

As Camila Pérez Palacio Mujica stresses, archeology is not a very exact science. “It is about what has been found and you have to understand that the pieces that are exhibited here were acquired from pre-Columbian graves, which means that they were taken out of context. They were removed by people who are not experts and just wanted to sell them. We know that some of the people in the graves were sacrificed. We don't have too many Inca pieces because the precious metal items were taken by the Spanish to Europe and many of these were melted into coins, utilitarian objects and building decorations. What we know about the pieces exhibited here is that most of them were used for ceremonial reasons as they were described by the Spanish chronicles: textiles, bowls with iconography but there were also utilitarian objects for the nobility or the lower class.” w w w . d t e u r o p e . c o m

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St. Patrick’s Day reception

The Ambassador of Ireland, Pat Kelly – in conjunction with Enterprise Ireland – welcomed members of the diplomatic corps accredited to Budapest in the building of the Hungarian Academy of Sciences to celebrate the Irish national holiday of Saint Patrick’s Day (or the Feast of Saint Patrick). The guest speaker of the event was Catherine Byrne, a Minister of State with special responsibility for Health Promotion and the National Drugs Strategy in the Irish government.

A Glance at Lebanon

The Ambassador of Lebanon to Hungary, Joana Azzi invited guests to the French Institute in Budapest for the opening of the exhibition ‘A glance at Lebanon’ by Lebanese painter Dr. Rida Yaghi. The exhibition is part of the 19th Festival of Francophonie. Rida Yaghi, who studied medicine in Romania, has lived and practiced medicine in Hungary for decades. He started painting 35 years ago.

Argentine concert

The Ambassador of the Argentine Republic to Hungary, Maximiliano Gregorio-Cernadas welcomed guests at the Tildy Palace, his residence on Budapest’s Andrássy Avenue. for a house concert of the series ‘Classics from Argentina and Hungary’, performed by the famed Argentine soprano Haydée Dabusti, accompanied on piano by Attila Jeszenszky-Böhm.

Where quality and refinement cultivate unforgettable culinary experiences.

photos by DÁVID HARANGOZÓ

Inspired by Gin and Jazz influence, The Ritz-Carlton, Budapest’s Sunday Brunch features a variety of hearty options perfect to celebrate the weekend. Enjoy Chef specialties, live stations, lavish dessert buffet, kids corner and vibrant jazz music. ritzcarlton.com/budapest Every Sunday starting from 12:30p.m. – 3:30p.m. 10 500 HUF / person including 1 welcome drink, soft drinks, tea and coffee. 13 500 HUF / person including all above and unlimited house wine, sparkling wine and beer. Prices are subject to 10% service fee. For more information or table reservation please call us at +36 1 429 5500 or email us at concierge.budrz@ritzcarlton.com

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WITTY

IN THIS SERIES, DIPLOMATS SHARE PERSONAL ACCOUNTS OF THEIR EXPERIENCES ON “EXCURSIONS” into Hungarian culture, art, gastronomy & scenery.

LE A K S

HAPPY MOMENTS IN DIFFICULT TIMES

THE HUMAN FACE OF BELGIAN-HUNGARIAN HISTORICAL RELATIONS BY MARIE-FRANCE ANDRE, AMBASSADOR OF BELGIUM

There have been numerous significant associations in the history of bilateral relations between Belgium and Hungary. The Belgian ambassador highlights two of these.

photos by KADOC-KU LEUVEN, GÉRUZET FRÈRES, DÁVID HARANGOZÓ

The first one takes us back to the 19th century when Princess Stéphanie of Belgium – born in 1864 to Leopold II and Marie Henriette of Austria – married Rudolf, the only son of Austro-Hungarian Emperor Franz Joseph and his wife, Elisabeth. Although, they had a daughter in 1883, the marriage was not a happy one. In 1889, Rudolf and his lover, Baroness Mary Vetsera were found dead in the Mayerling hunting lodge. Eleven years later, in 1900, Princess Stéphanie married Hungarian nobleman Count Elemér Lónyay of Nagylónya and Vásárosnamény. The couple moved to the Count’s castle in Oroszvár (now Rusovce, Slovakia). Elemér Lónyay was given

a princely title, Prince Fürst, in 1917 by Emperor Charles I. The couple left the Oroszvár castle in 1945 as Soviet troops were approaching Hungary. They found shelter at the Pannonhalma Abbey in Hungary where Stéphanie died in 1945. Some pieces of her furniture can still be found in the Belgian ambassadorial residence in Budapest. Earlier, during the First World War, Stéphanie resided in the Oroszvár castle, which she converted into a Red Cross Hospital for wounded soldiers. The Princess, herself was among the nurses running the ad-hoc hospital. She did an excellent job caring for the patients and in 1918, Stéphanie became a certified nurse.

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In addition to being a nurse, Princess Stéphanie was closely involved with two associations that worked to increase the offer of welfare services to Hungarian people. The first, the National Stefania Association for the Protection of Mothers and Infants, was founded because of concerns over the health of future generations, speculations about the declining birth rate, infant mortality and the protection of mothers as well as their infants. The second organization is the Orphans of Teachers and Widows of Teachers Association. Both were allowed to raise money through selling printed post cards in public places. Princess Stéphanie published articles in newspapers, gave speeches to a variety of audiences and wrote a memoire of her life, titled ‘Ich sollte Kaiserin werden’ (‘I should become an Empress’), which sold well.

References to the Belgian Princess remain present in Hungary to this very day. Budapest has a street named after her, the ‘Stefánia út’. Additionally, the Belgian Princess introduced several dishes featuring cooked eggs, which are still common to this very day. An example of her gastronomic contribution is the ‘Stefánia vagdalt’.

Post-war projects The second association of interest took place right after the end of WW1. After the destruction of the First World War, Hungary was plagued by poverty, inflation, high unemployment and food shortages. At that time, the most successful support from Belgium was the Belgian-Hungarian Child Relief Project in the 1920s. Between 1923 and 1927, more than 20,000 Hungarian children were sent to Belgium for ‘holidays’, where they stayed with host families. Special dictionaries were distributed to ease communication, during the few months of their stay. The entire project strongly improved bilateral relations between Belgium and Hungary. However, not long after both countries were on different sides in the World War. Shortly after the Second World War, a similar project was initiated. This time, the scale was smaller and the duration was shorter due to the entirely different international political context. Nevertheless, just like the first time, the project was hugely successful among Belgian families. Many Belgian families who had previously taken part in the Child Relief Project and accommodated Hungarian children, opened up their doors to welcome ‘de Hongaartjes’ once more. Undoubtedly, the second Relief Project also contributed positively to the bilateral ties between both countries. The Hungarian Child Relief Project(s) played an important role in the renewed political rapprochement between the two countries. A couple of books have been written in memory of these happy moments in difficult times. During the opening of an exhibition that I inaugurated last year on these projects, I had the pleasure to meet some people who participated in these trips to Belgium as a child. This created a strong bond between the families who are still in regular contact today.

Hungarian Mária Petrányi (4th from the left) and the receiving family in Diest

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5TH HUNGARIAN FILM WEEK

APRIL 22 - APRIL 27, CORVIN CINEMA The Hungarian Film Week offers an excellent opportunity to have an idea on the trends of local cinematography, to meet filmmakers and industry professionals. Organized by the Hungarian Film Academy Association with the support of the NMHH Media Council and the Hungarian National Film Foundation, the 5th Hungarian Film Week will be hosted by the Corvin Cinema in Budapest. 200 films be screened in seven categories: feature film, TV, television series, short film, documentary, educational film and animation film. Come and watch Hungarian Films! www.filmhet.hu

INTERNATIONAL BOOK FESTIVAL 2019

APRIL 26-28, MILLENÁRIS PARK Budapest’s International Book Festival is considered the largest event on the Hungarian book scene, with up to 60,000 visitors. The festival’s 25th edition offers a great number of cultural programs and at least 50,000 books as well as the opportunity to meet noted authors (up to a hundred, from 25 countries). The festival’s guest of honor this year is Karl Ove Knausgard, known for six autobiographical novels, titled My Struggle (Min Kamp). The festival’s guest country this year is Norway. Visitors are invited to enjoy book presentations, readings and on-stage conversations. Concerts, record and film screenings will make the event a true festival. www.konyvfesztival.com

THE DAY OF THE BOOK

The festive celebration of books and literature draws its inspiration from a Catalan tradition, the Festival of the Rose. Legend has it that Saint George, Patron Saint of Catalonia and international knight-errant slew a dragon about to devour a beautiful Catalan princess. From the dragon’s blood sprouted a rosebush, from which the hero plucked the prettiest rose for the princess. The traditional Rose Festival is celebrated in Barcelona to honor chivalry and love. In 1923, the festival merged with ‘El dia del libre’ (The Day of the Book), to mark the nearly simultaneous deaths of two giants of literary history, Miguel de Cervantes and William Shakespeare. The festival soon grew beyond Barcelona and Spain.

JUNE 11, PAPP LÁSZLÓ BUDAPEST SPORTARÉNA Slayer is a five-time nominated, two-time Grammy Award-winning metal band that writes songs, which mirror the turmoil and aberrations of our society. The band’s 11th studio album ’Repentless’ debuted in 2015. “It is crushing and brutal, steadfastly refusing to cater to the mainstream,” the band describes the album that was written and recorded by guitarist Kerry King and singer/bassist Tom Araya at Henson Studios in Los Angeles, along with returning drummer Paul Bostaph and guitarist Gary Holt. Thirty-six years into its career, Slayer remains the preeminent punk-trash band that helped establish the genre and that up-and-coming metal heads continue to revere and emulate. The band announced the kick-off of their final world tour, arriving in Europe this summer. www.livenation.hu

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FEELINGS ARE FACTS: THE LIFE OF YVONNE RAINER (MOVIE)

PART OF THE SERIES ‘WHAT IS DANCE? DOCUMENTARIES ABOUT THE GREATEST FIGURES OF AMERICAN POST-MODERN DANCE’ APRIL 8, 15 AND 22, TRAFÓ In the ’40s, Merce Cunningham separated dance from music, used dice to make choreography, and later introduced dance with computer. In the early 1960s, postmodern dance started with a burst of experimentation by a rag-tag group of rebels called Judson Dance Theater in Greenwich Village. They broke with the expressionism of Martha Graham and the theme-and-variations structure of Doris Humphrey. They walked, they ran, they touched the earth and fell onto each other. They aligned with Minimalist artists and musicians in their wish to strip down to essentials – in fact, many of the musicians and artists created their own dances. They were all influenced by Merce Cunningham and John Cage, but developed their own styles. “The function of art is to shake us out of our complacency and comfort,” says Yvonne Rainer whose avant-garde performances and films have agitated audiences for 50 years. Since co-founding New York’s influential Judson Dance Theater, Rainer’s boundary-crossing art has been labeled in many ways: feminist, conceptual, post-modern, political. Feelings Are Facts examines the contradictions and creativity of this remarkable provocateur – still performing at age 80 – and raises the question, What does it mean to be an avantgarde artist today? Yvonne Rainer exploded onto the performance scene in the early 1960s, a protégé of John Cage and Merce Cunningham, boldly pursuing a minimalist aesthetic, using every day, often random movements that confounded critics. At Judson, she collaborated with the rule-breaking artists of her generation: Robert Rauschenberg, Trisha Brown, Steve Paxton, Lucinda Childs, and Meredith Monk. With foundational works like 'Trio A', Rainer radically altered the vocabulary of modern dance forever. In the 1970s, Rainer turned from performance to filmmaking, and after 25 years of filmmaking she returned to choreography once again to make courageous, unpredictable dances. www.trafo.hu

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photos by DEPOSITPHOTOS.COM, ANDREW STUART, GERGELY BOTÁR

SLAYER: FINAL WORLD TOUR

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TOTO CUTUGNO CONCERT

AVATAR: DISCOVER PANDORA

APRIL 27, TÜSKE CSARNOK Italian singer Toto Cutugno celebrates his 75th birthday in Budapest with a live concert featuring his unique and inimitable magic – the genuine Mediterranean feeling – through his Italian songs. The two-hour concert will include his biggest hits: L’Italiano, Solo noi, Donna donna mia, Soli, Innamorati, Serenata and Insieme. Toto Cutugno will be accompanied by a 52-member symphonic orchestra on stage, conducted by Alterisio Paoletti. www.funcode.hu

BUDAPEST100 – IN THE FOOTSTEPS OF BAUHAUS

ON MAY 4-5, ALL OVER THE CITY In 2019, Budapest100 will be organized on the first weekend of May. The program series, initiated by the Open Society Archives (OSA), an organization committed to the preservation of architecture, is traditionally held on the 99th and 100th day of the year when several dozen 100-yearold buildings in Budapest are opened to the public. “These events give the residents of the buildings the opportunity to get to know each other and the often hidden treasures of their houses,” organizers say. “We organize walking tours from building to building, from district to district. Each building has its own story, and maybe its own historian. Budapest100 offers the opportunity for these hidden attractions to be discovered.” Activities this year will be colorful: quizzes, courtyard programs, children’s playhouse and street festival are among the planned programs, which have the Bauhaus style in focus, presenting many houses owned by famous residents such as actress Zsuzsa Csala, writer Emil Kolozsvári Grandpierre, count János Esterházy and director Pál Sándor. In 2013, a journalist from the Guardian, Laura Benett selected Budapest100 as one of Europe’s best arts events. “It's a brilliantly simple concept – you wonder why more cities don't follow suit.” www.budapest100.hu

UNTIL MAY 31, ANDRÁSSY ÉLMÉNYKÖZPONT On February 2, AVATAR fans in Budapest became the first in Europe to have the opportunity to step inside AVATAR: Discover Pandora, the state-of-the-art interactive exhibition inspired by James Cameron’s movie. Presenting Pandora as a real place, AVATAR: Discover Pandora gives visitors the opportunity to interact with the exhibition through a series of exciting and engaging immersive environments that highlight Pandora’s diverse flora and fauna, exotic wildlife, and the amazing culture and mythology of its indigenous people, the Na’vi. Learn about space travel and the science behind the discovery of Pandora in the Alpha Centauri solar system. Explore recreations of Pandora’s most compelling environments showcasing its unique plants and animals and what they can teach us about our own planet. Engage in interactive activities based on the culture, language and music of the Na’vi, the nine-foot-plus tall humanoids who are the indigenous people of Pandora. Experience the jewellike glow of Pandora’s bioluminescent plants and animals. Interact with banshees, learn to operate an AMP suit, picture yourself as part of the Avatar Program. The artifacts and specimens presented on 10,000-square-meter showground were curated by scientists from the RDA’s Avatar program. For an experience that could enchant the entire family, leave the 21st century behind and step into a 22nd century world filled with science and wonder!

DID YOU KNOW?

Released in 2009, James Cameron’s AVATAR is the highest-grossing film in motion picture history, with a box office gross of nearly USD 2.8 billion. Mesmerizing all ages across the globe with its otherworldly visuals and groundbreaking special effects, the film quickly became a worldwide phenomenon so popular it will be followed by four sequels, with the first sequel due for release on December 18, 2020. AVATAR was named best picture at the Golden Globe Awards and won numerous Academy Awards®. www.avatarkiallitas.hu

MUSE: STIMULATION THEORY TOUR

MAY 28 BUDAPEST ARENA With its intense, futuristic synth and guitar driven sound, the multi-platinum, Grammy Award-winning Muse – featuring rock icons Matt Bellamy, Dominic Howard and Chris Wolstenholme – deliver the perfect package of arena-ready rock. Since forming in 1994, Muse has earned massive success at home in its native U.K. and around the world, selling over 15 million albums including Black Holes and Revelations, The Resistance, and Drones. They performed at the opening ceremony of the 2012 Olympic Games in London with the official single 'Survival'. In 2018, the trio released its eighth studio album Simulation Theory, and began their Simulation Theory World Tour 2019. www.livenation.hu

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gastronomy 9TH GOURMET FESTIVAL

PAYING COMFORTABLY WITH YOUR PHONE AT GOURMET

Each year, Gourmet Festival strives to make services simpler and more convenient for customers. With the help of OTP Bank, the fest’s main sponsor, “besides paying with a touch of your card, you can also use the Simple app on your smartphone to pay for the tickets and the food and drinks. All you need to do is register your bank card in the app and enjoy paying by phone,” Zoltán Péter Nagy, OTP Bank’s Marketing and Communication Director reveals.

PAPRIKA, BREAD HEEL AND BEER ARE THE THEMES A two-Michelin-star Viennese chef, the daredevils of the Korean, Russian and Albanian cuisine and the best Italian sparkling wine to star at OTP Bank Gourmet Festival on May 16-19 at Budapest’s Millenáris Park. Organizers of the annual Gourmet Festival came up with a triple theme this year to inspire the exhibitors present at the festival. More than 50 restaurants and chefs will offer their favorite dishes, along with specialties that has something to do with paprika, crusty bread heel or beer. “This festival has developed into a mass attraction over the years and the line-up in 2019 is the strongest so far. Very creative and interesting concepts will be presented,” organizer Richárd Nemes promises. “We chose this year’s theme with a mission: to educate the public on waste-free cooking, and the use of leftovers,” the gastro-blogger and Gourmet Fest’s host, reveals. “Bread is a sacred and symbolic element of gastronomy, while its heel and crust are often regarded as a portion only the poor eat. Bread heels are generally used in the form of breading, fried foods, bread salads and soups, stuffed bread, bread pudding, etc., in Hungarian, as well as

in French and Italian kitchens. I’m sure we will see many interesting transformations of this ingredient at the fest.” András Jókuti, the other host of Gourmet Festival notes that “as for the paprika, we are known for it, worldwide. I hope restaurants won’t stick to presenting traditional foods such as beef

legendary

An exciting international line-up

stew and goulash at the fest, rather come up with renewed concepts and modern formulas.” The third topic is something chefs can use as an ingredient in marinades and sauces, but, of course, many vendors will present beers on tap: alongside classic Belgian and Czech beers, Hungarian craft beers will be available.

The gourmet fest traditionally invites the best Hungarian and international chefs to cook side by side, presenting exclusive dinners at Millenáris Park. This year, the two-Michelin-star Viennese chef, Konstantin Filippou will create a fusion of Austrian and Mediterranean flavors, while the one-Michelin-star Lee Jong-kuk from Seoul will concentrate on aged soy sauce and marinades. Twin chefs Ivan and Sergei Berezutsky of Twins Garden will bring several authentic ingredients from Russia. Stand, one of Hungary’s newest Michelin star restaurants, headed by Tamás Széll and Szabina Szulló, will present a lunch, pairing their creations with a special selection of the Italian sparkling wine Ferrari. The Albanian chef Bledar Kola (who worked at Noma, one of the world’s best restaurants) is also invited to the fest, along with Max Stiegl who is best known for his modern approach towards Burgenland cuisine, renewing guts and steam dumplings in his restaurant at Fertő Lake.

Gundel, the

Take advantage of the grand ballroom for large events, or book a secluded room for private negotiations.

The main dining room is ideal for casual meetings. Enjoy prix-fixe meals or á la carte dining.

Seal the deal with a gift. Thank clients or business partners with a signature selection of pralines available in our boutique.

We can also come to you, catering any size event in almost any venue in Budapest.

photos by KATA MAJOR

CULINARY HERITAGE OF HUNGARY

More than just any restaurant, the 125-year-old Gundel is legendary for a reason: It offers an unforgettable gastronomic experience paired with unparalleled service. Whether it’s for discussing important matters, or throwing a diplomatic event, think of Gundel for your business needs. Here there’s always room for any celebration or occasion.

For more information please contact Anikó Nagy, Director of Corporate & Diplomatic Sales Gundel Restaurant • 1146 Budapest, Gundel Károly út 4. • www.gundel.hu • aniko.nagy@gundel.hu • +36 1 889 8196

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wine

VINCE BUDAPEST WINE SHOW 2019

WHERE TO FIND THE BEST BOOZE?

PRESENTING THE WORLD’S FINEST WINES

One of the most prestigious wine events in the CEE region, VinCE Budapest celebrates its 10th anniversary this year. Hosted by the Castle Garden (Várkert Bazár), the three-day program kicks off on April 25.

BUDAPEST’S BLUE FOX BAR RANKS HIGH AMONG THE 50 BEST COCKTAIL BARS IN EUROPE

Big 7 Travel has picked out Europe’s best cocktail bars; the places with the world class mixologists, the spectacularly plush decor and the drinks that will take your breath away. Blue Fox The Bar at Budapest's Kempinski hotel came in 19th on the prestigious list. Organized by VinCE Magazine, VinCE Budapest offers a truly unforgettable experience for wine enthusiasts and professionals alike. The event that traditionally presents the world’s most respected wine celebrities is a paradise for wine lovers and for professionals it is a must. Besides displaying an awesome cornucopia of wines, with no less than 160 exhibitors presenting 1,000 different types of wine, the exhibition also offers seated tastings where wine lovers may indulge in wine and knowledge alike. 20 different master classes and interactive workshops will be held on the hottest topics in the wine world, such as mixing red cuvées and gin, presenting internationally acclaimed wineries such as Villa Sandi, Antinori, Mionetto and the Portuguese Symington, along with acclaimed Hungarian professionals such as Mihály Figula Jr., István Szepsy Jr. and representatives of the Mád Circle. The 2019 show will feature internationally acclaimed wine writers, sommeliers and wine judges such as Essi Avellan Master of Wine, champagne expert György Márkus, and Zoltán Szabó who worked as a sommelier at the Trump International Hotel and Tower in Toronto. www.vincebudapest.hu

While beer accounts for a large percentage (37%) of alcohol sold across Europe, spirits are close behind, with 25% of the market share. Europe’s cocktail industry is booming, with creative bartenders behind some of the continent’s most exciting bars, speakeasies and classic cocktail lounges. Dogma (Antwerp, Belgium) came in at No.1, with Pharmarium (Stockholm, Sweden) at No.2 and Cash Only (Prague, Czech Republic) taking No.3. With social media playing a huge part in food and drinks trends (a search for ‘cocktail’ on Instagram returns more than 10.7 million hashtags), bars are going above and beyond to have cocktails that taste as good as they look, with a stylish interior to match.

FIGULA W I N E RY

photos by VINCE, ADAM BERTALAN/WWW.ADAMBERTALAN.COM

PRESTIGE RESERVE PRIZE 2018 “Best Winery of the Year” Hungary, Balatonfüred | figulapinceszet@figula.hu | +36 30 662 4332 | figula.hu

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THE ORIGINAL PILSNER BREWED THE ORIGINAL WAY DON’T DRINK AND DRIVE www.alkohol.info.hu

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