Hollosi Information eXchange /HIX/
HIX MOZAIK 384
Copyright (C) HIX
1994-12-24
Új cikk beküldése (a cikk tartalma az író felelőssége)
Megrendelés Lemondás
1 Ministry of Foreign Affairs - Newsletter (dec.21) (mind)  271 sor     (cikkei)
2 Ministry of Foreign Affairs - Newsletter (dec.22) (mind)  106 sor     (cikkei)
3 Ministry of Foreign Affairs - Newsletter (dec.23) (mind)  277 sor     (cikkei)
4 CET - 21 December 1994 (mind)  155 sor     (cikkei)

+ - Ministry of Foreign Affairs - Newsletter (dec.21) (mind) VÁLASZ  Feladó: (cikkei)

N  E  W  S  L  E  T  T  E  R

Republic of Hungary                             Budapest, 1394 . 423
Ministry of Foreign Affairs                     Telephone:36(1)156-8000
Press Department                                        Telefax: 36(1) 156-3801
557/1994.                                       Budapest, December 21, 1994



Hungarian Press Review


        Budapest, December 20 (MTI) - Nepszabadsag: A state budget reform
committee is to be set up as of January 1. Its aim will be to prepare a
comprehensive reform of the state budget and, according to the daily, the
scheme will receive support from the World Bank and a Japanese bank
loan.

        Magyar Nemzet: The Ministry of Industry and Trade has proposed
that the prime minister re-examine the privatization of the HungarHotels
company, Minister Laszlo Pal said.

        Nepszabadsag: According to calculations by the Ministry, which also
supervises tourism, one single member hotel of the HungarHotels chain
could have fetched the same price as that for which the State Property
Agency intends to sell all 14 hotels in the chain to the American General
Hospitality.

        Magyar Hirlap: Minister of Interior Gabor Kuncze continues to
disapprove of the investigations in the HungarHotels affair following the
privatization decision of the State Property Agency.

        Uj Magyarorszag: Metalworkers will stage a protest on Thursday.
Those in Diosgyor welcomed, others in Ozd voiced reservations, about the
government decision made on Sunday.

        Nepszava: An article reviews the programme worked out for handling
the crisis in the Diosgyor and Ozd industrial regions. The current president
of the Trade Union of Metallurgical Workers describes the programme as
merely a temporary solution.

        Nepszabadsag: Minister of Industry and Trade Laszlo Pal denied that
Sunday's decision had merely postponed closure of the Diosgyor foundry
for another two years.




President Goncz Receives Croatian Deputy Prime Minister


        Budapest, December 20 (MTI) - Croatia strives for good relations with
its neighbours, and Zagreb aims at playing an active role in the creation of
European security, and a more active involvement in European integration,
according to Croatian Deputy Prime Minister and Foreign Minister Mate
Granic.

        Granic made the remarks in the course of his meeting with
Hungarian President Arpad Goncz on Tuesday, the last day of his official
visit to Hungary.

        The sides expressed with satisfaction that Croatia had also signed
the minority protection document of the Central European Initiative. Granic
said Croatia is ready to conclude a bilateral minority protection agreement
with Hungary.

        Both President Goncz and the Croatian politician said there were
good prospects for bilateral relations. Granic mainly called for expanding
contractual relations. It was noted that the trade agreement between the
two countries sets down the basic principles of foreign trade relations,
including application of the most favoured trade status, and places
accounting on a convertible basis. Preparations are in progress for
aviation, tourism and veterinary hygiene agreements. Discussions were
also held on the need to conclude a customs agreement between Hungary
and Croatia.

        President Goncz mainly stressed the need to develop infrastructural
cooperation which, according to Granic, is in the interest of Croatia as well.
The three main areas of infrastructure cooperation include Hungarian
participation in the development of the Rijeka harbor, and expansion of the
railway and road networks. The Hungarian president said expert talks
should begin on these issues within two or three months.

        Concluding his official visit to Hungary, Mate Granic is scheduled to
leave Budapest this morning.


Hungarian Foreign Trade Jan-Oct


        Budapest, December 20 (MTI) - At the end of October Hungary's
foreign trade deficit amounted to HUF 311 billion, according to a Central
Statistical Office report, which was sent to MTI on Tuesday.

        Imports of HUF 1,186.2 billion, calculated at current prices, compared
only with HUF 875.2 billion exports (1 USD equals 111 HUF) over the first 10
months of the year.

        At comparative prices, imports were 20 per cent higher and exports
16 per cent higher than in the same period of 1993.

        Exports and imports conducted with free-market countries both
increased by 22 per cent.

        Imports from ex-socialist states rose by 15 per cent, while exports
virtually remained stable.


Year-End Press Conference at Foreign Ministry


        Budapest, December 20 (MTI) - The full staff of the Hungarian Foreign
Ministry attended the year-end press briefing of the foreign affairs
spokesman in Budapest on Tuesday.

        Drawing a balance of foreign ministry work done over the past year,
Minister Laszlo Kovacs mentioned among the positive developments the
major moves aimed at extending European integration eastward.

        The main results of the European Union (EU) conferences held in
Corfu and Essen lie in that from this time on the associate countries have
to be involved in working out the joining process.

        A closely related decision was made in Essen for a summit and two
foreign ministers" conferences a year carrying this process further.

        Another important decision was to work together with associate
countries on the so-called second and third pillars of the Maastricht
agreement, that is cooperation in foreign and security policy and interior
and justice matters. Although the system of such cooperation has not been
completely elaborated yet, Hungary would like if the association agreement
itself was expanded with the Maastricht provisions concerning the second
and third pillars.

* * *

        Budapest, December 20 (MTI) - Kovacs then turned to discuss the
importance of NATO's Partnership for Peace plan, which he said would
strengthen the atmosphere of stability and confidence in the region by not
excluding any country from cooperation. In addition, it helps countries
which apply to the organization in preparing for membership.
        The foreign minister quoted U.S. President Bill Clinton as saying that
the question remaining about NATO's enlargement is not whether the
alliance can be expanded, but when and how this can be done. This also
indicates a serious shift in American thinking.

        Regarding the expansion of EU and NATO, Kovacs drew attention to
the fact that the two organizations make their decisions according to
slightly differing standpoints. While the EU mainly examines how the entry
of one or another country would affect its inner conditions, the principal
viewpoint for NATO is the influence expansion is likely to have on the
outside world, primarily Russia.

        It follows that Hungary may have a greater say in when it becomes an
EU member than when it can join NATO. On the other hand, NATO's
admission criteria seem far easier to meet. Even so, Hungary sees
integration as a complex process and does not set up any order of
preferences.

        The minister cited the results of the Middle East peace process
among the positive developments of 1994. "To us, an indirect effect of this
is the disappearance of a potential source of conflict that has threatened
the stability of both the region and the world for several decades," Kovacs
said.

* * * *

        Budapest, December 20 (MTI) - Among the positive features of 1994,
the foreign minister mentioned the results of the Budapest summit of the
Conference on Security and Cooperation in Europe, despite the fact that
there had been dissenting voices both in the press and among the
decision-makers regarding the meeting. Kovacs said the Budapest
conference had created certain conditions that cam make the CSCE more
efficient and enable it to take a more active part in crisis prevention. The
organization's crisis management capability has been also strengthened
with the decision to send a peacekeeping force to Nagorno-Karabakh. The
compromise reached in Budapest enables Russia to play a major role in
this peacekeeping manoeuvre, but with the CSCE conducting the action on
the basis of its norms and with the participation of international forces.

        As regards the "failure" of the summit, it was not the fiasco of the
conference but the reflection of the region's controversies, the foreign
minister said. It is enough to mention the example of the South Slav crisis,
which none of the international organizations have been able to settle over
the past two and a half years, he added. And the American-Russian dissent
over the expansion of the North Atlantic Treaty Organization caused the
first clashes not during the Budapest summit but on December 1, when
Andrey Kozyrev did not sign the peace partnership document, Kovacs
explained.

        Of the negative aspects of 1994, the Hungarian foreign minister
pointed to the attempts that have all failed to settle the South Slav crisis.
Thus the peace and stability of the region is still at risk, and the threat of
escalation in the crisis lingers on. The crisis provides a precedent which
indicates that territories can be gained by force. The overall settling of the
crisis is also important from this point of view, Kovacs said.

* * *

        Budapest, December 20 (MTI) - Paradoxically, yet there is one
positive effect of the South Slav crisis. It has given a serious lecture to the
international community on the significance of crisis prevention and of
minority rights guarantees.

        On the negative side of the scales, there is the crisis of Chechnya,
which is not only a tragic development but also a warning that similar
conflicts might erupt on the territory of the former Soviet Union.

        As regards Hungary itself, it has done everything over the past six
months to further integrate into the Euro-Atlantic organizations, said the
foreign minister.

        There has been some improvement in the relations with the
neighbouring countries.

        There has been no breakthrough - neither has been any promised,
the minister continued. Nobody can expect that centuries-long problems be
resolved in a few weeks' time, he added.

        Nevertheless, there has been some development in the Hungarian-
Slovak and Hungarian-Romanian links, also in connection with the basic
treaties.

        After two and a half years of - basically resultless - negotiations, th
e
Hungarian government recently presented a draft to Romania, which covers
the issue of minority rights in more detail than the previous one,
buttressing the related points with international documents.

        This is the first document handed over to Romania which touches on
the inviolability of borders and on territorial claims.

Next IMF Delegation to Visit Hungary in March


        Budapest, December 20 (MTI-ECONEWS) - The next IMF delegation
will arrive in Hungary in March next year in order to prepare a new
agreement with the International Monetary Fund, a Finance Ministry press
release announced on Tuesday.

        The visit in March will aim to study the government's three-year
economic strategy and the programme for reforming the general
government.

        The IMF delegation's two-week annual country survey ended its visit
on Monday. The delegation lead by senior IMF official David Burton met
Hungarian Minister of Finance Laszlo Bekesi and representatives of the
government and the National Bank of Hungary. The delegation will present
its report to the IMF board which is expected to review Hungary's economic
development in the first quarter of 1995.

        Without a mid-term central economic plan, the Hungarian
government is unlikely to reach agreement on a three-year extended credit
facility, which means that the next round of talks will obviously focus on
new stand-by credit, press reports said on Tuesday.

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

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Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************


+ - Ministry of Foreign Affairs - Newsletter (dec.22) (mind) VÁLASZ  Feladó: (cikkei)

N  E  W  S  L  E  T  T  E  R

Republic of Hungary                             Budapest, 1394 . 423
Ministry of Foreign Affairs                     Telephone:36(1)156-8000
Press Department                                Telefax: 36(1) 156-3801
558/1994.                                       Budapest, December 22, 1994

Hungarian Press Review


        Budapest, December 21 (MTI) - Nepszabadsag: According to an
article on the customs measures to be introduced from January 1, 1995,
duties on industrial products will decrease, while those on agricultural
products and food will go up. Permits will no longer be required for food
imports.

        Nepszabadsag: The multinational companies in Hungary are not
pleased that the government has cancelled their hitherto tax benefits, with
retroactive effect. On behalf of 46 member companies, the Hungarian
Council of International Companies has asked the government to involve
them in the preparations of its decisions.

        Magyar Hirlap: A Hungarian mafia engaged in blackmailing affluent
entrepreneurs, employed Kurdish armed money collectors. The mafia
demanded that the entrepreneurs pay millions of forints, otherwise harm
would come to their children and families.

        Nepszabadsag: According to the White Paper issued by the National
Ethnic and Minority Legal Protection Office, there were 120 atrocities
committed against Gypsies this year. The director of the office, Imre
Furmann, who was the deputy chairman of the Hungarian Democratic
Forum until his voluntary resignation, reports about the incidents against
the minorities.

50th Anniversary of Provisional National Assembly - Goncz


        Budapest, December 22 (MTI) - To mark the 50th anniversary of the
Provisional National Assembly (PNA), the Hungarian Parliament held a
memorial session in the east Hungarian town of Debrecen on Wednesday.

        After an ecumenical service held in the local grand church, MPs and
guests went to the Oratory of the Reformed College where the historic
events took place 50 years ago. (The PNA, representing the nation's anti-
fascist and democratic political forces, convened in Debrecen on December
21, 1944 after the Soviet army liberated eastern Hungary from under
German occupation. On December 22, 1944, the PNA elected the
Provisional National Government, which operated until the autumn of 1945.)

        The Wednesday celebration was attended by delegates from all
parliamentary party groups, three members of the government--Ministers
Ferenc Baja of Environment and Regional Policy, Pal Kovacs of Social
Welfare and Pal Vastagh of Justice-members of the one-time PNA, and
representatives of the historic churches. Ambassadors and military
attaches in Budapest of the United States, Russia, France and Britain were
also present.

        Opening the session, President Arpad Goncz recalled the difficult
task in 1944, amid seriously restricted sovereignty, of forming a people's
representation agreeing on political questions, a government which the
winning allies accept as negotiating partners and which will be able to
restore the country's sovereignty. On the side of the allied powers, on the
basis of an order of values identical with theirs, so that the country can
integrate into the family of free nations. Rarely had Hungarian politicians
been faced with a task more difficult than that, Goncz said.

        The president stated: The PNA and the Provisional National
Government fulfilled their mission by bringing about legal frameworks for
the survival of a completely defeated country, under the circumstances of
limited sovereignty, leading the country into the new world order after the
war and creating conditions for the faultlessly legitimate expression of the
will of the people.

* * *

        Budapest, December 22 (MTI) - "That the Cold War prevented their
works from being capped, that Stalin's tyrannical rule thwarted the
promising democratic start do not change the fact that what they did
constitutes an integral part of our recent history," Goncz said, adding that
under the operation of the Provisional National Assembly and Government
the Hungarian people clearly indicated that they can conceive their future
only in democracy.

        "1956 was another eloquent proof of this. In 1990, through the twists
of history but mainly by our own strength, we again embarked on the road
of genuine democratism. Today we are in possession of our full
sovereignty and are building genuine democracy, even if under difficult
circumstances, and can at last boast of belonging to the family of free
nations. We hope that this will happen formally too as soon as possible by
attaining full membership in the European Union," the president concluded.

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

           [*]   [*]  [*]   [*]  [*][*]    [*][*][*]
           [*]   [*]  [*]   [*]  [*]  [*]  [*]
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           [*]   [*]  [*]   [*]  [*]  [*]  [*]    
           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************


+ - Ministry of Foreign Affairs - Newsletter (dec.23) (mind) VÁLASZ  Feladó: (cikkei)

N  E  W  S  L  E  T  T  E  R

Republic of Hungary                             Budapest, 1394 . 423
Ministry of Foreign Affairs                     Telephone:36(1)156-8000
Press Department                                        Telefax: 36(1) 156-3801
559/1994.                                       Budapest, December 23, 1994



Hungarian Press Review

        Budapest, December 22 (MTI) - Nepszava: Police have taken security meas
ures
to protect the Russian colony in Hungary. The step was made necessary as
Chechyn
groups have threatened to carry out terrorist actions because of the Russian
siege of
Grozny.

x x x x x

        Nepszabadsag: Road tolls will be introduced in Hungary only after the f
irst
Hungarian concession motor way is handed over at the end of 1995. The article
also
details the growing costs of international road shipping.

x x x x x

        Nepszava: The Hungarian Democratic Forum has announced it is insolvent,
 and
notified several ministries about this in a letter last week, according to the
new
economic director of the party, Sandor Kovacs. The insolvency announcement was
made after the December 14 meeting of the party's creditors.

        x x x x x

        Nepszava: The Economic Competition Office has imposed fines of nearly H
UF
400 million on the five largest Hungarian coffee distributors - Douwe Egberts,
Eduscho,
Jacobs, Suchard and Tschibo - as they concluded a price bargain among
themselves
when coffee prices were raised in early summer. The coffee distributors
question the
decision of the Office.
x x x x x

        Magyar Hirlap: The managing director of the Hungarian Suzuki Co., Istva
n
Lepsenyi, has resigned. This autumn, the Japanese owner appointed a Japanese
expert to head the company, and Lepsenyi continued on as his deputy. Lepsenyi,
who
figured prominently in organizing and managing the Hungarian Suzuki Co. from
the
s.


Budapest Local Council Holds Founding Session

        Budapest, December 22 (MTI) - Budapest city council, the largest electe
d
through party lists, held its first session today.

        In the 67-strong body, of which 24 deputies had been members before, 21
 seats
are held by the Hungarian Socialist Party (HSP), 20 by the Alliance of Free
Democrats
(AFD) together with Mayor Gabor Demszky, 10 by the Hungarian Democratic Forum
(HDF), six by the Federation of Young Democrats (FYD), four by the Independent
Smallholders Party (ISP), and three each by the Christian Democratic People's
Party
(CDPP) and the Party of Hungarian Justice and Life (PHJL). The age of
councillors is
between 20 and 57 years.

        In his letter greeting the founding session, President Arpad Goncz said
 the
formation of temporary or lasting coalitions was particularly important in view
of the
division of votes.

        President by seniority Gyula Takacsy (HDF) stressed cooperation between

councillors of Budapest and its districts, which he saw as a precondition for
Budapest
becoming a more beautiful, more homely and safer city under uniform control
over the
next four years.

        The session elected two deputy mayors each from the HSP-AFD faction whi
ch
entered into coalition on Wednesday. Of the 65 councillors entered in the
secret ballot,
Janos Atkari of the AFD (finance-privatisation) got 42 votes, Andrea Szolnoki,
AFD,
(health-social policy) 39, Janos Schiffer, HSP, (education-culture) 41 and Pal
Vajda,
HSP, (city-portfolio management) 41.

        Gabor Demszky, Mayor of Budapest, wanted everyone to subordinate daily
political squabbles to the interests of Budapest so that it can be a
flourishing city as at
the turn of the century.

Tom Lantos, Hungarian-American Congressman, in Budapest

        Budapest, December 22 (MTI) - "There is no doubt that Hungary is well o
n the
way to joining the European Union. The only remaining question about becoming a
full
member is the date of entry," Tom Lantos, a U.S. Representative of Hungarian
origin,
told the press in Budapest on Thursday.

        According to Lantos, democratic development is continuing in Hungary, a
s
indicated by the free elections held recently. However, creation of a market
economy is
being slowed by difficulties stemming from the transitional situation of the
economy,
including the black market, growing crime, and privatisation mishaps. He
described
Hungary's development as progressive, although the now reforming Eastern
European
economies have no support as effective as the Marshall aid given after World
War Two.

        Lantos said the main task of NATO was to safeguard democratic values. T
o
Hungary, membership would mean a kind of guarantee for becoming an integral
part of
Western Europe. He said he would do everything possible to accelerate the
joining
process.

        On his latest talks with Prime Minister Gyula Horn, Lantos said he had
offered
his personal influence to help Hungary join the European Union and NATO as soon
as
possible. At the same time, he called the prime minister's attention to the
importance of
the international conference to be held in Cleveland in mid January on
privatisation
taking place in Eastern European countries.


        Lantos felt "Cold Peace", used first at the recent CSCE Budapest summit
, to be
"dramatically exaggerated". He said relations between the United States and
Russia
are extremely good. Russia remains a great power and this should be taken into
account by the foreign policies of both America and the Eastern European
countries.

Statement by Government Spokesperson's Bureau

        Budapest, December 22 (MTI) - The European Union seeks to help the
Hungarian government start work out a medium-term strategy called "Hungary in a
New
Europe". The European Union will extend ECUs 120,000 in support to make the
initial
steps in the first stage. Hans Beck, the EU's ambassador in Hungary and Andras
Toth,
political state secretary at the Prime Minister's Office, the head of the
Cabinet Office,
signed an agreement to this effect in Parliament today. Prime Minister Gyula
Horn also
attended.

        An agreement on finance and other areas will be reached by Hungarian
government officials and the EU in their January talks.

        Akos Balassa, deputy state secretary at the Finance Ministry, is respon
sible
for
planning the project "Hungary in a New Europe", while Imre Forgacs, head of the
Modernisation Programme Office at the Prime Minister's Cabinet is in charge of
coordinating preparations and elaborating various aspects of EU harmonisation.

        As the project's first step, an inter-ministerial commission working un
der the
Finance Ministry, has coordinated the guidelines for a medium-term economic
policy
worked out by experts.

        Heavy emphasis on EU harmonisation will be needed.


Parliament Ratifies International Treaties

        Budapest, December 22 (MTI) - Parliament on Thursday ratified, with no
votes
against, no abstentions, a treaty on elected tribunals and reconciliation
concluded by
Hungary and Switzerland, about a procedure of settling disputes used between
the two
world wars simpler, faster, and cheaper than going to the present forums.

        Parliament also unanimously ratified the 11th protocol and the promulga
tion of
the ninth protocol of the Convention of November 5, 1950, Rome, protecting
human
rights and fundamental freedoms.

        Now Hungarians can use the European Court of Human Rights.

        Hungary was the fourth member state to ratify the 11th protocol dealing
 with
the
merger of the European Commission for Human Rights and the European Court of
Human Rights.

        Parliament also voted towards promulgating an agreement between the
Republic of Hungary and the People's Republic of China on May 29, 1991,
mutually
protecting investments.

        The bill was passed with no votes against, no abstentions.

        MPs passed, with a vote against and one abstention, a bill on promulgat
ing an
agreement signed by Hungary and Kuwait on November 8, 1989, on the promotion
and
mutual defence of investments.

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

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           [*]   [*]  [*]   [*]  [*]   [*] [*]

Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
*****************************************************************


+ - CET - 21 December 1994 (mind) VÁLASZ  Feladó: (cikkei)

21 December 1994
Volume 1, Issue 22
 

**Budapest Bourse Turns Around**
  The Budapest Stock Exchange did an about face yesterday,
  with stocks rising 6.53 points to close at 1445. But Budapest
  brokers still feel blue. Many think the Budapest bourse will
  remain languid all winter. It certainly has been during the
  holiday season, with one broker saying that people are
  spending their money on Christmas presents and not shares.
 
 
**Hungarian Budget Vote**
  The Hungarian Parliament begins voting Thursday on the 1995
  budget, which will probably be passed next week. It includes
  controversial tax measures affecting business. The budget
  projects expenditures of $17.5 billion with revenue of just
  over $15 billion. Hungary's 1995 budget includes new business
  taxes which analysts say could deter foreign investment.
  While the basic corporate tax rate would be cut in half from
  36% to 18%, dividends will be taxed at a higher rate. And the
  proposed 23% tax would start applying to foreign investors
  who at one time were exempt from any dividend tax. The move
  seems designed to encourage companies to invest their
  profits in Hungary. But tax analyst Peter Garandasi of Price
  Waterhouse says the bill's effect is uncertain, especially
  since the government won't announce until January if double
  taxation treaties apply.
 
  "Hungary's double tax treaties, or most of them, have a
  reduced rate of withholding tax of between 5 and 15% which
  in practice will operate to hopefully reduce the 23%
  additional tax to the lower rate of tax as prescribed by the
  double tax treaties."
 
  While both the Socialist led government and most of the
  conservative opposition agree on the need for new business
  taxes, they disagree on deficit projections. The opposition
  Hungarian Democratic Forum says the Socialists estimated
  privatization revenues are too high, so the budget shortfall
  will be $825 million more than expected. But with a 72%
  majority, the government should have no trouble passing the
  bill. Parliament will consider about 120 budget amendments
  tomorrow and final approval is expected next Tuesday.
 
**Hungary's Microsystem grew rapidly, burned brightly and then
  fizzled. With it went hopes of international investors and the
  now questionable blessings of reputable business analysts.
  A few years ago Hungary's Microsystem was on top of the
  world. It was the Compuserve server for Hungary and it had
  essentially cornered the country's personal computer market.
  by rushing past communist-era competitors who were
  bloated, over priced and under supplied. It's now bankrupt.
  When Microsystem went down at the end of October, it took
  with it $900,000 in debt and a $2.8 million investment by the
  European Bank of Reconstruction and Development. The 1992
  investment had given the bank a 17% stake in Microsystem. In
  fact, it was the EBRD's first ever capital investment and it
  was also its first to go belly-up.
 
  This month's Business Central Europe Magazine does an
  autopsy on Microsystem. The magazine's business editor, Ken
  Kazreil, says what happened to Microsystem is a case of
  hubris and poor planning.
 
  "To hear a story like this does sort of bring to mind a classic
  sort of business school case study. Simply, over expansion,
  not being able to manage it financially, what I call sort of a
  fast lane wipe-out."
 
  And Microsystem was running in the fast lane, taking groups
  of western investors with it. Everybody was enamored with
  the company's early success. The Hungarian-American
  Enterprise fund put in $2.5 million and the US firm Data
  General bought 5% of the company.
 
  The EBRD based its investment on glowing analysis from
  Salomon Brothers and Arthur Andersen. Kazreil says this was
  a mistake:
 
  "I don't know what was going with them. I can only speculate
  that all parties involved, including the bank, were happy to
  find so early on such an apparently exciting investment
  prospect. The figures they were given to work with were flat
  wrong, and the EBRD itself was flat wrong to rely on them."
 
  But while the west was throwing money at Microsystem, it
  was also cutting the company down. Janos Muth was Chief
  Executive Officer at Microsystem from 1991 to '93. Muth
  explains that the firm was unprepared to handle its new
  western competition after the fall of communism.
 
  "All the big international computer companies, like ICA
  Hewlett Packard, IBM, entered into the market or reentered
  the market and started aggressively selling their products
  here in Hungary."
 
  Muth says this new and powerful competition, a growing cycle
  of debt and decreasing profits, combined to make
  Microsystem's demise inevitable. But he admits there were
  some things it could have done differently:
 
  "Of course, Microsystem could have coped with the situation
  in a better way, by introducing different management skills
  and a way of handling a crisis situation."
 
  Another thing Microsystem could have done is streamline, but
  it ignored advise to do just that. Kazreil says in many ways
  the company was a victim of its earlier success:
 
  "I'm not sure if it was naivete or extreme cockiness. It was,
  to put it most safely, just a dismal failure to heed the way
  the market was going."
 
  Microsystem's demise is such a textbook example of western
  style business failure that everybody seems to have learned
  their lessons. For example, Kazreil says the EBRD will no
  longer trust outside analysis so much and Muth says he's
  learned that sometimes subtle business decisions can have a
  dramatic effect in a market economy.
 
  Actually, the US Commerce Department is reporting that most
  American small business start-ups end in failure. In this
  light, Microsystem's experience seems even more typical and
  Kazreil says it probably wouldn't even have made news in the
  west.
 
 
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* CET On-Line - copyright 1994 Word Up! Inc. and Cameron M. Hewes.
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.

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