Amerikai Magyar Hírlap, 2010 (22. évfolyam, 1-50. szám)
2010-09-17 / 35. szám
Hungarian Journal Hungarian Budget U-Turn a Relief, But Markets Want Proof BUDAPEST, Sept 9 (Reuters) - Investors are breathing easier after Hungary’s government bowed to pressure from markets and the European Union and pledged to cut its fiscal gap, but it will remain under pressure until it produces a credible 2011 budget. The announcement on Wednesday that Budapest would aim for a shortfall below Brussels’ ceiling of 3 percent of gross domesticproduct was a complete U-turn for Viktor Orban’s government, which had for months turned its back on outside aid and eschewed budget austerity as it tried to pull Hungary out of recession. But even if the shift was what market players wanted to hear, analysts said months of communication gaffes and attemptsto wiggle out of commitments by Orban’s cabinet meant they would be sceptical until they saw concrete steps to achieve it. “When facts change, we change bur mind,” said Christian Keller at Barclays in London. “The announcement regarding fiscal policy by itself is not enough for such a change of mind, and we remain sceptical for now. However, it could be a first step.” Markets gave a thumbs up to the decision, helped by improved global risk appetite. Debt yields dropped and Hungary raised its bond sales at an auction on Thursday. The forint gained 0.8 percent to 284.70 to the euro. But that was still far weaker than the 264 per euro in April, when Orban’s Fidesz party swept to power, while the cost of insuring Hungary’s debt is still double, with the 5-year CDS at around 376 basis points, versus 190 in March. Having cornered an unprecedented two-thirds majority in the April vote, Orbán declared he would fight to regain Hungary’s financial independence and “economic sovereignty”. That included rejecting a new financing deal with the International Monetary Fund, a blow to market watchers who say Hungary will be very exposed in the event of another bout of investor flight or a dip back into recession for the global economy. Keller said what was needed now were additional statements from Orbán confirming the government’s fiscal commitment and concrete details on how it would cut the deficit to below 3 percent of GDP in 2011, from a goal of 3.8 percent this year. If Orban’s government delivers, it would likely soothe investor jitters, attract more demand to local bond tenders and drive down the cost of financing. “The announcement is of vital importance as this is exactlywhat market participants and rating agencies expected to see - thus it was critical in creating room for Hungary to safely finance its deficit,” said CIB Bank analysts in a note. “The government’s declared commitment to the original budget targets... may cause its risk premium to drop.” But risks remain. Twists and turns in the government’s policies in its few months in power have eroded its credibility and global investor sentiment remains fragile, keeping the pressure on its forint currency. Some analysts said Wednesday’s announcement recalled events in June when the government swiftly committed to this year’s budget target after a market sell-off due to confusing comments from some Fidesz officials likening Hungary to Greece. “This feels like June where there was a same about face but then slippage back,” said Peter Attard Montalto at Nomura. “What I think is going on here is a deliberate attempt to calm the market and appear on side with EU around deficit reduction in the short term,” he added. “But there is no serious commitment to consolidation behind this.” HOLDING PATTERN A particular worry is the Swiss franc, which hit an all time high against the forint this week. Also influenced by a weak euro, the franc has put huge pressure on hundreds of thousands of Hungarians who owe on franc loans taken in the belief that the forint would continue strengthening against it, the euro, and the dollar. The forint slid to an all time low past 226 versus the franc on Wednesday. It recovered only to 221 on Thursday, still about 30 percent weaker from levels where most of the loans were taken out prior to the 2008 crisis. With the political focus on municipal elections on October 3, some analysts said uncertainties over next year’s budget would likely prevail until mid-October when the economy ministry has to put down a first draft. After that, there also remains the risk that the government may drift back into talks with the IMF over support. Analysts are deeply divided over the chances of such a shift and it may simply depend on how the situation on markets plays out. “The current unfavourable global market mood and the cautious reaction of market participants to the government’s communication are likely to limit positive impacts in the short run, especially before the municipal elections,” CIB Bank said. “I think we will see some calming down for one or two days then again increased volatility and forint weakening,” a currency dealer in Budapest added. BKV to Buy Second-hand German Trams The Budapest transport company BKV will buy 16 second-hand TW6000 trams for about HUF 160 million as a result of a public procurement tender, BKV told MTI on Thursday. The trams will replace some of the old Ganz trams from early next year. BKV purchased 68 TW6000 trams in February 2001 for HUF 7.1 billion. BKV said it has gained positive experience with the trams, known in Budapest as the “Hannover” trams. The Budapest city council decided in the spring that BKV could purchase second-hand trams from a HUF 10 billion funding received from the city council. BKV has a total of 584 trams at present. The average age of the fleet is 26 years. The TW6000 trams were first manufactured by Germany’s DUWAG between 1974 and 1993, then Siemens and the Alstom subsidiary Linke-Hofmann-Busch. (MTI Econews) Szeptember 17, Inflation drops to to 3.7 per cent in August Budapest - Inflation fell from 4 per cent in July to 3.7 per cent in August, according to data published by the Hungarian Central Statistics Office on Friday. Consumer demand is falling amid high unemployment and the rising cost to Hungarians of servicing foreign currency mortgages. Nevertheless, many analysts had predicted a slight rise in the headline inflation figure for last month. Inflation averaged 4.2 per cent in 2009. The Hungarian National Bank’s medium-term target is 3 per cent. Hungarian Soldier, Wounded In Afghanistan, Dies Ensign György Kolozsvári, 37, died of severe brain injuries in a hospital Tüesday morning, the Defence Ministry announced. Kolozsvári was critically wounded by shrapnel in an ambush in Afghanistan in which Judit Ábrahám Papp died last month. The Taliban meanwhile called on Hungarian soldiers serving in Afghanistan to leave the country, via the website of the Pakistani newspaper The Frontier Post. On the day following the ambush Taliban spokesman Zabihullah Mudjaheed had demanded the departure of the Hungarian contingent, warning that they are planning further attacks. As Hungarians and Afghans have no conflict with each other it makes no sense for Hungary to send soldiers to “the occupying forces”, Mudjaheed argued. US ambassador Eleni Tsakopoulos Kounalakis conveyed her condolences to the soldier’s next of kin. Defence Ministry state secretary István Simicskó told reporters yesterday that the armed forces may change the composition of the team taking part in the Afghan mission. In all four Hungarian soldiers have now died in Afghanistan. Source: Hungary Around the Clock. Malév Air Tours Records Solid Profit “No day goes by without negative headlines about Malév, but the company is continuing to work hard in the background and sometimes there is also, good news,” Malév Air Tours CEO Péter Takács said last Wednesday. The subsidiary, a 100 per cent-owned division of the renationalised airline, has managed to record a solid profit despite the financial crisis and disputes at its parent company. Takács is anticipating a modest profit of around HUF 10 million (EUR 35,167) for the whole year. Bouncing back For a business, that may not sound particularly high but it is a considerable achievement given that Malév Air Tours was on the brink of ruin at the end of 2008. “I took charge of a crippled, inflexible company that was not even capable of supporting itself in 2008,” Takács told a press conference. “So the question was: what next?” There were two possibilities: insolvency or restructuring. Takács went for the latter and introduced an entirely new model. “In addition to travel organization, we are now also in charge of Malév customer service,” he said. “As a result, after 40 years we have been able to put an end to unnecessary and counterproductive competition between the parent company and its subsidiary.” Lean machine That step entailed a drastic round of layoffs and cuts at all levels. “You have to imagine, the airline performed customer service until the end of 2009 with 16 staff in a huge 660-square-metre office,” Takács said. Now customer service is taken care of by the staff of Malév Air Tours in a new 100-square-metre office in Petőfi Sándor utca. With that step Takács can save Malév HUF 60 - 70 million (EUR 211- 246,000) in staff and rent costs annually. The new setup bore fruit in the first half of this year: 40 per cent more flight tickets were sold and revenue rose 6 per cent. The discount game According to the CEO the formula for success also includes lowcost offers. Discount offers today certainly do pay off if you can find the right level, he said in reference to rumours blaming an excessively low pricing policy for the state in which the Malév airline finds itself. The English Page of the Hírlap can serve as a bridge between the non-Hungarian-speaking members of the family and the community. Use it to bring people together! Subscribe to the Hirlap! Advertise your business in the Hirlap! Phone: (323) 463-6376 DUNA Travel 8530 Holloway Dr. #102 W. Hollywood, CA 90069 Spa, Hotel foglalások, Kocsi bérlés Kedvezményes repülőjegy árak LAX-BUD-LAX $575 -tői + Tax + Fee (2010. augusztus 30-tól) Információért hívják ZSUZSÁT TEL: (310) 652-5294 FAX: (310) 652-5287 1-888-532-0168
