Wednesday, 21 June 1995
Volume 2, Issue 119
REGIONAL NEWS
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**MILITARY MANEUVERS**
American military rescue teams, similar to those which plucked
US pilot Scott O'Grady out of Bosnian Serb territory recently,
are coming to Hungary next month. They will be practicing
with their Hungarian counterparts in Veszprem County. These
will be the first joint maneuvers between US and Hungarian
forces under NATO's Partnership for Peace program. About 100
American soldiers and 350 Hungarian troops will take part.
**TREATY TALKS**
Hungary is calling on Romania to show it is willing to
compromise in the current round of high-level talks between
the two countries aimed at reaching agreement on a basic
treaty. Romanian and Hungarian experts are holding two days
of talks in Bucharest to try and agree on sensitive parts of
the treaty concerning minority rights. Hungarian Foreign
Ministry spokesman Gabor Szentivanyi said yesterday that the
Romanians should reflect a willingness for a solution.
Szentivanyi refused to reveal any details on the current round
of talks but said it was clear they would center on
interpretations of the Council of Europe's 1201
recommendation. The recommendation sets guidelines on
minority rights. Hungary wants 1201 to be included in the
treaty, but Romania is suspicious, fearing it would give the
1.6 million ethnic Hungarians in western Romania too much
autonomy. Hungarian Prime Minister Gyula Horn and Romanian
President Ion Illiescu held a much publicized telephone call
last week in which Horn complained that a Romanian education
bill, currently before parliament, violated European norms on
the rights of minorities to receive an education in their own
language. Szentivanyi says the legislation has an
increasingly restrictive effect on negotiations.
BUSINESS FEATURE
----------------
**A DIFFERENT KIND OF DEBT**
By David Fink
Debt for equity swaps, in which a bank accepts shares in a
privatized company instead of government loan repayments, have
been popular in South America for years. Now they are
starting to catch on in Central Europe. Poland is reportedly
ready to covert some of its debt into stock in privatized
companies this year. Michael Kapoor is Finance Editor of
Business Central Europe magazine. He said countries that owe a
lot of money to foreigners can benefit greatly from debt for
equity swaps.
"If you look at a country like Hungary in the Visegrad
countries it has a lot of payment problems. You swap some of
that debt for stakes in local companies and you obviously have
to repay less of it and you have less pressure on your budget."
But Poland is not in bad shape. Its external debt is a
manageable $41.5 billion. The country has a debt service ratio
of 11 percent... meaning Poland has to spend 11 percent of its
export revenues to service its debt. That compares with a 12
percent debt service ratio in the Czech Republic and 57
percent in Hungary. Under these circumstances, Kapoor said it
is clear Poland is using debt for equity swaps to encourage
investment in certain sectors rather than to reduce the
deficit.
Kapoor said Polish debt for equity plans probably will not
involve too much money. He added it is far from certain that
banks will even go for the deals. They will only agree to the
swaps if they get a better return than on the government
bonds, called Brady bonds, they are holding now. Western banks
are also being asked to help Bulgaria's privatization through
debt for equity swaps. Sofia has issued bonds worth slightly
more than $5 billion to cover its commercial bank debt. Most
of them can be traded for stock. Still, the socialist
government has put road blocks in the way of western
investment, limiting the amount of the purchase price
payable in bonds to 50 percent. But Kapoor said governments
have to give banks big discounts to make it worth their while
to swap their trusty Brady bonds for debt for equity.
"A Brady bond is only going to stop performing if the
government or the country goes belly up which is not likely to
happen even for someone like Bulgaria. If you take a stake in
a local company you have all that risk, plus the risk of the
company's performance."
It is far from certain that banks will get favorable terms in
either Bulgaria or Poland. In Bulgaria that is because the
market is still somewhat disorganized. But in Poland, it is a
sign that the investment climate is attractive enough that
Warsaw no longer needs to beg for western cash.
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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.
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date=6/20/95
type=correspondent report
number=2-180765
title= NATO/East Europe (l only)
byline= Stefan Bos
dateline= Budapest
content=
voiced at:
Intro: The United States and Hungary are preparing for one of
the largest military exercises to be held so far under the NATO
Partnership for Peace Program. Stefan Bos reports from Budapest
that forces from the two countries will take part in a combined
mock rescue operation next month.
Text: Hungary and American military officials say they expect to
get valuable training information from the joint exercise
involving a total of nearly 500 armed forces personnel from the
two sides.
In an interview with VoA, American lieutenant colonel Robert
Hamilton said the exercise is one of the largest in the NATO
Partnership for Peace Program focusing on search and rescue in
peacetime.
He said it is also one of the largest of more than 30 partnership
peace exercises scheduled to be held this year with countries
that have joined the NATO program. The program provides for
joint military cooperation, but does not extend to NATO
security guarantees for the countries.
Lieutenant colonel Hamilton said more than 100 American air and
ground forces personnel will fly to Hungary to join more than 300
Hungarian personnel.
// Act Hamilton //
What you have is three exercises in one. You have an
air exercise going on with helicopters and C-130's
(planes). You have ground operations going on with
helping the downed airmen and victims of simulated
accidents. And you have a medical exercise going on,
all at the same time. It promises to have a lot of
activity and a lot of interaction. Of course, there
will be confusion, and in that, a lot of training value
should be gained from it also.
// End act //
Hungarian military officials say the exercise might be a first
step toward Hungary joining the NATO alliance. But lieutenant
colonel Hamilton says it is separate from eastward expansion of
the alliance.
// Act Hamilton //
Partnership is not designed to evaluate nations for
NATO membership. In fact, the Partnership for Peace is
a program that should be considered as its main
objection to improve the defense structures. The idea
is that whether a country joins NATO or not, that is
not the issue.
// End act //
The colonel says the Hungarian / U-S exercise under NATO auspices
is unusual, and he would never have expected to take part in a
military operation in a former Warsaw Pact country.
// Act Hamilton //
There was a time when I was a young lieutenant in the
height of the cold war, when the thought of me being at
the "mod" (ministry of defense) in Hungary was
impossible. I think it works well for the future that
we can be open with each other.
// End act //
The exercise will cost Hungary nearly 400-thousand dollars, of
which an undisclosed part will be paid by the United States.
(Signed)
neb/sf/mh/cf
20-Jun-95 3:22 pm edt (1922 utc)
nnnn
source: Voice of America
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A tovabbterjesztest a New York-i szekhelyu Magyar Emberi Jogok
Alapitvany tamogatja.
[*] [*] [*] [*] [*][*] [*][*][*]
[*] [*] [*] [*] [*] [*] [*]
[*][*][*] [*][*][*] [*][*] [*][*]
[*] [*] [*] [*] [*] [*] [*]
[*] [*] [*] [*] [*] [*] [*]
Reposting is supported by Hungarian Human Rights Foundation News
and Information Service.
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