OMRI DAILY DIGEST
No. 217, 7 November 1995
CONTROVERSIAL SLOVAK PARLIAMENT SESSION. Opposition deputies have met to
discuss the agenda of the parliament session scheduled to begin on 8
November, Sme reported. The parties agreed to reject calls by the Slovak
National Party (SNS) for the creation of a parliamentary committee to
investigate the activities of President Michal Kovac. They also decided
that although there is a need for a new language law, they will not
support the current version, which they called unconstitutional, anti-
minority, and anti-Slovak. Meanwhile, representatives of the Democratic
Union on 6 November met with ethnic Hungarian deputies to discuss the
draft laws on the state language and on anti-communist resistance.
According to DU Deputy Chairman Jan Budaj, both bills are aimed at
driving a wedge between opposition parties, TASR reported. Parliamentary
chairman Ivan Gasparovic told Slovenska Republika on 7 November that the
issue of the DU mandates will not be discussed during the current
session. * Sharon Fisher
SLOVAK INTELLIGENTSIA OPPOSES GOVERNMENT POLICIES. The Forum of
Intelligentsia of Slovakia-which includes a number of well-known
scholars, actors, and writers-on 6 November issued a statement
expressing opposition to government policies. "Slovak society is being
turned into a boxing ring" in which political opponents of the current
government are being labeled "people who insult the nation" or "traitors
[bought by] Western agencies," the group said. The forum also said
Slovakia is becoming a "European disappointment" that may have
"unforeseeable consequences," Pravda reported. In other news, the
Liberal International, meeting on 4-5 November in Opatija, Croatia,
accepted two resolutions on Slovakia. With regard to the DU mandates,
the LI demanded that the coalition stop its attempts to change the
election results. It also requested that the government start a dialogue
with minorities. The Hungarian Civic Party became the first Slovak party
to be accepted as a regular member, while Coexistence and the DU
maintain observer status, Sme reported. * Sharon Fisher
CONTROVERSY OVER HUNGARIAN OFFICIAL IN PREMIER'S PRESS OFFICE. Hungarian
media on 6 November reported that Endre Mihalyi, a newly appointed staff
member of the Prime Minister's Press Office is currently being
investigated by the police for embezzling funds at his previous work
place. Henrik Havas, a well-known journalist who heads the office, said
Mihalyi will not be taken on until the investigation is over. In the
future, staff members will be asked to make a statement on whether any
proceedings are under way against them. The office was recently created
to advance dialogue between the government and society. * Zsofia
Szilagyi
HUNGARY'S HIGHEST TAX BRACKET TO BE SET AT 48%? Magyar Hirlap on 7
November reported that the Finance Ministry has drawn up a tax schedule
imposing a 48% tax on those whose annual income exceeds 1 million
forints ($7,600), instead of the current 44%. The new tax schedule comes
in the wake of a bill on personal income tax approved by the government
on 26 October. The only main difference between this bill and the 1995
tax legislation is that the zero tax bracket has been eliminated.
Although talks within the Interest Coordination Council-a group composed
of government, employer, and employee representatives-are under way, the
Finance Ministry said it will not back down from its plan to collect
480 billion forints in personal income tax next year, adding that if
necessary, the highest tax bracket could be set at 48% or somewhere near
that figure. * Zsofia Szilagyi
BELGIUM SUPPORTS HUNGARY'S NATO MEMBERSHIP DRIVE. Hungarian Defense
Minister Gyorgy Keleti on 6 November received support for Hungary's bid
to join NATO from his visiting Belgian counterpart, Jean-Pol Poncelet,
Hungarian media reported the next day. With regard to Russian leaders'
concerns about the eastward expansion of the alliance, both ministers
stressed that while Russia is a major power, accession is the sovereign
decision of independent countries and cannot be vetoed by Moscow. On the
subject of stationing Belgian peacekeeping forces in Bosnia, Keleti
confirmed that Hungary will give all possible assistance when the troops
pass through Hungarian territory. It is also conceivable, he said, that
Hungarian medical or logistical units will join the international force.
* Zsofia Szilagyi
[As of 12:00 CET]
Compiled by Jan Cleave
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Tuesday, 7 November1995
Volume 2, Issue 216
BUSINESS NEWS
-------------
**THE FORINT TO BECOME SIMPLER**
The Hungarian parliament is expected to pass a new foreign
currency code today. The legislation would liberalize the use
of the forint in payments for foreign goods and services.
CET's David Fink has more.
Zoltan bodnar, the vice president of theHungarian National
Bank, says the main advantage of the new foreign currency
code is that "It will lay down accurately the sort of
transactions which are prohibited; the ones which are simply
to be reported and the ones which have no limitations." Under
the code, some limitations on capital transactions would
remain in effect temporarily. But companies would still be
able to freely exchange their forints for any currency in
transactions tied to their basic activities and transfer money
abroad in current transactions. The code would also allow
Hungarian companies to take out hard currency loans and set up
companies in countries that are members of the Organization
for Economic Cooperation and Development or in nations with
which Hungary has an investment protection agreement. Also
under the new code, in most cases foreigners wouldn't need
special permits from financial authorities when buying
property in hungary. To prevent an influx of "hot" money.,
the code would ban short-term foreign investment in state
securities. Any security with a maturity of less than a year
would be considered short-term.
**HUNGARIAN BANK SHAVES INTEREST RATES**
The National Bank of Hungary cut a number of leading interest
rates yesterday. The NBH lowered its overnight repo rate by
half a percentage point to 31 percent; its one-week reverse
repo by one percentage point to 27 percent and its two-week
reverse repo by one percentage point to 27 and a half percent.
The bank says the rate cuts are in line with market
developments. Last Friday, NBH President Gyorgy Suranyi told
a news conference the bank would continue to seek lower
interest rates but didn't want them to fall below the level of
inflation. He said the central bank planned to reduce its
two-week reverse repo interest rate as a signal that market
interest rates shouldn't drop too far. He also said the NBH
planned to cut its one-week reverse repo rate in order to
increase commercial banks' room for manoeuvre. The NBH says
the rate cuts are also aimed at preventing the yield
differential between forints and hard currencies from widening
too far.
**HUNGARIAN DRUG COMPANY SOLD**
Teva pharmaceutical industries says its wholly owned European
subsidiary has signed an agreement to buy 78 percent of Biogal
Pharmaceuticals of Hungary for 26 million dollars. The
purchase is subject to several conditions. They include an
agreement that would define a reorganization of the Hungarian
company. The price is also subject to an audit of the
company's nine-month earnings statement. Teva officials say
they expect the deal to be concluded by the end of this year.
In the first nine months of this year. Biogal earned one
point seven million dollars on sales of 62 million dollars. In
all of 1994 the company earned almost five and a half million
dollars on sales of about a hundred million dollars.
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