Budapest's Szabadsag Hid engulfed in smog

When Alexander Graham Bell invented the telephone, he had no idea that it could also be used for corruption purposes, so loud that it can be heard on the other side of the Atlantic.

The US Securities and Exchange Commission (SEC) has accused Hungary’s telecommunications group Magyar Telekom (alias MATAV) of serious corruption, via its parent company – Germany’s Deutsche Telekom (DT).

SEC claims that MATAV was directly involved in a major corruption scandal in violating the Foreign Corrupt Practices Act (bribing the governments to obtain a monopoly in Hungary, Macedonia and Serbia during the period 2005-2006). Officials at DT declined to directly comment on the accusations. In a parallel lawsuit three Hungarian nationals (namely former MATAV CEO Elek Straub, former Director Andras Balogh and former Director Tamas Morvai were personally also directly involved in the corruption scandal. MATAV had allegedly already earmarked some USD 48-mil to settle the penalty with SEC.

Based on a recent economic survey 85% of the Hungarians enjoy drinking tap water. At least 75% of all adults participating in the survey, carried out by order of the Hungarian Public Water Association (MAVIZ) claim to “love” the quality of their water.

However the survey failed to mention that bottled water costs an arm and a leg and many people wouldn’t bother buying water in retail outlets. Nevertheless Hungarians are more positive about their drinking water than its neighboring seven countries and most of the European Union peers.

MAVIZ claims that Hungary’s drinking water is considered the nation’s most prized asset and therefore undergoes stringent health and safety measures. The majority of the population answering the questionnaire said that the advantages of Hungarian drinking water lies in its “sustainability for the environment” and “affordability.”

MAVIZ now claims that it wishes to improve legislation for public water in 2012 following a bill that was enforced on Jan 1, 2012. The bill regulates the presence of some 200 components present in drinking water.

Experts agree that all public drinking water in Hungary satisfies legal requirements.

MAVIZ is a collective association for about 100 public water service companies who not only supervise the water industry and trade, but also provide 95% of all available drinking and public water.

National Economy Minister Gyorgy Matolcsy

Arriving on the heels of embarrassing news about Hungary’s ‘new’ relationship with the IMF and the Government’s confusing PR campaign about “this time being different,” the Orban-cabinet was dealt another crushing financial blow on Friday morning.

For the first time in 15 years, Hungary’s credit rating was downgraded to ‘junk’ (Ba1) status by Moody’s Investment Service. The agency said that faith in the Government’s ability to consolidate the Hungarian budget and cut state debt (on the medium term) has dwindled, and a further downgrade could come if there is a significant decline in government financial strength due to a lack of progress on structural reforms.

The National Economy Ministry labeled the move as being part of a series of financial attacks against the Hungarian government, saying the economy has improved in several key areas. “Budget deficit will be pushed below 3 percent for the first time in 7 years,” a statement revealed, adding that only 6 out of the 27 other EU member states will achieve this with their current budget.

Who knows who and when new delegations are arriving to Hungary from China.

However based on the latest reports Chinese Premier Wen Jiabao is paying an official visit to the Goulash capital on a week-long trip and will allegedly discuss how it can relocate billions to Europe, in what markets have dubbed “support from Europe’s ailing economy.” The European Union had planned to see their group be the strongest economy of the world, by 2010, but corruption and political feuds had allegedly undermined these plans.

The Chinese have disclosed that they are sending thier premier President Hu Jintao to Budapest (as Hungary is still presiding the EU until July 1, 2011) from where he will also visit Berlin and London on a red-carpet visit (colour not connected to China’s communist regime). He is expected to sign all kinds of trade and cultural agreements but will certainly avoid any questions from the state media on human rights issues.

It is unclear exactly Wen will discuss what as Hu knows exactly what he wants. However China, with its foreign exchange reserve exceeding USD 3-trillion, is expected to buy up large sums of European debt and in return would receive a strong foothold in the EU.

Wen’s delegation is expected to pen some state and commercial deals with Hungary during the visit. Those staning in line to get a handshake and a pat on the back from the Chinese will include Hungarian President Pal Schmitt, Prime Minister Viktor Orban, German Chancellor Angela Merkel and British Prime Minister David Cameron.

Academy award rap singer Eminem has reportedly sued German-owned car maker Audi for unlawfully using his song ‘Lose Yourself’ in an advertisement campaign planned for their 2012 Audi A6 Avant.

Eminem’s song was used in his movie titled ‘8 Mile.’ Ironically Audi claims that its video (referred to) was “not an advertisement.” However Eminem’s publishing company Eight Mile Style LLC believes otherwise and has filed suite in a court in Hamburg Germany.

In the ad, a professionally-dressed man drives the luxury vehicle through a city as the memorable guitar rift and snare taps from “Lose Yourself” play in the background.

Eminem’s legal team claims that not only did Audi use their client’s song in their commercial, but they allegedly took elements of another commercial from a Chrysler campaign. Chrysler is also expected to start legal proceedings against Audi.

Exactly how much the plagiarism will cost Audi is unclear, but it may just be another pay-out of lunch money as Audi is allegedly concentrating its interests on Hungary. The German car-maker is reportedly spending at least USD 1.2-bil on boosting its TT coupe and A3 cabriolet models’ production lines at their plant in Gyor (NW Hungary).

The up-grade will see Audi roll out 125,000 new cars and more than 1.38-mil engines each year by 2013. Last year Audi Hungaria saw production exceeding 32,600 cars. Reportedly Audi Hungaria is hiring some 1,800 more assembly workers and will have a workforce of 5,800 – the biggest employer in Hungary, after the public servant roll-call.

Audi Hungaria says their new expansion plans will help ‘rap’ up sales by 50% to see Audi produce 1.5-mil cars per year in 2015.

At a news conference on Tuesday, PM Viktor Orban announced that his cabinet has reaquired 21.2 percent in the oil giant MOL for EUR 1.88 billion – a package previously owned by Russian Surgutneftegas.

Orban’s statement comes after a year-long string of negotiations, that he said “secured” the Hungarian oil company and described as a move “defending the interests of Hungarians.”

Surgutneftegas was created in 1993 by merging several previously state-owned companies with large oil and gas reserves in Western Siberia. The company’s headquarters are located in Surgut, Tyumen Oblast.

American Airlines and Malev have promised to start daily direct flights between the Goulash capital and New York as of April 6, 2011. This was announced on Tuesday (Feb 8, 2011) by representative Kurt Stache in Budapest.

The financially troubled Hungarian state-owned national carrier Malev believes that this new seat-sharing agreement will help increase ticket sales rather than letting the carrier lean on “Allambacsi”. News has it that in the following winter months there will only be four flights weekly.

Officials of the Oneworld Alliance trust to see full flights in both directions as service demand between Budapest and the Big Apple, has recently increased, they claim. There have been suggestions that if all goes well then on certain days the airlines could increase to two daily flights on Boeing 767-300 jet liners allegedly offering 225 seats.

At the invitation of the European Chambers in Hungary, Minister of National Economy György Matolcsy addressed about 300 European business leaders at a business luncheon on Thursday.

At the event Maurizio Sauli, incumbent Chairman of the European Chambers in Hungary, emphasized that European business has continuously being proving that it is strongly committed to contribute to the progress and the success of the Hungarian economy. It created about half a million jobs in Hungry, is transferring skills and technology and pays a large amount of taxes, Sauli said. He emphasized that European companies wished to continue this mutually beneficial co-operation, and urged the authorities to re-enter a dialogue with this important part of the Hungarian economy.

Minister Matolcsy stressed that the key objective of the government is to make Hungary the most attractive business location in Central and Eastern Europe, adding that this also required the support of its strategic partners abroad. “Hungary needs foreign direct investment, that’s clear cut”, the minister said. He added: “All sectors, all investors are welcome, but in the heart of our investment policies we’d like to create more jobs outside of the service sector and invite investments for creating jobs in manufacturing, in the production sector.” Among others, the “New Széchényi Plan” would boost investments in Hungary and provide new business opportunities to the economy, including foreign strategic partners. “You are welcome to be part of it”, Matolcsy told the European business audience. According to the Minister, the Hungarian investment ratio might reach 22-23 percent in 2013, compared to the current level of 17 percent.

According to Matolcsy, one of the most important priorities of the economic policy of the government is the reduction of the budget deficit and public debt. By the end of the current political cycle Hungary’s public debt will drop to below 70 percent of GDP, meaning that Hungary should get out of the debt trap, the minister said. He confirmed that the crisis sectors imposed on the energy, telecommunications and retail sector will definitely be phased out as promised. “They will be out by the end of 2012”. In the case of the bank levy, Hungary would like to have a common European solution, he added, which “might be a levy, a tax or something else”.

Regarding the structural reforms to be announced by the end of the month, Matolcsy promised that they will be “comprehensive and sweeping ones”. “All of them will be permanent measures, resulting in a sustainable budget deficit level in the medium term”, Matolcsy told the European business leaders.

DALLAS, Texas and CALABASAS, Calif. – January 20, 2011 – The 12 finalists of the second Indie Game Challenge (IGC) sponsored by the Academy of Interactive Arts & Sciences (AIAS), GameStop (NYSE:GME) and The Guildhall at Southern Methodist University (SMU) have been announced. Winners will be announced February 11th at the D.I.C.E. (Design, Innovate, Communicate, Entertain) Summit at the Red Rock Resort in Las Vegas. Hosting the IGC awards ceremony is Adam Sessler, Editor-in-Chief of Game Content for the G4 Network and Host of G4’s “X-Play”; additionally, this year exclusive online content of the Indie Game Challenge will be hosted on G4tv.com/DICE.

“Hosting the IGC awards in 2010 was nothing short of an honor,” said Adam Sessler, Editor-in-Chief of Game Content for the G4 Network and Host of G4’s “X-Play.” “And having seen the finalists for 2011 I must say it is equally humbling to celebrate the imagination, innovation and dedication of this year’s young developers.”
The IGC finalists, which includes six non-professional and six professional teams, are eligible for more than $350,000 in prize monies and scholarships. Prizes up for grabs include: $100,000 awarded to each of the professional and non-professional category winners A $50,000 academic scholarship to The Guildhall at SMU A DesignMetrics® title assessment to each of the winners, a $30,000 value from Electronic Entertainment Design and Research (EEDAR) $10,000 to the IGC Gamer’s Choice winner $7,500 in technical prizes

In addition to monetary awards and industry recognition, all 12 finalists have the unique opportunity to pursue potential commercial avenues for their games while at the D.I.C.E. Summit and also will be provided a full pass to the exclusive gathering. The IGC founders also arrange private face-to-face meetings between the finalists and video game executives from such top publishers

Mirroring the continued evolution of how games are played, the IGC created a Kongregate Award for the best browser-based game. The award recipient in this category, determined by reviewing all browser-based entries by Kongregate, will be announced at IGC by the company’s CEO Jim Greer. The winner’s game will be featured prominently on Kongregate, one of the fastest growing social gaming sites, and will receive immediate exposure to more than 13 million avid game players.

The 12 finalists include:
Non-Professional Category (Team/game) Hazard – Hazard: The Journey of Life
One Man Down – Solace Team Height Advantage – Subsonic Team Hermes – Inertia Toxic Games – Q.U.B.E. ZZZ Games – Symon
Professional Category (Team/game) Bad Pilcrow – Vanessa Saint-Pierre Delacroix And Her Nightmare Nemesys Games – Fortix 2 Playdead – LIMBO Pocketwatch Games – Monaco Spaces of Play – Spirits SpikySnail Games – Confetti Carnival

Finalists from last year’s inaugural IGC have experienced major success, allowing them to successfully break into the video game industry.

Ironically Hungary was to adopt the European common currency, the Euro, in 1999. Nevertheless experts said that the 2014 (another one of the uncertain dates) new deadline calls for an extremely strong Euro.

Hungary said that despite the fact that a strong Euro may give Hungary cause to worry on the new adoption date, it expects the strong Euro to build stronger cohesion within the community and help Hungary enter a financially stable and strong European Union- common currency-wise. Heads of state in Brussels told a conference that they expect the strength of their “blue-back” to rock the global market.

The conference was supposed to have drawn up a basic treaty to provide sustainability for a strong currency. Sadly overspending countries like Greece, Portugal and Ireland have been blamed for partly being the cause of the weaker Euro currency, obligating the 27 to bail them out so as to prevent a collapse in their economies.

Hungary’s EU presidency starts on Jan 1, 2011 and the Hungarian President and Prime Minister have allegedly pledged to help put the EU in its “rightful place among the world’s top economies.”

One of the main focuses have been highlighted as the upcoming EU Energy summit, due in Feb 2011, where participants are expected to draw up a final blueprint for a stronger and sustainable energy source for the EU, independent from Russian energy dominance and dictatorship, experts said.

Hungary’s sovereign credit rating on Monday was reduced to Baa3 from Baa1 by Moody’s Investors Service, according to Bloomberg.

Baa3 is the lowest investment grade, and one step away from speculative, or “junk” category. The Hungarian Forint weakened after the announcement.

“Today’s downgrade is primarily driven by the Hungarian government’s gradual but significant loss of financial strength, as the government’s strategy largely relies on temporary measures rather than sustainable fiscal consolidation policies,” Moody’s said, according to Bloomberg.

The rationale resonates with Standard & Poor’s November verdict, which called the Hungarian Government’s measures ad-hoc and lacking structural reforms.

Arriving on the heels of media rumors concerning state acquisition of Hungarian oil giant MOL, a second instance court decision on Thursday said the company acted within legal boundaries, when it placed prohibition on board membership for its Russian shareholder Szurgutnyeftyegaz.

MOL officials said denial was a reaction to the Russian company’s refusal to unveil its ownership structure – as regulations require shareholders above 5 percent to do so. Szurgutnyeftyegaz, which had refused the demand and filed the legal complaint, acquired its MOL shares of 21.22 percent earlier this year from Austrian OMV.

The MOL Group is an integrated oil and gas group in Hungary, also present in the Europe, the Middle East and Africa region, as also in the CIS countries, with interests in exploration, production, refining, marketing and petrochemicals. MOL employs over 34,000 people internationally and it is a market leader in Hungary and Slovakia. It is the second largest company in Central and Eastern Europe.

Hungarian retail and office property developing company TriGranit has announced the completion of a mega mall in the Croatian city of Zagreb. The capital construction, known as Arena Center, is said to have cost the investors some EUR 350-mil.

It is reported that TriGranit covered the lion’s share of the project by spending some EUR 250-mil, while of the cost of the project, while the tenants have supplied the remaining sum. The company said that already 95% of leasable space has been let in the 60,000 sq m complex.

Self-made billionaire, Sandor Demjan (who also happens to be the chairman of TriGranit) was reported to have said his company would invest some EUR 1-bil in Zagreb. An increasing number of Hungarians are using Zagreb as a starting point for their overseas flights, due to the strong developments and completion of motorways and infrastructure in Croatia.

One Hungarian said he was closer to Zagreb than Budapest, despite the fact that he lived almost an equal distance to both capitals, in Hungary. TriGranit had reportedly earlier built a sporting complex in Zagreb. It now wishes to expand the existing shopping complex and construct some 400,000 sq m of business and residential real estate and a congress center.

National Economy Minister Gyorgy Matolcsy arguing for the 2011 budget.

International rating agencies are expected to downgrade Hungary’s credit rating in November following centre-right government’s new budget plans, experts in Budapest and London told Budapest Report. Their cited reasons being that Hungary will be weakened financially as it does not want to depend on an IMF bail-out to strengthen its reserves.

Hungary’s 2011 budget has reportedly been heavily criticized by the IMF whose delegates left the goulash capital allegedly claiming that the new budget (due to go before parliament soon), is full of structural weaknesses (whatever that means -Ed). Experts say that the markets will most likely react negatively to these weaknesses and give concern to medium term investments and sustainability in Hungary.

Reportedly the questionable Royal Bank of Scotland (questionable because in 2010 the bank was bailed out by the British Government – using tax-payers’ money – to save it from going bust) also criticized the Hungarian Government’s shortfalls, claiming that it was “unimpressed.” The bank was reportedly sceptical about Hungary’s 2011 fiscal targets based on planned tax reductions.

The On the contrary the Hungarian government has suggested its commitment to its decision to improve the budget deficit “its own way” and without the “interference” of the IMF

German investor RWE has allegedly scrapped plans to expand the capacity of its lignite-based (brown coal, that is high in water content) power generating unit Matrai Eromu, the company said.

The plant, located in Visonta, at the foot of the Matra Mountain, was expecting to spend at least HUF 300-bil on building a new 440MW power generating block to boost capacity expansion by at least 50%.

But RWE reportedly admitted that no matter how hard the Hungarian Power Co (MVM) tried to carry out the investment, RWE would not swallow the bitter pill in an investment that would have been unprofitable in the long term.

German car makers are breaking new records. However these will not be speed or endurance records, but rather an all new investment record in Central and eastern Europe. The Ingolstadt-based automaker Audi AG (a member of the Volkswagen Group), plans to investment at least EUR 1-bil at its production and assembly unit in Gyor, North-western Hungary, sources said.

The Hungarian Prime Minister was expected to make the announcement on Sept 23, 2010. Germany’s Opel group (a member of the US-based General Motors group) also reportedly plans a further investment of at least EUR 500-mil at its assembly unit in Szentgotthard (Western Hungary). Both investments are said to be topped by state subsidies as the two companies have pledged to help boost employment (directly and indirectly) at their units.

Initiated by the Hungarian partner the first international-Chinese law firm of the world, named Yingke Várnai was established. As the first step of the European expansion the Deed of Foundation of the Budapest office was signed by Dr. Rupert Várnai and Mr. Mei Xiangrong in Kodály Hall at the Hungarian Academy of Sciences.

Dr. Rupert Várnai dreamt of establishing the first international-Chinese law firm of the world, after traveling to China two years ago. He imagined that a Hungarian law firm, namely his own team would constitute the partner of the Chinese company. The dreams were followed by actions, intensive search and a series of negotiations, as a result of which the perfect partner was found in the person of Mr. Mei Xiangrong, the leader of Beijing YingKe Law Firm. At that time, the idea of expansion outside China was not new for YingKe, the law firm with the staff of almost thousand and producing the most dynamic development in China. The idea proposed by the Hungarian partner was a perfect match to the plans of YingKe.

The founders base their cooperation on the notion that a team of counsellors including Chinese lawyers, with a know-how of local conditions could provide Chinese companies with an aspiration to expand in Europe with increased safety, not least on account of serving the clients in their mother tongue. Parallel to this, Hungarian clients of Yingke Várnai Law Firm can make use of the legal services on an international standard in Hungarian and in a familiar environment.

The law firm by the partners will provide legal services on an international standard to its clients in Budapest, and in the future, as the next step of the European expansion, in other countries of the region also under the name of Yingke Várnai. “We chose Budapest as the first step of our intensive expansion policy and the law firm established here will be the centre of our regional network in the future”, said Mei Xiangrong.

After signing the document Dr. Rupert Várnai said: „I am confident that we will be able to contribute to the success of Hungarian companies and to the success of Hungarian products and services in China. On the other hand, the newly established law firm will be guarantee to Chinese investors, who will hopefully increase their investments in Hungary, and will choose the country for the basis of their European expansion.”

The Hungarian Parliament on Wednesday passed a law permitting local public institutions to purchase produce from local farms without an often protracted and severely bureaucratic ‘public procurement process’.

Hungarian Agricultural Minister Sandor Fazekas (left) and Government Spokesperson Anna Nagy announced the change in the small town of Many, near Budapest.

Small farmers will no longer bear the restrictions on public institution sales, increasing their income, while consumers are assured of high quality, fresh local products, Nagy claimed.

The Agricultural Minister said the move is part of a large-scale initiative to open the Hungarian market to Hungarian farmers.

The Hungarian administration has vowed to further boost bilateral relations with Croatia on all levels to help both countries exploit each other’s potentials to the maximum. The Hungarian Government has also promised to give maximum support for Croatia in its bid to join the European Union.

The majority of Hungarians are reportedly spending their hard earned cash during their summer holidays in Croatia, which is arguably the top destination for Hungarian holiday makers. Croatia’s oil and chemicals group INA has been partly acquired by the Hungarian Oil and Gas Co. (MOL). Croatia and Hungary are also heavily involved in what is known as the Adriatic natural gas pipeline, sources said.

Nokia Siemens Networks has picked Budapest for its global railway communications center, the company’s Hungarian MD Robert Esik said at a press conference on Monday.

The move is claimed to create 100 jobs this year. Hungarian Economic Minister Gyorgy Matolcsy and Finnish Prime Minister Mari Kiviniemi, on an official Hungarian visit this week, toured the center on Monday.

Earlier, Olli-Pekka Kallasvuo was removed as CEO of Nokia and replaced with Stephen Elop, the head of Microsoft’s business division, in a bid by the mobile phone maker to up its competitiveness against Apple and Google in the smartphone market.

Kallasvuo has been the head of Nokia for the last four years, but will step down on September 21st, at which point Elop will take over.

The change was brought about as Nokia struggles to compete in an increasingly important market. The company’s share price has been steadily falling, along with market share, as the mobile phone maker has not released a smartphone to compete with Apple’s iPhone.

Kallasvuo is blamed for a lack of leadership, which has seen Nokia lose two thirds of its share price, a USD 60 billion drop in market capitalisation since the iPhone release in 2007.