Some rather unhappy news for the Hungarian ladies: Jude Law won’t be taking a stroll on the streets of Budapest any time soon. The reason? Martin Scorsese has decided to shoot his new film The Invention of Hugo Cabret in France. Although the film was slated to be shot in Budapest and London, Scorsese chose Paris as a backdrop and several other Hollywood directors moved to France this summer to shoot movies. The changes of heart were not merely the spectacular scenery Paris and France has to offer. The Americans was also swayed by the 20 per cent discount the French state offers foreign filmmakers.

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Who will move first to raise rates?

Though fears of a double-dip recession have not entirely vanished, the global economy is on its way to recovering from the deep downturn. Fiscal and monetary stimuli to boost activity are gradually being withdrawn as economic growth gets back on track and the time arrives to consolidate public finances.

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Tesco chief financial officer Erzsébet Antal resigned last Wednesday as accusations continued that the retail chain fails to pay the minimum wage to its cashiers, and police investigated allegations that hundreds of workers have not received overtime pay.

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The doomsayers are proven wrong, so far, about a second economic collapse after IMF snub.

Despite an initial slide in the value of Hungarian stocks and the currency after the abrupt departure of IMF and EU delegations in mid-July, it appeared last week as though the sky was not about to fall on Hungary just yet.

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Old-style suggestion box a great idea.

German software company SAP is one of the most active large enterprises when it comes to encouraging and implementing employees’ ideas. The Budapest Times spoke to its Budapest support director, Markus Hilken, about generating, developing and putting these ideas into practice.

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Hungary not a fit example in stimulus-stabilisation debate.
Blaming the IMF for austerity in Hungary is economic nonsense.

In light of recent government bond auction data, the government’s strategy of not seeking any further agreement with the International Monetary Fund might seem vindicated. Last week the government debt management agency sold more bonds than expected of five and 13 years maturity, even if demand on three years’ maturity was less than hoped.

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Top Manager in Discussion: Frank Klein, CEO of Mercedes-Benz Manufacturing Hungary.

The fact that the investment of Daimler AG in Kecskemét is progressing so well is due in no small part to Frank Klein, who has been in charge of the factory development since February of this year as CEO of Mercedes-Benz Manufacturing Hungary Kft. The Budapest Times spoke to him on-site about how the construction work is going and the milestones to come.

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Packaging plant to create 400 jobs.

The Pennsylvania-based generic and specialty pharmaceuticals company Mylan is to establish a EUR 67 million drug packaging plant in Komárom Industrial Park. The investment by the industry’s third-largest corporation is expected to create some 400 jobs in the northwest of the country according to International Trade Development (ITD) Hungary.

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Failure of negotiations with EU, IMF missions sends negative message.

Suspending negotiations with the International Monetary Fund never augurs well but some countries in some cases can afford to do so. Whether Hungary belongs to that rank will be a major question in the coming months.

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Socialists irked by Fidesz taking credit for balancing books.

Hungary's budget deficit was way over the year-end target at the end of June, according to figures released on Friday by the Economy Ministry. Confirming preliminary data from the beginning of the month, the deficit was just over HUF 1 trillion (EUR 3.55 billion) in June, 118.8% of the year-end target. The current centre-right Fidesz government will "naturally" stick to the 3.8% year-end target agreed by the previous government with the IMF.

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The Hungarian European Business Council (HEBC) presented its annual report last Thursday with the zeitgeist-appropriate title "Sustainable Competitiveness". But its members cannot disguise the fact that they are above all pursuing the interests of their own companies. That results in numerous contradictions. 

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European Central bank says cap should only apply to future appointees.

The government last week defended its decision to include directors of the Hungarian National Bank (MNB) in a HUF 2 million (EUR 7,145) monthly wage cap for all publicly funded employees.

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Uneasiness prevails, preventing monetary easing from resuming.

Uncertainties seem to grow regarding the negotiations between the government and the IMF on the existing stand-by facility and its possible renewal.  According to an earlier statement by Economy Minister György Matolcsy, the government intends to agree with the fund on a two-year precautionary loan in the EUR 10-20 billion range. Yet, the IMF seems to be unhappy about the way the government has presented its proposed policy measures and has reportedly criticised some elements of the package.

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Renovations and green building could be solutions.

Henrik Tóth economic strategy committee chairman of the Joint Venture Association (JVSZ) opened their most recent event –  “Quo vadis construction industry” – with a progress report on the construction sector.

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Aims to boost tourism.

The Hungarian Association of Hotels (HAH) has come up with a seven-point action plan to jump start the ailing tourism sector. “The quick recovery of the national hotel and tourism industry can only be possible with the coordinated introduction of various measures”, the association’s proposal notes.

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Development minister reads the riot act to previous governments

Interest in a talk given by the National Development Minister Tamás Fellegi was so great that the organiser, the Joint Venture Association, had to close the list of participants a week ahead of time - an unusual occurrence for chamber events.

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Top Manager in Discussion: Dr. László Balázs CEO, director of corporate & treasury and Zoltán Kiss Deputy CEO, director of retail from Volksbank Hungary.

Volksbank Hungary  is predicting that big banks will get bigger in the next five years while only those niche players with an appropriate business model will remain in Hungary.

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Banks make case to the IMF

The government will press ahead with plans to raise HUF 200 billion (EUR 714.81 million) annually through a temporary tax on the domestic financial sector.
Economy minister György Matolcsy said last Tuesday that the tax would be applied as described in a bill presented to parliament on 2 July, and there would be no further negotiation with banks following the collapse of talks earlier that day.

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Industry excels, economic environment difficult to predict.

With industry performing particularly well in May – the Central Statistical Office (KSH) announced 13.7% output growth compared to May 2009 – the real economy seems to vindicate those who predicted that the recovery would start this year in Hungary.

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Credit insurer Coface holds conference on rising number of defaulters.

The number of defaulting customers is increasing in the wake of the economic crisis, so every businessperson should concern themselves with the topic, Zoltán Dercze, national director of credit insurer Coface Hungary, told a conference last Thursday.

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Minister says motion will be tabled after talks with banks collapse.

The government last week pressed ahead with a proposed levy on the financial sector of HUF 200 billion (EUR 700.75 million) after talks with Hungary’s leading banks collapsed. Economy Minister György Matolcsy told the news agency Reuters last Friday afternoon that the six leading banks had pulled out of talks with the government. Banks subsequently denied they had pulled out, and had only asked for talks to be postponed until after this week’s visit by delegates from the IMF and the EU. Nevertheless, Matolcsy said the proposal would be presented to parliament the same day.

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The National Architecture Council gave its approval for a building designed by British firm Foster and Partners, which will replace a block of four unused structures near the British Embassy in downtown Budapest.

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Ownership change to save jobs: spokesman.

After the Minister for National Development recently launched an enquiry into the use of state subsidies received by off-shore owned Hungarian vaccine manufacturer Omninvest, the firm announced that it will be made more transparent by transferring its ownership to five individuals.

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Socialists slam ‘oligarch-enriching’ policy.

The government approved last Wednesday 16 of the measures outlined earlier by Prime Minister Viktor Orbán in a hastily prepared, 29-point economic “action plan”.

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The American Chamber of Commerce in Hungary (AmCham) welcomed new members last Tuesday at its Business After Hours event held at the brand new Continental Hotel Zara on Dohány utca in  District VII.

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Genex Zrt. at the first business show of the Hungarian-Bulgarian Chamber of Commerce.
 
Last Wednesday the Hungarian-Bulgarian Chamber of Commerce presented its first business expo. The focus was on the company Genex Zrt., which has made a name for itself with its air-conditioning units and building systems at home and abroad.

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The Joint Venture Association’s Asia Day.

The huge growth rates in the emerging countries of the Far East are of course also attractive to Hungarian firms. However, companies eyeing up the region face significantly greater challenges than for example in relation to the EU. That was one of the reasons why the Joint Venture Association dealt specifically with Asia last Thursday in its “In Focus” events series.

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Last week saw the groundbreaking ceremony of a new production hall on the open area beside the existing Bosch factory in Miskolc.
“This is my first groundbreaking and I am proud that in just a few years have been able to lead the factory in Miskolc to this step,” said Klaus Leupold, manager of the Bosch factory in northeast Hungary. HUF 6.5 billion (EUR 22.87 million) is being invested in the new building.

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Transition paths differ across CEE.

Eurostat has recently published its new assessment on member states’ GDP per capita in purchasing power standards (PPS) for 2009. According to this, interesting changes have taken place regarding the relative wealth of countries in relation to the EU average.

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