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VOL. 20, NUMBER 3

I FEB 10, 2012 – FEB 24, 2012

Budapest Business Journal

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Translation providers ﬁnd their ways even in crisis The narrowing possibilities of the local market could provide an impetus for the domestic translation industry. PAGE 13

FOCUS

LAUGHING MATTER

MARKET WATCH

Flight after death

Beyond the “Pesti vicc”

MMTS: time to say goodbye?

After a long struggle, all flights of national airline Malév were grounded on February 3. The hundreds of passengers stranded at Budapest airport took the news with sadness and incomprehension. Landscape after crash. PAGE 9

Wikipedia’s definition is smart and simple. “A joke (or gag) is a phrase or a paragraph with a humorous twist. ... Jokes may have a punch line that will end the sentence to make it humorous.” Lets check on that... PAGE 12

The current MMTS trading system of the Budapest Stock Exchange has been updated and has operated continuously at close to 100% reliability in the past few years, but it is still a 15-year-old system with limited capacity. PAGE 7

2 CONTENTS

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EDITOR-IN-CHIEF:

András Rác a.rac@bbj.hu COPYEDITOR:

NEWS

digest

NEWS

bi-weekly

Tamás Deme PROOFREADING:

Robin Marshall

OPINION

All the president’s words

FEATURES

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22 9

Research (research@bbj.hu)

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SOCIALITE

The Political Charm of Making Theater

FOCUS

Flight after death

DESIGN:

Absolut Design Stúdió (production@bbj.hu)

After a long struggle, all flights of national airline Malév were grounded on February 3. The hundreds of passengers stranded at the Budapest airport took the news with sadness and incomprehension. How could things get that bad and what does the future hold?

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SPECIAL REPORT

Babel business

The narrowing possibilities of the local market could provide an impetus for the domestic translation industry.

SPECIAL REPORT

MMTS: time to say goodbye? BSE CEO György Mohai talks to the Budapest Business Journal about consolidation versus independence.

Netherlands Hungarian Chamber of Commerce

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SPECIAL REPORT

Flash Art: a magazine with a mission Bringing local works to the international art scene is the mission...

LAUGHING MATTER

Beyond the “Pesti vicc”

Wikipedia is smart and simple. “A joke (or gag) is a phrase or a paragraph with a humorous twist. ... Jokes may have a punch line that will end the sentence to make it humorous.”

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NEWS 3

Budapest Business Journal | Feb 10 – feb 24

digest

It occurred to me that nothing is more interesting than opinion when opinion is interesting HERBERT BAYARD SWOPE, THE NEW YORK EVENING WORLD, 1921

Death of antiSemitic ﬁgure recalls old secrets Hungary’s István Csurka, who, despite being an admired playwright, gained a controversial reputation as a far-right nationalist politician, died on Saturday, February 4. He was 77. Often criticized in Hungary and abroad for his anti-Semitic articles, Csurka’s death fired emotions in the press.

admitted having been part of the dreaded network who often informed on friends and relatives,” AP said. However, some might query this statement. Although the list of collaborators has not yet been made public, historical surveys published in the recent years show that a major part of the Hungarian society was forced to inform for the communist regime in order to avoid punishments. Csurka himself later stated that he had refused to fulfill the dirty task and had never written any reports.

FEBRUARY 4, 2012 FEBRUARY 7, 2012

Moderate reports on a low-key speech Prime Minister Viktor Orbán reaffirmed his commitment to measures the government has taken affecting taxes, jobs and the education system at his traditional annual “state of the nation” address in Budapest on February 7. Among others, he claimed that though the extraordinary financial-sector tax, the crisis tax and early foreign-currency-denominated loan repayment program did not represent the most “elegant” steps, the government had needed to urgently take these measures in order to put Hungary back on its feet. The PM said that the government has so far implemented 83% of the measures contained in its Széll Kálmán debt-reduction program announced in March of last year. Orbán concluded his speech by attesting that “we deserve

something better in view of the amount of work we have done. We obviously made mistakes in the 20th century, but our losses far outweigh the measure of the mistakes.”

ORBÁN HOLDS THE COUNTRY IN HIS HANDS LIKE A MONARCH Die Welt

FEBRUARY 7, 2012

The American Press published a rather lengthy factual report on Orbán’s speech, with numerous quotes from the Prime Minister. After giving a brief background on what events had led to the current IMF-Hungary negotiations, the AP goes on: “As Orbán spoke Tuesday, about 40 people marched in freezing weather to Budapest from Borsod County, one of the country’s poorest, hoping to bring the plight of their region to the government’s attention.” The article also cites Imre Tóth, a 44-year old unemployed man who came up with the idea of the march: “This hunger march signals that we are close to dying of hunger and our livelihood is barely secured. It was the inflexibility and inhumanity of this country’s government which moved us to launch our protest.”

In an article headlined “Leader of Hungary defends new constitution”, The New York Times’ Palko Karasz devotes several paragraphs to what Viktor Orbán did not talk about on Tuesday. He mentions that after Orbán pushed through the new Constitution and introduced measures that his critics said threatened the independence of the media and the judiciary, he offered to amend laws that could compromise the independence of the central bank – as a result of pressure coming from the European Union and the International Monetary Fund. “The European Commission, the E.U.’s executive arm, has threatened legal action over new laws on the retirement age of judges and the data protection authority that it said violated E.U. rules, and critics throughout the Union and elsewhere have said the new Constitution could breach

democratic principles. But Mr. Orban would have none of that on Tuesday,” The New York Times wrote.

FEBRUARY 8, 2012 Die Welt’s Wolf Lepenies says that Hungary is becoming an autocracy, but the EU is not hard enough on Budapest, thus giving the impression that the weakness of the euro is a bigger threat to Europe than the collapse of democracy. According to Lepenies, “Orbán holds the country in his hands like a monarch,” and 23 years after the collapse of communism, the young Hungarian democracy became an autocracy. Although the EU keeps protesting against this and threatens sanctions, Lepenies thinks that it is not strict enough. It is dangerous, he notes, because “who guaranties that other member states won’t follow Hungary on this path?”

France’s Associated Press (AP) probably gave one of the fairest reports on Csurka. Its deep article recalls the latest news around him such as his governmentsupporting speech at a rally in the city of Szeged and his letter to the staff of Budapest’s Új Színház theater in which he asked members of the company to work together in harmony despite their political opinions that might go against their newly appointed far-right director György Dörner’s ideas. The article also did not fail to review Csurka’s career as a playwright, before adding that, besides his more than 20 plays, Csurka wrote many newspaper and magazine articles, in which he often blamed Jews and international powers for Hungary’s problems. In order to correctly draw up Csurka’s political path before establishing the Hungarian Justice and Life Party (MIÉP) in 1993, AP recalled that Csurka, after spending six months in an internment camp for leading a college militia during the uprising against the Soviet-imposed regime in 1956, was recruited as an informant for Hungary’s secret police. “Csurka was among the very few who

Balázs Böcskei, a political analyst, did not aim to keep such emotional distance when it comes to Csurka. “I have never thought that I should forgive him,” Böcskei wrote in Népszabadság. Interestingly, the playwright’s extremist ideas and statements about the Jews stand only as an introduction to the article that rather looks at the controversial walk of life of Csurka from a wider perspective. Böcskei puts Csurka’s collaboration with the communist regime into focus. As Csurka signed an agreement to inform on his close circle, Böcskei calls the playwright-politician a confederate in keeping the dark secrets of the communist regime hidden from society. “Like Csurka, there are still crowds of people voicing the fairness and the advantages of the regime while suppressing their own roles in it,” Böcskei wrote referring to intellectuals who could reach high as journalists or teachers, for example, in the autocratic regime. If politicians are not ready to make the list of collaborators public, this secret will irreversibly damage Hungary’s fourth republic, Böcskei added. ÁV

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4 NEWS

Budapest Business Journal | Feb 10 – feb 24

QUOTE OF THE WEEK

bi-weekly

I'm facing the biggest intellectual challenge of my political career. I have to put together an economic policy that curbs indebtedness, pushes the budget deficit below 3%, in the context of recessions in many countries in the EU and low growth at home.

NEWS FOR THESE PAGES IS FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, HUNGARY A.M.

HUNGARY SEEKS €15-20 BLN CREDIT LINE FROM IMF Hungary must improve its investment environment and slow legislative changes to obtain an international bailout, Mihály Varga, state secretery in charge of the Prime Minister’s Office told the daily Magyar Hírlap in an interview on Saturday, February 4. Hungary is seeking an aid package from the International Monetary

gestions which the government “must take seriously”, including on the country’s investment environment, adding that the speed of changes initiated by the cabinet had been difficult to follow for some investors. Earlier, on January 20, Prime Minister Viktor Orbán said in a radio interview that dealing with legislation the European Commission has objected to was “not an especially difficult matter”. A day earlier, the IMF stressed that it will not issue a mandate for official negotiations until Hungary

quency block in the 900 MHz band at an auction, making it the fourth player on Hungary’s mobile telecommunications market, the National Media and Infocommunications Authority (NMHH) said on February 1. The consortium bid HUF 10 bln for the block and attached ranges. The three mobile telecommunications service providers until now, Magyar Telekom, Telenor Magyarország and Vodafone Magyarország, also won frequency blocks in the auction, NMHH said. Bids at the auction came to HUF 43.9 bln plus VAT, it added.

ORBÁN REAFFIRMS SOLIDARITY BETWEEN HUNGARY AND AUSTRIA

Fund (IMF) and European Union of about €15–20 bln to reassure investors it has financing even if it gets cut off from debt markets later this year. Varga expects that a deal might be reached in one or two months as it is in the interest of both parties to come to an agreement quickly. He noted that the IMF had several sug-

reaches an agreement with the EU on open questions.

STATE-RUN CONSORTIUM BAGS BIGGEST FREQUENCY BLOCK AT AUCTION A consortium of state-owned Magyar Posta, the Hungarian Electricity Works (MVM) and a unit of the Hungarian Development Bank (MFB) has successfully bid for a 5 MHz fre-

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Prime Minister Viktor Orbán reaffirmed Hungary’s solidarity with Austria after a meeting on January 20 with Austrian Vice Chancellor Michael Spindelegger. “Our values are shared with the Austrian government. We stand on the foundation of European values, we are a part of European culture, and we are invested in European debates,” Orbán said. “Let us work to keep Hungary and Austria strategic partners,” he added. Orbán said Hungary takes EU law seriously, adding that the government was prepared to make changes to national legislation even in cases where it did not think this was required by EU law. Spindelegger said it was important for Hungary’s and Austria’s cooperation to be efficient from the point of view of economics. He added that the two countries have to build a future on mutual economic interests.

TAKARÉKBANK ANALYSTS SEE HUNGARY GROWTH SLOWING TO 0.5% IN 2012 TakarékBank analysts believe Hungary’s economic growth could slow to 0.5% this year, but pick up to 1.8% in 2013, chief analyst Gergely Suppán said at a press conference on Thursday. The forecast is the same as the government’s projection. The bank’s analysts put the general government deficit, calculated according to European Union accounting rules, at 2.8% of GDP this year and 2.6% in 2013. The government targets a 2.5% deficit in 2012.

BUDAPEST MUST CUT SPENDING

slightly and Richter’s grew last month, data published by the companies show. OTP Bank had 4,716,106 treasury shares, or 1.68% of registered capital, at the end of January, down slightly from 4,716,888 at the end of December. Richter had 135,026 treasury shares, or 0.72% of registered capital, up from 134,949 at the end of December. Treasury share stock of the bourse’s other two blue chips, oil and gas company MOL and Magyar Telekom, was unchanged at the end of January. MOL had 5,793,316 treasury shares, or 5.54% of registered capital. Magyar Telekom had 390,862 treasury shares or 0.0375% of registered capital.

Budapest must tighten its belt if it is to bail out public transport company BKV, District 5 mayor Antal Rogán said. Rogán said Budapest did not provide one forint of operational support to the company in 2010 and 2011, while the government gave it more than HUF 140 bln in subsidies. As it has now become apparent that there will be no more external funds or tax hikes, he continued, the city should consider which investment projects it can cancel or postpone. The question arises as to whether Budapest can afford to spend more on the Budapest Transport Center (BKK) than on anything else, when it has to raise at least a further HUF 1015 billion for BKV operations. In response, Budapest deputy mayor István György said the city cannot fund public transport in Budapest alone without realistic additional revenues.

HUNGARIAN BANKS CLOSE BRANCHES

BUSINESS MALÉV EXPECTED TO BE LIQUIDATED Hungarian national carrier Malév is expected to undergo liquidation, but the National Development Ministry is continuing to review the possibility of establishing a Budapestbased airline, state secretary for infrastructure Pál Volner said at a press conference on Friday, February 3, hours after Malév’s flights were grounded due to bankruptcy. Volner said the new company could be established as a “greenfield investment” in order not to inherit Malév’s obligations. He said Malév would not have been capable of repaying some HUF 100 bln in state aid, considering the size of its existing debt and its annual revenue of HUF 100 bln, and the patience of its lenders had run out. The European Commission earlier ordered Hungary to recover the illegal state aid from Malév. Volner said the decision to ground Malév’s flights was a responsible one by the airline’s management.

OTP TREASURY SHARE STOCK EDGES DOWN, RICHTER’S GROWS IN JANUARY Of the four blue chips of the Budapest Stock Exchange, OTP’s treasury share stock fell

Photo: sxc.hu

ECONOMY

PRIME MINISTER VIKTOR ORBÁN SAID ON JANUARY 26 IN AN INTERVIEW WITH THE WALL STREET JOURNAL

Branch networks of banks operating in Hungary have shrunk at a fast pace since 2009, mainly due to increasing burdens from the state and narrowing business opportunities. Fourteen of Hungary's biggest banks cut a combined 56 branches from their networks last year, according to Hungarian business daily Világgazdaság. Compiled data show the number of branches operated by the 14 banks gauged by the paper have fallen by 87 in the past two years, and more closures are planned. The banks opened more than 500 branches between 2004 and 2008. But after the global economic crisis hit Hungary in 2008, banks became more reluctant. CIB Bank has cut 23 branches over the past two years, Erste Bank’s network has been reduced by 21, and Raiffeisen Bank’s by ten units over the last two years. Hungary’s biggest commercial lender OTP Bank and Magyarországi Volksbank had reduced their networks by eight branches by the end of last year. Budapest Bank and K&H Bank both cut the number of branches by five. The paper notes, however, that the FHB-Allianz merger last year contributed to the closure of 50 branches previously operated by Allianz. The trend continued at the beginning of this year. In January, Erste Bank shut down a further 41 branches.

GOVT PLANS NO ‘DRASTIC’ TAX CHANGES THIS YEAR, SAYS OFFICIAL Hungary’s government plans no drastic tax changes this year, and consultations will precede any small modifications, deputy state secretary for tax affairs Ádám Balog said in business daily Világgazdaság. “We don’t plan any drastic changes, but we will consult with the market on smaller modifications,” Balog said. He said there were no plans at present to raise taxes to compensate for the phasing out of the bank levy and sectoral crisis taxes. He added that the simplification of the tax regime for SMEs could take a new direction, but few changes would be made this year. Balog would not exclude the possibility of taxes being brought up at talks with the International Monetary Fund, but he said IMF representatives did not see in full Hungary’s flatrate, proportional tax system as it will appear in its finalized form from 2013.

UK FIRM BUYS INTO E-STAR British-registered Sandling Enterprises Ltd has acquired 192,000 shares or of Hungarian energy service company E-Star Alternative as part of share swap with József László Makra. Sandling Enterprises has become a business controlled by Makra as a result of the share swap, while Makra’s direct voting rights in E-Star dropped from 7.27% to zero following the transaction that took place on January 31. Through Sandling Enterprises he indirectly holds 7.27% of voting rights. The company and Makra had to report the deal because it exceeded the 5% disclosure threshold. E-Star Alternative is an A-category issuer on the Budapest Stock Exchange, whose owner and chairman Csaba Soós recently sold 264,000 of his shares in the company to the fund managers of OTP Bank and Aegon Magyarország and lent 90% of the proceeds to E-Star to “strengthen its cash position and capital structure”, the company said.

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NEWS 5

Budapest Business Journal | Feb 10 – feb 24

ANALYSTS EXPECT RICHTER PROFITS TO DECLINE IN Q4

HUNGARY TOBACCO INDUSTRY EXPANDS TO HUF 500 BLN IN 2011

Hungary’s leading drugs producer Richter Gedeon is expected to report a substantial year-on-year

Hungary’s tobacco industry grew almost 10% to HUF 500 billion last year, industry insiders said at a press confer-

excise taxes, expected stricter rules on tobacco sales and the expansion of the no-smoking policy in public places, the association said. Making more public establishments smoke-

ber that would require a concession from the state for retail tobacco sales and limit the number of retail outlets to one per 2,000 residents from 2013.

MOL LAUNCHES GREEN FILLING STATION

CIGARETTE CI IGARETTE EXCIS EXCISE TAX INCREASE IN 2012 IN FORINT (PER 1,000 STICKS)

IN PERCENTAGE

from February 1, 2012

11,500

30%

from July 1, 2012

11,900

31%

Hungarian oil and gas company MOL on January 19 inaugurated a more than HUF 300 mln environmentally-friendly filling station that has a charging station for electric vehicles as well as fuel pumps. The filling station costs about half as much to operate as conventional stations, MOL’s sales director for Hungary Jenő Horvath Dóri said. The charging station uses ABB technology.

HUNGARY TO SPEND HUF 600 MLN ON WINE MARKETING THIS YEAR drop in its operating profit, analysts polled by Portfolio.hu said. Richter is set to publish its earnings for the fourth quarter of 2011 on February 7. Sector peer Egis is also expected to release its Q4 figures the same week. Analysts unanimously said they expect a marginal increase in EBIT and a bigger rise in the net profit of Egis, according to Portfolio.hu.

ence organized by the Hungarian Association of Tobacco Industry Investors (DBMSz) on January 19. Hungarian tobacco companies BAT Pécsi Dohánygyár, Continental Dohányipari, Imperial Tobacco Magyarország and Universal Leaf Tobacco Magyarország established DBMSz at the beginning of last December. This year tobacco sales are expected to fall because of the economy, higher

free has resulted in as much as a 5% reduction in sales, judging from foreign experiences, it added. An increase in the excise tax on tobacco products from the middle of this year is expected to raise retail prices by 20%, the association estimates. The association is pressing for a loosening of planned additional regulation of retail tobacco sales. MPs of governing Fidesz submitted a bill to Parliament in Decem-

talk of the town PRO AND ANTI THE NEW THEATHER DIRECTOR Approximately 300 people protested against the new director of Budapest’s Új Színház in front of the theater in the evening on Wednesday, January 1. Budapest Mayor István Tarlós named György Dörner, an actor who has admitted links to far-right political groups in Hungary, to head the institution last October; his five-year mandate started on February 1. A smaller group of farright protesters tried to disturb the anti-fascist protest in front of Új Színház, and police stepped in to separate the two groups. Dörner succeeded István Márta, who had run the theater

for 13 years, most of that time profitably. Theater professionals across Europe and in Hungary have opposed Dörner’s appointment, but Tarlós said the new director’s performance would be evaluated “at an appropriate time” and asked critics for “patience and restraint”. Several actors in Új Színház’s c o m p a n y , together with some behind-the-scenes employees, have already announced their resignations. A number of contemporary writers have also revoked licences for their plays to be performed at the Új Színház. According to Dörner’s concept, Új Színház will now focus on the plays of Hungarian authors.

Hungarian winemakers can apply for about HUF 600 mln in funding for marketing this year, Agrármarketing Centrum (AMC) director Péter Simon said at a conference of vintners on January 19. Simon said a sales-based contribution toward the funding by winemakers was being phased out this year and support would come from “general tax revenues”. Funding will be allocated separately for marketing Hungarian wines abroad, he said.

VACANCY RATE ON BUDAPEST OFFICE SPACE MARKET FALLS UNDER 20% The vacancy rate on Budapest’s office space market has fallen under 20% for the first time in two years, the Budapest Real Estate Consultants Forum (BRF) told newswire MTI. Take-up in 2011 came to 397,333 sqm, 28% more than in 2010, bringing the vacancy rate to 19.2%. About 87,425 sqm of office space was inaugurated in the capital in 2011, 49% less than in 2010. At yearend, there was 3,158,889 sqm of office space in Budapest.

GVH INTRODUCES NEW FINES POLICY Hungary’s Competition Office (GVH) has introduced a new fines policy. The previous policy, called anti-trust fine statement, was withdrawn in May 2009, the office noted in its statement sent to MTI on February 2. The new policy took effect from February 1, 2012. In line with European trends, this “wants to give more ground to fines serving as deterrents imposed over cartels distorting competition”. The statement specifies the basic principles of imposing fines, explains the procedure and criteria applied, and

the content and relative weight of these criteria. GVH first decides on the basic amount of the fine based on the threat of the infringement regarding competition, its impact on the market and attitude of the enterprise to the infringement. The basic amount, in the most serious case, can be a maximum of 10% of the relevant turnover. The basic amount is then corrected in accordance with factors such as whether the infringement is recurrent, the advantage achieved, the necessary deterring effect, and the applicability of the policy of accommodation.

during a demonstration by the radical nationalist Jobbik party last Saturday. The offense of vandalism committed in public carries a prison term of 1-5 years, the authority’s spokesman said. Budapest police filed charges against two people who burned an EU flag at the rally staged in front of the Budapest offices of the European Commission.

NUMBER OF NEW JOBS RISE IN DEC

The prosecutor of Veszprém County has pressed charges against 15 suspects in connection with the red-sludge disaster which wiped out a village and surroundings in western Hungary in October 2010. The charges include causing death through negligence, causing extensive material and financial damage and endangering the public, as well as damaging the environment and ecosystem in connection with the burst sludge containment facility belonging to aluminum producer Mal Zrt. The suspects face a prison term of 5-10 years for the most serious charges. According to the charge sheet, certain employees of Mal Zrt are responsible for failures in management, monitoring and response on October 4, 2010. Documents linked to the investigation add up to more than 120,000 pages. The disaster claimed the lives of eight people and 226 suffered injuries, according to the prosecutor’s statement.

More than 10,000 employers posted almost 33,000 new jobs at employment offices in Hungary last December, figures published on the website of the National Labor Affairs Office (NMH) show. The number of new jobs was up 11.1% from November and more than doubled from 12 months earlier. About 70% of the new jobs were in state-subsidized work programs. Unadjusted figures show the number of registered job seekers at the end of December was 552,300, up 4.9% from a month earlier and down 6.6% from the end of 2010. More than 126,000 of the job seekers, or 22.9% of the total, had looked for work for more than 12 months, down 0.6% from a month earlier and down almost 26% from December 2010. Seasonally-adjusted figures show the number of job seekers fell by 2,500.

STATE, NOT BANKS, TO MANAGE “BABY BONDS” The government is drafting an amendment that would take management of “baby bonds” from banks and give it to the state. Since 2006, the Hungarian State Treasury has made available a HUF 42,500 “start-of-life subsidy” to all Hungarian-born citizens who reside in the country. Parents may contribute to the bond, benchmarked to the five-year government bond, until their children turn 18. So far the state has paid HUF 60 bln for the bonds and parents HUF 15 bln.

POLITICS PROSECUTOR INVESTIGATES JOBBIK FLAG BURNING The public prosecutor’s office has ordered an investigation into the burning of an EU flag

CULTURE PROSECUTOR BRINGS CHARGES AGAINST 15 SUSPECTS IN SLUDGE DISASTER CASE

ATHLETIC CHAMPIONSHIP CANCELLED FOR LACK OF VENUE Hungary will not hold its annual national Athletics Indoor Championship because there is no venue available that would fit the event, online news portal Index reported. The Syma Arena, where the championships were held in past years, is now too expensive for the organizers, as the majority of the rent was financed by the state, which has now cut back such expenditures. The Hungarian Athletics Association (MASz) cannot afford Syma if it does not find enough extra sources of income, Index said. For want of an alternative, MASz plans to enter championships in other countries of the region, as it is “nonsense” not to enter any races in the year of the Olympic Games, Index said. ÁV

Your first address if you like to start business in Slovakia! cegekalapitasa.hu

6 MARKET WATCH

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Budapest Business Journal | Feb 10 – feb 24

Downside risks cloud Hungary’s Growth prospects for 2012 negatively affected by impact of European debt crisis and missteps in domestic policy. IMPROVING PERCEPTIONS

CHECKLIST Institutional and legal changes necessary for talks with international institutions ■ Respecting the independence of the central bank

■ Restoring the competence of the Constitutional Court

■ Allowing the future freedom of tax policy by modifying the law on financial stability

Christine Lagarde, The head of the International Monetary Fund (IMF) Christine Lagarde – REUTERS/Zoubeir Souiss

■ Implementing the conditions necessary for the autonomy of the Budget Council

■ Abolishing the practice of bills submitted by individual MPs rather by the government, discussion of draft proposals with experts

■ Ensuring reasonable time for the adjustment to planned reforms and changes

■ Revision of the tax system

■ Revision of the pension system

Source: GKI

loan arrangement for Hungary that the IMF needs to see tangible steps that show strong commitment by the authorities to engage on all the policy issues that are relevant to economic stability. Research institute GKI pointed out that international organizations will insist on institutional and legal changes as a precondition for the start of negotiations (see box). In turn, the Hungarian government said that there were no preconditions to start negotiations with the IMF and the EU, and the Hungarian government stands ready, so talks could start at any time. Analysts expect negotiations to start in the next few weeks and an agreement to be

reached by the end of Q1 or the beginning of Q2. The IMF and the EC received a request from the Hungarian authorities for

possible financial assistance on November 21. The government indicated that it regarded any such support as precautionary.

BEYOND THE ASSISTANCE PACKAGE Without an IMF agreement, Hungary would head for a sovereign default. “At the beginning of 2012 Hungary is facing a financial and solvency crisis for the third time in the past six years,” warned GKI. But is a financial assistance package a cure-all?

BEYOND THE ASSISTANCE PACKAGE

Source: MNB

Recent developments surrounding a loan agreement between the government and the IMF have been the most important factor shaping perceptions about the economy, according to the National Bank of Hungary (MNB). “These included the change in the government’s communication about its intention to submit a formal request for an IMF loan and statements by government officials in response to messages calling for changes to legislation found to be in conflict with EU law,” the MNB said. IMF Managing Director Christine Lagarde said after a meeting with a country delegation to discuss when and whether to negotiate a new

At the end of last year, Hungary’s indicators continued to deteriorate as tensions between the government and the IMF and EU increased. The forint was weakening, interest rates were rising and government securities could be sold at very high yields only. In January, in line with the government’s increasing commitment to reach an agreement with the IMF and EU, perceptions about the economy started to improve, the MNB noted. At a January 26 auction of three-, five- and tenyear bonds, yields were sharply down compared to the previous auction of the bonds two weeks earlier. The forint strengthened to below 290 to the euro on February 1, levels unseen since the beginning of October 2011. However, increased uncertainty and high market volatility have remained, the MNB noted. Investments are still sharply declining, consumption is shrinking, foreign capital is leaving the country and Hungarians are moving their savings abroad.

Unfortunately, no. Even if Hungary receives the package there is still a lot to do and it will certainly be painful. As the IMF pointed out, the program “could relieve some of the constraints facing the Hungarian economy”, but will not miraculously solve all the problems. The IMF stressed that despite the weaker growth outlook, fiscal tightening is necessary given Hungary’s high public debt and uncertain financing prospects. This means further contingency measures. While these measures are necessary to improve Hungary’s risk assessment, they will further weaken domestic demand. At the same time, the IMF called for a “coherent tax and expenditure policy mix that would limit the impact of fiscal consolidation on growth and protect the most vulnerable sections of the population”. The IMF also noted that “the limited restructuring of Swiss franc debt contained in the recent agreement with the banking sector could help the economic recovery”, while suggesting that the scheme could be better targeted. Besides the debt burden, there are countless other problems to be solved. First of all, investor confidence must be restored. There is room for improvement in the business environment, competitiveness and labor supply. The IMF also stressed the importance of tackling the structural bottlenecks that impede investments. GL

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MARKET WATCH 7

Budapest Business Journal | Feb 10 – feb 24

MMTS: time to say goodbye? György Mohai has served as the BSE’s CEO from 2008.

BSE CEO György Mohai talks to the Budapest Business Journal about consolidation versus independence.

Mohai pre viously worked as the

bourse’s deputy CEO for four years

and as an advisor to the exchange between 2002 and 2004. Prior to that, he worked for ten years at CA IB Securities as a chief economist and deputy CEO. Mohai is a board member of the Central Clearing House and Depository and the Investor Protection Fund. He is also a member of the Management Committee of the Federation of European Securities Exchanges (FESE). György Mohai, the CEO of the Budapest Stock Exchange, sees a strong trend of small- and medium-sized businesses looking for financing on the capital markets in an environment of tight-fisted lending, both in Hungary and Europe. The BSE aims to facilitate the appearance of SMEs on capital markets in cooperation with the European Union and the Hungarian government. In December 2011, the EU announced an action plan to help Europe’s 23 million SMEs access more financial resources. The Commission’s regulatory proposals include measures to make SME markets and SME stocks more visible. Furthermore, the Commission has proposed reducing costs and burdens for SMEs by simplifying and cutting reporting requirements. The BSE’s pending project on a replacement trading system was awaiting a final decision on the planned merger of Deutsche Börse with NYSE Euronext, a $10 billion deal that would have created the world’s largest financial exchange operator. But on February 1, the European Union blocked the transaction, the Commission ruling against the merger because the combined exchange would have controlled 90% of trading in European derivatives. The BSE has yet to comment on the impact of these developments on the Hungarian bourse.

Q: WHAT IS GOING TO HAPPEN WITH THE BSE’S TRADING SYSTEM? A: Even if the BSE implements a new system, its order book will remain unchanged, providing information on securities listed on the Budapest bourse. Nevertheless, the trading system would certainly be operated jointly. Although the MMTS system has been updated and operated continuously with close to 100% reliability in the past few years, it is still a 15-year-old system launched in 1997. Therefore it is reasonable to introduce another system, as the MMTS’s capacity is limited and it is operated partly on outdated hardware. Q: HEINRICH SCHALLER, CO-CEO OF THE WIENER BÖRSE AND THE CEE STOCK EXCHANGE GROUP (CEESEG), WHICH CONTROLS THE BSE, TOLD THE BUDAPEST BUSINESS JOURNAL THAT AUSTRIA WANTS TO SPEED UP THE CONSOLIDATION OF THE GROUP IN ORDER TO BOOST THE DEVELOPMENT OF THE GROUP’S CAPITAL MARKETS. HAVE YOU ALREADY EXPERIENCED THIS IN BUDAPEST? A: Yes, consolidation is the main objective of all strategic alliances all over the world. However, I would like to stress that the BSE is an independent legal entity with the relevant strategic decisions made by its board of directors. Three members on the board represent the Wiener Börse. They have always acted on a strictly professional basis, thus the decision-making process has been balanced so far. The appointment of Petr Koblic, ChairmanCEO of the Prague Stock

Exchange, has been particularly helpful in that, as we have direct access to him now, we can always consult with him on important issues if necessary. However, the partner bourses have no direct influence on the BSE. If you have a look at the changes that have happened since 2004, when a majority stake in the BSE was acquired by a group of Austrian investors headed by the Wiener Börse, you can see that the core activities of the BSE have not been reorganized. At the same time, every group of exchanges all over the world, without exception, aim to exploit the possible synergies of their partnership. In the case of the BSE, the final decisions are still made at the board meetings. Q: SCHALLER ALSO MENTIONED THAT ANOTHER CLEARINGHOUSE COULD BE ACTIVE ON THE HUNGARIAN MARKET BESIDE KELER. A: On the basis of agreements concluded with the BSE, as a clearinghouse KELER performs the settlement of the transactions concluded at the stock exchange. As to its role as a central counterparty, which it fulfills through KELER CCP (see box), this segment sees fierce competition in the EU. While there are currently no intentions to transform the system in Hungary, it is reasonable to expect some changes in CCPs in the CEESEG group. The four group members have very close ties with one another. Talks are currently underway on the issue. We expect a solution after a decision is made on the new trading system, at the earliest. Q: HOW DO YOU SEE COMPETITION BETWEEN THE WIENER BÖRSE AND THE WARSAW STOCK EXCHANGE? A: Obviously, they are the two biggest exchanges in the region. It would be in the interests of the entire region if they could cooperate. The two exchanges have completely different strategies. Warsaw is chasing potential issuers who are willing to

...IT IS REASONABLE TO INTRODUCE ANOTHER SYSTEM, AS THE MMTS’S CAPACITY IS LIMITED... list their shares on the WSE. I think that a foreign listing could be a possible option for a Hungarian issuer if it aims to raise capital only, but it is proven by almost all past examples that, in the long-term, the center of liquidity for the issuers is always the home market. We certainly accept it if a BSE issuer aims to float its shares in Warsaw too, but we do our best to keep them here by providing high quality services. On the secondary market, Warsaw’s share is less than half a percent of the trading in the very same security in Budapest. GL

CLEARING HOUSE KELER as a Central Clearing House provides clearing and settlement services for all types of futures products of the BSE. Moreover, as the sole central counterparty in Hungary, KELER CCP provides settlement guarantee for all the products of the Budapest Stock Exchange (BSE). The KELER group has two members.

1. CENTRAL CLEARING HOUSE AND DEPOSITORY (BUDAPEST) LTD. Founded in 1993 Specialized financial institution CCP role till 2009 Equity capital:

HUF 13 BILLION Owners: Hungarian National Bank 53.33% Budapest Stock Exchange 46.67% KELER CCp

KELER CCP is a business association operating as central counterparty guaranteeing the fulfillment of stock exchange transactions and over-the-counter capital market transactions In order to ensure the secure management of risks related to KELER and the provision of central depository functions, the National Bank of Hungary (MNB) initiated the functional division of KELER in December 2004. After KELER launched a project to carry out the split in 2007, KELER CCP started operations in 2009.

2. KELER CENTRAL COUNTERPARTY LTD. FOUNDED IN 2008 Operation since January 1, 2009 Equity capital:

HUF 50 MILLION Owners: KELER 75.00% Hungarian National Bank 13.33% Budapest Stock Exchange 11.67%

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FOCUS 9

Budapest Business Journal | Feb 10 – feb 24

Flight after death By 6 a.m. on February 3, the departure hall of Budapest Ferenc Liszt International Airport was already full of Malév passengers waiting for their early flights. “Check-in suspended until 7 a.m.,” the loudspeakers announced every few minutes, but the increased police presence at the airport at such an early hour and recent reports about the troubled state of the Hungarian carrier suggested that this was more than just a temporary delay. Those with bad suspicions were proved right: a few minutes after 7 a.m., all Malév flight were announced as cancelled. “So it has really come about,” a middle-aged man, shocked by surprise, told the woman he was traveling with. At the same time, a group of young guys nearby cried out a catcall on hearing the announcement. Still, most passengers took the news of the collapse of the Hungarian national airline in stride. Those who wanted to rebook their tickets received numbers. A young woman with lots of luggage who still had her patience, got the number 704. “It’s strange. A woman standing right next to me got a number around 300,” she says, pointing out a shortcoming of the organized chaos. “We have no idea where to spend the night. If we had been informed a few hours earlier, we would not even have left home,” a passenger from the eastern Hungarian city of Miskolc, hoping to travel to TelAviv with his family, told the BBJ’s correspondent. His outcry might not lack all rational basis. According to a Malév source who wished to remain anonymous, the company’s inevitable and immediate insolvency became obvious at around 2 a.m. “Not the best time for the management to react instantly,” the source added ironically. “I cannot see the reason why this is happening now. All our flights have been fully booked over the past half-year,” a Malév check-in assistant busy coordinating passengers told the BBJ. “I don’t know where all the money has gone,” she added. It is no surprise that Malév flights were so popular recently. Although direct

flights, being more convenient for passengers, are usually more expensive than those involving a connection, the Hungarian airline offered, for example, its 110-minute direct flight to Zurich at onequarter the price of Austrian Airlines, which includes a transfer in Vienna and entire traveling time reaching up to four hours. While Hungarian passengers may find a €100 return ticket to Zurich less expensive at first sight than a €400 one, last Friday’s events proved that cheap sometimes costs more. Such discount prices at Malév contributed to increasing the company’s enormous debt, which, at the end of the day, is financed by Hungarian taxpayers. LONG WAY TO HELL However, Malév’s collapse did not come out of nowhere. “This is the end of a slow, 20-year death,” a Malév stewardess said, and she is apparently right. After decades of successful market-based financing, Malév, established in 1946, slipped into the red in 1992, when CEO Tamás Déri decided to launch long-distance flights. As such, the company bought two Boeing 767 planes that, as a two-plane fleet, could hardly be operated profitably, and had generated HUF 2 billion in losses by the end of that year alone. Although Déri’s idea was to grow the fleet brick by brick, which could indeed be a strategy to make some profit in the long run, his successors would not take the risk of purchasing more big planes yet did not dare shut down the existing lines. Malév was somehow able to keep going without a coherent business strategy that would turn the company back into a profitable firm, but the business needed bigger and bigger state subsidies. After being acquired by the Alitalia-Simest group in 1992, Malév’s shares returned to the state in 1994. Following several unsuccessful attempts to privatize the company again, Malév started to sell all of its properties, such as duty-free retail spaces or its slot at Lon-

don Heathrow, which exiled he secondary Malév flights to the Gatwick Airport. In 2006, AirBridge, a company controlled by Russian billionaire Boris Abramovich and two Hungarian businessdmen, bought Malév. According to the privatization contract, Malév took responsibility for all the loans that AirBridge took out related to the airline. As a result, when the Hungarian state regained Malév in 2010, the company’s debt already exceeded €110 million. Desperately trying to avert a Malév collapse, the Hungarian state has given the company no less than HUF 78 billion since 2010, allocated on various grounds. But the last nail in the coffin was a decision by the European Commission this January ordering Malév to repay all state grants received between 2007 and 2010. According to the verdict, Malév would not have been able to obtain similar financing from the market on the terms given by the Hungarian authorities. GOODBYE AND GOOD LUCK After the collapse last Friday, Budapest Airport was eager to declare its commitment to keeping Hungary’s main airport busy and already has called for negotiations on intergovernmental agreements that would enable further airlines to connect Budapest with, among others, destinations in the Middle East. Finding business partners for this might not be a problem. Airlines such as Wizz Air, Lufthansa, British Airways, Air France, KLM, Brussels Airlines and Norwegian put emergency plans on the table immediately and have already announced the launch of new flights to Budapest or running bigger capacity aircraft on their existing flights. As such, at least there will be a few who will win on the bankruptcy of Malév. Meanwhile Hungarians, 69% of whom say it is important to have strategically important companies such as a state-owned national airline, according to a recent Ernst & Young survey, will have to get used to the thought of losing another state-owned giant. ÁV

HOW DID WE GET THIS FAR? According ccording to József Vára Váradi, CEO of rian discount airline airl Hungarian Wizz Air, eation of an airline you need “for the creation dient as for war. Money, the same ingredient money, money. However, it is not available” for everyone; with the industry in the midst of a consolidation process, further bankruptcies are expected. The list of struggling European airlines is ever increasing. Privatization has already reached Polish airline LOT, Portugal’s TAP and Scandinavian carrier SAS. It seems that small carriers are being squeezed, unable to compete with supranational giants such as Air France-KLM, Lufthansa and IAG, while on internal markets they must battle with low cost budget airlines for market share. WHITE BOOK In December 2011, Tamás Fellegi, then Minister of National Development issued the “White Book – the legacy of Malév”, a publication illustrating the path leading to the crunch. It emphasized that Malév is the number one partner of Budapest Airport Zrt, responsible for 40% of traffic. In the absence of Malév, a substantial part of the airport operator’s budget will be lost, putting the operator at risk. “Such a shortfall would lead to an approximately HUF 450 billion (EUR 1.5 billion) immediate lump sum payment obligation for the government [today the majority stakeholder of the air company – ed].” It is not just Budapest Airport Zrt that will suffer, but also HungaroControl (HC), the air navigation service provider. It received 10% of its annual revenues from Malév, accounting for more than €9 million, an equivalent of HUF 2.5 billion in 2010. Should Malév cease its partnership with HC, then as 100% owner, the Hungarian state would be obliged to make up for its loss. Similarly, the EU funded ANS control center, worth HUF 8 billion, would no longer be financeable. EU SAYS NO HELP As has happened (several times) to Hungarian State Railways (MÁV) and the Budapest Public Transportation Co (BKV), you might think the state would rush to the rescue of the collapsing airline. But it won’t. It can’t. During recent weeks, the world reverberated to harsh criticism

of the past loose fiscal policy of the state sels demands that Vikand today Brussels tor Orbán’s administration restrain itself from unauthorized financial support and stick to the non-negotiable deficit limit of 2.5% of GDP. The requirement fits into a sequence of other demands for fiscal discipline from the administration if it expects any support from the EU and the IMF in stabilizing the national economy. According to Gyula Budai, a commissioner of the Orbán government, the previous technocrat Bajnai administration and its predecessor socialist-led Gyurcsány government deliberately breached European principles. Blaming the then Minister of Finance János Veress, Budai says that funds specified in privatization contracts should not have been used for funding Malév in 2007. Budai considers AirBridge Inc, the winner of the 2007 tender, “nothing more than a stooge company that was specifically set up for the privatization”. According to his theory, the company’s two major shareholders, Magdolna Költő and Kálmán Kiss – strongly associated with the then ruling socialist party – were financed by the majority owner, Boris Abramovich, a Russian businessman, with the aim that Russia’s Vnyesekonombank (VEB), a creditor of AirBridge, could acquire a majority stake in the airline. The privatization conspiracy theory becomes shaky when the re-nationalization of Malév in 2010 is considered. The state reclaimed 95% of the company. The remaining 5% is still owned by AirBridge Zrt-Vnyesekonombank, after it paid a bank guarantee of €32 million for failing to fulfill its obligations during the privatization process. The state granted a HUF 25.36 billion capital increase on 11 March, 2010, thus allowing Malév to cover its debts towards the state. Nevertheless, the wandering between markets and state for vast amounts of money contributed to the crunch. To save the company a HUF 100 billion lifebelt was dropped, but the European Court of Justice overruled that action and demanded Malév return it. Strangely, enough the collapse came before the HUF 100 billion could be returned, and Malév might now be able to keep the whole sum under the protection of its bankruptcy regulations. PT

Post-Malév landscape

Ryanair announced it would be flying four Boeing aircraft out of Budapest from April, offering tickets on 31 routes instead of the five it had originally planned last month. Ryanair hopes to completely squeeze Wizz Air from Budapest.

Wizz Air offered reduced ticket prices on 14 of its flights to all passengers unable to travel from February 3 - March 24, 2012 due to Malév’s collapse. Wizz Air is expanding capacity by 66% from Budapest, introducing five flights, instead of its planned three, looking to increase its passenger numbers by 50% (up from last year’s 1.4 million to 2 million) CEO József Váradi announced at a press conference on Friday (February 3).

EasyJet offered reduced fares and re-booking for Malév ticket holders for the London, Paris and Berlin flights, valid until midnight on February 9.

Travel Service CEO Attila Farkas said the company would aim to save the contracts concluded between Malév and the travel agencies with scheduled flights from May 1 under the Smartwings brand. Naming destinations, however, would be premature at the stage. “Not only TS, but the commercial airlines will also recoup within hours, if not days, the loss in capacity.”

Statement of PM Viktor Orbán: “The thunderbolt struck when the EU disapproved state support for Malév,” said Prime Minister Orbán, hinting that the state might otherwise have intervened. According to Ernst & Young, 69% of Hungarians favor state ownership in strategic industries such as aviation.

Busted Airlines / Bankrupt Airlines / Airlines gone broke Following the recession of 20082009, more than 30 European airlines were forced to shutter operations. In the last quarter of 2011 and first month of 2012, the industry witnessed the further collapse of four European carriers, while Alitalia announced a merger between Wind Jet and Blue Panorama Airlines. Here we list just some of the casualties: Seagle Air, Air Slovakia, Mexicana, Cirrus Airlines, Czech Connect, Air Alps, Spanair

Rider of the Apocalypse Representative of the Credit Institute Liquidation Nonprofit Ltd. Mr. Balázs Fábián was commissioned as a special administrator of Malév a day before the bankruptcy heralding the upcoming crunch.

Passengers More than 750,000 passengers held valid bookings at the moment of bankruptcy, but only a few will be able to recover costs due to the recently issued government edict. Siim Kallas, EU Transport Commissioner, said that all passengers are entitled to compensation, but his spokesperson, Helen Kearns, acknowledged that the current legal environment largely inhibits this in practice. Those who have booked via tour operators have a greater chance for getting compensation.

Lufthansa ordered larger aircraft on February 6 to service its Frankfurt and Munich routes and plans to further increase flights and capacity said Ofer Kisch, the regional director for Central Europe. It will take on new routes, offering daily flights to Budapest-Hamburg and Budapest-Berlin. In addition, Lufthansa Group member Swiss has commissioned a larger craft for its Zürich route, while Brussels Airline will fly three times a week instead of two from February 13.

Statement of Péter Oszkó: “Malév was on the verge of collapse,” said Oszkó, Minister of Finance in the Bajnai administration. He claims that continuous consultations were carried out with Fidesz politicians who did not act in the interests of the state, but rather for a major election victory. The state became a majority owner through raising capital from the debt owed and, according to Oszkó, plans for operations were drawn up with the consent and agreement of Brussels.

The market won. Neither government conducted maneuvers nor financial shenanigans could save a money-draining company from disappearing into the abyss. “If the government fancies establishing an airline, than it better be one that flies to nearby locations, to places the larger carriers don’t. This can be easily managed by 40-50 seat aircraft,” says András Bognár, an expert advisor to a London-based aviation company. According to Bognár the larger carriers will probably be unable to cover all of Malév’s markets. The aviation rights to Russia, Ukraine, Israel and Egypt, previously via exclusive contracts, therefore represent significant value.

Air-France-KLM proposed alternative solutions to those passengers who purchased tickets on its code share flights with Malév, and said it would notify its customers of possible arrangements as soon as possible. Air France continued to operate three flights between Paris and Budapest, and expected to fly passengers with tickets for Malév flights on the route.

British Airways’ Anthony Cane, the director of media relations for BA, said it would consider sending larger aircraft to the capital in the wake of the stoppage, and would “evaluate all options” in order to help Malév passengers, including the possibility of re-booking.

Austrian Airlines plans to put larger craft in operation, should sufficient demand arise. On Friday night (February 3) it ran an aircraft with 100 plus seats instead of its usual 70-seater for the ViennaBudapest flight, said spokesman Michael Braun.

Pilots There should be no trouble in settling in on Indian, Korean and Arab airlines. Travel Service is also interested in filling captain, co-pilot and air steward positions for its Boeing 737-800. As a captain, pilots can earn a net $15-20,000.

OrangeWays On its the scheduled bus routes, Orangeways offered to carry free of charge – depending on availability – all Malév passengers possessing valid tickets who had been unable to reach their destination due to the shutdown.

Unwanted The Chinese were apparently still interested in Malév, but reluctant to cooperate with potential Hungarian co-investor, Sándor Demján. Hainan Airlines (HNA) finally left the negotiating table claiming matters were disorganized, with quarrelling parties unable to make decisions. Beijing Business Today announced on Thursday, February 2, that HNA had completely cancelled any purchase plans, blaming poor market conditions.

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Budapest Business Journal | Feb 10 – feb 24

BEYOND THE “PEST JOKE”

Protagonists Dezső Bánffy (a Hungarian politician who served as Prime Minister from 1895 to 1899) once asked Hungarian playwright and author Ferenc Herczeg why it was that while all opposition newspapers were so interesting, progovernment papers were all horribly bad and boring. Herczeg, who himself often contributed to papers, was a bit upset about this thinly-veiled hint and gave a smart reply: “The reason is very simple, Your Excellency. While opposition newspapers are written for the public, pro-government papers are written for you.” As explained in the previous part of this series, Pest jokes, as a genre, originate in traditional anecdotes. While an anecdote is usually a longer story, a joke is short, often surrealistic and fictional. Unlike anecdotes, jokes must have a punch-line. If they don’t have one, they are called an anecdote. The main difference, however, is that anecdotes are always based on a real incident involving real persons. Jokes always operate with fictional characters, some of which, popping up again and again, may

per editors, theater directors, agents, dramatists, translators – in short, members of a social circle which was essential to shaping the satirical literature of this epoch.... Their lifestyle – spending the entire day at the coffee-tables – also affected their works. What appeared in the newspapers and humor magazines was, in most cases, written collectively.” In the enchanting world of Budapest cafés, the Pesti vicc found its true home. Ervin Szabó (1877-1918, librarian, journalist) wrote: “Yes! The

lavishing readers at regular intervals with scores of satires, parodies, krokis (another Hungaricum: a short story with a twist usually dealing with a current issue), cabaret sketches, and jokes, jokes, jokes... ARISZTID AND TASZILÓ In the earliest joke cycles the main target was the gentry: landowners fed up with the unexciting country life who moved to the city and tried to integrate themselves into the “upper crust” but lacked the necessary manners, edu-

ARISTID AND TASILO, two dumb noblemen;

and many other returning characters: Jean, the dumb count’s French butler; Móricka (little Maurice), a shrewed, naughty little Jewish guy, often making bawdy remarks; Pistike, another little kid, but not so smart; Nyuszika, the brainy Bunny and other members of the animal kingdom; Kohn and Grün, typical Pest Jews; the Székely góbé (an indigenous Hungarian from eastern Transylvania) and his family. Talks little, a staid man with a very peculiar way of thinking; the Gypsy personifying all the negative features other Hungarians also have but would never admit. become regular protagonists (see box for a list of recurring characters in Pest jokes). THE CRADLE OF PEST JOKES By the turn of the 20th century, Budapest had grown into the tenth largest city in Europe. At this time, the Hungarian capital, with a population of 617,000, had 198 gin shops, 1,650 pubs and 570 coffee houses. Coffee houses as such played a key role in joke-making, as these were the places where the literati – journalists, playwrights, writers, poets, artists, etc. – came together and discussed the latest political issues, revelled in the latest sex scandals of celebrities and exchanged gossip. Károly Szalai in his book “Satire and humor” writes: “...coffee houses from which the first jokes poured out into urban folklore were called ‘coffee fountains’. Regular customers included newspa-

coffee-house is the only largescale cultural institute of Budapest. Cultural institute! Because it is democratic. It is available for all, for a few pennies... I can meet my friends, read the papers in a well-heated, well-lit, cosily arranged place.” The constant bantering with each other and with outsiders produced fertile soil for jokes ridiculing with ruthless irony the pompousness and hypocrisy, the narrow-minded provincialism of urbanizing gentry, the unbearable snobbism of the nouveau riche, all the characteristics truly describing the rapidly changing social mix of Budapest. Real or fictional stories, quips, gibes and the like were exchanged or noted down to be sent to newspapers and humor magazines. In 1912, there were already 24 humor weeklies and monthlies published in Budapest. These papers were filled by the best brains of the time,

cation and refinement. Apart from de genere (often impoverished) counts and barons, there were hundreds of newly created noblemen, some receiving titles from Emperor Franz Joseph for their merits, some simply buying it for a few grand. Contributors to humor magazines created fictional characters to personify dumb and thick aristocrats. For some mysterious reasons the two “counts” representing typical pre-war noblemen – foolish, lazy and conceited, of no use to society – were named Aristid and Tasilo. It would be interesting to know who created the first Aristid-Tasilo jokes. Unfortunately, your author’s persistent and thorough investigations to unfold this mystery to date have yielded no results. The two names themselves must have been a source of laughter in those days. They were strange and weird-sounding to the Hun-

garian ear. Among parvenus a sign of snobbery was (and has remained ever since) giving foreign or foreign-sounding names to offspring instead of traditional and generally accepted Hungarian first names. If it is true in general that a joke must be told otherwise it loses all its flavor and effect, then, for Aristid and Tasilo jokes this conclusion stands even firmer. Pseudo-aristocrats often spoke with “uvular Rs”, (similar to how the French pronounce “Rs”) a sign of priggishness and affectation. Jokesters, therefore, have to exaggerate this style of speaking to give an idea of the snobbery and narrow-mindedness of the character. Aristid and Tasilo jokes are usually dialogues, like this one: Aristid takes his friend to the races and begins to explain the rules. “You see Tasilo the eight horses at the starting box. The one which crosses the tape first takes home the 10,000 pound first prize.” Tasilo is surprised. “If that’s so, then why do the other seven stretch themselves?” Most of the Aristid and Tasilo jokes are based on puns and are typical examples of dry humor. Aristid, in deep mourning, stands at a taxi station with a huge telescope hanging from his neck. “Hello Aristid ... What happened?” “I’m waiting for a taxi. A relative of mine has died. I am going to the funeral.” “But why do you have this telescope with you?” “The deceased was a very distant relative.” Many are peppered with sexual connotations and can hardly be printed in a decent publication like the Budapest Business Journal. Aristid and Tasilo owned a cattle farm. They made a nice living selling milk, producing dairy products and selling male calves for meat. One day, during a big fire, their stable burned down and all their cattle perished. Aristid became very dejected. “What are we going to do?” he wailed. “Where will our livelihood come from?” “Don’t worry,” Tasilo consoled

him. “A small shed, with one calf, was not destroyed. We shall take the calf to be bred, it will have calves, which in turn will be inseminated and soon enough we will have a big herd.” Aristid perked up a little. They took the calf to the village and asked one of the peasants: “How much do you charge for having your bull mount our heifer?” “Just $200,” replied the peasant. “Don’t you think that’s too much?” asked Tasilo. The owner of the bull retorted angrily: “If you don’t like the price, maybe you should do it yourself.” Both Aristid and Tasilo found this to be a capital idea. They returned to their farm and flipped a coin to decide who will perform the deed. It turned out that Tasilo was the man. He took off his jacket, rolled up his sleeves and entered the shed. For a while only muffled bangs, crashes and clangs were heard from inside and then Tasilo reemerged, breathing heavily, with torn clothing and bleeding from several scratches. “What on Earth happened to you?” asked Aristid in astonishment. “Do you know how difficult it is to flip a cow on its back?” (Translation courtesy of http://jokeparade.blogspot.com) After World War II, the abolishment of hereditary titles was soon followed by the elimination of the entire noble class. Although Aristid and Tasilo once or twice re-surfaced in updated versions of old jokes, they gradually disappeared from the mainstream: aristocrats, both clever and dumb, became the pariah of the classless communist society. They were pitied, but not despised any more. A joke could have begun like this: Aristid and Tasilo are quarrying stone together in the Recsk forced labour camp.... But by then, many of Budapest’s legendary joke-makers were dead and their beloved coffee houses had also transformed into dismal and uninspiring bistros and espresso shops. ASz Next: Sarcasm and derision: Jews about Jews in the Pesti Vicc.

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SPECIAL REPORT 13

Budapest Business Journal | Feb 10 – feb 24

Babel business The narrowing possibilities of the local market could provide an impetus for the domestic translation industry. An increasing number of companies are now focusing on international clients by utilizing the numerous competitive edges they have compared to other countries in the region. The translation industry is expanding by an annual average of 8% on a global scale, with revenues equal to nearly one-third of Hungary’s GDP and approximately half of its turnover generated on our continent. So, market players agree, there is a lot for Hungarian competitors to do out there. The first two years of the crisis had a great impact on translation agencies, as well as on translators. Several smaller, underfinanced firms went bust or tried to gain markets in other areas.

tors of market presence and expansion, is not as played down as it was two years ago,” Éva Simon, president of the Association of Hungarian Translation Agencies, told the Budapest Business Journal. Espell was among the first translation companies to be hit by the crisis in 2008. It was an early wakeup call, as Miklós Bán, managing director of espell translation and localization Kft, puts it. “The majority of our clients are large international corporations

TRANSLATORS IN TRANSITION The language industry gathered in Brussels last fall to tackle challenges the profession is facing. The Symposium on the Translation Profile, organized by the European Commission Directorate-General for Translation, addressed questions such as how the profession is changing as a result of changes in society, what skills are essential for translators to adapt to the changed circumstances and what employers expect from translators. One of the conclusions of the meeting was that the image of translators as lone figures working in their rooms with their computers, hidden from the world, is a thing of the past. Today, translation has become a social profession, where teamwork is a must and the ability to interact effectively has become an essential requirement. The relationship between translators and their clients has also changed. Translators today need to be able to sell their services, to understand their clients’ needs. Flexibility, adaptability and general open-mindedness are the three most important things a translator needs if he wants to stay competitive. When speaking about flexibility, the first thing that comes to mind is the willingness to use the new technologies that have been strongly impacting the profession in recent years. Flexibility, however, should be understood in a wider sense, notably a willingness to perform new tasks side by side with the actual translation, e.g. project management, marketing, budgeting, and relations with clients.

Demand has decreased and many clients, in the name of cost-efficiency, have opted for freelance translators instead of translation companies. But the second wave of the crisis seems to have been more merciful to language service providers. “Clients who reacted to the crisis by cost-cutting and introducing austerity measures didn’t see the results they expected so now translation, as one of the most important fac-

which were hugely affected by the crisis,” he said. Client companies’ financial problems resulted in an approximately 20% drop in revenues in 2008 and 2009, but espell is now back on track, Bán said. But in order to increase revenues again, it had to restructure operations, especially in the area of sales. “We had to adopt a more aggressive sales approach to get new customers,” Bán explained. “It took us two

years to figure out the right sales scheme, and one of the main challenges was becoming a sales-driven organization instead of one based solely on production.” Different times call for different solutions, but it seems such different solutions have worked for espell: the company managed to increase its net revenue by nearly 30% in 2011 from the previous year. Also, because demand for translation, especially from

WHAT TYPE OF CAT TOOLS DO YOU KNOW/USE REGULARLY?

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14 SPECIAL REPORT

Budapest Business Journal | Feb 10 – feb 24

HOW DO YOU USUALLY ACQUIRE NEW CLIENTS? Through personal networking I wait for clients to contact me By offline or online advertising By searching online forums I contact companies directly by emails

2010 when the company’s turnover stagnated, but it made up for it in 2011 with a 37% increase from the previous year. Turnover was €550,000 (approximately HUF 160 million) last year, which is more than double that of 2007, the last “good year” before the crisis. BACK ON PATH

Other

local clients, has dropped significantly due to the crisis, espell paid increased attention to foreign markets and other services, such as software localization. “This line of business went well even at the bottom of the crisis, so it helped us to increase our revenues again in spite of the hard times in 2008 and 2009,” Bán said. EYEING FOREIGN MARKETS Market players agree that translation industry professionals in the region are in a very favorable position. While the downturn hits the European economy, Hungarian language service providers (LSPs) are in a good position to find export

markets in the West, claims András Szalay-Berzeviczy, managing director of translation agency TranPress. Within the CEE market, Hungary can boast several competitive edges. High professional skills, good internet and IT infrastructure, favorable geographic location and low running costs help Hungarian enterprises grow on the global language services market. Mid-sized Hungarian LSPs can engage more intensively in multilanguage services, offering translation buyers more than one language. Specialization in a handful of industries and languages seems to be the best strategy for local LSPs, since

none are big enough to compete with top-earning global multi language vendors (MLVs) offering universal solutions in terms of language and service mix. “We specialize in providing full-scale localization services from translation to DTP/prepress services for multinational companies in the business management software industry, banking and finance, automation and industrial connection segment, and last but not least, the automotive industry,” Szalay-Berzeviczy said. Growing out of a “garage business” set up in 2002, TranzPress has been producing steady 25% growth each year. Upward tendencies were only halted in

Translation agency Reflex has actually benefited from the fact that lots of its clients have been burdened by the crisis and think twice before spending on services such as translation. “An increasing number of clients, both individuals and companies, start to recognize that they do not always need authenticated translation – such decisions, of course, are driven by cost-efficiency consideration in a number of cases,” Lajos Énekes, managing director of Ref lex said. And as only the National Office for Translation and Attestation is the only body that can authenticate translations in Hungary, their monopoly often results in higher prices and inf lexible customer service, Énekes said. Thus Reflex was basically able to increase its orders by taking in clients who did not want to deal with OFFI bureaucracy. Reflex managed to keep the majority of their clientele, but, as Énekes noted, the remaining clients now order less than they did before the crisis. But it seems that things have been on the right path: the company’s revenue had been gradually growing until 2009, although there was a setback in 2010. However, last year’s gross revenues of HUF 272 million surpassed 2006 gross revenues by HUF 2 million, said Énekes. GOING LOCAL LEG Magyarország, a 100% Hungarian-owned translation agency, also focuses on foreign clients. Revenues dropped in 2011, but the global crisis could only be partly blamed for it. The vast majority (90%) of its customers are Japanese companies and their main client is Suzuki. After the disastrous earthquake hit Japan in the spring of 2011, there was a notable decline in orders from Japanese companies. But strangely enough, while several translation agencies intend to conquer foreign markets, LEG is

about to increase its market share on the Hungarian market. “I believe that our ‘onestop shop’ service gives us the competitive edge we need on the local market,” György Kovács, president of LEG, told the BBJ. According to him, the key to success, both in international and local markets, is finding the right balance within the trinity of accuracy, speed and price. The company also employs computer-aided translation (CAT). “As the majority of our assignments are manuals or service documentations, using CAT is essential for us,” Kovács explained. But the human factor cannot be left out, he added. LEG is also looking into

using machine translation tools but, as Kovács said, the balance between using machine and human resources is very important, especially in the case of a rare language such as Hungarian. “Machine translation works really well with global language pairs, but has a long way to go with rare languages,” he said. (see box on machine translation) In general, Kovács believes that 2012 will be a year of recovery and that the future lies in utilizing new technologies in the sector. “It is important, however, to know the limits of the technology and use human resources in an optimal way,” he concluded. PF

DO YOU USE ANY COMPUTER-AIDED TRANSLATION (CAT) TOOLS?

Yes, even if the client does not require it Yes, if the client recquires it No

RAGE AGAINST THE MACHINE? Can machine translation (MT) take over human translators’ jobs? The answer is yes and no. On one hand, the use of translation tools and automated translation will increase due to the sheer volume of material to be translated. On the other hand, the human factor can never be excluded from the translation process, experts say. One thing is certain: in the future, the job of the translator will become more diverse with increased use of tools such as machine translation. When looking at the use of MT from a costbenefit perspective, this may indeed be the case. However, there is a risk of overusing machine translation, and the translator must still learn to translate and possess and continue to possess an above-average command of their respective language, otherwise they will remain at the bottom end of the market. Many large corporations are already successfully implementing in-house MT for a variety of purposes. But the problem is that non-professional use of statistical machine translation is increasing, and many translators seem unable to combine pre-translation with proper post-editing, so that final results are often substandard. But how widespread can MT become? It depends on the country in which it is used. Machine translation is not made for every type of document, or every language pair. Some language pairs, such as English/Spanish, are far more advanced than others, such as French/Russian, and this must be taken into consideration when looking at the success of MT in the future. This discrepancy is due to the lack of existing translations for these languages pairs as well as the very minimal demand for MT in them. The cost of setting up an MT system for a particular language pair and the continued development involved in maintaining and improving a system for use would far outweigh the benefits of the system in such cases. But regardless of – or in line with – the developments in technology on the translation market, there will always be a need for good translators, professionals agree.

WWW.BBJ.HU

SPECIAL REPORT 15

Budapest Business Journal | Feb 10 – feb 24

Endangered species A sharp mind, a quick tongue and excellent manners are just some of the few prerequisites interpreters need to have.

Everyone has an idea of what their dream job looks like and could easily give a detailed description of it when asked. It is likely interesting and varied, involves traveling and meeting people less accessible to most. A job where one is both financially and morally appreciated. Having read that list, did interpreters come to mind? Probably not. Yet interpreters, especially those working in international institutions, have all of the above. Visits to exciting places, encounters with highlevel people and topics so diverse that they come across boredom only when they translate that one word. Fiona

Dow, the head of the Hungarian Interpretation Unit at the Directorate for Interpretation in the European Parliament, has been on the job for decades but has never lost her fascination with it. “I have been in the profession for just over 20 years, yet still find it endlessly fascinating. You might be talking about endangered species of seals in the morning and interpreting an address by Bill Gates on development policy in the afternoon; the sheer variety of the work is unbeatable.” Such an array of topics, however, requires heavy learning and being up-to-

date all the time. “We start the day reading through the press of all available sources,” says Judit Süle, an interpreter at the German Embassy in Budapest. Of course, she does not need to know every remark a government politician made, unless it has national influence. Advance preparation involves looking up words or even making up new ones. “In the past season, there have been so many policy or economy-related terms coined that have no equivalent in German. So we have to improvise.” Working in the Plenary sitting at the European Parliament represents a different challenge with lively debates at a brisk pace. Interpreters generally work in teams of three

in a booth in simultaneous mode. There are no hard and fast rules about when to hand over from one colleague to the next. “When I am working in the booth, I am very often the only one in the team of three with Danish, as it is in relatively short supply. If a Danish minister visits a Committee to present the Presidency priorities and decides to speak Danish, I will work for the duration, however long that might be,” Dow explained. Regardless of the type of tasks, the number one requirement for an interpreter is mastery of their mother tongue. This enables them to deal with all kinds of styles, from highly formal rhetoric to the most colloquial of sound bites. ZsV

THE DOS AND DON’TS OF INTERPRETATION

DOS ✓ ✓Always be prepared for any situation, as you could be deployed at short notice for a high-level meeting. ✓Always prepare thoroughly for every meeting. ✓Always keep up to date with current affairs and political developments. ✓Always articulate clearly, never mumble. ✓Cultivate the highest standards of professionalism at all times.

DONT’S ✗

✗ Never arrive late. ✗ Do not rustle documents or click pens; microphones are very sensitive and pick up background noises, which are irritating for colleagues and listeners alike. ✗ Never assume you know it all; signing up for interpreting is signing up to lifelong learning and having the humility to realize that you will never know it all. ✗ Finally, do not dine out on garlic-heavy meals or spray on strong perfumes – the booth is a confined space and you should always show consideration towards your colleagues.

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16 SPECIAL REPORT

Budapest Business Journal | Feb 10 – feb 24

Translation agencies QUALITY CERTIFICATE MSZ EN ISO 9001:2009 ISO 9001–2001, EN 15038

» » » » » »

50,000

70,000

ISO 9001:2009, EN 15038

ATC, TAUS, ITI

250

–

» » » » » »

–

GALA, MFE, Linguapark Klaszter

Lionbridge, Microsoft, Mercedes

SIMULTANEOUS

Professional translation

» » » » » » 500

CONSECUTIVE

» » » » » » 200

76,000

MFE/ EUATC Eulogia, ATC, ProFord

55,000

CONSELL PANNONIA LTD. www.consell.hu 4

NAPOS OLDAL KFT www.naposoldaltranslations.com 237

MORÁVIA IT HUNGARY KFT www.moravia-it.hu

REFLEX TRANSLATION AGENCY KFT www.reflex.hu

LEG HUNGARY LTD. www.leg.eu

AFFORD FORDÍTÓ- ÉS TOLMÁCSIRODA KFT www.afford.hu

PROFESSIONAL ORGANISATION MEMBERSHIP

NO. OF SUBCONTRACTORS IN 2011

OTHER

AVERAGE INTERPRETATION FEE / DAY (HUF)

DESKTOP PUBLISHING

338

SOFTWARE LOCALIZATION

337

EN 15038:2006 ISO 9001:2009

HUNNECT LTD. www.hunnect.hu

PROOFREADING BY NATIVE

TRANSLATION

OTHER

INTERPRETATION

DESKTOP PUBLISHING

457

Bayer, Estée Lauder, J.P. Morgan, Roche, Shell, Telenor

609

SOFTWARE LOCALIZATION

457

Translation, multi-lingual localization, editing, proofreading, conference technology, voice-over, subtitling, DTP services

609

228

218

179

171

237

228

278

179

171

–

» » » » » » 450

» » » » » »

» » » » » » 150

–

69,900

–

MFE, EUATC

Linguapark Klaszter

69,900

MFE, AmCham

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Veronika Mendel Lehel (100) –

Veronika Mendel Lehel – –

1054 Budapest, Hold utca 15. (1) 269-1153 (1) 312-5408 office@icontact.hu

Individuals (100) –

Miklós Bán Edit Takács Tamás Pásztor

1075 Budapest, Károly körút 3/A (1) 239-8043, (1) 201-8575 (1) 270-0205 espell@espell.com

Sándor Sojnóczky (50), Anikó Sojnóczky (50) –

Sándor Sojnóczky – –

6726 Szeged, Sepsi utca 5. (62) 556-600 (62) 556-601 mail@hunnect.hu

Zoltán Fauszt (37.50) Consell B.V. (50), Zsuzsanna Ellmann (12.50)

Zsuzsanna Ellmann Miklós Urbán –

1073 Budapest, Erzsébet körút 23. (1) 373-0112 (1) 269-4780 consellp@consellp.hu

(50) (50)

Alistair Binks, Zsófia Takács – –

2890 Tata, Sport utca 20. (34) 482-910 (34) 381-915 info@naposoldaltranslations.com

–

Largest USA IT companies

– Moravia IT a.s. (90), Moravia Translations a.s. (10)

Zoltán Riesz – –

1053 Budapest, Magyar utca 36. (1) 237-1020 (1) 237-1021 info-hu@moraviaworldwide.com

ISO 9001:2008

AVERAGE DAILY INTERPRETATING (HUF)

European Parliament, European Commission, EU Translation Center, National Bank of Hungary, K&H Bank, OTP Bank

Equipment for simultaneous interpreting, issuing and administering certified translations and official certificates

ESPELL TRANSLATION AND LOCALIZATION LTD.[1] www.espell.com 2

REVENUE DIVISION (%)

KEY ACCOUNTS IN 2011

PROOFREADING BY NATIVE

INTERCONTACT BUDAPEST LTD. www.icontact.hu

SERVICES TOTAL NET REVENUE (M HUF) 2011

COMPANY WEBSITE

NET REVENUE FROM TRANSLATION AND INTERPRETATION (HUF MLN) IN 2011

RANK

Ranked by net revenue from translation and interpretation

Jabil Circuit, Siemens, Borsodchem, EDF Démász, Pfizer, GDF Suez, Bombardier, Bosch, Fővárosi Bíróság

Lajos Énekes (32), Erzsébet Fábián Énekes (31), Barbara Énekes (31), Erika Asztalos (6) –

Lajos Énekes Erzsébet Fábián Énekes –

1162 Budapest, Bajza utca 54. (1) 301-0486 (1) 301-0487 contact@reflex.hu

–

Alpine, Denso Wave, Honda, Neuron, Suzuki

Individuals (100) –

György Kovács – –

2011 Budakalász, Csapás utca 35. (1) 439-0650 (1) 439-0651 info@leg.eu

–

Unicredit Bank, European Commission, The UN Refugee Agency, Budapesti Turisztikai Hivatal, Siemens Zrt, Erste Bank Hungary Nyrt, GE Hungary Zrt

Individuals (100) –

Katalin Varga – –

1056 Budapest, Bástya utca 15. (1) 310-7168 (1) 310-7169 afford@afford.hu

–

WWW.BBJ.HU

SPECIAL REPORT 17

143

PENNA-EURÓPA KFT www.penna.hu

EMERALD LTD. www.emerald.hu

TURRIS BABEL LTD. www.turrisbabel.hu www.tbabel.com

BUSINESS TEAM TRANSLATIONS LTD. www.businessteam.hu

MIND POWER HUNGARY LTD. www.mindpower.hu

112

102

150

112

102

–

Trainig

–

Professional translation, editing and word-processing, transcription, voice-over, subtitling, terminology management

–

DTP editing, offical translations

Translation

–

» » » » » »

–

» » » » » »

650

100

762

70,000

55,000

49,000

100,000

MFE

proZ, BKIK

Phoenix Contact GmbH, SAP AG, UniCredit Bank, ENI, Nissan, Nestlé

Groupama Garancia, ICON, IBM, MSK, Quintiles, Novartis

SIMULTANEOUS

CONSECUTIVE

NO. OF SUBCONTRACTORS IN 2011

OTHER

AVERAGE INTERPRETATION FEE / DAY (HUF)

DESKTOP PUBLISHING

SOFTWARE LOCALIZATION

PROOFREADING BY NATIVE

TRANSLATION 30

QUALITY CERTIFICATE

Language consulting

ISO 9001:2009, MSZ EN 15038:2006

TRANZPRESS KFT www.tranzpress.hu 11

OTHER

INTERPRETATION

DESKTOP PUBLISHING

Complex Kiadó, Ministry of National Resources, Weishaupt Hőtechnikai Kft, Candy Hoover Hungary, Máv-Thermit Kft, BASF Hungária Kft, MVH, E.ON

ISO 9001:2008

KEY ACCOUNTS IN 2011

199

Translation, SDL TRADOS Authorised reseller

» » » » » »

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Individuals (100) –

László Reha Annamária Puskás Krisztina OltvaiGalambos

1114 Budapest, Móricz Zsigmond körtér 3/A (1) 209-6386 (1) 372-0136 ils@ils.hu

(100) –

András SzalayBerzeviczy Katinka Nagy Tamás Szőke

1022 Budapest, Detrekő u. 12. (1) 225-1426 (1) 225-1427 info@tranzpress.hu

Sándor Tóth (50), Balázs Fejes (50) –

Sándor Tóth, Balázs Fejes – –

1078 Budapest, István utca 5. (1) 321-6606 (1) 413-0424 translations@ penna.hu

Microsoft, Cisco, Dell, Canon, Google

Zsolt Kunos (100) –

Zsolt Kunos – –

1116 Budapest, Fehérvári út 130. (1) 464-3144 (1) 464-3145 zsolt.kunos@ emerald.hu

Péter Gárdos (50), Ádám Breuer (50) –

Péter Gárdos, Ádám Breuer Józsefné Valki –

1054 Budapest, Tüköry utca 3. (1) 329-0161, (1) 269-0150 (1) 329-0161, (1) 239-2431 info@turrisbabel.hu

Roland Rácz (90), Anita Nagy (10) –

Roland Rácz Anita Nagy Tamás Schlosszer

1034 Budapest, Szőlő utca 30. (1) 250-6729 (1) 240-9291 info@ businessteam.hu

–

István Elek Csóka (60), Máté Oresztész Csóka (40) –

István Elek Csóka – –

9023 Győr, Szigethy A. utca 95. (96) 951-822 (96) 814-909 info@mindpower.hu

Csaba Hajdú Márta Hajdú Máté Kovács, Ágnes Rajnai

8000 Székesfehérvár, Kossuth utca 8. (22) 311-653 (22) 311-653 office@m-prospect.hu

Jánosné Zsohár (50), Zsuzsanna Zsohár (50) –

Zsuzsanna Zsohár – –

1061 Budapest, Káldy Gyula utca 1. (70) 342-9383 (1) 700-2717 info@aquapr.hu

State (100) –

Lajos László Vigh József Veit –

1062 Budapest, Bajza utca 52. (1) 428-9600 (1) 269-5184 budapest@offi.hu

–

79,000

BKIK, MKIK, MFE, ChinaCham

Hungarian and foreign companies

Colgate-Palmolive Europe (Poland), Linde Gas Italia (Italy), Delta Plus Service SAS (France), Masonite (USA), Liegl & Dascher, Horváth Rudolf Intertransport Kft, Elster Méréstechnika Kft

78,000 (average price of interpretation)

BKIK

ATA, ISO 9001

M-PROSPECT KFT www.m-prospect.hu 17

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

ISO 9001:2008

SOFTWARE LOCALIZATION

PROOFREADING BY NATIVE

TOTAL NET REVENUE (M HUF) 2011 157

Consulting, education-training (as a translation agency software service)

AVERAGE DAILY INTERPRETATING (HUF)

ISO 9001:2008

157

REVENUE DIVISION (%)

MFE

–

MSZ EN ISO 9001:2009

ILS KFT www.ils.hu

SERVICES

PROFESSIONAL ORGANISATION MEMBERSHIP

COMPANY WEBSITE

NET REVENUE FROM TRANSLATION AND INTERPRETATION (HUF MLN) IN 2011

RANK

Budapest Business Journal | Feb 10 – feb 24

Becton Dickinson Hungary, Commerzbank Group, Emerson M-Prospect Kft. Process (100) Management, – Harman/Becker Automotive Systems, Győri Keksz, LUKOIL Magyarország, Visteon Hungary

NATIONAL OFFICE FOR TRANSLATION AND ATTESTATION ZRT www.offi.hu

–

Translation authentication

–

» » » » » »

140

50,000

80,000

100,000

100,000 (approximately)

MFE

–

ISO 9001

AQUA PR FORDÍTÓIRODA KERESKEDELMI ÉS SZOLGÁLTATÓ KFT www.aquapr.hu

NOTES: (1) espell Non-stop translation agency Kft and espell IT localization Kft merged with multidata Kft on December 31, 2011, and has operated as espell translation and localization Kft since. The company is the legal successor of the merged agencies.

»= would not disclose, NR = not ranked, NA = not applicable

This list was compiled from responses to questionnaires received by Febr 06, 2012 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

All the President’s words off ead o hea he h d tthe oullld Cou C state’s literary piracy turn Hungar y into a better democracy?

Nearly a month after it broke out, the scandal has led not only to an official examination of President Pál Schmitt’s thesis but also to a range of uneasy questions concer ning the state of Hunga rian democracy. In its first article, hvg.hu revealed that 180 pages of Schmitt’s 215-pa ge dissertation were near-verbatim translations of chapters from “Analyse du preogramme olympique”, a 1987 book published by Bulgar ian scholar Nikolai Georgiev. The article presented dozens of pages reveal ing conspicuous similar ities between Schmitt’s work and that of Georgiev. In his thesis Schmitt failed to refer properly (with quotation marks or footnotes) to Georgiev’s book, which he seems to have adapted. Thus, plagiar ism cannot be ruled out. In its statement, the Office of the President rebuffe d the allegat ions, recalli ng that a univer sity committee had found Schmitt’s thesis to be excellent in 1992. It stresse d that the President did indicate Georgiev’s work in its bibilio graphy. The statement argued that the President had known the late Bulgar ian schola r person ally and that “durin g their resear ch they consulted on severa l aspect s of the subjec t”. The President himsel f first commented on the matter a week later in an interview on public radio, but did not mention “joint research” with Georgiev. Instead, he stated that both had used the same “base material” (i.e. official documents of the Olympic Committee), which added up to 180 pages. “No one can claim this material one’s intellectual proper ty,” he said, stressi ng that the 30-35 page “Conclusions” chapter of the thesis was his own work. However, it turned out that the “Conclusions” chapter of the dissertation fills only a single page, not 30-35. Hvg. hu also revealed that a further 17 pages of the thesis appeared to have been copied from a Germa n scholar, Klaus Heinemann. All this

has ha ittt has h m it chm S Sch Schmit h at Sc hat ha d s tthat i nds ind in ee ffinds ttee itt mitt m mi om commi he c t he If the d pied pi copied y co ly dly gedl lege leg l le all alleged i n g al ing aviin av having ittt h mitt h mi ch Schmit to S up to ds up dds add ad adds iverrnive ni univer he u he siss, tthe hesi he tthesis, al oral t ctor o d doctor his hi d i ized rized a i l plagi plagiar 92. 1992 1991 1991-19 in thesis ge page 215 215-pa his 197 pages off hi much So title. al doctor the aw withdr can sity Throug h a series of reactions and institu uences. What about conseq ific’ ‘scient the for into grown has l scanda the tional hesitation, the politica l ones? They are a lot murkier. a litmus test of Hunga rian democracy and For Hunga ry is a countr y where politici ans public life in 2012. often get away with publicly exposed misThe govern ment has sought to downplay steps and dirty secrets. Péter y, inquir press a the issue. Answering One of the examples is the scanda l of 2002 Szíjjár tó, the spokesman for the prime minit turned out that the socialist prime when d “tabloi as ions ister, dismissed the allegat minister, Péter Medgyessy, had worked gossip”. Govern ment spokesperson Andrá s for the counterespionage of the commu nist ment govern Giró-Szász vowed that the ring the pressu re on him should “stand up for the President under any regime. Weathe essy stayed in office Medgy down, step to circum stances”. rity by pushin g popula his ined mainta and The opposition parties have demanded Progra m, a generDays ed Hundr the h throug called and on that Schmitt explai n the situati . easing ous fiscal for his resign ation if the allegat ions prove His succes sor Ferenc Gyurc sány made a to be true. The liberal and left-wi ng media big gaffe in 2006 by admitt ing at a party cried out in indign ation while conser vative meetin g that his govern ment had lied about Some s. papers published dry-worded report economy to secure re-elec tion. right-w ing conser vative publici sts (and even Hunga ry’s was recorded and leaked to speech The ment, a specia l commi ssioner of the govern the press in the fall of that year, causin g Imre Kerény i) ventur ed to defend the Presmassive protes ts. Thoug h his popula rity skewident’s case – playin g with dates and plunge d, Gyurc sány remained prime minising facts until they drew the conclu sion that ter, for a time at least. ized it was actual ly Gregor iev who plagiar Why hope for different conduct from other the On book. 1995 a in Schmitt’s thesis t – an honest confession and bidding Schmit hand, conser vative intellectuals did publish to the office? Speaki ng to an online ll farewe urged they which in ikk, an article on Jobbkl MPs predicted that Schmitt Fidesz paper, Schmitt to step down and protect the dignity the President anyway, as remain would of the Presidency. him in office) is not ready put (which Fidesz The Semmelweis University of Medici ne l defeat after Orbán has politica r anothe for a took PhD, t’s Schmit of (SOTE), the issuer ds. deman IMF-EU to in given week to face the issue. In its first statement Török, a wellGábor side, other the On the that d claime dean on Januar y 13, the he would be said t, analys l politica known evaluation procedure of the thesis was approstill Presiwas t Schmit if sed” surpri “very ements requir the priate and the work “met resigdecent a him, For r. summe this dent of the era”. Three days later, a group of PhD “still not is ry Hunga that show would nation Minthe to SOTE, to laureates sent a petition entirely the East,” adding that “March 28 istry of National Resources and to the Huncould mark the start of a new era.” sts scienti The s. garian Academy of Science Gábor Filippov, an analyst at the Magya r demanded an expertly-performed examinasszív Intézet, also expects Schmitt’s Progre that warned tion of the Schmitt thesis and which would seriously erode the ation, resign turnin g a blind eye to the issue could disruling Fidesz party and the the of e prestig tions. credit Hunga rian scienti fic institu as Filippov points out, “the But ment. govern The petition (signed by 2,300 people with not allow MPs to recall does ution Constit SOTE scienti fic titles) prompted action: case like this, formal ly a in nt the Preside decided to set up a committee to official ly to resign. Neverthehas who t Schmit is it to week a examine Schmitt’s work. It took Hunga rian politics with r familia less, those recruit the members of the committee amid n is not in Schmitt’s decisio real the that know rule to d rumors that many professors decline man to make the the , xically hands. Parado on such a delicate issue. Meanwhile, public patron who put chief t’s Schmit is n decisio real hunsentiment grew tense: on Januar y 21, ” Orbán. Viktor him into the job: dreds of people protested against the PresiAs university experts scrounge over his illdent, calling for his resignation. The clamor thesis, Schmitt is seeing his popularity fated ced announ rector SOTE’s after subsided only . Meanwhile, in the city below his presiplunge ton Januar y 25 that a five-member commi residence in the castle district, common dential the on report a e produc to tee would be ready how investigative journalism gave of is talk thesis by March 28. The list of the committee yet another chance to become a counry Hunga t protec to ly avowed secret, a experts remains after all, there are consequences. where, try them from outside influence.

G NG N

ÁF

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SPECIAL REPORT 19

Budapest Business Journal | Feb 10 – feb 24

Young translators

Audiovisual translation

Language deﬁciency

Number of contestants for EU translating prize steadily rising

Subtitling starting to prevail in cinemas

Hungary at back of the class in teaching English to high school kids.

3,400

87.5%

74.8%

TOOK PART IN THE 2011 JUVENES TRANSLATORES CONTEST

OF MOVIES WERE SUBTITLED OR DUBBED IN 2009

OF HUNGARIANS DON’T SPEAK ANY FOREIGN LANGUAGES

1,300

translation profession.

2007 Number of entrants Source: European Commission/BBJ

19%

Assuming that the saying “the number of languages you speak is the number of persons you are” holds true, Hungary really has to worry about the size of its population. According to fresh data from Eurostat, the EU’s statistical office, 74.8% of Hungarians don’t speak any foreign languages, and the situation of students taking part in compulsory education is even more alarming. Compulsory language learning starts at the age of nine, and has no specific requirement as to which language has to be taught. English and German is taught in most primary and secondary schools, followed by French. Eurostat data shows that Hungary is at the bottom of the CEE list when it comes to the ratio of lower secondary school students learning English. Students learning German are slightly more represented but even on that list, only Romania is behind. This trend is not new and seems likely to continue with the new public education act, amended late last year. While the teaching of foreign languages from an early age and to a high level should be a priority goal of education policy as a key factor in Hungary’s competitiveness, the act will no longer support bilingual education institutions. This is especially strange considering that the new law on higher education specifies language exams as a compulsory admission requirement. These negative tendencies are supported by the labor market experiences of T-Systems subsidiary IT Foreign language teaching is Services, which currently weaker in Hungary than in most employs 2,500 people. of its neighbors. While the ratio “As the largest IT service of students learning English provider in Hungary, we has long been above 90% (and face the deficiencies of counting) in CEE, in Hungary it the education system has been more modestly placed; only 70% learned it in 2004. everyday, which we and The arrears stick out similarly other large enterprises for German, although the two have to compensate for,” countries’ economic ties are managing director Péter traditionally stronger. Ilosvai explained. AJM Source: Eurostat

Three main language transfer practices exist side by side in Europe for translating foreign audiovisual works: subtitling, dubbing and voice-over. These vary not only from one country to the next, but sometimes within the same country depending on the broadcast medium (cinema or television) or the target public. A study ordered by the European Commission covering 33 European countries and published in June 2011 shows that subtitling helps to improve foreign language skills, create awareness and provide motivation to learn languages. According to the survey, in countries with a tradition of subtitling, the majority of respondents state that their language level (particularly in English) is close to mothertongue level, i.e. a level of four or five on a scale of five, whereas in countries with a tradition of dubbing, the majority of respondents evaluate their level at three. In Hungary, most audiovisual works require translation. In 2009, the national output of movies was 24, compared to 93 US films and 64 European films. Consequently, 87.5% of the total number of works needed subtitling or dubbing. Hungary, traditionally a dubbing country, is increasingly turning to subtitling, although dubbing remains the most widespread practice for television. Nonetheless, digital broadcasting is starting to change the audiovisual environment, giving TV viewers access to original versions with subtitles. In terms of preference for dubbing or subtitling, A comparison with data there is a correlation concerning the pre-university with age and the period brings to light an number of languages interesting finding: there is spoken. The study a pronounced shift towards shows that the younger preference for the original, the respondents and whether subtitled or not, among students from dubbing countries the more languages (like Hungary). Their numbers they speak, the more rise from 19% to 72% for a film in pronounced is their a known foreign language and preference for subtitling from 13% to 51% in the case of a over dubbing. AJM film in an unknown language. Source: Eurostat

Source: Eurostat

Virág Simon, from the Neumann János secondary school in Eger, took the prize for Hungary’s best young translator at the 2011 European contest known as Juvenes Translatores. The annual contest is organized by the European Commission’s Directorate-General for Translation and is open to 17-year-old secondary school pupils. A winner for each of the 27 EU countries was selected from among more than 3,000 entrants. The contest was run for the first time on November 14, 2007 as a pilot project to give young people a taste of what it is like to be a translator and to raise the profile of language learning in schools. This year the number of entrants was up by more than 400 compared to last year, and was the highest since its launch. The contestants all translated a one-page text based on their choice of any of the 506 language combinations possible among the EU’s 23 official languages. Although many chose English as a source language, the total number of language combinations used was 148, which was the highest since the launch of the competition. Simon, for example, translated from English to Hungarian, but she also speaks two other languages, French and German. And the German winner, for instance, wanted to go to a music school in Hungary, so as well as perfecting her skills on the flute and piano, she also learned to speak Hungarian. The Romanian winner On 14 November 2007, more wrote a biophysics than 1,000 17-year-olds from paper that was partly almost 300 schools across based on technical the European Union had a go English source material at professional translation. that she translated. More than 100 assessors then For the contest, she evaluated more than 1,300 translations before the Christmas translated Romanian to holiday. It proved to be a good Hungarian – being an way of reaching out to the public, ethnic Hungarian from promoting language learning Transylvania. AJM and raising awareness of the

70%

2011 Pre-university preference of films Source: European Commission

Ratio of students learning languages in secondary schools, 2004 Source: Eurostat/IT Services

Ratio of students learning languages in secondary schools, 2009 Source: Eurostat/IT Services

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20 SPECIAL REPORT

Budapest Business Journal | Feb 10 – feb 24

WHO'S NEWS

Do you know someone on the move? Send information to research@bbj.hu

Bercsi has gained experience in the energy field over the last ten years. Before his current appointment as managing director of Hungary’s Nabucoo pipeline company NNC, he worked as managing director of Sinergy Energy Service Provider, Investor and Consultancy Kft (an RWE subsidiary).

Mészáros has more than ten years of experience in the financial sector in the field of financing, risk management and restructuring, and held top management positions at K&H Bank and MKB. He studied at the Pannon University and the University of Economics in Budapest, and obtained his MBA from the joint course of CEU and Purdue University in 2009.

Name Gábor Bercsi Current company/position Nabucco (NNC)/ managing director Previous company/position Sinergy/managing director

Name Zsolt Sándor Current company/position Deloitte CRS Kft/director Previous company/position ING Befektetési Alapkezelő Zrt/investment director

Sándor has been named to head the recently created new consultancy team at Deloitte. Sándor has more than 13 years of experience in the field of business process outsourcing and compliance services. As a consultant, he has participated in the preparation of several multinational companies before they entered the Hungarian market. Before joining Deloitte, he was partner at Bipros Kft.

Name Attila Mészáros Current company/position Ernst & Young/head of restructuring services Previous company/position -/-