BBJ 20/08

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VOL. 20, NUMBER 08

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Budapest Business Journal

-16% YR/YR IN CONSTRUCTION SECTOR OUTPUT SEE MACROSCOPE

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HUNGARY’S PRACTICAL BUSINESS BI-WEEKLY SINCE 1992 | WWW.BBJ.HU

Brave new [labor] world

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Access to communist-era secret service files People who were the subject of surveillance can get a free copy of all the documents they are entitled to see. The right to access documents can also be inherited by close relatives... PAGE 07

ENTERPRISE

Infant ventur venture re capital capital

Interview with Péter Oszkó, former FinMin, today the Chairman-CEO of PortfoLion Venture Capital. Is venture capital and private equity mature enough in Hungary? PAGE 10

SPECIAL REPORT

Stagnating hopes

ALTHOUGH THE BASICS OF THE LABOR CODE CURRENTLY IN EFFECT WILL NOT CHANGE SUBSTANTIALLY, A FOREIGNER WILL FIND A DIFFERENT WORKING ENVIRONMENT FROM JULY 1.

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In an iynsecure economic environment with high unemployment, workers can feel quite defenseless. Although large-scale improvements are not likely to be seen in the Hungarian labor market in 2012, the picture is not all gloom and doom. PAGE 14

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A chance for Hungary’s Roma to shine The story of cricket in Hungary started out as just a bunch of guys getting together on a Saturday to knock a ball around. PAGE 26

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€ 690.1 mln KSH noted that the sector’s production in February is typically about 40% below the monthly average.

HUNGARY TRADE SURPLUS WIDENS IN FEBRUARY Hungary had a €690.1 million trade surplus in February, up from €419 million in January and down from €860.2 million in February 2011, the Central Statistics Office (KSH) has said in a first reading. February exports fell 1.2% yr/yr to €6.605 billion after rising 2.3% yr/ yr in January. They dropped 1.1% in December in the first yr/yr export drop in two years. Imports were up 1.5% in 12 months to €5.915 billion in February following a 2.7% 12-month rise in the previous month. The February yr/yr import growth came from a high base of 20.3% in February 2011, which in turn slowed down from a 30.7% yr/yr increase in January 2011. Import growth has exceeded export growth for

states had a 75.2% share in Hungary’s exports and a 71.1% share in its imports in February. KSH will publish a second reading of the February data on May 3.

CONSTRUCTION SECTOR CONTRACTS DOWN IN FEBRUARY Output of Hungary’s construction sector was down 16% in February from the same month a year earlier, according to both unadjusted and calendar year-adjusted data, according to data from the KSH. Unfavorable weather in February contributed to the fall in construction output, KSH said. Output of the building segment was down 18.9%. The segment has contracted in a year-onyear comparison each month since February 2011. Output of the civil engineering segment dropped 10.8%. The

DAIMLER PRODUCTION LAUNCH BOOSTED INDUSTRIAL OUTPUT The start of production at German carmaker Daimler’s plant in Kecskemét at the end of March will probably have a big effect on Hungary’s industrial output from April, analysts told MTI, after the KSH published fresh data. KSH said Hungary’s industrial output rose 1.1% year-on-year in February, according to unadjusted figures, but fell 3.4%, according to workday-adjusted data. New export orders fell 7.2% from the same month a year earlier, but new domestic orders were up 57.1% due to a single large order, KSH added.

Gergely Suppán of Takarékbank said a fall in new export orders could be the result of the base effect. He added that export orders were expected to pick up in the coming months, in line with data from Germany, Hungary’s biggest trading

931,000 the fourth month in a row.

The pace of both export and import growth started slowing from September 2011 after double-digit increases earlier in the year. The surplus in the first two months reached €1.109 billion, down from €1.292 billion one year earlier. Two-month exports rose 0.4% to €12.871 billion and two-month imports rose 2.1% to €11.762 billion. Other European Union member

sector also contracted in January, but registered doubledigit growth in November and December. In a monthon-month comparison, construction sector output declined 7.3% in February after falling 1.2% in the previous month, seasonally adjusted figures show. Output of the building segment fell an adjusted 7.3% from January and civil engineering output declined 3.3% on the month.

GUEST NIGHTS IN FEBRUARY AT COMMERCIAL ACCOMMODATIONS

partner. The start of production at Daimler’s plant in Kecskemét at the end of March could have the biggest effect on headline output, he said.

HUNGARY CPI SLOWS TO 5.5% IN MARCH Consumer prices in Hungary rose 5.5% yr/yr in March, slowing from a sharp rise of 5.9% yr/yr in February, the KSH has reported. Consumer prices rose 0.8% in March, at the same

monthly pace as in February.

London analysts forecast the 12-month rate between 5.45.6% this week. Analysts polled by the business daily Napi Gazdaság put 12-month inflation at 5.7% and the monthly rate at 0.9%. January-March inflation came to 5.6%, compared to last year’s annual average inflation of 3.9%. Tax changes, including excise-tax increases and a 2%-point rise in the main VAT rate, rising fuel prices and the weakening forint pushed the

1.1% 12-month CPI up from 4.1% in December to 5.5% in January and 5.9% in February. Excluding the effect of tax changes, March inflation would have been 0.6% mth/mth and 3.4% yr/yr, both down from 0.7% and 3.9%, respectively, in February. Seasonally adjusted core inflation fell both on the month (to 0.5% in March from 0.6% in February) and on the year (to 5.0% from 5.4%). The monthly rise of food prices slowed to 0.8% from 1.7 % m/m in February, although seasonal foodstuff prices rose 4.1% in a month. Clothing and footwear prices were up 0.9% m/m in March after dropping on winter sales in the previous two months. Consumer durables became 0.3% cheaper after a 0.1% m/m increase in February as the forint recovered part of its sharp weakening early this year. Household energy prices went up 0.2% from February after a 2.7% m/m monthly increase, and services prices were up 0.2% after a plus of 0.3% in February. The largest monthly

TRADE SURPLUS IN FEBRUARY

rise, of 3%, was registered with alcoholic beverages and tobacco after a 0.9% rise in the previous month. Vehicle fuel and lubricant prices followed with a 2.4% increase following a 0.5% drop m/m in February.

HUNGARY GUEST NIGHTS RISE 5.3% IN YEAR TO FEB The number of guest nights at commercial accommodations in Hungary rose 5.3% to 931,000 in February from the same month a year earlier,

YR/YR RISE IN INDUSTRIAL OUTPUT IN FEBRUARY fresh KSH data show. The rise slowed after a 10.3% increase in January. The number of guest nights spent by foreign guests rose 12.2% in 12 months to 451,000 in February. The number spent by domestic guests slipped 0.4% to 480,000. The number of guest nights at hotels rose 6.8% to 820,000 during the period. Germans spent nearly 75,900 guest nights at commercial accommodations in Hungary in February, more than any other nationality. Austrians followed, with 55,245 guest nights. Guests from the United Kingdom came next, with 29,295 guest nights.

January-February guest nights increased 7.8% yr/ yr to 1.894 million with foreign guest nights rising 15.8% to 954,000 and domestic guest nights rising just 0.8% from a year earlier to 941,000.

SPENDING ON R&D GROWS COMPARED TO GDP Hungary’s National Innovation Office (NIH) has published a report on cor-

porate R&D that shows expenditures grew compared to GDP, but funding is still scarce. According to NIH figures, total expenditures on R&D were less than 1% of GDP between 20012009, then rose to 1.17% in 2009 and slipped to 1.16% in 2010. The EU average is 2%. The expenditures of businesses on R&D reached 61% of the total in 2010, also under the EU average of two-thirds. Hungary ranks 19th among EU members in regard to spending on R&D. According to NIH, problems in the field arise from the lack of high-tech enterprises, the low number of globally competitive services and the generally low support for R&D. RETAIL INVESTMENTS IN GOV’T SECURITIES GET GREEN LIGHT Hungary’s government has approved a set of measures aimed at boosting the purchase of government securities by private individuals, rechanneling HUF 1.96 billion in additional funding to the state treasury for this purpose. The measures, which include setting up securities accounts for public employees with the state treasury, were approved in a government resolution dated April 5 and published in the official gazette Magyar Közlöny. The resolution calls for the National Economy Minister to take immediate steps so that the state treasury can purchase the hardware necessary to expand and update the IT systems in order to meet the increased demand for government securities investments. The resolution also instructs the Minister of National Development to review by April 10 ways to amend the public procurement act which would make most of the treasury’s procurements related to securities distribution exempt from the public procurement regulations if the value is under the respective EU value limit. ■

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[The government]...guarantees that all minorities can live in safety in this country; we will protect them, including the Jewish minority residing here.

PRIME MINISTER VIKTOR ORBÁN SPEAKING IN PARLIAMENT A FEW DAYS AFTER ZSOLT BARÁTH, AN MP OF FAR-RIGHT OPPOSITION PARTY JOBBIK MADE WHAT HAVE BEEN SEEN AS ANTI-SEMITIC COMMENTS IN A SPEECH

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

PortfoLion believes in Hungarian fashion designer Nanushka

ECONOMY TEMPLETON UPBEAT ON HUNGARIAN BONDS Franklin Templeton Investments, the biggest institutional holder of Hungarian government debt, is upbeat on its investments in Hungary as it considers remaining disputes obstructing an agreement with the EU and the IMF on a funding package as “surface issues”. “The issues that are actually at stake that are causing friction between European Union, the International Monetary Fund and the Hungarian government are really trivial,” Michael Hasenstab, the manager of Franklin’s US-based $61 billion Templeton Global Bond Fund, told reporters in Singapore on April 16. “We like those with good long-term fundamentals, and we like those which everyone hates, and Hungary fits that bill,” Bloomberg quoted Hasenstab as saying. The government has done “exactly what the IMF has asked them to do”, said Hasenstab, who also manages Templeton’s Luxemburg-based $43 billion Global Bond Fund.

“They just have a little friction in the market,” he said, add-

ing that he was still “positive” on the forint in the “mediumterm”. The Hungarian government has been engaging in “structural reforms that most of Europe hasn’t touched”, including rising retirement ages, Hasenstab said. The country is also benefiting from its “economic linkage with German exports”, he added.

HUNGARY FINANCIAL TRANSACTION TAX WOULD BE NO MORE THAN 0.1% Prime Minister Viktor Orbán said on public radio on April 13 that the government was “a long way” from taking a final decision on the introduction of a tax on financial transactions it is currently mulling.

He added that taxes should be changed mid-year only if absolutely necessary, which was not the case at present. Orbán said the 2013 budget would “very likely” reduce taxes on labor while transferring the burden to consumption and turnover.

BUSINESS SMES WHO PUT OFF INVESTMENTS LOSE HUF 300 BLN Investments put off by Hungarian SMEs resulted in lost revenue of about HUF 300

billion last year, according to a survey by GE Capital, the parent of Budapest Bank.

About 30% of SMEs in the survey said they lost on average HUF 2.8 million of revenue last year because their equipment was not up to par.

GE Capital estimated this added up to HUF 300 billion in lost turnover for the whole sector. A little more than half of SMEs surveyed said the uncertain economic environment was the biggest factor limiting capital expenditures in the coming 12 months, while 45% said a lack of capital was the most important reason. Almost 60% of the SMEs had a pessimistic outlook for the sector and just one-fourth were optimistic. In spite of the poor outlook, almost one-fourth of the SMEs plan to make new hires while only 12% expect to reduce headcount.

GOVERNMENT LAUNCHES HUF 21 BLN IN TENDERS FOR ADDITIONAL WAGE COMPENSATION The government has launched HUF 21 billion in tenders for additional support for employers to raise wages. The fund supports employers who are unable to finance the required mini-

mum 5% wage rise to compensate lower-wage earners for losses in net income due to the elimination of employee tax write-offs and a one-percentage-point rise in the health-insurance payroll tax, National Economy Ministry State Secretary Sándor Czomba announced.

Czomba estimated that employers would use the additional funding to pay for a 2-3% wage rise for 450,000 to 650,000 employees whose gross monthly income is less than HUF 216,806. The state secretary said that employers have 30 days to submit applications for the funding, 70% of which the government will make available in July and the rest in September. Eligible are employers who pay wage compensation to all workers affected, maintain headcount at or above last year’s levels, do not make more than onefifth of full-time employees part-timers, and did not pay average gross wages of more than HUF 215,000 per month last year. A first wage compensation support system, worth about HUF 100 billion, has been in place from the start of this year: employers who raise the wages of all employees can withhold the

amount above the required 5%, if any, from their social security contributions.

BUDAPEST MAYOR, SUEZ CEO AGREE ON REPURCHASE OF STAKE IN WATERWORKS Budapest mayor István Tarlós agreed on April 16 with French utilities company Suez Environment CEO JeanLouis Chaussade on the repurchase of a minority stake in the capital’s waterworks, the mayor’s office told MTI. The local council approved in March a letter of intent on the repurchase of the 25% stake in the waterworks held by Suez and Germany’s RWE for HUF 15.1 billion. The local council mandated Tarlós to terminate the city’s contract with the two companies if the repurchase was not finalized.

SPENDING ON R&D GROWS COMPARED TO GDP Hungary’s National Innovation Office (NIH) published a report on corporate R&D that shows expenditures grew compared to GDP, but funding is still scarce. According to NIH figures, total expenditures on R&D were less than 1% of GDP between 2001-2009, then rose to 1.17% in 2009 and slipped to 1.16%

László Sólyom, photos: REUTERS/Viktor Veres

Venture capital fund PortfoLion, a unit of OTP Bank, Hungary’s biggest commercial lender, is investing $1.6 million in Hungarian fashion design company Nanushka and providing it with a $1 million credit line, PortfoLion chairman-CEO Péter Oszkó told MTI. Oszkó said Nanushka was a stable, growing and profitable company that had achieved international success.

PortfoLion has made ten investments totaling HUF 3.5 billion since it starting operating in 2010.

in 2010. The EU average is 2%.

The expenditures of businesses on R&D reached 61% of the total in 2010, also under the EU average of two-thirds.

Hungary ranks 19th among EU members in regard to spending on R&D. According to NIH, problems in the field arise from the lack of high-tech enterprises, the low number of globally competitive services and the generally low support for R&D.

AMCHAM OFFERS COOPERATION IN GOVERNMENT’S CONSULTATION WITH MULTINATIONALS The American Chamber of Commerce in Hungary has hailed the government’s demonstrated willingness to hold consultations with multinational corporations operating in Hungary and offered its cooperation, AmCham told MTI on April 6. Prime Minister Viktor Orbán announced after talks with leaders from the Hungarian European Business Council that they had agreed to establish a consultative office to coordinate continuous communication between the government and the Council, which is composed of 15 multinational corporations conducting business in Hungary.

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CITIBANK HUNGARY BRANCH ANNOUNCES HUF 10.8 BLN PROFIT FOR 2011 The Hungarian branch of Citibank Europe closed 2011 with after-tax profit of HUF 10.8 billion, up 4% from the previous year, the lender said on April 4. Pre-tax profit rose 26% to HUF 16.4 billion, according to Hungarian Accounting Standards.

The branch had total assets of HUF 813.4 billion on December 31, 2011, up 29% from 12 months earlier. Batara Sianturi, who heads the branch, said the loan-to-deposit ratio was a remarkable 35.2% last year. Net interest revenue came to HUF 31.8 billion.

ROA was 1.5%. Net lending stock edged up 1% to HUF 142.6 billion. Stock of deposits increased 18% to HUF 404.8 billion. Retail lending stock dropped 11% to HUF 58.6 billion but stock of retail deposits climbed 25% to HUF 119.4 billion. Net corporate lending stock rose 10.8% to HUF 84 billion and corporate deposits climbed 15% to HUF 285.4 billion. Sianturi said Citibank issues every third credit card in Hungary.

GOV’T TO DECLARE GYULAI HÚSKOMBINÁT “COMPANY OF STRATEGIC SIGNIFICANCE” Troubled meat company Gyulai Húskombinát is to be declared a “company of strategic significance” under a

rescue plan to be submitted to the government by Rural Development Minister Sándor Fazekas, state secretary Gyula Budai said on April 16.

The declaration, made by the government, allows the application of special rules regarding liquidation and aims to keep companies important to the national economy operating. The ministry told MTI about the plan after Budai met with Lajos Kovacs, who heads Gyulai Húskombinát’s parent company, NAGISz, and Janos Ruck, the CEO of Gyulai Húskombinát. Gyula Húskombinát, founded in 1868, is Hungary’s oldest meat company.

FOOD INDUSTRY INSIDERS ESTABLISH E-MARKET Hungarian food industry players along with consumer and professional groups on April 16 established an electronic market to support trade of local products. Twelve parties, including retail chain Tesco, environmental protection group Levegő Munkacsoport and consumer protection association Tudatos Vásárlók Egyesülete established the market, called the Hungarian Gastronomy Map Cluster. Farm association MAGOSz and the Ministry of Rural Development are sponsors of the market.

MALÉRT MAKES PROGRESS ON ESTABLISHING AIRLINE BUT CALLS FOR MORE ACTION Mihály Vécsei, who heads the Hungarian Association for Air Travel (Malért), called a letter from state secretary for infrastructure Pál Volner acknowledging the importance of a Budapest-based airline “a step forward”, but said that good intentions must be matched with action. Vécsei said Malért had started compiling criteria for a new business plan and was in talks with potential investors.

Malért launched an initiative to establish a new Budapestbased airline after troubled national carrier Malév was grounded in February.

DECISIONS COORDINATED BY HITA BRING MORE THAN 924 MLN IN INVESTMENTS TO HUNGARY The Hungarian Investment and Trade Agency (HITA) coordinated 24 positive decisions last year by foreign companies on more than €924 million in investments, HITA deputy chief György Kerekes said at a press conference on April 11. The investments will result in the creation of more than 5,700 jobs in the near future, Kerekes said. Last year, HITA’s project management departments handled 83 projects and 70 inquiries, mainly in the vehicle manufacturing and electronics industries, industri

talk of the town CHANCES OF FAILURE OF IMF-EU NEGOTIATIONS WITH HUNThe likely negotiations between Hungary and the International Monetary Fund (IMF) and the European Union (EU) about a bailout deal are still surrounded by a fog of doubt and insecurity. While the government is still trying to defend the principles of controversial regulations such as the Central Bank Act – which critics say threatens the independence of the country’s central bank and is blocking the launch of the bailout negotiations – the markets have started to factor in the possibility of Hungary not getting any aid money. The latest development of the story was provided by London analysts on April 16: the risk scenario of EUR/HUF levels above 300 is now approaching and the Hungarian risk premium has decoupled “once again” from the Eastern European average as no deal on a new IMF-EU financing package is

in sight, economists said. According to Commerzbank, “a new chapter in the story of 1Why the IMF and the Hungarian government are unlikely to ever reach an agreement’ began on Friday” when Prime Minister Viktor Orbán stressed in a radio interview that the IMF (and the EU) would not be able to dictate any political conditions to Hungary. Moreover, Orbán “is prepared to face up to a confrontation with the European Court of Justice should the EU1s reply to (his) reform proposals as part of the infringement procedures... turn out to be negative”.

Eurasia Group, a major global risk assessment consultancy said in its latest research note that the chances of failure are “more than theoretical... a probability we place at 35%, and even if a program is agreed, slippage and hiccups will remain likely”.

but growing interest was also seen in the food and logistics sectors. Most of the projects involved investors from the United States, Germany and Asia. Last year, HITA managed 13 investments that are being awarded subsidies based on one-off government decisions. The big investments are worth more than HUF 210bn and will create about 4,500 jobs.

POLITICS PRIME MINISTER NOMINATES JANOS ÁDER FOR PRESIDENT Prime Minister Viktor Orbán has nominated Member of the European Parliament Janos Áder to serve as the next President of Hungary, spokesman Péter Szijjártó said on April 16.

Fidesz Parliamentary Group Leader János Lázár announced last week that Parliament would elect the prime minister’s presidential nominee on May 2. In a statement to MTI, Áder said he had accepted the nomination after thoroughly considering “the weight of the function and the personal responsibility involved” and would return to Hungary from the European Parliament and give up his membership in Fidesz, of which Prime Minister Orbán serves as chairman. The new president will replace Pál Schmitt, who resigned from the post on April 2, after Budapest’s Semmelweis University withdrew his doctoral title.

FORMER PRESIDENT TO SUE SEMMELWEIS UNIVERSITY Ex-president Pál Schmitt is going to file a lawsuit against the Semmelweis University, the Presidential Office said in a statement on April 3. Schmitt decided on taking legal steps after he was stripped of his doctorate title by the academic senate of the university on March 29 because of his plagiarism scandal. “The former president, after receiving the

decision of the senate of the Semmelweis University, which contains factual, legal and procedural mistakes, will make the necessary legal actions with the assistance of an assigned law office,” the statement reads.

Schmitt had originally said of the decision that he was deeply offended but was not considering any legal actions.

DOMESTIC THOUSANDS MARCH IN BUDAPEST HOLOCAUST REMEMBRANCE RALLY Several thousand people joined the March of the Living, a procession marking Holocaust Remembrance Day, in Budapest on April 15. Hungary’s March of the Living Foundation organized the event for the tenth time this year. The organizers said the aim of the march was to teach the lessons of the Holocaust and show future generations its cause. Cardinal Péter Erdő said Christianity was incompatible with anti-Semitism or with any incitement to hatred on account of religion or ethnicity. Among the marchers were acting President László Kövér and acting House Speaker Sándor Lezsák. The Speaker of the Swedish Parliament Per Westerberg, Prime Minister Viktor Orbán’s wife Anikó Lévai, Israeli ambassador to Hungary Ilan Mor, former Supreme Court chief judge Zoltán Lomnici and leading politicians of the Fidesz, LMP, Socialist and the Democratic Coalition political parties joined them.

BUDAPEST METRO LINE COULD BE FINISHED BY SPRING 2014 Budapest’s civic leaders have taken extraordinary measures in the past weeks to see the completion of the capital’s fourth underground line which could technically be finished by

the spring of 2014, mayor István Tarlós said in an interview published in daily Magyar Nemzet. Tarlós said “scandalous” contracts signed by the city’s previous government had caused the cost of the project to swell to HUF 400 billion. He said the city had appointed new management at the directorate overseeing the project: Tibor Radnay, who was earlier the technical director of Metrober, will take the top position, rather than the CEO of the Budapest Public Transport Company, and his deputy will be a lawyer with expertise in the area.

FIRST CHARTER FLIGHT OF SEASON LANDS AT HÉVÍZ-BALATON AIRPORT The first charter flight of the season landed at the Hévíz -Balaton Airport in Sármellék, western Hungary, on April 14. The Boeing 737500, operated by German airline Luft hansa, arrived from Hamburg with a stop in Berlin. The aircraft was given a water salute and its 95 passengers were taken to accommodations in the spa towns of Hévíz, Sárvár and Zalakaros as well as other holiday destinations around Lake Balaton. The Luft hansa charters will be operated under a contract with Heviz-based Mutsch Ungarn Reisen until November 10. Mutsch Ungarn Reisen managing director Josef Mutsch said the charter flights would arrive from Dusseldorf and Frankfurt as well as from Hamburg and Berlin. Passengers on the flights from Germany are expected to spend about 120,000 guest nights in the region, he added. Hévíz mayor Gabor Papp said Lufthansa would operate four charter f lights a week at the airport. He added that the launch of a further 11 f lights from Germany, operated by Salamon Reisen, was being planned. ■

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HUNGARY HUNGARY’S PAKS PAY $92.5 MLN DIVIDEND Hungary’s Paks Nuclear Power Plant, a unit of the state-owned Hungarian Electricity Works, will pay out its entire 2011 after-tax profit of HUF 20.8 billion ($92.5 million) as dividend, communications director István Mittler said after its annual general meeting. The general meeting approved the company’s balance sheet showing total assets of HUF 199.8 billion at the end of 2011. Paks sold its electricity at an average price of HUF 11.66 (0.039 euro cent) per kWh in 2011, the lowest of any electricity generator in the country, Mittler said.

reported in February that Wildhorse Energy had signed a cooperation agreement with Hungary’s state-owned Mecsek-Öko and Mecsekérc on the start of Uranium mining in the Mecsek Hills.

PANNÓNIA ETHANOL STARTS PRODUCTION OF BIOETHANOL PLANT Pannónia Ethanol, a Hungarian unit of Ireland’s Ethanol Europe Renewables, has started production at its €120 million bioethanol plant in Dunaföldvár, central Hungary, the company said. The plant is expected to turn out an annual 240 million liters of bioethanol from 575,000 tons of domestic maize. The plant will also produce 175,000 tons of feed annually. The company said Dunaföldvár is the biggest bioethanol plant in Hungary and one of the biggest in the region.

WILDHORSE ENERGY TO RAISE UP TO £5.6 MLN FOR HUNGARY FEASIBILITY STUDY

HUNGARY’S MOL PROPOSES TO PAY A DIVIDEND THE FIRST TIME SINCE 2008

Australia’s Wildhorse Energy has said it will raise up to £5.56 million ($8.84 million) through the placement of new shares to start a feasibility study at an underground goal gasification in Hungary’s Mecsek Hills. MTI-Econews

The Board of Directors of Hungarian oil and gas company MOL Nyrt proposed paying a HUF 45 billion ($199.7 million) dividend from last year’s profits, the company said Wednesday in a stock exchange filing.

This represents more than 2%

dividend yield, the company said. The AGM on April 26 will decide on paying the dividend.

Net profit of the group reached HUF 154 billion last year, up from HUF 104 billion in 2010.

Downstream operations realized an operating loss of HUF 500 million in 2011, without special items, while upstream increased its operating profit, excluding special items, by 16% to HUF 330 billion.

UKRAINIAN PARLIAMENT BACKS BILL TO BAN SALE OF GAS PIPELINES Ukraine’s Parliament barred any sale of NAK Naftogaz Ukrainy after officials said Russia sought a stake in the state-run energy company’s natural-gas pipelines in exchange for cheaper supplies of the fuel. A bill to boost the efficiency of Naftogaz’s pipeline system while maintaining state ownership was backed by 242 lawmakers in the 450-seat legislature, Parliament said on its website. Any reorganization of Naftogaz’s pipelines or storage facilities will now require Cabinet approval. The former Soviet nation’s pipelines carry 80% of Russian gas shipments to Europe.

REGION & WORLD OPEC MEMBERS MAY EARN $1.2 TRLN ON OIL EXPORTS, DOE SAYS OPEC members may earn $1.17 trillion in net revenue from oil exports this year, up 14% from 2011, the Energy Department said in a report.

OPEC’s revenue from exporting oil may reach $1.13 trillion in 2013, according to the federal Energy Information Administration. Members of the Organization of Petroleum Exporting Countries earned $1.03 trillion last year, a 33% increase from 2010, the agency said. “Saudi Arabia earned the largest share of these earnings, $312 billion, representing 30% of total OPEC revenues,” the agency said.

BULGARIA PLANS TO EXPAND ONLY GAS STORAGE FACILITY According to the head of the state-owned company Bulgartransgaz, Kiril Temelkov, Bulgaria’s only natural gas storage facility in Chiren will be expanded to reach its maximum capacity, the Sofia News Agency reported

on its website. Thus, the Chiren storage site will reach its maximum capacity of 1 billion cubic meters of natural gas, said Temelkov. Bulgartransgaz, a subsidiary of the state monopoly Bulgargaz, is the owner and manager of the Chiren gas facility. The expansion of the Chiren site, which should be completed by 2015, will cost the company about €200 million, Temelkov said.

OPEC CRUDE SHIPMENTS SURGE MOST SINCE 2008 The Organization of Petroleum Exporting Countries will boost oil shipments this month by the most since at least 2008 as Asian refiners build stockpiles, according to tanker-tracker Oil Movements. OPEC will export 24.32 million barrels a day in the four weeks to April 28, an increase of 5.2% on the 23.12 million a day that was scheduled for shipment in the period to March 31, the researcher said. OPEC raised forecasts for supplies from outside the group last week, echoing an assessment by the International Energy Agency that oil markets are adequate-

ly supplied. Exports from the Middle East, including nonOPEC members Oman and Yemen, will rise 6.5% to 18.14 million barrels a day in the four-week period, according to the report.

POLAND TO AMEND RENEWABLES BILL AMID WIND-FARM INVESTOR CONCERN Coal-reliant Poland will reverse course and push through a law providing guaranteed purchase prices for power generated from wind turbines, an Economy Ministry official said on last week. Poland presented an overhaul of its renewable support plan in December that sought to retract guaranteed purchase prices for renewables, a move that raised investor concern in the rapidly growing wind sector. “We are going to restore the obligation to buy energy from renewable sources at a guaranteed price, based on a formula set by the market regulator,” said Janusz Pilitowski, director of the ministry’s renewables department, quoted

by Bloomberg. The government also plans to keep subsidies for current and planned wind farms unchanged for 15 years after commissioning, he said at a conference in Warsaw. ■

[ EXPERT OPINION ]

Ready, steady, old!

This year, the global event touches upon a sore spot for ageing earthlings: we are tipping the population scale.

Before you blink, more elderly people are shuffling around the earth than children skipping.

Kids are becoming outnumbered by the elderly.

All that thanks to an ever growing life expectancy – a silver lining for most of us. The dark side? Longevity is riddled with myriads of diseases, the result of environmental pollution and unhealthy lifestyle. The question is looming: how can any government and health system contend with the masses of future patients? The problem is universally pressing the world over, whatever the GDP.

“Rapid change for the better is what we really need,” says Dr. Solymos, “because statistics are alarming: we are but a single generation away from a serious crisis that caring for the masses of inactive old people would impose on humanity.

That’s the social aspect. On a personal level, how long someone lives is actually secondary to how actively one can enjoy those years. Health and vitality rules over longevity.”

“Why live for 100 years, you may ask,” says Dr. Mónika Solymos, cardiologist at Dr. Rose Private Hospital. “Old age is most often associated with crippling health conditions, painful diseases and gradually dwindling life comfort. As if the last decade of your life was really about death and dying. Far from it.”

The doctor’s order? Annual cardiovascular checkup, stress ECG and echocardiography are strongly advised over 40. Below 40, regular tests are advisory for those doing sports or who have a known predisposition for cardiovascular disease.

A point in case is the leading cause of death in our day and age: cardiovascular diseases, heading the black statistics with a commanding 54%. Health conscious lifestyle alone could turn the tide dramatically in favor of life.

www.drrose.hu

PLAY WITH THE GENES One out of 600 people are likely to live 100 years, and one out of seven million will live to be 110. Since British scientists discovered and mapped the sequence of longevity genes in 2010, we have been able to tell with more precision than ever who is privileged to live a Methuselah lifespan. The same research, on the other hand, revealed that people destined for long life are genetically just as prone to cardiovascular disease, diabetes or Alzheimer’s, but the genes responsible for longevity suppress the genes predisposing for illness. Having said that, even the lucky genes will lose the game against the bad habits of smoking, alcohol abuse, sedentary lifestyle and unhealthy diet.

1 News

BBJ

07

focus

Young vs old in Fidesz on informants With its proposal to fully open the files on informants working for the secret police under the communist regime, LMP has successfully driven a wedge between Fidesz and significant portions of the rightwing intellectual elite, as well as between the younger and older members of the Fidesz and KDNP parliamentary groups.

Fidesz has rejected the LMP proposal, but now finds itself under pressure to present its own ideas about disclosure. It appears that the governing party is uncomfortable with the issue. To work fairly, the system determining which files and names to disclose would have to take many factors into consideration, and some fear that the process may be abused or hampered by Fidesz for political gain or to avert political damage.

BBJ POLICY SOLUTIONS

The question of whether to publish the files on informants for the communist secret police is a perennial issue in Hungarian politics, though for the most part it was a matter of intellectual debate: none of the major political players has evinced a genuine interest in opening the files to the public. It appears, however, that LMP has managed to skillfully exploit the issue to hound Fidesz, highlighting a discrepancy between the latter’s pugnacious anticommunist rhetoric and the

reality of its unwillingness to commit to disclosure.

A few weeks ago, LMP’s András Schiffer introduced a bill that would have satisfied the most radical demands by releasing every file. For all but two-dozen MPs, the Fidesz and KDNP factions voted no, easily defeating the motion. Fidesz did not at first even take an official position on the question, apparently hoping that it would quietly go away.

A SUCCESSFUL WEDGE But that was possibly always going to be an optimistic view. LMP has been relentlessly castigating what it sees as Fidesz’s hypocrisy and, more importantly for the government, a significant number of right-wing intellectuals are grumbling as well. The governing party’s reluctance to embrace the issue has been met with consternation, especially among younger conservative intellectuals – the governing party’s fierce anticommunism is one of the key drawing points for the young generation. There was already growing disenchantment among some conservative intellectuals with the government’s policies, but in light of Fidesz’s inability to provide an unambiguous explanation for its refusal to follow the LMP suggestion, some have questioned how much remains that is worth supporting.

LMP’s proposal not only pitted the party and portions of its intellectual backwater against one another, but also divided the majority parliamentary factions internally. Like their counterparts outside Parliament, some younger MPs demanded that the issue be dealt with and that there be at least some disclosure of files. Fidesz’s parliamentary leader János Lázár attacked LMP’s proposal as “Lacking credibility, unprofessional and hypocritical… like the party that introduced it.” He also claimed that internally Fidesz had been debating the issue for more than a year now and would soon present its own proposal.

HOW MUCH DISCLOSURE? The vexing question is what portion of the vast archives

should be disclosed and, even more importantly, what criteria – if any –selection should be based on. Like other communist parties that ruled in the Eastern Bloc, the Hungarian Socialist Workers’ Party (MSzMP) operated a gigantic network of informants, whose level of cooperation and enthusiasm differed widely. Many were blackmailed into collaborating with methods that would render at least some types of cooperation excusable – that is, if the informant submitted

Moreover, in some cases it is even conceivable that names were added to the informant list even if the person in question did not cooperate at all. And Fidesz argues that national security considerations must also be considered, which is certainly a valid objection to full disclosure, though at first glance it is difficult to imagine reports from the socialist era that would still have national security ramifications.

Whatever standard one may apply, however, sifting

without involving the opposition or independent experts.

From the Media Council all the way to the Constitutional Court, there is a tendency in Fidesz to entrust key oversight functions exclusively to party loyalists, citing the governing parties’ two-thirds majority.

If the selection of names is also performed by a bunch of party hacks that would seriously delegitimize the entire process. Many suspect that Fidesz’s reluctance to embrace the issue has more to do with the number of persons in its

MANY, ESPECIALLY IN THE YOUNGER GENERATION, ARGUE FOR FULL DISCLUSURE useless reports, as some did.

In 2002 these dilemmas came to the fore when, in an openly political attack, it was leaked that the father of Zoltán Pokorni (then Fidesz’s chairman) had reported to the so-called III/III division, the internal secret police service. Fighting back tears, Pokorni related that his father had been under extensive pressure, but the Fidesz politician still resigned all positions save his seat in Parliament, arguing that though morally he shared none of the blame for his father’s actions, he would otherwise leave himself and Fidesz open to political attacks.

TOUGH ISSUES Given the complexities of why and how someone became an informant, any disclosure scheme should take both the underlying personal situation and the level of cooperation into account, and try to protect those whose transgressions were minimal or none.

Dragging the names through the mud of those who were under extreme duress and still cooperated only nominally would appear unfair.

through the archives and studying them with a view towards selecting names based on a set of criteria is bound to be immensely time-consuming and often inevitably arbitrary. How could any system of disclosure separate those who collaborated enthusiastically for ideological reasons or out of plain human malevolence or pettiness, from those reluctant cooperators who gave more or less useless reports and/or were subject to inhumane duress? What is a useless report and what constitutes non-cooperation?

Also, who would perform the reviews and selection and what course of legal remedies would be open to those who feel that, based on the legal criteria, their names should not have appeared on the disclosure list?

WHO GUARDS THE GUARDIANS? It appears that Fidesz would like to establish a National Remembrance Commission to formulate a proposal on how to handle these difficult questions. One obvious problem may arise if Fidesz were to address the problem alone,

ranks who might be affected by full disclosure than any genuine concern for unfair attacks on basically innocent persons. That is also why many, especially in the younger generation, argue for full disclosure.

WHICH WAY OUT? Ultimately, the dilemma is for Fidesz to resolve. It might decide that fully expropriating the selection process has fewer political costs than allowing independent experts and/or experts nominated by the opposition, to partake in it. Like the Constitutional Court, the Media Council, etc., this too is an issue that is mainly relevant to the intellectuals only, rather than to the wider public. The difference compared to the previous “intellectual” issues however, is that this time much larger segments of the right wing have strong views on the question – views that tend to be at odds with what Fidesz does, though they may be more or less consistent with what it says. “Heed what I do, not what I say,” was the prime minister’s suggestion for interpreting his positions, and

it seems that frustrated rightwingers are inclined to do so.

LMP has a keen political interest in keeping the issue on the agenda and Fidesz under attack. Given the lack of the affected generation among its ranks, it knows full well that only Fidesz and the modern day socialists (MSzP) can suffer from any potential revelations emerging from fully disclosed archives. This is also an opportunity for the green party to appeal to those young voters who would like an alternative to Fidesz but have misgivings about the liberal-green party’s ability or willingness to transcend the traditionally understood Hungarian left, as it was epitomized by MSzP and the liberal Free Democrats (SzDSz) before 2010.

SINS OF THE FATHER? Small wonder then that nerves are raw in Fidesz, which is one of the reasons why János Lázár chose to respond to LMP’s proposal by attacking András Schiffer over the role Schiffer’s grandfather played in the old regime. Lázár’s verbally intense attack, denying the latter’s right to advance such issues given his ancestry, invokes a mindset that Fidesz – in theory, at least – does not embrace. Though Tibor Navracsics (significantly) later suggested that these kinds of probes into each other’s ancestry are not the best way forward and called on everyone involved to take a step back, his is a personal opinion, while Lázár’s statement – since reiterated – apparently reflects the position of Fidesz, as whose leader he spoke in Parliament.

To avoid further embarrassments, politically speaking, Fidesz would be well advised to quickly remove the issue from LMP’s grasp by setting up some type of arrangement on disclosure.

As the necessary corrections to the hundreds of laws that were fast-tracked through Parliament show, however, producing quality legislation in a short timeframe is not a Fidesz forte. Even political necessity might bode ill for a decent resolution of this complex and difficult issue. ■

www.policysolutions.hu

R K O W H E N E IN T T N R BY LA I In most people’s mind, the structural organization of Hunga ry’s intelligence i st nist commun he commu uring tthe during unit d unit pider’’ss ng sspider confusiing is a confus era is era e st udapest Budap he B ere, tthe Here, web. H web. s, es, prov ide a l provid Journal ss Journ Business Busine e be ob ting tto attempting w ithout attemp withou o uide tto guide e, a g ve, hensiv ehensi compre compr off set-up o ated set-up cated complic the compli the nterior the IInterio of the III of div ision III divisio from y from unga rry Hunga off H yo Ministrry Minist 60s he ‘‘60s off tthe ng o beg inniing the beginn the he off tthe cha nge o the chang unti l the until PF 989. PF 1989. n1 reg ime iin regime

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Based on Reader for political studies of the secret services by Béla Révész

- - - - - - - - HOW THE TENTACLES OF STATE SECURITY REACHED OUT - - - - - - - - -

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1.

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4.

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Analyzing, assessment, information

5.

8.

8 7.

Counterintelligence in tourism

6.

Counterintelligence against incoming immigrants

Preventive protection of the military industry, transport, intelligence unit, authorities and ministries

INSTITUTIONAL BACKGROUND

ACCESS TO ONE’S OWN FILES, ACCESS FOR RELATIVES

The Historical Archives of the Hungarian State Security Services preserves and handles the documents of the former state security organizations dating from the period between December 21, 1944, and February 14, 1990. In 1997, the Hungarian Parliament set up the Historical Office, which functioned as an archive. In e he 2003, after a scandal following the y itty u r ity ur public revelation of the State Security past of then Prime Minister Péterr he Medgyessy, Parliament founded the n an r ian Historical Archives of the Hungarian al ga State Security Services, as the legal he th At the successor of the Historical Office. At enttss men end of 2011, the quantity of documents as as kept in the Historical Archives was h he Th The d. T nd 3,953 meters, measured end-to-end rererper majority of the documents are paperge rg rge a arge large based records, but there are also lla ty riity rit quantities of contemporary security microfi lm copies.

People who were subjects of surveillance can get a free copy of all the documents they are entitled to see. The right to access documents can be inherited by close relatives (a relative in direct line, a sibling, a spouse or life partner if the marriage or the partnership existed both at the time when the document was made and at the time of the person’s death).

PUBLICITY

ACCESS FOR RESEARCHERS , Scientific researches need permission from the curators of the archives. With such permission for except project, research their to related persons of n informatio personal researchers can access to public fi gures. information on the person’s health status, sexual habits or vices. Special rules refer State Security Anybody can turn to the Historical Archives to ask for data concerning the possible whether they past of such people. In such cases, the Historical Archives has to ask the person affected the enquiry. If answer will archives the this, to admits person the If gure. fi public a admit to their being request may the submitted who person the person does not admit it, their request has to be denied. The gure or not. fi public a is affected person the whether decide to task court’s the is it then go to court and The archives will provide or deny access according to the ruling.

The relevant legislation does not oblige the archives to make original fi les or registries publicly available, but sets strict limitations on when the personal data on affected persons may be published. Such data can only be made publicly available after the protection period expires (30 years after the person’s death; if the date of death is unknown, 90 years after the date of birth; if this is also unknown, then 60 years after the date of the document).

GERMANY

POLAND

CZECH

ROMANIA

Germany is regarded as setting the standard when it comes to facing its communist past. The institution that handles national security documents of the former East Germany was established in 1990, right after the reunion of East and West Germany. The BStU stores approximately 111,000 meters of documents, measured end-to-end, in its archives. There are also some 16,000 bags of shredded documents. Currently, the BStU is attempting to restore these files. According to the law, all individuals have the right to look into their own files, but there are certain restrictions. Possibilities for research work in the BStU archives are varied. As a basic rule, anyone can research the files, but if you’re a researcher without the support of a university, academic or research institution, you need to hand in your request with a synopsis or a research concept.

The relevant law does not oblige the BStU to make any part of the documents publicly available.

Founded in 1998, Poland’s Institute of National Remembrance (IPN) has the second largest volume of national security documents after the BStU. The institution is set to investigate communist and Nazi crimes committed against the Polish nation between 1939 and 1989. It has four independent departments. One of them has carried out some 900 investigations and handed down 240 indictments against 400 people. Janusz Kurtyka headed the IPN from December 2005, until April 10, 2010. He was on the flight of the 36th Special Aviation Regiment carrying Polish President Lech Kaczyński, which crashed near Katyn, Russia, killing all aboard. The Polish Parliament made the personal data of public figures accessible without limitation in 2006, and obliged the IPN to publish the data of former national security officers.

The Institute for the Study of Totalitarian Regimes was established in 2008 in Czech Republic. The main duty of the institution is to study, explore, preserve and publish the operation of communist and Nazi regimes. Also in 2008, the Czech Security Services Archive was founded. The volume of documents handled by the archive was some 20,000 meters, end-to-end, at the beginning of 2010. Under the relevant law, anyone can access and search the files; there is no differentiation between affected persons and researchers. However, healthrelated files of former security officers cannot be viewed by anyone. In order to ward off accusations of being a manipulator, the Institute for the Study of Totalitarian Regimes does not make lists of former national security officers public but publishes digitalized copies of the old files and registry books without commenting on them.

Romania’s National Council for the Study of the Securitate Archives (CNSAS) was set up in 1999. However, the CNSAS started actual work only in 2005, because the documents in question had been stored at the Romanian Intelligence Service until then. Today, the relevant government decree states that every Romanian citizen, as well as citizens of EU member states, has the right to access their own data in the former Securitate fi les. The right to access the documents can also be inherited. In the case of researchers, the law requires an accreditation procedure during which the CNSAS evaluates the professional qualifications and the references of the researcher, and the purpose of the research work.

Data on personal and family life is handled anonymously.

2 Business

BBJ

Enterprise

SPECIAL REPORT

TRENDS PARTNER WATCH

Migrant workers in the EU Stagnating hopes

12

Flexible workplaces Temp agencies, Recruitment agencies

20

Infant venture capital After 12 years as an advisor at Deloitte, Dr. Péter Oszkó, a lawyer by trade, joined a crisis management government of experts to become Finance Minister under PM Gordon Bajnai. Following the 2010 elections, Oszkó returned to the private sector and today is CEO of PortfoLion Venture Capital Fund Management Co. PortfoLion is a member of the OTP Group, a leading Hungarian and regional financial institution.

BBJ ANDRÁS RÁC

IS VENTURE CAPITAL AND PRIVATE EQUITY MATURE ENOUGH IN HUNGARY? In Europe, private equity and venture capital has a smaller share of the financial market than in the

United States, which is a weakness. Private equity helps to finance enterprises via the special structure of ownership, which offers a lot of projects based on development and innovation. Hungary is even weaker than Western Europe; the sector has not grown from its infancy.

Some pioneering actors tried to change this situation very early on, but a few fund managers cannot guarantee a total breakthrough unless they act in the supporting ecosystem of this sector. We need the critical mass of private equity participants and tools to break through. The EU recognized this burning need so the JEREMIE funds were born to change the momentum and to create this ecosystem.

HOW OPEN ARE THE PROJECT OWNERS? Since the JEREMIE and eight simultaneous funds started their operations, more and more projects pop up. Startup conferences and competitions prove that the number of projects is ever growing. We can boast that there is strong enough intellectual capital in this country. However, when we consider management abilities, company development and related business skills, the

situation worsens. The market is underdeveloped. Biotech experts and engineers have not yet shown any interest in company development, but have relied on state and EU subsidies and tenders. They have studied how to write a tender and how to answer the administrative requests of an assessment, but not how to meet the market’s needs.

IS THERE ANY REASON FOR OPTIMISM? It is too early; we are only a one-and-a-half-yearsold company. I am satisfied with the initial period as the first months always present the major challenge to these investments. The companies need four to five years to show their potential. Some have proved to be ‘adult’ and operate on their own, while others need more support.

So the time has not yet come to sit back with satisfaction.

In macro-economical terms we can talk about a success story, as JEREMIE managed to secure finances for these companies. However, the true success remains a question of the future.

WHAT OTHER SOURCES CAN PORTFOLION USE BESIDES JEREMIE?

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Interview with Péter Oszkó, Chairman-CEO of PortfoLion Venture Capital

Private ones.

Right now, we have to admit, the region does not attract too many investors, and this is not only due to the crisis. Just take a look at the yields of the last 20 years; they all converge on zero.

European funds show scary results; nevertheless, there are huge differences among fund managers. In Hungary, nobody has succeeded yet with a permanently wellperforming fund. Experts do not blame fund managers; they rather agree that the market has not been capable of offering more opportunities. LogMeIn or Prezi have been exceptional successes on the Hungarian market, when a brilliant project owner with an innovative mind found a coowner and investor with the proper network and management know-how. Beyond them, a list of an additional 20 success stories could not be compiled.

In the environment created by JEREMIE the situation is much better.

According to the program, it guarantees 70% of the

investment but requires only a basic interest in return, not the yield corresponding with the whole share. [Market investors always negotiate for a higher percentage, at least the proportion of their investment – Ed.] Whatever the investor of the remaining 30% can make above this basic rate can be gathered. So JEREMIE says forget the yields that you had to harvest individually, I guarantee you a good return of your investment. Suddenly, even a mediocre yield offers a great profit, so it triggers more interest from those who previously refused to be involved. Whether it will meet expectations we will find out only when the funds close their projects.

At the moment JEREMIE is working extremely well.

THAT IS THE INSPIRING PART OF THE INVOLVEMENT OF A CENTRAL GOVERNMENT. BUT THERE ARE ALSO REGULATIONS, LIKE THE EU’S AIFM DIRECTIVES. Well, AIFM projects the para-

noia that evolved in the financial crisis on to private equity. It has saddled the industry with the heavy burden of administration. Nevertheless, Hungarian regulations, quite strict ones, already included them, just like the JEREMIE regulations, so AIFM has not deeply affected the Hungarian market.

It is rather the general environment that affects the market. Not more than 45 enterprises were reached by the new funds and programs and they do not depend on local developments. The companies of our portfolio are mostly interested in regional and global markets.

The local market is small, and we have a huge debt to pay, so there is very little chance offered for a company to become successful within its borders. Venture capital always keeps its distance from gloomy risks.

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IF THE MARKET AND ESPECIALLY ITS PLAYERS ARE STILL LIVING THROUGH THEIR EARLY YEARS AND INNOVATIVE PROJECT OWNERS, PARTICULARLY THE OLDER GENERATION, NEED MORE UNDERSTANDING, EDUCATION IS A MUST. WHAT EFFORTS ARE BEING MADE BY THE SECTOR? Certain universities run courses on the topic, but the education is in its infancy too. We are happy to see that the Central European University is planning to start a major incubation system. The market lacks an incubation system. We are also happy to support these efforts, as our company will benefit from the arrival of new projects and opportunities that do not require yearlong preparation before the actual investment. Meanwhile, interest has grown tremendously. We receive invitations from universities to give courses on the topic and graduating students are looking for the chance to join the profession.

DOES PORTFOLION OR ANY PRIVATE EQUITY ORGANIZATION PLAN AN INSTITUTIONALIZED EDUCATIONAL PROGRAM? I have no knowledge about any such effort. Today the time dedicated for extra

work is very limited. A fund is financing its professionals and managers, those, who start the engine of investments before money is earned from successful projects closing. For us OTP Bank is a solid base, but still, payroll is sensitive. Some of my colleagues and I do intend to develop the market, but our opportunities are limited. A university or a state-sponsored institute must have better resources and if our expertise were invited, we would willingly support them.

WHERE DOES PORTFOLION RAISE ADDITIONAL SOURCES FOR ITS FUNDS? OTP is a major regional bank

and helps to extend the opportunities beyond the borders of JEREMIE. It helps to persuade other institutions to join. Our ambition is to create more different funds, so they concentrate on different segments of the investments and a variety of market sectors. These efforts are in progress, this year we are planning to start one or two more funds.

THESE TWO FUNDS WILL DEFINITELY START? One of them is an accepted project by OTP and the Hungarian Financial Supervisory Authority is just running the approval process. It will support so-called turnaround investments, when a well established company is targeting a stable market segment, but its credit is deteriorating and therefore its growth potential is still limited. We will help them by raising their capital. According to our plans, this fund will open this year.

YOUR COMPANY IS MOSTLY INTERESTED IN INNOVATIVE PROJECTS. MEANWHILE YOU ARE CLASSIFYING PROJECTS BY THEIR MATURITY. WHAT ARE THE PROPORTIONS? We have decided to support innovative products.

Consider-

ing maturity our portfolio can boast a rather colorful palette. Some of the companies earned HUF 2-300 million annually when we invested. The proportion of young to mature companies approaches 50-50%.

DOES THE OTP BRAND HELP? To earn the appreciation and trust of the targeted companies, it definitely helps.

Besides the rich opportunities of investments, it supports the fight against suspicion. Those who seek this financial support will face very harsh growth requirements. A private equity

investor does not have any guarantee that his or her investment will surely return. Therefore a private equity investor requires ownership and management roles in the framework of a contract as a guarantee, but a project owner may feel that his company is just being taken away. Until that moment nobody else told him what to do, now an investor comes along and gets involved in everything... which is actually not even true, as an investor only wishes to get involved in issues that belongs to his or her field. Under the OTP brand, this suspicion becomes less grave.

HOW OFTEN DO YOU MENTION THE BUSINESS KNOW-HOW OF THE PRIVATE EQUITY MANAGERS AS AN ASSET BESIDES THE MONEY THE COMPANY CAN RECEIVE? Always.

Considering money, the very same offer and numbers could be received from other funds.

Therefore the real competition is about additional values, like the know-how, management support, a strong board. Even opening a major investors’ consortia could be an important advantage, and other doors open thanks to the fund managers.

A FINAL QUESTION, OUT OF THE PRIVATE EQUITY BOX: WOULD YOU TAKE A GOVERNMENT POSITION AGAIN? The question is too general. I will not take one in the short-term. I wish to build a full investment success story, just as I did as an advisor earlier at Deloitte.

I feel that before becoming the finance minister of the Bajnai administration in 2009 I had finished and therefore did not interrupt my advisor career. This time I have the same ambition in private equity. ■

[ EXPERT OPINION ]

Hungary’s new constitution - the beginning of a new regime or merely technical amendments?

Is Hungary really on the way to becoming an authoritarian regime? Does the newly adopted constitution violate EU regulations? These questions have been reported daily in local and foreign media recently and included heavy criticism of the country’s leadership. In this article, we try to briefly answer the above questions objectively, on basis of the legal texts. We also aim to shed light on the context in which the government’s controversial measures took place.

François Dániel d’Ornano Gera, Dr RESIDENT PARTNER GIDE LOYRETTE NOUEL BUDAPEST

In April 2010, the parliamentary elections in Hungary resulted in an overwhelming victory of the conservative Fidesz-KDNP alliance, sending the previously governing Socialist party into opposition. As the Hungarian election system usually strengthens the winners, the alliance secured a 68% majority in Parliament which made it possible to form a government without allies and to adopt radical changes in the country’s legal system.

The winners interpreted their victory as a “revolution in the polls” by which Hungarian voters declared their desire for fundamental changes.

This led the governing party to adopt radical changes in the country’s several systems and build a new political and social system based on new rules. The governing party considered that further legislative work was necessary to finalise the change of regime that started in 1989, and that this process would be concluded by adopting a new constitution.

The new constitution was adopted by Parliament on 18 April 2011 and came into force on 1 January 2012. It is Hungary’s first constitution adopted after democratic free elections. It succeeded the constitution adopted back in 1949 and almost entirely re-written on 23 October 1989.

Even though a number of significant legislative changes were adopted and heavily criticised since then, the actual text of the new constitution is largely based on the previous one, in that it provides for the protection of human rights and does not contain significant changes to the country’s governmental form.

The changes appear in some minor albeit significant details, which – besides giving the text a conservative character – for the time being have rather philosophic, symbolic consequences and may only be considered troublesome because – depending on their interpretation – they may provide sufficient ground for stricter regulations.

The most debated changes introduced by the new constitution were the following: ■ the change of the country’s name from Republic of Hungary to Hungary, the word Republic no longer in the country’s name; ■ the new constitution protects marriage as the symbiosis between men and women (which may deprive same-sex couples from the right to marry); ■ the new constitution declares the protection of foetal life from the moment of conception (which may potentially be used as a basis for ultimately banning abortion); ■ the new constitution modifies the clauses deal-

ASSOCIATE GIDE LOYRETTE NOUEL BUDAPEST

ing with certain fundamental rights, so that the state only “aspires to provide” them instead of “providing” them (right to social security, to public utilities, etc.); ■ the ban on discrimination does not mention age or sexual orientation as a basis of unlawful discrimination; ■ the new constitution provides the possibility of life imprisonment for violent crimes; ■ the right to turn to the Constitutional Court was heavily cut back; ■ the new constitution restricts future governments’ power as family policy, taxation and pension systems may only be altered by fundamental laws (passed by a 2/3 majority).

The concept of the new constitution remains in line with the traditions of Hungarian constitutional law by setting out merely the most important rules, and leaving detailed regulations to the fundamental laws. The problem with the abovelisted provisions is rather that they leave the door open to regulations restricting human rights.

Most constitutional lawyers agree that the text places less emphasis on the individual rights and the main achievements of liberal democracy, and stresses rather conservative values. This – in itself – does not make it impossible to govern the country in a democratic way. Constitutional lawyers agree that the decisive factor differentiating between democratic and authoritarian regimes is the way of interpreting and “using” laws, rather than the way in which they are formulated (in the past, several authoritarian regimes had “democratic” constitutions). There are, however, question marks as to how the new constitution can fulfil its sociological and emotional function to unite the nation and represent the nation’s core values accepted by the vast majority of society.

Despite the heavy criticism, government party officials and MPs argued that the new constitution cemented the break with Hungary’s communist past and completed the country’s transition to democracy. They stressed the importance of the new clauses on public finances, which does not allow Parliament to adopt a budget that would increase the country’s debts. The aim of those clauses is to protect the country from high indebtedness.

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SpecialReport

Migrant workers in the EU One of the essential principles of the EU is the free movement of labor: nonetheless, statistics show that on average, only 2-2.5% of the active workforce goes abroad to seek work. Hungary is among the countries with the least mobile workforce, with only 1% taking a chance on foreign employment. Along with growing tensions towards migrant workers (mostly non-EU citizens) in Western Europe, there is also a growing demand for highly qualified workers, even immigrants, to make up for the large number of locals that decide to move on to an even better life.

BBJ ANIKÓ JÓRI-MOLNÁR

1. UK The United Kingdom has traditionally been a preferred target for migrants from Central and Eastern Europe as well as from the developing world.

There has been a significant inflow of qualified workers aiming to fill the vacancies that require higher skills. A recent government decision declared that this is what the UK really needs. The Migration Advisory Committee recommended that the limit for the number of foreigners that can receive a work permit remain at 20,700 through 2013-2014. However, gaining the visa will now require a higher minimum skill level, typically equivalent to a bachelor’s degree, although there will be exceptions for jobs in occupations where there are shortages, and the creative industry. Experts suggest the worse is yet to come in terms of unemployment.

2. GERMANY One of Europe’s strongest economies had serious concerns about letting Eastern European migrant workers into its territory after the accession of the ten new members in 2004, but these proved groundless. Instead of the hundreds of thousands of workers that it was predicted would flood the job market, a mere

63,000 actually came to work in the country, Frank-Jürgen Weise, the head of the country’s Labor Office, was recently cited by Reuters as saying. The late opening of its job market (see timeline) and the categorical demand for German-speaking workers could be among reasons for the low figures.

According to official statistics, about 13% of the migrants are Hungarian, attracted by opportunities in construction and manufacturing. It is estimated that there are probably tens of thousands working illegally, although Germany has shown significant improvement in rolling back illegal employment, which now stands at an 18-year low.

3. AUSTRIA Probably the job market opening that was most anticipated, from a CEE perspective, was that of Austria in May 2011.

Austrians, like the Germans, feared a flood of migrant workers from Eastern Europe would take their jobs. However, only a little less than 9,000 workers arrived in Austria in the first month after the opening, well below general expectations or those of the labor ministry.

While Germany is usually a target for repatriation, Austria sees a larger number of Eastern Europeans commuting

from Hungary and Slovakia.

The country has a high share of immigrants (17%) within the total working-age population but it also has one of the highest shares of immigrants working in jobs below their qualification level. In fact, the liberalization of the job market attracted a number of migrants taking low-paid jobs in tourism and catering.

4. NETHERLANDS The Dutch need to accept that, for continued prosperity, they must let migrant workers in and let them help grow the economy, a fresh publication from the country’s employer organization VNONCW notes. As in many Western European countries, the Dutch can also get into heated debates over immigration issues, a wave ridden by rightwing anti-immigration voices.

Geert Wilders of the Freedom Party wants tougher immigration policies in exchange for his agreement to the coalition government’s recently proposed budget cuts. According to CBS, the Netherlands’ statistics office, a record number of immigrants, 160,000, came to the country in 2011. Immigration figures have been steadily growing since 2006, with workers mainly coming from within the European Union.

5. FRANCE Of its 62 million inhabitants, 7.2 million or 11.1% were born in another country, and France has a net migration rate of 1.1 per 1,000 inhabitants, according to 2010 Eurostat data. France has been a country of mass immigration since the 1980s and anti-immigration voices are therefore quite strong. However, they usually target Muslims and cultural differences based on religion.

African immigrants account for 42.5% of the total, while European immigrants comprise 38%. Eastern European workers are relatively few in France, and are usually more qualified as well. The Polish, Romanian and Russian communities are present in larger numbers. Besides them, many Eastern Europeans come with temporary status, to seek work in the manufacturing and building sectors, as well as in health care assistance.

6. IRELAND At the time of the accession of the ten Eastern European countries, the UK and Ireland were the destinations most targeted by migrant workers, partly because of the language and partly because they opened their labor markets earlier than other countries like Germany.

And Ireland really needs for-

eign workers, as a significant proportion of its population emigrates every year. According to the Irish Statistics Office, about 17% of the population are not Irish nationals; most of those are from the UK, followed by other EU countries.

In 2002-2006, net immigration was 48,000 people annually, two-thirds of the total increase in the population in that period. Census figures from the end of March 2012 show an almost exact reversal, with net migration accounting for onethird of the growth in 2006-11.

Polish and Lithuanian workers found Ireland most attractive, and their headcount currently reaches 150,000.

7. DENMARK In 2008, Denmark announced legislation favoring the qualified immigrant workforce.

Whether as a consequence of this or not, in 2009 there was positive net migration of almost 20,000 immigrants, and the proportion of immigrants and their descendents within the total population in Denmark reached 9.8% in January 2010, according to the OECD. In 2010, Turkish immigrants had the largest proportion of the total with 10.9%, while Eastern Europe was represented by an increasing number of Poles (+4.4%) and Roma-

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8. BELGIUM With a 9.8% ratio of foreign population (OECD, 2009), net migration is below the Western European average. But that hasn’t limited anti-immigration action. There have been recent reports of a website set up by the far-right Flemish Interest Party so that illegal immigrants can be reported by locals. Although much criticized by international governments and communities, it reflects a trend that is increasingly visible in the developed world. The integration of EU citizens into the job market should be flawless, but the hundreds of thousands of Eastern

European immigrants who have come to Belgium since accession seem to be enough to stoke the fires of anti-immigrant sentiment.

9. SPAIN In the last few years, Spain has gone from a country with the highest rate of employment and being a permanent target for immigration to a crisis-hit country with record unemployment that hits the young and temporary workers, including migrants, hardest, according to the Migration Integration Policy Index. The crisis has not seen the shuttering of the Support Fund for Integration of Immigrants thus far, but it has no more financial resources for the training, employment aid or intercultural mediation for which it was established. In 2010, the fund received $261 million, but in 2011 the socialist government of former Prime Minister José Luis Rodríguez Zapatero only provided $88 million, according to the Inter Press Service. Of Spain’s population

of 47.5 million, there were 4.5 million foreign legal residents at the end of 2011, 48.7% of those from non-EU countries.

10. SWEDEN Sweden is famous for its successful integration strategies and the equal rights it provides all residents, regardless of nationality. With the 2009 Labor Market Introduction Act, this inclusive society took one step further in helping newcomers find their way on the job market.

The OECD’s “top student” shows an example of a migration policy that is working efficiently to feed labor market needs that were not being met, without adversely affecting the domestic situation.

In 2004, Polish immigrants already made up the largest group within the category of EU and EEA citizens, according to a report by FocusImmigration. When Bulgaria and Romania joined in 2007, immigrants from these countries also made up a significant community in Sweden. ■

Source: European Vacancy Monitor

COUNTRY HIGHLIGHTS COUNTRY

NUMBER OF JOB VACANCIES IN 2011 Q2

OCCUPATIONS IN HIGH DEMAND)

NUMBER OF UNEMPLOYED IN 2011 Q2

UK

2,433,000

356,000

Engineering, health care

GERMANY

2,465,000

829,000

Waiters and bartenders, building finishers and related trades, building frame and related trades

AUSTRIA

175,000

62,000

NETHERLANDS

360,000

484,000

FRANCE

2,469,000

1,738,000

IRELAND

300,000

6,000

DENMARK

213,000

246,000

Food preparation assistants, building frame and related trades, agricultural, forestry and fishery workers

320,000

216,000

Heavy truck and bus drivers, general office clerks, manufacturing laborers

4,831,000

1,262,000

Waiters and bartenders, domestic, hotel and office cleaners and helpers, building frame and related trades

418,000

481,000

Shop salespersons, personal care workers in health services, building frame and related trades

BELGIUM SPAIN SWEDEN

Building finishers and related trades, building frame and related trades, market gardeners and crop growers Waiters and bartenders, shop salespersons, domestic, hotel and office cleaners and helpers Building frame and related trades, agricultural, forestry and fishery workers, waiters and bartenders Sales, marketing and customer service, ICT, science and engineering

[ EXPERT OPINION ]

Hays Hungary issues new Salary Guides TAMMY NAGY-STELLINI Managing Director HAYS HUNGARY

Hays Hungary, the leading specialist recruiter, has issued its 2012 salary guides. Managing Director Tammy Nagy-Stellini provides a sector-bysector breakdown of the key findings.

LIFE SCIENCES In the sales and marketing area, pharmaceutical companies have had to restructure their field forces in light of recent legislative changes. As a result, cross-functional expertise is in demand as organizations have to cover more areas with fewer people. The focus has therefore shifted from maintaining a sales force towards key account management.

In the CEE region, there continues to be strong demand for clinical research professionals, which puts our Hungarian team in an excellent position to cater for our partners in countries such as Romania, Bulgaria, Serbia and Croatia. The candidateled nature of the market explains the increase in CRA salaries.

IT We have noticed a significant increase in the salaries of IT professionals. Employers are aware of the need to raise salary bands if they want to attract qualified employees, for example in IT within the telecoms sector. Skills in particular demand include JAVA, J2EE and C/C++.

Technical school graduates can often expect to be more attractive to employers than those with a diploma. Experts with 3-5 years’ work experience are most widely sought because of their diversified knowledge; salary demands of this group are often the same as those with 5-7 years’ experience.

ENGINEERING New graduates can expect considerably higher salaries than in other sectors, particularly in Hungary’s booming automotive industry, which has seen a surge in investment.

However, mid-level positions are not as well rewarded financially as other sectors given that these candidates often fall short in the ‘soft’ or non-technical skill competency requirements. Therefore, a recent graduate production coordinator may earn a higher salary than a professional with more than two years’ experience.

As for managerial positions, companies are aware that they need to meet senior professionals’ salary demands, as these individuals are willing to relocate and change roles, especially when offered the opportunity to develop their technical knowledge.

ACCOUNTANCY AND FINANCE Graduate salaries have increased in all areas, with financial controller positions enjoying the highest gains. Although salaries have remained stable for senior accountants, the demand for accountants with language skills has risen considerably. In auditing, for example, salary ranges reflect seniority.

The remuneration expectations of candidates are influenced by educational background (ACCA, CPA, CIMA and MBA qualifications are particularly valued by employers), language skills, overtime and career development opportunities.

Regional and finance manager salary levels have increased overall but vary depending on the above factors and the specific industry sector.

SALES AND MARKETING We have observed a slight increase in management salaries, as demand has picked up significantly post-crisis. On the other hand, multinational companies are centralizing their marketing functions regionally, thereby reducing the number of vacancies in the local market and creating regional managerial positions that command higher salaries.

FMCG salaries have decreased marginally as companies are more willing to offer career opportunities to junior candidates. Larger firms have implemented new organizational structures to drive cost efficiencies, which involves strategy planning at company headquarters and local implementation carried out by junior employees.

Wage levels depend primarily on a candidate’s prior work experience – language skills are not a determining factor. As there is an excess supply of mid-level experts, companies can select suitable candidates based on salary expectations.

BUSINESS SERVICES The first SSCs moved to Hungary at the turn of the millennium, and salary levels have historically always been extremely competitive. The market is now more stable and newcomers or those in phases of expansion are now not offering such attractive remuneration packages.

We have seen a growing demand for professionals with fluent French and German, particularly for customer services, accountancy and IT support roles.

The more established SSCs are looking for experienced professionals, such as improvement specialists, business analysts and transition managers. Graduates with an economics background are at an advantage while proficient language skills are no longer a guarantee of employment in this sector.

Hays Hungary conducts annual salary guides, including typical salary brackets for specialist sector roles. To request your free copy or for more information on salary trends, call +36 1 501 2400 or email hungary@hays.hu.

hays.hu

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nians (+26.9%) between 2009 and 2010. Denmark estimates that the proportion of immigrants of non-Western origin and their descendents will increase from 6.6% in 2010 to 7.6% in 2020. The labor market participation of non-Western immigrants was 64.9% in 2009 and those with higher education levels are more likely to contribute.

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Stagnating hopes In an insecure economic environment with high unemployment, workers can feel quite defenseless.

Although large-scale improvements are not likely to be seen in the Hungarian labor market in 2012, the picture is not all gloom and doom.

BBJ ÁGNES VINKOVITS

to settle for more work for the same money just to keep their positions, and are ready to take over the tasks of unlucky former co-workers washed away by the previous waves of the crisis.

“Even student workers have become more loyal and reliable,” Csongor Juhász, the managing director of temp agency Prohumán noted, illustrating that lack of job security is the most typical feeling among employees nowadays. “Everyone is waiting. The crisis is still far from its end,” he added.

Although Hungary is still far from the dire position of Spain, which is facing an unemployment rate of more than 23%, the 11% here is nothing to be proud of. In a labor market such as this, buttressed by rising inflation, employees are forced

SUPPLY AND DEMAND While the effects of the mass layoffs that came with the closing of plants such as those of Nokia and Elcoteq, and involved thousands of Hungarians, were somewhat eased by other companies in the electronics manufacturing market taking on

BY INTERNATIONAL COMPARISON, THE HUNGARIAN WORKFORCE IS VERY INFLEXIBLE staff, the ongoing decline in the construction sector can hardly be compensated on the long run. Also, companies in the telecom and pharmaceutical sectors, which have also been saddled with so-called crisis taxes, are trying to rationalize their headcounts and are likely to implement some staff cuts, HR experts agreed when asked by the Budapest Business Journal.

Looking at the more positive side of the picture, positions in demand are mostly in the technical sectors or

require the knowledge of more than one language.

For example, experienced Java programmers, quality engineers, multilingual accountants and multilanguage helpdesk agents are likely to find a job in a relatively short time and probably for good money.

However, in general, there are unlikely to be any wage hikes to cheer employees in any sector this year. The reason for this is not only the Hungarian economy, which is expected to all but stagnate in 2012, but also the so-called compulsory wage compensation, a government initiative that obligates companies to raise the wages of low earners who would otherwise take home less because of the recently introduced tax changes, or face some negative consequences.

“A lot of companies are having difficulties even with the wage compensation or with raising salaries in line with inflation,” said Sándor Baja, managing director at market leading recruitment agency Randstad.

WORKFORCE GOOD ENOUGH? “In general, Hungarian employees come through very well,” Baja said, pointing to the high number of Shared Service Centers (SSC) established in Hungary in the past five years as proof of the existence of a multilingual, qualified and experienced workforce in the country.

But when it comes to flexibility, Hungarian employees get a weaker grade. “By international comparison, the Hungarian workforce is very inflexible,” Baja said, referring to the fact that while in most countries people are ready to move to other cities for work, Hungarians are more anchored to their homes. This is not only rooted in tradition, but is also due to the property market.

“Contrary to many western countries, here 80% of homes

are owned by their residents,” said András Kovács, Head of Division at Grafton Recruitment. “Taking the decision to sell their homes at the current low prices and leaving what is sure behind for what is unsure is obviously not so easy,” he added.

However, there are some positive signs. “It can clearly been seen that Hungarian employees are becoming more open and showing more f lexibility in order to reach their professional goals,” Tammy Nagy-Stellini, Managing Director of Hays Hungary told the BBJ. “Definite contracts seem to be more acceptable, which clearly shows the self-confidence of employees,” she added.

BETTER EDUCATION FOR BETTER OPPORTUNITIES Still, flexibility is not a major characteristic of Hungarian education, either.

Thousands of people graduate from university faculties such as cultural management or international communication. “Poor kids think that they will have better opportunities after going to university,” said Grafton’s Kovács, adding that youngsters with such degrees do not have an easy task on the labor market.

“Another problem is that most teachers have no private sector experience and so they can deliver only theoretical knowledge,” says Ádám Szakmáry, recrutitment head and consultant at recruitment agency JobGroup. However, he also highlighted some positives, noting the tendency of universities and colleges to try to make their syllabuses more practical and, in cooperation with companies, tailor them to actual market needs.

While admitting that the education system has not followed real labor market demands in the past decades, which was additionally

aggravated by the worsening quality of teaching staff, Randstad’s Baja is somewhat optimistic. “The government is trying to change these tendencies by implementing a more practical education system,” he said.

At the same time, companies could also do a lot to make some in-demand faculties more appealing for young adults. “The SSC sector needs to market itself because, although this is one of the most flourishing in Hungary, young people still have low awareness about it and many of them think that jobs in this sector only involve data uploading,” Nagy-Stellini of Hays said. “This sector needs to advertise itself not only to university students but also to high school students so that they will be aware of career opportunities at SSCs as fresh grads.” ■

All for one Mass pressure for wage hikes in healthcare remains half success BBJ ÁGNES VINKOVITS

After spending long decades surrounded by government insensibility to the terrible working conditions and extremely low wages in the Hungarian health care system, to the point where this had finally started to threaten even the sustainability of services, the health profession had enough and last year decided to fight back.

The awakening started in March 2011, when resident doctors’ association MRSz announced that thousands of trainee doctors had conditionally deposited their letters of resignation. If, by the end of 2011, there had not been a threefold salary increase, they said, the resignations would be activated.

At first the health secretary of the Ministry of Human Resources could only ask for more patience and emphasized the restrictions that huge state expenditure cuts had placed on the decision makers of every state sector.

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Later that year the state secretary offered band-aid solutions such as a scholarship program to ease tempers.

Although these initiatives did mean some extra money, it was for a very few people and only if they guaranteed to continue to work in Hungary for several years. As such, these proposals were far too little to convince either the disillusioned residents, who can earn many times their Hungarian wages abroad, or the Hungarian Medical Chamber (MOK), which also kept threatening the collapse of the health care system as a result of brain drain of Hungarian doctors.

In the last few days of 2011, the government finally announced it was setting aside HUF 300 billion from the state budget to finance wage hikes in the health care sector. Despite some press sources saying that the promised salary increases cannot be covered from the state budget, the announcement was enough to win some time and start negotiations between the government and the representatives of the professionals.

As a result, residents managed to get a HUF 42,000 increase to their current HUF

90,000 monthly wage, which, despite being far from the originally demanded threefold hike, has convinced Magor Papp, the head of MRSz, that “health care will turn into a more livable sector”, and he started shredding the deposited letters of resignation.

Following this symbolic act, the government announced on April 10 that nearly 86,000 health care workers will receive salary increases this year, affecting 16,520 doctors, 67,978 skilled workers and another 1,380 people working as chemists, psychologists and biologists within the health care system. The extent of the wage hikes is far from what is needed, but at least it indicates the government’s commitment to settling this issue, the ministry explained.

However, not everyone is fully satisfied or patient. Professional organizations on April 14 formed a “symbolic” strike committee to force the government to increase the salaries of family doctors.

Still, they underlined that a strike in their case would not mean a real walkout, but they do want to emphasize that wage negotiations have to start “immediately”. ■

16 2 BusinessSpecialReport BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 20 – May 03

Brave new [labor] world Although the basics of the Labor Code currently in effect will not change substantially, a foreigner coming to work to Hungary will find a different working environment from July 1, when the new legislation comes into force. The change affects all in the labor market, including some 20,000 foreign employees currently working in Hungary, as well as their employers.

PWC – BBJ

In general, the new law offers large scope for negotiation between employers and employees – as is more common in many foreign countries.

There are still two ways of employing foreign citizens in Hungary: they can sign a local employment contract in Hungary, or the employer issues an assignment letter, in which case the Hungarian rules do not apply to the employee.

But there is one change that is expected to make the life of both employers and employees simpler: the new Labor Code makes multiple employments possible.

“This used to be a problem before for multinational companies. If an employee held a regional position, being responsible for several European countries, the employment contract was signed with only one subsidiary – in the rest of the countries, the employee had to sign part-time contracts,” László Szűcs of Réti, Antall & Partners Law Firm at PwC Hungary explained.

Now, an employee can have more than one employer, while he or she receives wages only from one employer. The new law also makes it possible for taxes to be paid in a different country to the actual place of work.

“Thus it can happen that an employee in a regional

position will receive his or her salary from Slovakia, but has an employment contract in Hungary too, and pays taxes in Poland,” Szűcs noted.

Wages still have to be paid in the Hungarian currency, provided that the employee receives his or her wages in Hungary. Otherwise, they can be paid in euros.

EXECUTIVES’ CONTRACT The new Labor Code leaves an executive’s working contract basically unchanged.

Such contracts are still based on mutual agreement and can be quite flexible.

The current legislation defines executive employees as the head of the employer and his/her deputies, but the new law may classify other

FOREIGN EMPLOYEES WORKING IN HUNGARY WILL FIND THESE CONDITIONS MORE FAMILIAR employees as executives with the same rights and obligations if they are in key positions and have a certain salary level.

Another change is that executives will have greater liability after the new legislation takes effect. Earlier, the liability of an executive was limited to a degree, related to his or her work description.

“Unlimited liability is

something foreign employees are familiar with, as labor codes in most countries include such passages,” Szűcs said. “The insurance sector has built a whole new industry around it, and this is expected to happen in Hungary with the introduction of the new legislation.”

Part of the legislation that concerns permissions for employees from countries outside of the EU have not

altered; they still need residence and employment permits and their local employment will run for the term of validity of their permits.

But rules about terminating employment relationship have been modified.

TERMINATION As before, the employment relationship can be terminated by mutual agreement, by ordinary notice, and by termination with immediate effect. But according to the new rules, fixed-term employment can also be terminated by (ordinary) notice in the following cases: during bankruptcy and liquidation proceedings; grounds based on the incapacity of the employees; and if the maintenance of the employment becomes impossible due to external reason out of the parties’ control.

Further new features are that employees may terminate fixed-term employment by ordinary notice if maintenance of the job becomes impossible or disproportionally difficult with respect to the employee’s circumstances.

The new protection system has three categories; a prohibition on termination, protection against termination, and limitation on termination.

Other new termination rules include a prohibition on termination during pregnancy and human reproduction treatment only if the employer was informed before the handover of the termination notice. The notice period cannot be longer than six months, and the exercise of the right of ordinary notice can be excluded for one year from the commencement of the employment.

Also, termination during the probationary period is categorized as a termination with immediate effect.

There is no significant change relating to collec-

tive redundancy (it is clear from the Labor Code that the employer shall negotiate with the workers’ council and not with a trade union).

CONSEQUENCES OF TERMINATION The consequences of unlawful termination will change as well. Employment will now terminate with the original notice and not with the binding judgment (as the current law stipulates). The employer will be obliged to pay the arrears of salary for the employee but the amount of the salary will be limited to an amount equal to 12 months of salary.

Further compensation can only be paid if the employee proves it is justified. The current legislation says that in addition to any compensation – which is equal to an average of 2-12 months of salary – the employer also has to pay the arrears of salary for the duration of the judicial process.

WORKING HOURS As for working hours, the new legislation offers more possibilities. The new law states ordinary working hours on Sunday if a person is employed in a job operating on Sundays due to its function, in seasonal work, in working order without interruption, in shift work, in on-call duty, in a part time job exclusively on Saturdays and Sundays, to fulfill common needs or to provide services abroad, and temporarily abroad.

VACATION The rules regarding vacation periods will also change. In general, the new code allows more f lexible allocation of vacation.

“It has been a problem for foreigners, as the Hungarian legislation was not in line with many Western European countries’ rules,” Szűcs explained. “With the new law, foreign employees working in Hungary will find these conditions more familiar as they will be similar to what they experienced in their mother countries.”

According to the new rules, employees will have more freedom to negotiate about their vacation allocation: upon agreement with the employer, one third of the vacation days may be carried over to the following year. ■

WWW.BBJ.HU

17

Budapest Business Journal | Apr 20 – May 03

Purpose, passion, mission John Baldoni leadership coach guru comes to Budapest BBJ JUDIT ÁBRI

Leadership excellence and coaching – I am passionate about them. Fortunately enough, they complement each other so my passions are also time saving. When leaders lead and coaches coach they practice very similar professions: they allow others to reach their golas.

It had not taken too much time to realize that I needed my coach and leader as well to coach me about coaching...

Wouldn’t it be great to learn in person from those who coach, educate Fortune 500 leaders?

Of course it would.

I fulfilled my mission when I invited John Baldoni, all the way from Ann Arbor, Michigan to meet us in Budapest.

I found John Baldoni on the official list of Top Leadership Gurus International prominently ranked 11 in 2011. Guru comes from Sanskrit language and means the wise one, i.e. the guy with a beard on the perifery of the village telling us the supercool. “I have been on the Gurus List since 2007.

The guru is an honorific. It’s fun to acknowledge but not much else,” he told me with honest shyness.

He has 10 best selling books under his belt. “Lead your Boss” is one of his masterpieces translated to Hungarian, Vietnamese, Thai, Korean, Mandarin, Japanese and many more to spread his wisdom all over the world. “Having a book translated into another language is always a thrill. It means that people from other cultures who speak another language believe that what I have written is valuable to them. That is a true honor,” says Baldoni.

Influencing without authority, applying power appropriately, leading with grace and conviction, and developing genuine followers form the core of his complex science, which he distilled in his last book, “Lead with Purpose, Giving Your Organization a Reason to Believe in Itself”.

The book concentrates on a fundamental principle: purpose. “Purpose is an inner compass that points us in the right direction... There are relatively few resources on how to discover purpose and apply it to an organization. My challenge

was to show organizations how they could unlock the purpose of their organizations and put it to good use for employees to apply to their own jobs. The net effect is to help individuals, teams and organizations to optimize performance by understanding how to use purpose for good intention.”

Join Baldoni’s workshop in Budapest on May 10 and you will hear more about it. “Purpose is the catalyst for the organization. It provides the why and the how. Why is what we want to achieve. How is the means by which we will do it.

Defining these words becomes the impetus for action. Purpose

I DEVELOP MYSELF BY LISTENING AND LEARNING FROM PEOPLE I COACH is also the trigger for vision, mission and values. Vision is what you aspire to achieve; it is the process of becoming. Mission is what you do; it is the process of doing. Values are what hold the organization together; it is the foundation for individual and corporate accountability. Knowing your purpose provides clarity. Leaders must work hard to connect the dots between what an individual does and how that enables the organization to succeed.”

Leadership is connected to communication. No surprise that Baldoni started his own carrier in the communication industry working with senior leaders in a variety of different business sectors. Recognizing another burning need he

decided that instead of helping them in developing messages shaping their lives their lives by teaching, coaching and writing would be more useful, as – even though the importance of communication remins unimpeachable – it does not replace action. Leaders’ deeds carry the burden of responsibility and importance if one wants to determine him or herself as a serious head of operations. Altogether words and deeds must be consistent.

“Three [things] leaders must do: be seen, be heard, be there.

One, let people know you are around. Two, connect the dots between purpose and work and listen, listen, listen. Three, be available to do whatever the organization needs you to do.

That’s leadership.

“I develop myself by listening and learning from people I teach and coach. I also read widely and take advantage of new opportunities, such as traveling to Hungary. Travel is a fine teacher because it puts you in an environment that is new and different and it opens our perspective, if we pay attention.” ■ Judit Ábri von Bartheld Executive coach and communication advisor ICF accredited coach Organizer of the international event series “Coaching Without Borders”

18 2 BusinessPartnerWatch BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 20 – May 03

Temp agencies NO. OF OFFICES IN HUNGARY OF THESE, OUTSIDE BUDAPEST WORLDWIDE

38,000

14 12 14

TRENKWALDER KFT www.trenkwalder.com 1

21,580,607

25,318

9,300 12,875

95

5

70

30

» » » » » » » »

PROHUMÁN KFT www.prohuman.hu 4,820,600

2

5,759

5,505 3,951

13,163

» »

4,512

» »

75

25

60

40

20

10

8

7

18

32

0

5

»

»

NO. OF FULL-TIME EMPLOYEES ON MARCH 1, 2012

NO. OF PEOPLE IN DATABASE ON MARCH 1, 2012 76,000

20 17 350

MAIN CLIENTS IN 2011

OTHER

LEGAL

INDUSTRIAL

SALES AND MARKETING

IT

TECHNICAL

FINANCE

BREAKDOWN OF TEMPS SUPPLIED

BY SECTOR (%)

CLERICAL

WHITE-COLLAR

BREAKDOWN BY TYPE OF WORK (%)

BLUE-COLLAR

PERMANENT

BREAKDOWN OF PLACEMENTS BY LENGTH (%)

TEMPORARY

TOTAL NUMBER OF TEMPORARY WORKFORCE IN 2011 NUMBER OF NEW TEMPORARY WORKFORCE IN 2011

TOTAL NET REVENUE (HUF MLN) 2011

COMPANY WEBSITE

HOURS BILLED 2011

RANK

Ranked by hours billed in 2011

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

131

Tamás Szabó (10) Trenkwalder International AG (90)

Tamás Szabó Bernhardt Rainer Balázs Köves

1062 Budapest, Aradi utca 8–10.

(1) 354-0933 (1) 302-7589 infohungary@ trenkwalder.com

94

Béla Ignácz, Profólió Csongor Menedzsment Juhász, Kft (100) Sándor Zakor – – –

1146 Budapest, Hungária körút 140-144.

(1) 432-1280 (1) 432-1281 prohuman@ prohuman.hu

80

– Ottó Vég Adecco Anikó Törőcsik SA (98.47), – Adecco GmbH (1.53)

1134 Budapest, Váci út 45.

(1) 323-3500 (1) 323-3529 adehuadeccodl@ adecco.com

118

Grosvenor Kft (97.80), other (2.20) –

Tamás Homonnay Imre Molnár Péter Lippkai

1114 Budapest, Bartók Béla út 15/D (96) 508-000 (96) 508-001 pannonwork@ pannonwork.hu

István Medvegy, Rajmund Dénes, Zsolt Csaplár – –

1072 Budapest, Dob utca 20.

(1) 877-0900 (1) 877-0910 info@humancentrum.hu

ADECCO KFT www.adecco.hu 4,535,733

3

»

»

»

»

» » » » » » » » 100,000

14 10 5,500

»

PANNON-WORK ZRT www.pannonwork.hu 3,029,046

4

»

»

76

24

» » » » » » » »

13,000

»

38

(100) –

3

65,630

6 4 6

IBM, NCR, Unilever, Sapa, Emerson, Telenor, Kincstárház, Vodafone

94

Videoton Holding Zrt (100) –

Touré Fatime, Attila Molnár Anikó Bánhidi Ilona Kovács

8000 Székesfehérvár, Berényi út 72–100.

(22) 554-170 (22) 554-191 info@pannonjob.hu

0

55,000

6 5 6

»

64

Róbert Csákvári (100) –

Róbert Csákvári – –

3526 Miskolc, Szentpéteri kapu 80.

(1) 312-3729 (1) 354-3436 titkarsag@work-force.hu

2,959

20

80

65

35

9

4

6

8

7

60

–

6

2,333,784

4,356

2,548 1,410

28

72

39

61

3

–

20

40

15

19

–

2,225,880

3,017

1,300 2,709

100

0

75

25

15

5

5

0

0

75

0

5

2,395,000

6

PANNONJOB KFT www.pannonjob.hu

»

17 16 17

925 1,097

HUMÁN CENTRUM KFT www.humancentrum.hu

»

21 20 25

WORK FORCE KFT www.work-force.hu

7

Velünk minden HR-kérdés a helyére kerül!

Munkaerő-kölcsönzés • Munkaerő-közvetítés • Munkaerő-kihelyezés Bérszámfejtés bérmunkában • Cafeteria management • Munkajogi és munkaügyi tanácsadás • HR-outsourcing • Diákmunka

Az ország egyik legnagyobb HR szolgáltatójaként Önnek is szívesen segítünk emberi megoldásainkkal. Hatékony és rugalmas szolgáltatásainkat az egész országban igénybe veheti. www.prohuman.hu

WWW.BBJ.HU

19

SALES AND MARKETING

INDUSTRIAL

LEGAL

OTHER

76

24

24

5

–

5

–

66

–

–

25

75

50

50

45

5

1

2

2

45

0

0

NO. OF FULL-TIME EMPLOYEES ON MARCH 1, 2012

IT

8

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

61

– Kelly Services Inc. (96.70), Kelly Properties Inc. (3.30)

Anikó Jónás Mariann H. Tóth Szilvia Varga

1062 Budapest, Aradi utca 8–10.

(1) 354-2770 (1) 354-2771 info@kellyservices.hu

33

László Mátyás (80), Imre Papp (10), Erika Dékány (10) –

Imre Papp Erika Dékány Mátyás Pintér

4024 Debrecen, Batthyány utca 10.

(52) 316-242 (52) 530-965 job@hsakft.hu

54

– Grafton Recruitment B.V. (75), Niall Keyes (25)

Tamás Fehér – –

1053 Budapest, Károlyi M. utca 12.

(1) 235-2600 (1) 235-2601 info@grafton.hu

Attila Dobár, Botond Csordás György Thury –

1094 Budapest, Angyal utca 24.

(1) 239-9922 (1) 239-9926 job@job.hu

NO. OF OFFICES IN HUNGARY OF THESE, OUTSIDE BUDAPEST WORLDWIDE

TECHNICAL

92

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

NO. OF PEOPLE IN DATABASE ON MARCH 1, 2012

FINANCE

1,617

853 581

914,544

CLERICAL

1,077

890 124

WHITE-COLLAR

2,545 1,163

BREAKDOWN OF TEMPS SUPPLIED

BY SECTOR (%)

BLUE-COLLAR

2,957

BREAKDOWN BY TYPE OF WORK (%)

PERMANENT

9

HUMAN SERVICE AGENCY www.hsakft.hu

1,360,252

BREAKDOWN OF PLACEMENTS BY LENGTH (%)

TEMPORARY

KELLY SERVICES HUNGARY KFT www.kellyservices.hu

TOTAL NUMBER OF TEMPORARY WORKFORCE IN 2011 NUMBER OF NEW TEMPORARY WORKFORCE IN 2011

8

TOTAL NET REVENUE (HUF MLN) 2011

COMPANY WEBSITE

HOURS BILLED 2011

RANK

Budapest Business Journal | Apr 20 – May 03

MAIN CLIENTS IN 2011

85,269

1 – 3,600

»

12,527

7 6 7

Tigáz Zrt, E-on Hungária, Curver Magyarország Kft, IT Services Hungary Kft, Bumet Hungary Kft

54,480

2 1 70

»

Samsung, Ford, Robert Bosch, Telenor, Industrial Technique

20

László Hadi (54), Attila Dobár (16), Botond Csordás (30) –

Diageo, DuPont, Kraft Foods, NEC

12

Magánszemélyek (100) –

Tímea Bíró – –

1092 Budapest, Ráday utca 51.

(1) 336-2910 (1) 336-2911 info@focusconsulting.hu

70

– Randstad Holding N.V. (100)

Sándor Baja Stef Leijdekkers Balázs Varga

1024 Budapest, Lövőház utca 39.

(1) 411-2090 (1) 411-2091 info@randstad.hu

Róbert Laczai – –

1111 Budapest, Bartók Béla út 4. 4. em. 7 (1) 279-0862 (1) 209-7444 info@atwork.hu

GRAFTON RECRUITMENT KFT www.grafton.hu 435,344

10

75

25

35

65

40

10

4

7

4

35

–

–

JOB KFT www.jobgroup.hu 11

12

13

FOCUS CONSULTING KFT www.focusconsulting.hu

RANDSTAD HUNGARY KFT www.randstad.hu

80

20

5

95

20

15

25

20

10

5

–

5

108,000

1 – 1

60

40

–

100

40

40

–

5

15

–

–

–

65,000

1 – 1

311,142

904

353 197

69,000

345

33 64

2,334

545 335

20

80

–

100

40

20

20

20

–

–

–

–

20

10

–

–

–

–

–

50,000

»

»

5

95

1 – 4,195

»

3000

1 – 1

GSK, MSD, MOL, EDF, GDF

5

Róbert Laczai (100) –

38,432

1 – 1

»

6

Individuals (100) –

Krisztina Varga – –

1083 Budapest, József körút 53.

(1) 411-0055 (1) 267-0942 workplus@workplus.hu

2 1 –

»

»

Péter Baldaszti (100) –

Péter Baldaszti – –

1064 Budapest, Izabella utca 62–64.

(1) 413-7434 (1) 413-7435 info@doit-hr.com

»

440

(100) –

Zoltán Márkus – Marianna Baksy

1118 Budapes, Előpatak utca 78.

(1) 248-2010 (1) 248-2016 info@humaniakft.hu

55

– Manpower France SARL (100)

Judit Kiss Boher Ákos Vidovics Katalin Szekeres

1133 Budapest, Váci út 76., Capital Square (1) 411-1590 (1) 266-0536 manpower@ manpower.hu

6

Mónika Tóth (100) –

Mónika Tóth – –

1015 Budapest, Hattyú utca 14.

(1) 224-9030 (1) 224-9005 cv@personnel.hu

»

Zsuzsanna Németh (30), J-Tools Kft (55) Norval Kennedy Sinclair (15)

Zsuzsanna Németh – –

1016 Budapest, Hegyalja út 22.

(1) 453-2000 (1) 453-2004 office@select.hu

60

Attila Pál (100) –

Mariann Tál Attila Szabó Orsolya Varga

1027 Budapest, Henger utca 2/B (1) 214-0657 (1) 214-0658 ventiv@ventiv.hu

» » » » » » » » 210,185

14

AT WORK CONSULTING AND SERVICES KFT www.atwork.hu

20,000

116

10 3

15

WORKPLUS KFT www.workplus.hu

7,456

72

15 7

15

85

10

90

70

NR

DOIT.HR HUNGARY KFT www.doit-hr.com

»

»

» »

»

»

»

»

» » » » » » » »

»

NR

HUMÁNIA SZEMÉLYZETI TANÁCSADÓ ÉS SZOLGÁLTATÓ KFT www.humaniakft.hu

»

3,393

» »

»

»

90

10

» » » » » » » »

13,000

NR

MANPOWER KFT www.manpower.hu

P&P PERSONNEL NR LEASING KFT www.personnel.hu

SELECT NR HUMÁNERŐFORRÁS KFT www.select.hu

VENTIV KFT NR www.ventiv.hu

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

»

»

»

»

»

» »

»

» »

101

» »

1,920

» »

56

30

»

44

70

»

86

–

»

14

100

»

» » » » » » » »

50

18

2

1

20

5

–

4

» » » » » » » »

7 6

»

25,000

7 6 3,900

38,000

1 – 1

»

» »

»

»

»

605

53

47

–

100

48

3

–

9

28

–

3

9

23,000

1 – 1

Lilly, Amgen, Servier, Leo Pharma, BoehringerIngelheim

This list was compiled from responses to questionnaires received by April 18 , 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

20 2 BusinessTrends BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 20 – May 03

Pharma reps

Flexible workplaces

Training tenders

Layoffs end

Greater flexibility in work schedules has proven to be more productive.

Record amount available via new tender

The Hungarian pharmaceutical industry may have put behind it an action-packed 2011 but is once again facing a new year full of challenges.

According to new regulations that came into effect in mid-2011, the obligatory contribution from the turnover of pharma products was raised from 12% to 20%, while the resources invested in personal meetings are being cut back due to other “special taxes”, as a recent Szinapszis survey shows.

Current changes include increased registration fees (from a yearly HUF 5 million to HUF 10 million) for medical and pharmaceutical sales representatives, which is reshaping the interior operations and marketing strategies of health care and pharmaceutical companies. The fee hike instantly triggered mass layoffs among professionals, with even the biggest pharma companies hit. Sanofi-aventis, for example, laid off most of its reps and also ceased research activities in Hungary.

According to a fresh report by the National Institute for Quality and Organizational Development in Health care and Medicines (Gyemszi), the companies with the largest sales rep networks are Richter (176), Teva (126), Krka (124) and Egis (112).

Decision makers from the pharma sector indicated, however, that most of the layoffs have already been made and very few further negative changes are expected on the job market.

Additionally, an important trend on the Hungarian Since November 2003, medical scene is an increase in digital sales representatives have to be registered at the National services, together with the Institute of Pharmacy (now part increasingly important HR of Gyemszi) and must have a support for current staff. photo ID to legally work. At the The parallel use of personal peak, in 2006, there were 2,772 meetings and alternative registered reps in the country. sales tools requires proper introduction and training of reps so that they don’t treat technology as an enemy but a partner. AJM

2,772

51%

Flexible working has advantages that are already being experienced by many companies and employees worldwide. According to a study conducted by Regus, a global provider of flexible workplaces, this method of working not only creates an energized, motivated staff, but also has additional benefits for businesses, which can use the approach to overcome barriers to growth.

Of the 16,000 senior managers and business owners queried worldwide, 72% reported increased productivity and 68% declared increased revenues as a direct result of flexible working practices. Small businesses and emerging economies are especially convinced that flexibility can be a key part of their development.

Working from outside the office or regular office hours is attractive to employees, with 63% saying they feel more energized and motivated, meaning flexibility is also a great way to retain talent.

Meanwhile, 51% of companies said they plan to hire freelancers in the near future, but even more, 80% are sure there will be increasing demand for a flexible work environment for large amounts of people who want part-time jobs.

According to a study conducted by pollster Ipsos in January 2012, only 1% of Hungarian respondents work from home on a daily basis, while a total of 8% work this way either on a regular or occasional schedule; however, more than one third would be ready do take on teleworking full time. For the first time this year, on April 21, Hungary joined a global initiative called “Home Office The results of a March 2011 Day” (“Dolgozz Otthonról survey by Regus showed that flexible working practices had Nap”), supported by Telenor, become a mainstream solution Microsoft and WWF Hungary. to containing costs and boosting This aims to influence as profitability, with 81% of firms many Hungarian employers globally offering their employees as possible (mainly those who a certain level of choice about employ white-collar workers) when and where they work. to make working from home possible for their employees and spread the idea of flexible working. AJM

81%

21bln

OF FIRMS PLAN TO HIRE MORE FREELANCERS

IS AVAILABLE FOR TRAINING

As in almost every year, there will again be a tender in 2012 for the training of employees of SMEs and large corporations, but the conditions have been modified to be more favorable and to more effectively boost competitiveness.

With the elimination of the contribution that companies could choose to spend on training, there was a need for a way to finance employeetraining programs at the workplace. The National Development Agency (NFÜ) predicts that applications for funds will mostly come from the central region of the country, and from large enterprises. The new tender call does not have any geographical restrictions, so companies with sites in Budapest or Pest County can also apply, from May 1, 2012 - the previous years saw several companies left out of tender opportunities because of their place of operations.

Nonetheless, enterprises outside the central Hungarian region are still a preferred target for attracting new developments: the call has a budget of HUF 6 billion for micro- and smallsized enterprises and HUF 8 billion for mediumsized business. In central Hungary, micro-, smalland medium-sized enterprises can apply for HUF 300 million in funds, while large corporations are offered HUF 400 million. Another easing in conditions this year is that an assigned business development EU tender will not be a precondition to applying in a training tender, again granting the chance for many more enterprises to apply, while the ratio of financial support can reach up Last year the training tenders to 100% of training costs. of the New Széchenyi Plan supported the workplace learning The types of supported of micro-, small and medium training are unchanged: enterprises and also helped crossprofessional and business border cooperation in the fields operation trainings language of vocational and adult training, and computing courses are all the development of the capacities among the options. The new of employee representations and calls could give a boost to the self-employment. training market as well, which has long been suffering from the effects of the crisis. AJM

750 mln

HUF

1,820

THE NUMBER OF PHARMA REPS IN HUNGARY

[ EXPERT OPINION ]

Safeguarding your key asset cost more MÁRIA MOLNÁR Payroll Supervisor

Upon introduction, about 15 years ago, many companies were reluctant to implement the Cafeteria system. But it has become a settled system and, as such, one of the generally accepted compensation tools, and has often been used by employers for motivation purposes.

This year’s legislation has caused disturbances in the system.

On one hand, the administrative burden increased as the benefits now have to be administered again in an itemized way by title, by group, by item and in aggregate. On the other hand, the fringe benefits mean increased costs for employers in comparison to those of last year.

The fringe benefits system changed several times in accordance with the priorities of the actual government. Currently domestic tourism seems to be motivated and stimulated as all three sub-accounts of the SZÉP Card (accommodation, catering, leisure) can be utilized for locally available accommodation services, beside the normal function of the sub-account. While the effort is to be evaluated, some of the card holders scarcely want to spend their free-time in village tourism, but instead would rather purchase basic commodities. This is to indicate that the former voucher

users and the current target card-holders are not overlapping.

Furthermore, it takes almost one month from the date of signing the contract with one of the commercial banks before employees can have the “SZÉP” card. Activating the card is not smooth and precise either.

In comparison, the order process of the Erzsébet voucher is easier, but can be utilized at only few affiliated partners.

As a result of this years’ changes, existing Cafeteria policies have to be significantly modified which lead to additional administration time and costs. Apart from the partially old, partially new general rules, specifics shall be included for cases when, for example, an employee leaves unexpectedly and has in the meantime used more benefits than he or she would be entitled to on a time

proportionate basis. Such a situation may lead to increased tax liabilities for the employer.

Today’s HR managers need more creativity to replace the former attractiveness of the meal and recreation vouchers with new methods and tools (beyond the fringe benefits) in order to strengthening employee loyalty and commitment. Trust, respect, fairness, and openness are the preferred professional and powerful means.

TMF Group operates successfully in 75 countries. Our office in Budapest provides payroll and HR administration.

TMF Hungary Ltd. Wesselényi u. 16., 3. em.

1077 Budapest T. +36 1 461 31 00 hungary@tmf-group.com www.tmf-group.com

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

2 BusinessPartnerWatch 21

BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 20 – May 03

Recruitment agencies TELECOM AND MEDIA

NO. OF PEOPLE IN DATABASE ON MARCH 1, 2012

NO. OF OFFICES WORLDWIDE YEAR ESTABLISHED

40

PHARMACEUTICALS

40

IT

5

30 461

20

SALES AND MARKETING

57 2,179

FMCG

–

MANUFACTURING

35

BANK AND FINANCE

35

OTHER

30

MIDDLE MANAGEMENT

OTHER

2,334

PERCENTAGE OF CANDIDATES PLACED IN 2011 (%)

TOP MANAGEMENT

PLACEMENT FROM DATABASE

1,009

NUMBER OF EMPLOYEES IN EXECUTIVE SEARCH AND CONSULTING ON MARCH 1, 2012.

NO. OF CANDIDATES PLACED IN 2011

ADVERTISING

RANDSTAD HUNGARY KFT www.randstad.hu

BREAKDOWN BY SEARCH METHODS (%)

DIRECT SEARCH

1

TOTAL NET REVENUE (HUF MLN) 2011

COMPANY WEBSITE

NET REVENUE FROM PERMANENT PLACEMENTS (HUF MLN) 2011

RANK

Ranked by net revenue from permanent placements

210,185

4,195 2004

INDUSTRY SPECIALIZATION

GUARANTEE PERIOD SEARCH TIME

3-6 months 2-8 weeks

69

3-6 months 1-8 weeks

OWNERSHIP TOP LOCAL (%) EXECUTIVE MAIN CLIENTS HUNGARIAN CFO IN 2011 NONMARKETING HUNGARIAN DIRECTOR

Sándor Baja Stef Leijdekkers Balázs Varga

1024 Budapest, Lövőház utca 39.

(1) 411-2090 (1) 411-2091 info@randstad.hu

»

– Tamás Fehér Grafton – Recruitment – B.V. (75), Niall Keyes (25)

1053 Budapest, Károlyi M. utca 12.

(1) 235-2600 (1) 235-2601 info@grafton.hu

»

– Kelly Services Inc. (96.70), Kelly Properties Inc. (3.30)

Anikó Jónás Mariann H. Tóth Szilvia Varga

1062 Budapest, Aradi utca 8–10.

(1) 354-2770 (1) 354-2771 info@kellyservices.hu

»

– Hays Plc. (100)

Tammy NagyStellini Aleksandra Keller Judit Üveges

1062 Budapest, Teréz körút 55–57.

(1) 501-2400 (1) 501-2402 hungary@hays.hu

–

GRAFTON RECRUITMENT KFT www.grafton.hu 641

2

3

KELLY SERVICES HUNGARY KFT www.kellyservices.hu

275

1,617

2,957

20

23

35

57

40

15

5

HAYS HUNGARY KFT[1] www.hays.hu 4

270

287

20

40

40

–

31 366

21

»

13

4.60

20

18

12

60

83.40

2-4 months 2-5 weeks

20

3-6 months 1-6 weeks

–

–

–

–

54,480

70 1996

85,269

3,600 2004

»

257 2007

ADDRESS PHONE FAX EMAIL

– Randstad Holding N.V. (100)

22 2 BusinessPartnerWatch

WWW.BBJ.HU

NO. OF OFFICES WORLDWIDE YEAR ESTABLISHED

TELECOM AND MEDIA

PHARMACEUTICALS

IT

SALES AND MARKETING

FMCG

MANUFACTURING

GUARANTEE PERIOD SEARCH TIME

BANK AND FINANCE

INDUSTRY SPECIALIZATION

OTHER

MIDDLE MANAGEMENT

TOP MANAGEMENT

PERCENTAGE OF CANDIDATES PLACED IN 2011 (%)

NO. OF PEOPLE IN DATABASE ON MARCH 1, 2012

Budapest Business Journal | Apr 20 – May 03

NUMBER OF EMPLOYEES IN EXECUTIVE SEARCH AND CONSULTING ON MARCH 1, 2012.

NO. OF CANDIDATES PLACED IN 2011

OTHER

PLACEMENT FROM DATABASE

ADVERTISING

BREAKDOWN BY SEARCH METHODS (%)

DIRECT SEARCH

TOTAL NET REVENUE (HUF MLN) 2011

COMPANY WEBSITE

NET REVENUE FROM PERMANENT PLACEMENTS (HUF MLN) 2011

RANK

BBJ

100,000

55,000 1991

IBM, Citigroup, Sapa, Continental, Flextronics

– Adecco SA (98.47), Adecco GmbH (1.53)

Ottó Vég Anikó Törőcsik –

1134 Budapest, Váci út 45.

(1) 323-3500 (1) 323-3529 adehuadeccodl@ adecco.com

65,000

1 1997

Diageo, Aegon, Morgan Stanley, Walt Disney Internet Group, Kraft Foods

Magánszemélyek (100) –

Tímea Bíró – –

1092 Budapest, Ráday utca 51.

(1) 336-2910 (1) 336-2911 info@ focusconsulting.hu

14 2004

AFL Hungary Kft, BORGWarner TurboSystems, Caterpillar, CIB Bank Zrt, DHL Global Forwarding, FHB Group, Magyar Telekom Nyrt, MKB Bank Zrt, Unilever Magyarország Kft etc.

Profólió Menedzsment Kft (100) –

Béla Ignácz, Csongor Juhász, Sándor Zakor – –

1146 Budapest, Hungária körút 140–144.

(1) 432-1280 (1) 432-1281 prohuman@ prohuman.hu

Tamás Szabó Bernhardt Rainer Balázs Köves

1062 Budapest, Aradi utca 8–10.

(1) 354-0933 (1) 302-7589 infohungary@ trenkwalder.com

OWNERSHIP TOP LOCAL (%) EXECUTIVE MAIN CLIENTS HUNGARIAN CFO IN 2011 NONMARKETING HUNGARIAN DIRECTOR

ADECCO KFT www.adecco.hu 5

6

236

FOCUS CONSULTING KFT www.focusconsulting.hu

217

13,163

345

50

40

20

20

20

35

10

25 650

5

12 85

10

10

30

30

60

3-6 months 1-6 weeks

60

3-6 months 2-6 weeks

–

PROHUMÁN KFT www.prohuman.hu 183

7

5,759

25

20

50

5

12 325

9

57

34

3-9 months 3-6 weeks

–

53,000

TRENKWALDER KFT www.trenkwalder.com 181

8

25,318

20

35

35

10

23 379

20

16 260

»

»

»

3-9 months 1-6 weeks

78

3-6 months 1-3 weeks

76,000

350 1995

»

Tamás Szabó (10) Trenkwalder International AG (90)

40,000

1 2002

Continental, Gránit, Hankook, IBM, Lear, Lego, Nestlé, Reckitt, Schlumberger

Péter Tokár (97.2), Tamás Tokár (2.8) –

Péter Tokár – –

1096 Budapest, Thaly Kálmán utca 39.

(1) 279-0707 (1) 466-0549 info@tesk.hu

1037 Budapest, Montevideo utca 16/B (1) 439-2940 (1) 439-2963 office@itjobs.hu

TESK CONSULTING LTD www.tesk.hu 175

9

320

10

50

20

2

20

–

–

–

ITJOBS SZEMÉLYZETI TANÁCSADÓ KFT www.itjobs.hu 170

10

205

30

30

40

–

15 333

5

20

75

3-6 months 2-8 weeks

60,000

4 2001

»

(100) –

Zsuzsa Gárdus – –

1 2000

CIB Bank, MKB Bank, McKinsey & Company, Vodafone Hungary, Lufthansa Systems Hungária Kft, Evosoft Hungary Kft

Balázs Majer (50), Dávid Pelle (50) –

Balázs Majer, Dávid Pelle – –

1053 Budapest, Károlyi Mihály utca 17.

(1) 429-0029 (1) 429-0030 info@mphil.hu

6 1993

IBM, NCR, Unilever, Sapa, Emerson, Telenor, Kincstárház, Vodafone

Videoton Holding Zrt (100) –

Touré Fatime, Attila Molnár Anikó Bánhidi Ilona Kovács

8000 Székesfehérvár, Berényi út 72–100.

(22) 554-170 (22) 554-191 info@pannonjob.hu

1 1992

Samsung, Ford, Robert Bosch, Telenor, Citibank, Iron Mountain

MP SOLUTIONS KFT www.mphil.hu 73

11

12

PANNONJOB KFT www.pannonjob.hu

69

73

4,356

70

5

20

40

10

55

–

–

9 60

36 2,716

10

2.0

30

9.50

60

88.50

1-6 months 1-5 weeks

65

1-12 months 0.5-4 weeks

JOB KFT www.jobgroup.hu 66

13

14

AHC INTERNATIONAL PERSONNEL CONSULTING KFT www.ahc-international.hu

60

904

62

25

20

50

70

25

10

–

–

8 322

4 81

5

14

30

44

3-6 months 4-8 weeks

42

3-6 months 2 weeks

–

–

–

–

–

–

–

–

–

19,800

65,630

108,000

12,000

15

54

3,017

35

28

35

2

10

40

50

3-6 months 1-6 weeks

50,500

László Hadi Attila Dobár, (54), Attila Botond Dobár (16), Csordás Botond CsorGyörgy Thury dás (30) – –

3 1993

»

Lászlóné Dorozsmai (40), Réka DorozsmaiGallasz (20) Udo M. Chisteé (40)

5 2003

Brose Hungary Automotive Kft, Carrier CR Magyarország Kft, Swarovski Ag., Diebold Hungary Önkiszolgáló megoldások Kft, Knorr Bremse Fékrendszerek Kft, Jabil Circuit Magyarország Kft, EMEA Távolsági Szolgáltató Zrt

Róbert Csákvári (100) –

WORK FORCE KFT www.work-force.hu

7 120

ADDRESS PHONE FAX EMAIL

1094 Budapest, Angyal utca 24.

(1) 239-9922 (1) 239-9926 job@job.hu

Lászlóné Dorozsmai – –

1065 Budapest, Bajcsy-Zsilinszky út 53.

(1) 316-2800 (1) 374-0943 ahc.budapest@ ahc-international.hu

Róbert Csákvári – –

3526 Miskolc, Szentpéteri kapu 80.

(1) 312-3729 (1) 354-3436 titkarsag@ work-force.hu

WWW.BBJ.HU

23 NO. OF PEOPLE IN DATABASE ON MARCH 1, 2012

NO. OF OFFICES WORLDWIDE YEAR ESTABLISHED

TELECOM AND MEDIA

PHARMACEUTICALS

IT

SALES AND MARKETING

FMCG

MANUFACTURING

GUARANTEE PERIOD SEARCH TIME

BANK AND FINANCE

INDUSTRY SPECIALIZATION

OTHER

MIDDLE MANAGEMENT

PERCENTAGE OF CANDIDATES PLACED IN 2011 (%)

TOP MANAGEMENT

NUMBER OF EMPLOYEES IN EXECUTIVE SEARCH AND CONSULTING ON MARCH 1, 2012.

NO. OF CANDIDATES PLACED IN 2011

OTHER

PLACEMENT FROM DATABASE

ADVERTISING

BREAKDOWN BY SEARCH METHODS (%)

DIRECT SEARCH

TOTAL NET REVENUE (HUF MLN) 2011

COMPANY WEBSITE

NET REVENUE FROM PERMANENT PLACEMENTS (HUF MLN) 2011

RANK

Budapest Business Journal | Apr 20 – May 03

23,500

18 2000

OWNERSHIP TOP LOCAL (%) EXECUTIVE MAIN CLIENTS HUNGARIAN CFO IN 2011 NONMARKETING HUNGARIAN DIRECTOR

PANNON-WORK ZRT www.pannonwork.hu 16

17

42

HUMÁN CENTRUM KFT www.humancentrum.hu

41

4,512

2,959

10

10

60

40

30

40

–

118 3,576

10

38 163

–

6 64

2

10

30

30

68

0-6 months 1-4 weeks

1960

3-6 months 2-6 weeks

30

3-6 months 1-3 weeks

–

–

13,000

18 1993

38,432

1 1989

ADDRESS PHONE FAX EMAIL

Grosvenor Kft. (97.80), other (2.20) –

Tamás Homonnay Imre Molnár Péter Lippkai

1114 Budapest, Bartók Béla út 15/D (96) 508-000 (96) 508-001 pannonwork@ pannonwork.hu

»

(100) –

István Medvegy, Rajmund Dénes, Zsolt Csaplár – –

1072 Budapest, Dob utca 20.

(1) 877-0900 (1) 877-0910 info@ humancentrum.hu

»

Individuals (100) –

Krisztina Varga – –

1083 Budapest, József körút 53.

(1) 411-0055 (1) 267-0942 workplus@ workplus.hu

Judit Kósa Beáta Korb Zoltán Paár

1124 Budapest, Koszta J. utca 21.

(1) 309-5452 (1) 309-5453 ipconsulting@ t-online.hu

»

18

WORKPLUS KFT www.workplus.hu

19

IP PERSONNEL CONSULTING KFT www.ipconsulting.hu

21

21

30

35

35

–

5 20

5

45

50

3-6 months 3-6 months

15,000

5 1995

Woodward, FP Forward

Judit Kósa, Zoltán Paár (100) –

20

AT WORK CONSULTING AND SERVICES KFT www.atwork.hu

6

116

15

30

30

5

2 6

0

40

60

3-6 months 3-6 weeks

» » » » » » »

3,000

1 2001

GSK, MSD, MOL, EDF, GDF

Róbert Laczai (100) –

Róbert Laczai – –

1111 Budapest, Bartók Béla út 4.

(1) 279-0862 (1) 209-7444 info@atwork.hu

21

ACCESS RECRUITMENT HR CONSULTING www.job-center.hu

–

»

80

3-6 months 4 weeks

300,000

1 2011

»

Balázs Vadon (50), Barna Bertus (25), Judit Nagy (25) –

Balázs Vadon – –

1061 Budapest, Andrássy út 10.

(1) 302-0038 – info@job-center.hu

5

» »

»

3-6 months 1-4 weeks

»

4 2005

»

Péter Baldaszti (100) –

Péter Baldaszti – –

1064 Budapest, Izabella utca 62–64.

(1) 413-7434 (1) 413-7435 info@doit-hr.com

20

» »

»

3-6 months 2-6 weeks

»

1 2007

»

Beáta Fürjész (50), Gabriella Ruff Berzéthy (50) –

Gabriella Ruff Berzéthy Beáta Fürjész –

1065 Budapest, Révay utca 12.

(1) 354-2060 (1) 354-2061 info@ karrierhungaria.hu

»

– Manpower France SARL (100)

Judit Kiss Boher Ákos Vidovics Katalin Szekeres

1133 Budapest, Váci út 76.

Capital Square (1) 411-1590 (1) 266-0536 manpower@ manpower.hu

»

Attila Pál (100) –

Mariann Tál Attila Szabó Orsolya Varga

1027 Budapest, Henger utca 2/B (1) 214-0657 (1) 214-0658 ventiv@ventiv.hu

DOIT.HR HUNGARY KFT NR www.doit-hr.com

KARRIER HUNGÁRIA KFT NR www.karrierhungaria.hu

31

5

»

»

72

5

»

»

10

20

10

25

60

10

70

30

30

70

15

25

NR

MANPOWER KFT www.manpower.hu

»

»

5

40

45

10

NR

VENTIV KFT www.ventiv.hu

»

»

5

45

45

5

NOTES: (1) Data of business period July 1, 2010–June 30, 2011.

8

5

»

» »

45

10

»

»

10

»

25

10

»

»

50

»

–

–

–

–

–

–

–

» » » » » » »

40

3-6 months 1-6 weeks

»

3-4 months 1-6 weeks

–

–

–

–

–

25,000

3,900 1990

»

1 1995

24 2 BusinessInsurance BBJ

WWW.BBJ.HU

Budapest Business Journal | Apr 20 – May 03

Insurance companies struggle The Hungarian insurance market shrank further in 2011, making it three straight years of contraction. Insurers blame the decline on the economic downturn and the effects of the foreign currency-denominated mortgage repayment scheme.

They are, however, trying to remain positive and hope that domestic demand will somehow revive.

Hungarian insurers’ combined revenue from premiums dropped an inflationadjusted 2.7% to HUF 821 billion in 2011, according to the figures of the Association of Hungarian Insurance Companies (MABISz).

The number of policies fell by 60,000 to 11 million.

“We hope that after the deadline for the mortgage repayment program ends and families’ burdens decrease somewhat, the extra resources will be redirected to the insurance market and clients will be more willing to invest,” Uniqa CEO Othmar Michl told the Budapest Business Journal.

There is a huge difference between the life and nonlife segments, Groupama Garancia CEO Yann Ménétrier pointed out. While the former is relatively stable, the latter saw an almost 5% decrease in premium income last year. “This has not surprised us, as there is a strong correlation between the performance of the non-life segment and GDP growth in every European country,” he noted.

Unfortunately, the two main indicators that reflect the development of the nonlife segment are declining, said Ménétrier. For one, new car sales are still 50% lower than their pre-crisis levels and as the vehicles get older, the value to be insured decreases, he explained.

Hungary’s housing market, the other driver for the non-life segment, is declining too. Last year, 12,655

Market share by companies, 2011

■ Allianz ■ Generali-Providencia ■ Groupama ■ Aegon ■ ING ■ UNIQA ■ Hungarian Post Total ■ K&H ■ MPÉ Hungarian Post Life

new buildings were built, 39% less than in the previous year. The number of construction permits was 12,488, down 28% from 2010. The Central Statistical Office (KSH) described this low as “unprecedented” for Hungary.

Ménétrier expects the downward trend to continue, as most Hungarian households are struggling with financial difficulties.

Unfortunately, this results in cases where several families had to decide to cancel their home insurance contracts.

He added that insurers are also hit by fierce price competition in both segments.

In terms of insurance penetration, Hungary lags behind most EU countries, at only 3% compared to the EU average of around 7%, Ménétrier said. He believes that this tendency could be reversed only by a major government intervention to boost domestic spending, citing the example of another European government, which provided oneoff subsidies for the purchase of new cars.

KEEP THE FAITH When asked about his outlook for 2012, Ménétrier said he still hopes that the government will somehow try

■ CIG Pannónia Life ■ Union ■ AVIVA ■ AXA ■ Erste ■ Signal ■ Grawe ■ Others

Source: MABISz

BBJ GABRIELLA LOVAS

said Michl. The company will place greater emphasis on corporate clients by extending its range of insurance products for them.

to boost domestic consumption. He stressed that the sector needs a more predictable business environment, as insurance products are always long-term. In turn, market players could do without measures, e.g. solidarity tax, that make even recently made investments questionable, he added. In 2012, Ménétrier aims to keep Groupama Garancia’s current market share and foresees a slight increase in revenues and 10% growth in ROE. Uniqa aims to continue growing in 2012 by offering additional services to the 170,000 new clients it attracted during the latest car insurance campaign. Othmar Michl, the CEO of Uniqa Insurance Zrt, pointed out that the campaign is always a major event in the life of the company. He believes that initiatives such as offering an electronic discount contributed to this year’s success. The scheme, in which clients agree to correspond electronically when they sign their contracts, resulted in substantial savings for both clients and the company, he noted.

Uniqa will continue to focus on the strategically important life insurance business, in which it has managed to increase its share despite the declining market,

SELLING ONLINE Both companies plan to develop their online sales activities further by widening the range of products available. However, as both insurers experience strong demand for the professional help offered by their agents, they are aware that “an adviser cannot be replaced by a software”. Uniqa, for instance, is currently recruiting consultants.

Groupama Garancia has already signed several tens of thousands of contracts through its new online sales channel launched last year. For 2012, the company plans to sell new products online, including a home and accident insurance product, as well as thirdparty insurance. “However, it has a long way to go, as the vast majority of contracts are made through the network; the direct channel needs at least five years to reach a 10% share,” Ménétrier says. On the other hand, there are fields where personal counseling is demanded by the client. “Still, the online channel is an important way to retain customer loyalty, as it gives clients a chance to be more independent and to be better informed,” he stressed.

INSURERS AWAIT HEALTH SECTOR REFORM Besides the liberalization of the car insurance market, market players are also looking forward to the development of the health insurance sector. A change to the tax laws, under which health insurance premiums paid by employers in Hungary count as a tax-deductible expense as

COMPREHENSIVE LEGISLATION FINANCIAL AUTHORITY CALLS FOR NEW, UNIFIED REGULATIONS Financial market watchdog PSzÁF is promoting new comprehensive legislation on financial intermediaries, as the current regulations need to be revised in many ways, it told the BBJ. It is expected that regulations will be modified soon anyway, as the revision of the EU’s Insurance Mediation Directive (IMD2) has been on the agenda of the Commission for years. It is expected to release its first legislative proposals on IMD2 this month.

PSzÁF is urging the revision of rules concerning not only insurance brokers, but also the intermediaries of all financial products and services, as the laws in force are already outdated. Current laws regulate only insurance brokers, while intermediaries have become active in other areas in the meantime. In 2009, this issue was partly handled in the sector of credit institutions, PSzÁF added.

Another development is that intermediaries are becoming active in more than one sector, thus there is no need to keep separate registries and introduce special regulations for each sector, PSzÁF believes. In addition, current laws are based on the assumption that intermediaries are strongly related to insurance companies, which reflected the state of the market back in the 1990s. Today, however, independent brokers dominate the markets.

PSzÁF therefore believes that the regulation of intermediaries should be unified with standard categories, requirements and registries.

Furthermore, regulations on financial institutions and intermediaries should be separated.

“PSzÁF is right in promoting a more transparent and better regulated market,” Groupama’s Ménétrier said. He believes that this would be beneficial for customers, for insurers and for intermediaries as well. He added that the issue has been on the agenda of MABISz for two years.

In Hungary, there are still too many intermediaries relative to the size of the market, Ménétrier said. The more intermediaries there are, the more customers have to pay for their insurance. This is reflected by indicators such as the cancellation rate, which is unreasonably high, for instance in the case of home insurance products.

of 2012, has been welcomed.

Uniqa has played a key role in the Hungarian health insurance market, said Michl, as every second individual health insurance sold is the company’s ‘Med Help’ product, launched in 2005. In order to meet demand for high quality health care services, Uniqa has now introduced a new product named MediQa. “This is the area where we need to expand our customer base the most, as Groupama is one of the top players

INSURERS’ TOTAL GROSS INCOME COUNTRY

TOTAL GROSS PREMIUM INCOME (HUF)

CHANGE (%)

2007

929,706,722

12.01

2008

890,390,427

-4.23

2009

830,501,249

-7.32

2010

843,792,346

1.6

2011

821,075,463

-2.69

Source: MABISz

Insurance companies call for measures to boost domestic spending

in France’s health insurance market,” Ménétrier said. He stressed, however, that comprehensive health sector reform and the restructuring of hospitals and how they operate are the prerequisites for the expansion of the market in Hungary.

“I do not believe that the only way to develop the health sector is with private investors,” Ménétrier stressed.

Based on his opinion that public hospitals should be able to provide the same quality services as private clinics, he has ambitious plans for the sector.

“Instead of remaining a niche market, we want to provide complementary health insurance services to several million Hungarians,” he said.

He is certainly right in that, in the absence of comprehensive reforms, there will be a two-speed health sector in Hungary. “In that case, only about 6-7% of the population will be able to afford expensive health insurance products and enjoy high quality services,” he noted. ■

WWW.BBJ.HU

25

Budapest Business Journal | Apr 20 – May 03

on despite shrinking market HAPPY IN HUNGARY

Due to such uncertainties, Groupama’s management decided to adopt a new strategy called ‘Business Line Performance’ in markets where the group is already strong, while at the same time reducing its financial risk exposure. “This is essentially a shift from a growth strategy to focusing on the profitability of existing operations,’ Ménétrier explained. Groupama aims to operate in both the life and non-life segments in all of its markets.

The new strategy will not affect the Hungarian market, as “We have already reached profitable growth here and it is not just a play on words.”

Groupama Garancia is the only one of the top six insurers in Hungary that has managed to increase its premium income every year since 2008, and is among the top three in terms of ROE. The group does not plan to exit the Hungarian market, said Ménétrier, adding that Groupama Garancia is now ranked third on the list of the top Hungarian insurance companies. “The market may stagnate now, but the group has a long-term strategy,” he said, pointing out that Groupama Group has signed a 20-year partnership agreement with OTP Bank.

Moreover, the Hungarian subsidiary is now responsible for the group’s Slovakian operations as well, Ménétrier said. Groupama, which has a small team of 60 employees in Slovakia, is now in the middle of the integration process. The group set up the Groupama Garancia Poistovna brand in the Slovak market in March 2009, following the acquisition of OTP Garancia.

“The Slovakian market is currently more profitable than the Hungarian one and the market is actually growing there, unlike in Hungary,” Ménétrier pointed, out adding that the group has invested a lot to make the Slovakian branch profitable. By transforming the company from an affiliate into a branch, it can benefit from the expertise and know-how of the Hungarian company, he noted.

While the Hungarian operations are safe for now Groupama, which had only recently opened a Polish division, Proama, has decided to sell its assets there. “Our decision might have surprised the market, but when we launched the Polish subsidiary, nobody foresaw the extent of the European debt crisis,” he stressed. In previous statements, the company had said Poland was one of its key markets, however, the Groupama Group was only at the very beginning of building up the Polish business when it decided to leave the market. Proama was created in 2010 to develop individual non-life insurance activities on the Polish market. The first policy was sold in November 2011.

Groupama, holder of €2 billion worth of Greek bonds, was the hardest hit among insurance companies by the restructuring of Greece’s government debt. Private investors holding Greek sovereign bonds have agreed to write off some €100 billion. This compares to a total Greek debt of €305 billion, of which €206 is held by private investors. Banks and insurance companies bear a sizable share of this loss.

MKB LIFE

28,062,692

6,936,798

3,068,861

-13,75%

8,74%

-12,82%

16,88%

UNION

CHARTIS BRANCH OFFICE

MKB GENERAL

119,481,122

25,429,665

6,437,190

2,309,242

-5,74%

3,24%

-9,50%

108,52%

GROUPAMA

Groupama SA’s 2011 results were strongly affected by the company’s exceptional losses on financial investments, especially exposure to Greek debt, the financial markets slump and its impact on equity investments.

“The debt crisis is not over yet and we are still not sure that Greece will adhere to its promises or that other member states will stick to their debt reduction policies,” Ménétrier said.

AHICO (METLIFE)

144,094,596

GENERALI-PROVIDENCIA

GROUPAMA GROUP HIT HARD BY GREEK DEBT RESTRUCTURING

CIG PANNÓNIA LIFE

AVIVA

ASTRA

EUROPEAN TRAVEL

89,330,076

21,147,946

6,030,476

2,249,837

-2,16%

-17,65%

n.a.

6,00%

AEGON

AXA

MKB TOTAL

AIM

82,234,193

16,983,816

5,378,103

2,138,688

-3,76%

-1,11%

44,06%

-37,32%

ING

ERSTE

QBE EUROPE BRANCH OFFICE

PORSCHE BRANCH OFFICE

75,536,043

14,209,606

5,135,465

602,318

-1,91%

13,91%

-2,88%

9,10%

UNIQA

SIGNAL

DIMENZIÓ

CIG PANNÓNIA GENERAL

53,114,909

13,056,896

4,020,203

138343

-4,54%

5,73%

7,34%

n.a.

HUNGARIAN POST TOTAL

GRAWE

EULER HERMES

TIR BE

38,500,363

8,307,248

3,739,574

67,015

4,91%

9,60%

19,19%

-62,17%

K&H

MP HUNGARIAN POST

WABARD

TOTAL

34,727,151

7,628,376

3,494,312

821,075,463

30,35%

-7,91%

8,53%

-2,69

MPÉ HUNGARIAN POST LIFE

KÖBE

GENERTEL

30,871,987

7,047,963

3,442,856

8,65%

12,74%

-28,49%

LEGEND Total gross premium income Life Non-life

Change 2011/2010

Source: MABISz

ALLIANZ

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CHAMBER CORNER BETTER KNOW A CEO ART MARKET

CRICKET

A chance for Hungary’s Roma to shine The story of cricket in Hungary started out as just a bunch of guys getting together on a Saturday to knock a ball around, and has led to the brink of affiliation to the world governing body, the International Cricket Council.

July whether Hungary can be affiliated to the ICC,” Zador says. Glover notes that, “We are very hopeful, as the people responsible for European development, who helped us, do not tend to forward applications to the ICC unless they have a very strong chance to get it through.”

The HCA already has good connections with the ICC, but membership will take cricket in Hungary to the next level.

BBJ ANDRÁS SZARVASI

FINDING THE FUTURE “There is consistency here, as many of the expats that helped us solidify the structure are permanently in Hungary,” Zador says. He cited the example of other countries in the region where many players end up leaving or moving to other jobs. “The difficult thing is that everyone involved in cricket has busy lives, work life or family life, so every year we lose a few players due to family or work commitments,” he notes.

But a bunch of expats playing cricket is not enough any more to develop the game in Hungary. Therefore, the HCA has been trying to promote the sport to Hungarians. This is not easy, as it is still a curious game for some in Hungary, while Indians, Australians, and Pakistanis grew up with the game. Currently, there are about 250 active senior players in Hungary. The proportion of Hungarians is approximately 10% of the total. “There is already one dedicated Hungarian team, the Danubian Kangaroos, set up by the Török brothers, who fell in love with cricket when they spent some time in Australia,” Zador says.

“Without some sort of

Cricket has been played in an organized way in Hungary since 2007. “A group of us, a few expats, met about six years ago in an Irish pub in Budapest to talk about the possibility of reestablishing cricket in Hungary,” communications director of the Hungarian Cricket Association (HCA) Adrian Zador tells the Budapest Business Journal. “Within a few weeks, we already had our first games.”

The HCA is now an official sports entity with its own dedicated cricket ground developed by KPMG partners Michael Glover and Mark Bownas, an investment in excess of €200,000 in Sződliget (near Budapest). Glover also serves as HCA treasurer and International Cricket Council (ICC) affiliation director when not in his day job. In addition, there are several smaller grounds, specific training nets and indoor practice areas in the country.

It has taken a while to get cricket officially recognized as a sport in Hungary. The turning point was a visit from the International Cricket Council in 2011. “We find out in June or

long-term plan we will die off, eventually,” Glover warns. The HCA is trying to grow by targeting sportsoriented schools and training teachers how to train their students. “If we are going to make this successful over the long-term, we need to get cricket into schools in Hungary. We need children growing up with the game, understanding the game and wanting to play it, because we clearly can’t keep the organization going on the back of only some 250 people forever,” says Glover. This does not seem hopeless, as there were already eight junior teams competing at the last tournament in Szolnok, with an all-girls team winning that tournament.

To reach its long-term goals, the HCA needs equipment, which is not too expensive, coaches who speak Hungarian, the openness of schools and teachers, as well as the time and energy put into it, says Glover. The association needs more coaches, as it cannot rely on only a couple any more; it needs a whole team of trainers, he adds.

PUSHING FOR SPONSORS In order to reach its ambitious goals, the HCA needs to find the funding to back up the organization and be able to pay coaches. Glover expects that the ICC will provide part of this, because it wants to see the game develop in Hungary. The HCA plans to put forward a development plan to the ICC this month and the ICC will allocate funds from the international budget to Hungary.

“The more development of children we do, the more funding we will get,” Glover says. “We are trying to be in

Labor Code paves way to competitiveness Jan Habeš, Beiersdorf Hungary F**k design

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Budapest Business Journal | Apr 20 – May 03

a position where we can show the ICC that our main aim is development.”

In the first year, Glover expects to get funding in the value of $25,000-30,000 maximum, which could grow later. There are three different tiers of membership at the ICC. The intro-

ductory level, affiliation, is what Hungary is looking for.

The next is associate membership, while full members are at the top level. These include the big international teams of England, Australia, South Africa, India and Pakistan, among others.

The group of full members gets the mo most funding and brings in the most revenues.

The majority majorit of these come from broadc broadcast rights, with cricket the second biggest sport in the world w for spectators, after football. fo The revenues are the then spread around the different differen countries at various level levels.

The HCA will not have to pay a me membership fee to bu it is required the ICC but 10 of the fundto ensure 10% ing. “If they give us $25,000 we have to find $2,500 but

this is not a big challenge really, because we have found more than that already,” said Glover. The HCA had HUF 3.2 million revenues in 2011, up from HUF 2 million in the previous year.

Currently, there are match fees, some HUF 2,000 per player, that cover the cost of the ground and the umpires, while the remainder goes to the association. In addition, each club pays an annual membership fee. “Some of our members, the owner of an Indian restaurant or of a property development firm, put in more money, but we still operate on quite a small budget,” says Zador.

“We have not systematically approached sponsors yet, because we did not have a very good story to tell,” Glover says, adding that until

Joining the International Cricket Council (ICC) Members are the organizations which are recognized as the governing body of cricket in their country.

The organization was founded in 1909 as a sport organization of the British Empire and named the Imperial Cricket Conference. After South Africa left the ICC it changed its name to International Cricket Conference. In 1989 ‘conference’ was replaced with ‘council’.

Currently 105 governing bodies have membership.

The full members are:

CRICKET AUSTRALIA 15 July 1909 BANGLADESH CRICKET BOARD 26 June 2000 ENGLAND AND WALES CRICKET BOARD 15 July 1909 BOARD OF CONTROL FOR CRICKET IN INDIA 31 May 1926 NEW ZEALAND CRICKET 31 May 1926

PAKISTAN CRICKET BOARD 28 July 1953 CRICKET SOUTH AFRICA 15 July 1909

SRI LANKA CRICKET 21 July 1981 WEST INDIES CRICKET BOARD 31 May 1926 ZIMBABWE CRICKET 6 July 1992

they get close to ICC affiliation, they are still seen as just a group of guys playing cricket. Zador agrees, noting that when they approach companies in Hungary that don’t know about cricket, they don’t see what the potential benefits are. “But when we say that we will get ICC affiliation this year and we have our own full-size cricket ground, then all of a sudden it takes on a different dimension,” Glover explains.

Thus, this season seems to be the right one to push for sponsors. One idea is to approach the Hungarian representatives of the biggest international cricket sponsors, such as LG and Pepsi, through the ICC. Cricket in Hungary currently has two major sponsors, including KPMG Advisory and property company MPI. ROMA CRICKET INITIATIVE One of the HCA’s new ideas, which came up at a board meeting at the end of last year, is the Roma cricket initiative.

The idea is to find a mechanism for helping out disadvantaged people, but it is still in the initial stages of planning. “The benefits of that from our perspective is that we get more people

to play cricket, but from their perspective, they learn a value system based on fair play and rules that are followed properly,” explains Glover.

“In Hungary this is a huge problem, but through sport, especially cricket due to the nature and the spirit of the game, we could not only offer cricket to one community, such as the Roma, but get Hungarians to play together with the Roma in villages and towns all over Hungary,” stresses Zador.

He believes that while football is more of a divisive sport, cricket might be one way to bring people closer. “In our team, for example, we have Australians, Hungarians, Bangladeshis, Indians, people of all backgrounds, races and religions playing together.” Last year a group of Afghan refugees set up a team in Debrecen. The nice thing is that cricket is ‘allinclusive’, with men, women, girls and boys of all ages playing it, he notes.

It is a game of various aspects, with lots of things happening at the same time, Glover explains. It is not just a game of hand-eye coordination, or throwing or passing something. It is a thinking game, not just an active game, you have to use your brain,

build a strategy and add a bit of psychology.

One way the association could help make cricket available to the Roma community is providing cheap or free equipment, if necessary. “To start playing, you need only a bat and a ball,” Glover notes.

This will certainly not happen overnight. “This is hard work, but a lot of us are pushing it forward,” says Zador.

The HCA is trying to create links with NGOs dealing with the Roma and to work together with institutions, such as the Central European University and the Open Society Institute.

To prove his point that cricket could turn lives around, Glover mentions a story about a gang in Los Angeles that started to play cricket and ended up establishing a team. The Compton Cricket Club, more informally known as the Homies and the Popz, has toured the UK several times and made history as the first all-American team to tour Australia. “This gang got out of the violence and crime because they understood the rules and fair play and they started to respect themselves through playing,” Glover stresses. It is a model that could equally apply here. ■

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Budapest Business Journal | Apr 20 – May 03

New Labor Code paves the way to competitiveness Hungary’s new Labor Code will come into force on July 1. The legislation, intended to make employment conditions more flexible, offers large scope for negotiation between employers and employees. The new code, however, has attracted a great deal of criticism, both from employers and employees. PF

IF YOU HAD YOUR SAY, WHAT WOULD YOU ADD, SUBTRACT OR CHANGE IN THE NEW LABOR CODE? GERGELY MIKOLA CHAIRMAN British Chamber of Commerce in Hungary

ISTVÁN HAVAS

The BCCH has participated from the very beginning in drafting proposals and positions to help create a sustainable, up-to-date, and most importantly, competitive employment environment in Hungary. Discussions along the procedure were difficult and involved confrontations, but one thing needs to be underlined: there was a discussion and flexibility on the part of all stakeholders, which I tend to evaluate as a promising sign. As for the content, we saw useful amendments such as contracts with more than one employer, employee actions outside working hours brought in line with company interests, a more realistic regulation of termination procedures, and the rules providing more flexibility on working and non-working hours.

However, some practical questions are still not resolved: for example, compulsory part-time employment of those returning from maternity leave, which employers will need to arrange themselves. In summary, I see a more flexible employment environment paving the way to competitiveness, with practical items still pending. I think a regular professional review to see whether it brings the expected results will be essential.

PRESIDENT American Chamber of Commerce in Hungary

The new Labor Code creates a more up-todate and flexible regulatory framework, which will enable more efficient workforce management thereby contributing to the creation of new jobs. The new atypical forms of employment introduced by the new Labor Code such as employment on call or shared jobs may provide much needed flexibility. Yet, we do not know the transitory rules and this creates uncertainty and increases the costs of the transition to the new Labor Code.

APRIL 25

APRIL 25

MAY 5

AmCham business breakfast: The essence of the new Labor Code – practical guide for employers LOCATION Budapest Marriott Hotel, 1052 Bp, Apáczai Csere János u. 4 TIME 9 a.m. – 11:30 a.m.

FEE for AmCham members HUF 6,500 + VAT, non-members: HUF 21,500 + VAT ORGANIZER American Chamber of Commerce in Hungary CONTACT anita.arvai@amcham.hu

Her Britannic Majesty’s Ambassador (British Embassy) Chairman Gergely Mikola (British Chamber of Commerce in Hungary): St. George’s Day LOCATION British Embassy in Budapest, 1051 Bp, Harmincad utca 6 TIME 6:30 p.m. – 10 p.m.

FEE BCCH members: free of charge, non-members: HUF 6,000 + VAT ORGANIZER British Chamber of Commerce in Hungary CONTACT www.bcch.com

Oranjebal 2012 LOCATION Gundel Étterem, 1146 Bp, Gundel Károly út 4 TIME 7 p.m. – 1:30 a.m.

FEE Members: HUF 25,000, non-members: HUF 30,000 ORGANIZER Netherlands-Hungarian Chamber of Commerce, Dutch Club Hungary CONTACT www.dutcham.hu

MAY 7

MAY 9

MAY 9

MAY 15

AmCham Seminar and Cocktail: Competition Law - Why Comply?

HR executives’ club: Working with students – advantages for companies LOCATION Hotel Novotel Budapest Danube, 1027 Bp, Bem rakpart 33-34 TIME noon – 2 p.m.

FEE members: HUF 7,900 HUF + VAT, non-members: HUF 10,300 + VAT ORGANIZER Hungarian-French Chamber of Commerce and Industry CONTACT www.ccifh.hu

Business Lunch with Zsolt Becsey, Ministerial Delegate in charge of foreign economic relations LOCATION Kempinski Hotel Corvinus Budapest, Salon BandiniRegiomontanus, 1051 Bp, Erzsébet tér 7-8 TIME noon – 2:30 p.m.

FEE Members: HUF 11,500 + VAT, non-members: HUF 15,000 + VAT ORGANIZERS: CCIFH, CCCH, and their cooperating partners: Netherlands-Hungarian Chamber of Commerce, AWEX, Italian Chamber of Commerce in Hungary, DUIHK, BCCH CONTACT info@ccch.hu

AmCham Communications School with Szilvia Krizsó, TV anchorwoman LOCATION AmCham Conference Room, 1051 Bp, Szent István tér 11, 6th floor TIME 6:30 p.m – 8 p.m.

FEE AmCham members: HUF 30,000 + VAT/person for the entire series; non-members: HUF 45,000 + VAT/person for the entire series ORGANIZER American Chamber of Commerce in Hungary Contact laszlo.metzing@amcham.hu

LOCATION Kempinski Hotel Corvinus

1051 Budapest, Erzsébet tér 7-8 TIME 4:30 p.m. – 7 p.m.

FEE AmCham members: free of charge, non-members: HUF 15,000 + VAT ORGANIZER American Chamber of Commerce in Hungary CONTACT ildiko.takacs-berka@amcham.hu

MAY 5 Global Impact Competition CEE&SEE 2012 Finals LOCATION to be confirmed TIME 2 p.m. – 6 p.m.

ORGANIZER American Chamber of Commerce in Hungary CONTACT anita.arvai@amcham.hu

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Budapest Business Journal | Apr 20 – May 03

WHO'S NEWS

Name Dr. Zoltán Balázs Kovács LL.M. Current company/position Szecskay Attorneys at Law, partner Previous company/position Szecskay Attorneys at Law, associate

Name Albert Roggemans Current company/position Hungarian branch of AXA Bank Europe SA, CEO Previous company/position ING Romania, CEO

Kovács has been made partner at the independent law firm, Szecskay Attorneys at Law. He is a Hungarian attorney admitted to the Budapest Bar. The graduate of the Institute of Comparative Law at McGill University (LL.M. in International Labor Standards) and ELTE (JD, summa cum laude) joined the firm in 2006 and specializes in corporate and commercial law, liquidation, labor law and data protection law.

Roggemans has become the new CEO of the Hungarian branch of AXA Bank Europe SA. Roggemans, a Belgian citizen, received his degree at the l’Université Libre de Bruxelles in 1973. After graduation, he worked for BBL Group (later ING) for more than 40 years. From 2000 to 2008, Roggemans was the head of ING’s Belgian sales network overseeing 4,000 employees and 700 sales points. Between 2008 and 2011, he was the CEO of ING Romania. Roggermans speaks French, Flemish and English fluently.

[ BETTER KNOW A CEO ]

Do you know someone on the move?

Send information to research@bbj.hu

Name Dr. András Dániel László LL.M. Current company/position Szecskay Attorneys at Law, partner Previous company/position Szecskay Attorneys at Law, associate

Name Gergő J. Budai Current company/position Invitel, deputy director of the legal and regulations directory Previous company/position Pfizer, legal director

László has been made partner at the independent law firm, Szecskay Attorneys at Law. He is a Hungarian attorney admitted to the Budapest Bar and also a member of the New York State Bar (USA). The graduate of Columbia University, New York (LL.M.) and ELTE, Hungary (JD) joined the firm in 2002 and specializes in commercial and corporate litigation/arbitration.

Budai has become deputy director of the legal and regulations directory at Invitel. Prior to this, he was the legal director of Pfizer. The 35 year old Budai has a PhD from the Pázmány Péter Catholic University. He also spent a semester at the University of Pretoria, South Africa, studying international and human rights.

Budai first worked for international law firm White & Case, in Brussels, Washington and Budapest. From 2007, he was legal director of Pfizer; first in Hungary, then in Romania and Czech Republic.

▶ Who is your favorite

fictional hero?

Harrry Potter – if I were he, Harry I cou could ulld be in Budapest, u Prague ue and Bratislava ue (my th three hre ree offices) a att th tthe e same tim time me

JAN HABEŠ COUNTRY MANAGER BEIERSDORF HUNGARY

Jan Habeš, a 52-year-old marketing specialist, completed his education in Czech Republic and England, where he has studied economic and business studies.

At the beginning of his carrier he worked for Procter & Gamble as a brand manager. Later he worked as a marketing manager responsible for the consumer division at Bristol-Myers Squibb, where he was also a marketing consultant for other BMS divisions.

Habeš moved to the Beiersdorf group in 1996. At first he was responsible for the Czech and Slovakian markets, where his key achievements were doubling the market share of NIVEA Body and achieving a market leadership position for NIVEA Visage and NIVEA Deo. In Austria, worked in the commercial and financial areas and during this time he also played an important role in the establishment of BDF Romania. In 2000, he became the head of business development and the marketing director of the consumer division in Austria and CEE. Here, one of his biggest results was to achieve market leadership for NIVEA Shower and the best market position for BDF in hair styling worldwide. The production of successful TV campaigns for NIVEA Deo was also linked to his name.

From 2005 to 2011 he has been working as a general manager and the country manager for Beiersdorf in the Czech and Slovak Republics.

SPONSORED BY

Name Péter Kertész Current company/position Kraft Foods Hungary, head of public affairs and PR Previous company/position BASF, PR manager

Name Gergely Gabler Current company/position Equilor Investment, senior stock analyst Previous company/position Erste Investment, stock analyst

▶ How does your

dream dinner party look like?

A Metallica concert as a private party, with all my friends around

As of April 2012, Kertész is the head of public affairs and public relations at Kraft Foods Hungary. Kertész has more than 12 years of experience in PR and public affairs, having started his career as a PR manager, then took a position at Mmd/Grayling.

Shortly after that he became deputy managing director of the agency.

In 2009, he joined the Hungarian branch of chemical manufacturer BASF as a PR manager. Last year, he worked at the company’s Brussels Coordination Center promoting BASF’s public affairs and lobbying activities.

Gabler has joined Equilor Investment as a senior analyst. Gabler will oversee the Hungarian, Czech and Polish stock market and will also prepare regional macroeconomic analysis. Gabler has moved from Erste Investment where he worked for four years as a stock analyst, mainly dealing with corporate assessment and the stock market.

At Equilor, he will be responsible for these areas as well as bonds and currency market. Gabler, who holds a degree in economics, began his career at OTP Bank.

▶W What hat was yyour

ffavorite avvorite toyy when yyou ou u were a child?

Guitar G uitar – is it a toy?

What is your motto?

When and where were you happiest?

How many times a month do you travel?

Think fast, live slowly and enjoy!

Three times – when my kids were born

I am continuously on the move

Which talent would you most like to have?

What is the most extravagant thing you’ve done in your life?

What are the activities that help you to cope with stress?

I had a short career as a hard-rock musician

Music – playing and singing

What is your hobby?

Which Hungarian habit did you get accustomed to most easily?

To satisfy my company and my wife at the same time...

What is the trait you most disapprove in others?

High mountains and fresh air

Corruption and domestic violence

What historical person do most identify with?

Vaclav Havel – now he has become a history person.

Natural work-life balance

What is the one thing without which you cannot imagine your life in Hungary?

Villany wines

“Let us discuss.”

What is your most treasured possession?

My cabrio

What kind of job did you dream of when you were a child?

Which word or phrase do you tend to overuse?

What is your favorite gadget?

My iPhone (although it can also be a nightmare)

What is your favorite Hungarian dish?

Something unique is international cuisine with a Hungarian touch

What is it your dream to live to see?

No substantial one

What is your favorite Hungarian word?

What three things would you take with you to a desert island?

What is your greatest fear?

Words that are unique in Hungarian (although they could use something international): megbeszélés, szálloda, üzletember...

Railway engine driver

Honest politicians and clean rivers in Europe

What is your greatest regret?

Losing a close person

What makes you sad?

Aging

I would not bring a computer!

What is the weirdest thing you have experienced in Hungary?

Everybody speaks Hungarian with such ease!

ZsV

s n g i e d F10k WWW.BBJ.HU

Budapest Business Journal | Apr 20 – May 03

Unsustainable design leads to overconsumption and depleted resources.

It also creates jobs, which makes it a great tool for crisis management.

BBJ ZSÓFIA VÉGH

and It is 9 a.m . on a Friday, nd . ha in cof fee mu gs are d, un aro all er att There is ch wn. do s die y all du gra ich wh n is Now on ly one perso e som ing ch pit tal king, as. ide g thoug ht-provokin ng No, thi s is not the morni eCr er oth an st –ju ng me eti ativeMorn ing. a CreativeMornings is ture lec t fas ak bre ly nth mo es. series for creative typ , rge cha of e fre is nt Each eve te inu -m and includes a 20 held tal k, plus cof fee. It is Frion ies cit ny ma across est. dap Bu days, including se rul the , hu hg. by d “When I bought the Organize , n’t ary did I ng , shoes, he starts off ing design site of Hu to ut, imagine they were going the tal k this time is abo er aft t No e. tim le . litt so ign for last well, des ntthe Sze on .” tag ing The man stand reading its price e to vie péteri is not the only on stage of the old art mo on an ny rd, pen bea tty a pre a rts nt spo spe r e ate hav the out lfd ha fin d an to rt ly something on ugly brown shi her it was not worth it. Everyone torn shoes. He looks rat sion, has had a shoe/media-player/ scruff y for his profes ed at or – tfit ou hairdryer whose life end design. His ple hpeo wit t no ese is Th – . es ely sho tur the ma pre least ate ntwere not the few unfortun out purpose. Márton Sze . d les an app ian bad tor the his y ch rar cat ones to péteri, lite or lyho out The products wore professor at the Mo and broke down on purpose.

Nagy University of Ar t ut The phenomenon even has Design in Budapest, is abo ed e hav we a term coined for it: plann to lecture on why . ign des e started to hat

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BBJ

reusing are oth to it sev- cling and th them, we could eral more options. Wi lure of new and the to no times: most say m is shiny things. The proble recently tives rna alte se the of in the past that none ign’s des disposable two to three consider may it as d Ba . social aspect years. and ent nm iro env the be on Another ed nn pla s, to on people’s wallet way e sid d goo its has obsolescence increase jobs. es sav and s ate cre It . too consumpinisWhy else did the US adm essol ob al on cti fun ney mo tion – ch mu so nt spe or- tration cence – is to create po country’s the out g lin bai on falls quality products. If it auto industry? napart after a year, it Manufacturers like Ge ed, lac rep has to be ed hir rd Fo eral Motors or no question about ers new CEOs and design ly bab that. This has pro ngly iki str h wit up e cam and earned companies more new new designs (such as the le sty did n tha es mi sh ene ggi slu ost bo to n) e Lincol nt me or systemic obsolescenc ern to sales. Were the gov the (the deliberate attempt at ies tor fac ete to leave the ma ke a product obsol ts, thouin mercy of the marke tem sys testing by altering the pro - sands would be use.

Ho which it is used). Many con ite Wh the at lash for jobs on cti du sumers have decided to pro on k bac g ttin ese Cu and s out against design. Th wn tdo shu nsi- would lead to people hold design respo an envi- layoffs. Instead of con the t ble and claim tha er, it would bet- ronmental disast sumer societ y would be e on ial they lead to a soc ter off wit hout it. Or as ritans can pu ign des , Yes sucput it rat her crudely, if ir FMCG the scale back on cinctly: “Fuck Design.” oy prodenj and on pti consum It is not known where ucts of sustainable thinkfirst or when this phrase ative side ead ing (which have neg spr has it but ed, those appear For ll.) we as arly effects latthe quickly and has cle on the refusing to give up ies pan reached Budapest (check com es, hav old est must d, iPa graffiti on the wall of an the e lik cts du pro er dy off for le apartment block in Bró tab sui un well- a tablet that is Sándor utca). Like any the eye and Fuck reading (strains , groomed movement (no physiing typ or d) han the been Design stickers have . board) its fans (noth- cal key Depression of the 1930s. created for lecture is coming to an e eat Th Gr y ver and a s to tee ys as pla ll we as let cy) ph fan obsolescence. It pam ing a in Question marks hang in istic: It was first used products, but its end. h n suc ssio iting er (innate) human character pre oth De the g din the air, everyone is wa ing called En es- major feat was making peosol e an the desire to own someth Ob vid pro ed to nn ri Pla éte gh ntp rou Sze ter, a Th should we for how er: und t he wo pop Bu a little newer, a little bet ple ned m. gai ble m wer to the pro ary. cence. The ter h environmental ans wit d oks l har Bro a little sooner than necess dea gh ing ou hav thr o 4 als 195 is in was larity finances can’t. He g lin ind dw t usand tha m ind Planned obsolescence ct har can du ing a pro st- Stevens, an Ameri disposability? time nam m fro d s ing use ent ult s created with the idea of boo em res ven uir Ste req er. s all the pa- trial design her than repair- fulfill ing consumption, and com rase as the title of a lec- Replacing, rat on the list of of being sustainable, socially ph the to se cho – ely nies – very wis an adver- ing stuff is high ve, functional and havth- ture he was to give at waste, pollution, sensiti for es nn son Mi use design as one tool. No ive me rea in e enc fer l ing stylish design. “G e up tising con r,” he ing makes you want to giv designer and the depletion of natura ove e it Th nk 4. thi 195 to e in tim lis e apo som cell money). d (an s new rce his ou in on your perfectly working ing res ay ign aw s des t s and trudge ped- thought tha t, sustainable design say , worn-out shoes. ■ firs peo d At phone more than its sou lea ally ntu eve l wil pricey elop- stuff rkers sounds like a great answer. up successor. Even if dev ple to buy and get wo er e silv som n thi for a d ly un on aro ans ment me bly line. The It is been one. back to the assem gevline on the back of the ph ved valu- time, it is designed for lon pro and d rke wo a ide ocyobs Re ed . nn etc pla ort ity, functionality, The idea of able enough for firms to res the to k bac s goe ce lescen

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Chocolate and more Famous Hungarian family-owned company Szamos Marcipán has opened its new pride, the Szamos Gourmet House, at Vörösmarty tér in downtown Budapest. In addition to gourmet desserts, the house offers breakfast, lunch and dinner. The Chocolate Manufacture, operating in the house, is open for chocolate lovers who would like to make their own sweets (www. csokoladeiskola.hu).

Address: Budapest, Dist. 5, Váci utca 1 – Váci1 Commercial Building (entrance from the Deák Ferenc utca).

Opening hours: every day 8:30 a.m. – 9 p.m.