Budapest Business Journal 20/13

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VOL. 20, NUMBER 13

I JUNE 29, 2012 – JULY 12, 2012

Budapest Business Journal

66 % OF THE EU AVERAGE – HUNGARY’S GDP PER CAPITA IN 2011

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

THE NAME OF THE GAME

Budapest could have been SPECIAL REPORT one of the cities ten years A bigger bite of dental tourism ago, and again two years Hungary, with an estimated ago, that got an economic market share of 40% on the continent, has become a dental boost from hosting the superpower on its own, with no state aid. Now there Olympic Games. What had virtually is the helping hand from the Hungary missed by not government – but it might be a PAGE 24 bidding to be a host? PAGES 10-11 little too late, some say.

BUSINESS

LIFE

Attacked!

Dreams come true

Computers and human beings have a lot in common, from being prone to infections to potentially becoming virus centers without knowing about it.

Hackers seem to capitalize on this and the gaps in the protection of many PCs. PAGES 14-15

Most people had a childhood dream about what they would become as a grown-up. The BBJ introduces two women who, after working for decades in other fields, finally took the risk of working out their fond dreams.

PAGES 30-31

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NEWS

Business sector employment down Art cinemas to be rescued

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Altera to enter the parquet this fall

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digest

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

FORGIVENESS OR PROVOCATION? Hungary’s Parliamentary Speaker László Kövér’s controversial gesture of attending a ceremony for Transylvanian-born ethnic Hungarian writer and Nazi sympathizer József Nyírő at first only caused diplomatic tension between Hungary and Romania, but more recently also seemed to cause outrage in the entire Jewish society with the lead of Nobel Peace Prize laureate Elie Wiesel, who repudiated a Hungarian state award he had received in 2004.

The whole case started in May when a group of Hungarians decided to rebury Nyírő in the Transylvanian city of Odorheiu Secuiesc (Székelyudvarhely). The newly formed Romanian government, which is otherwise openly not a close friend of the Hungarian ethnic minority, saw the idea of reburying the “counter-Romanian, fascist and anti-Semite” Nyírő as an offense, and since Hungary’s prominent László Kövér also announced plans to attend the event, the entire case soon generated a diplomatic fray between Budapest and Bucharest. As a result, the reburial fell through, and only a commemoration ceremony was held instead.

By the time the conflict between the two neighboring countries seemed to fade away, the controversy has been topped with Elie Wiesel’s reaction of returning his Grand Cross Order of Merit. The 83-year-old Holocaust survivor Wiesel, whose parents and sister were sent to their deaths by wartime Hungarian officials, said in a letter to László Kövér that he did not want to be associated with activities such as the May 27 ceremony for Nyírő, a World War II member of Hungarian Parliament whom Wiesel calls a “fascist ideologue” and “an anti-Semite”.

“It has become increasingly clear that Hungarian authorities are encouraging the whitewashing of tragic and criminal episodes in Hungary’s past, namely the wartime Hungarian governments’ involvement in the deportation and murder of hundreds of thousands of its Jewish citizens,” Wiesel wrote in his letter.

He also said it was distressing that public spaces were named after Miklós Horthy, Hungary’s head of state at the time the country allied with Nazi Germany.

The ongoing case has made Hungarian papers react immediately and also attracted strong international attention, with most sources saying that collaboration with wartime criminals is not something that can be washed away in the name of forgiveness, and that a person’s literary achievements cannot be separated from his actions.

CONTRARY TO THE SOCIALIST GOVERNMENTS, THE ORBÁNADMINISTRATION ROLLED BACK FAR-RIGHT ORGANIZATIONS Véleményvezér

June 19, 2012 While most prominent international papers and news sites reported on the rehabilitation of Nyírő and Wiesel’s indignation, only a few of them have decided to publish opinions about the case. An article published on the blog site of the New York Daily News, headlined as “Elie Wiesel to Hungary: Keep your award,” was one of the pieces that took a side.

The article by Alexander Nazaryan shows understanding of those old Jews for whom, in contrast with the younger, modern ones who see the Holocaust as a “distant familial memory,” “the smoke of the camps is far more pungent.” “And as survivors of the camps dwindle in number, their voices, their invocations to never forget, become ever more urgent,” he continues.

About Hungary’s recent past the article says that “with the Iron Curtain long lifted, and preparing to enter the Western European fold, Hungary seemed to be trying to account for its

past, which included helping the Nazis exterminate some 70% of its 650,000 Jews. Recent events, however, have stymied such efforts, leading Wiesel to return the award.” Here the author probably refers to a square that was recently renamed after Miklós Horthy, the regent of Hungary from 1920 until the end of World War II. However, this part of the article includes some factual mistakes. It says that the ceremony for Nyírő took place in the Hungarian village of Gyömrő, but this is not true: Gyömrő is where the newly labeled Horthy square lays, while the Nyírő ceremony was held in Transylvania. When it comes to data, the author claims to cite a report of Associated Press (AP), though the alluded piece by AP does not contain these mistakes.

However, the New York Daily News is not afraid to draw an opinionated conclusion. “Wiesel, who is of Romanian and Hungarian descent, has good reason not to want an award from the Hungarians,” it says. Also, it adds a comment on some worrisome trends evolving

in the region. “Hungary’s rehabilitation of its wartime leaders comes during a time of general nationalist resurgence in Eastern Europe, particularly in countries like the Czech Republic, Poland, Ukraine and Russia.

As is often the case, feelings of nationalism spill over into xenophobia, and especially anti-Semitism.”

June 20, 2012 “It is sad to see that Mr Wiesel misunderstands the Hungarian political situation that much,” an article on prominent Hungarian blog Véleményvezér (translates as opinion leader), which remains unbiased by often publishing opinions against both political sides, says in the very first paragraph.

After briefly introducing Wiesel’s letter to Kövér, the blog post, headlined as “Elie Wiesel returns Grand Cross: not the government’s fault this time,” clearly states that those living in Hungary and paying attention to politics must know that the Fidesz govern-

ment cannot be accused of supporting the far-right.

“Contrary to the Socialist governments, the Orbán-administration rolled back farright organizations, including Magyar Gárda, and set its face against the openly antiSemitic statements,” Véleményvezér says, adding some examples. It also states that the attention to Nyírő is obviously for the literary achievements and the Transylvanian origins of the writer and not for his wartime role.

However, not to leave the right side of the political spectrum without a slap in the face, it finally says: “As for Véleményvezér, Hungarian top officials attending Nyírő’s ceremony was ridiculos and pathetic rather than outrageous or threatening.”

June 20, 2012 “Mr Elie Wiesel and his cross” was the title of the article published in government-friendly daily Magyar Hírlap. The opinionate piece gets straight to the point and raises the question of whether the Gyurcsány government gave the Grand Cross to the right person back in 2004.

“They did not,” the answer comes immediately.

The rest of the article is not getting any softer, either. “Wiesel has never read a single line from Nyírő,” it states, adding that Wiesel’s stories as a writer, even if he is a Nobel Prize winner, are “lethally boring”.

The piece, apart from such comments, does not say anything about Wiesel himself or about Nyírő’s literary work and his role in the Nazi’s deeds. However, it finally suggests to all readers of Magyar Hírlap that they should read Nyírő’s books, the works of a writer “who did not refuse any state awards.”

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QUOTE OF THE WEEK

Downgrades by ratings agencies do not necessarily mean that the government is working poorly NATIONAL ECONOMY MINISTER GYÖRGY MATOLCSY TOLD A PARLIAMENTARY COMMITTEE

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

Rudas gets major facelift Reconstruction works at Budapest’s Rudas Thermal Bath has arrived at a milestone: in addition to a facelift to the façade of the 440-year-old bath, renovation works in the lounge of the bath started recently. Owner and operator Budapest Gyógyfürdői és Hévizei (BGyH) Zrt won a HUF 393 million EU grant from the European Regional Development Fund of the EU in 2011 to the historical renovation of Rudas Thermal Bath. Total cost of the investment is HUF 493 million; 22.7% of the investment is funded by BGyH.

ECONOMY KEY RATE KEPT ON HOLD The National Bank of Hungary’s (MNB) Monetary Council decided to keep the central bank’s key rate on hold at 7.00% at a rate-setting meeting on June 26. The decision to keep rates on hold, taken for the sixth month in a row, was in line with market expectations. The Monetary Council last changed the rate on December 21, 2011, raising it by 50 basis points. The Council discussed two proposals, one to keep the rate on hold and another for a 25% rate cut, and the Council took the decision with an overwhelming majority, MNB governor András Simor said at a press conference held after the meeting.

MNB CUTS INFLATION PROJECTION FOR 2012 The National Bank of Hungary (MNB) cut its inflation projection in 2012 and raised it for 2013, cut growth forecasts for both years sharply in its fresh quarterly report. The MNB does not rule out a 2013 deficit over the government plan, but expects the shortfall

below 3%, he said. The report projects inflation to fall to the 3% mid-term target by the end of 2013, MNB governor András Simor told journalists. In the March report, they projected to reach the 3% target in the first half of 2013.

The MNB cut its projection for average annual inflation to 5.3% from a 5.6% forecast in March. The MNB cut its GDP projection for 2012 sharply, projecting a 0.8% contraction instead of 0.1% growth forecast in the March report. The Bank raised its projection for CPI in 2013 to 3.5% from 3.0%. It lowered its forecast for 2013 GDP growth to 0.8% from 1.6%.

GKI RAISES INFLATION FORECAST FOR 2012 Hungarian economic research company GKI raised its projection for average annual inflation in 2012 from 5.3% forecast in March to 5.7%. GKI chairman András Vértes said GKI was standing by its earlier projection for a 1.5% economic contraction this year. The research institute expects GDP to drop 1.5% year-on-year both in Q2 and Q3 and a smaller decline in Q4. Hungary’s GDP contracted by an unadjusted

0.7% and a calendar-adjusted 1.2% year-on-year in Q1 this year. The researchers’ inflation forecast is higher and their GDP projection is more pessimistic than that of the government which prepared the 2012 budget assuming a 0.5% increase in GDP and 4.2% annual inflation.

WORLD BANK: 1.5% GDP GROWTH IN HUNGARY IN 2013 The World Bank projects Hungary’s economy will contract 0.4% this year but grow 1.5% in 2013, a report on the region published recently shows. The projection for 2013 is just under the 1.6% assumption in the government’s 2013 budget draft. The projections were contained in a report on Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic and Slovenia, as well as one prospective European Union member, Croatia. The World Bank noted that nine of the ten EU members in the study were subject to excessive deficit procedures by the European Commission.

“Persistent market pressures coupled with the necessity to adjust to the EU budgetary rules underlined the need

for further fiscal consolidation despite weaker economic prospects,” it said. The report outlined additional measures Hungary had to take to restore fiscal discipline, such as new levies on telecommunications services and financial transactions, reductions in drug subsidies and spending cuts at ministries, but said the country was “now on track” to reduce its excessive deficit by year-end.

SALES IN RETAIL SHOPS DECREASED IN APRIL In April 2012, sales in retail shops decreased by 2.7% in volume year-on-year. A fall in the sales of food, drinks and tobacco stores, petrol stations as well as in those of furniture and electrical goods shops played a determining role in this decrease, the Central Statistics Office (KSH) said. In terms of volume, retail sales decreased by 2.7% in April 2012 and by 0.7% in the first four months. Retail shops, mail order houses and online sales generated HUF 676 billion of sales in April and HUF 2434 billion in the first four months of 2012. Yearon-year, the volume of sales in food, drinks and tobacco stores fell by 1.8% in April

and rose by 0.8% in the first four months of 2012. Yearon-year, the turnover of nonfood retail trade – at constant prices – decreased by 3.6% in April and by 0.9% in the first four months of 2012.

TAX PREFERENCE FOR WAGE COMPENSATION TO BE HALVED The government plans to maintain a wage compensation scheme next year, but wants to halve the related tax preference, according to a senior government official. The government assumed in the 2013 budget bill that the tax preference would be halved next year, National Economy Ministry state secretary Péter Benő Banai said. Employers who raise the wages of lowearners to prevent a fall in their net wages that would otherwise result from tax changes may avail of the preference. These employers may deduct any amount over a requisite 5% wage rise from payroll contributions. The tax preference will cost the budget HUF 64 billion next year, down from about HUF 115 billion targeted for this year, Econews calculated based on the budget bill submitted to Parliament recently.

BUSINESS SECTOR EMPLOYMENT DOWN The number of employees in Hungary’s business sector, which includes private as well as state-owned companies, fell 1.8% year-on-year in April, slightly faster than in March and dropping for the fifth month in a row, data published by the Central Statistics Office (KSH) show.

Nationwide, the number of employees was down 0.4% year-on-year to 2,684,100 in April. The two segments recording new hires were public work schemes, where employment rose a steep 60.8% from April 2011, and non-profit institutions, where the number of employed rose 0.5%. The number of employees at businesses employing at least five people fell by 32,500 from a year earlier to 1,812,500 in April. The number was down 5,200 from March. The decline came after steady year-on-year increase between May 2010 and November 2011.

BUSINESS DAB TO BUILD WATER PUMP FACTORY IN HUNGARY Italian-owned DAB Pro-

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duction Hungary Kft is to build a €1 billion water pump factory in Nagykanizsa, managing director Paolo Mario Menon said at a recent press conference. Construction work is to start in August, and production is scheduled to begin in March 2013. The company purchased an area of 27,000 square meters at the local industrial park and plans to build a 5,000 sqm production building by March, which they would later expand. The plant is expected to make 50,000 water pumps in the fi rst year, which could be raised to 600,000 over three years.

WABERER’S SIGNS €75 MLN DEAL WITH ELECTROLUX Hungarian road haulage company Waberer’s Zrt has signed a three-year agreement worth €75 million to make deliveries for Swedish household appliance maker Electrolux. Waberer’s will bring products made at Electrolux’s two plants in Hungary to other EU member states as well as make deliveries for Electrolux units in Germany, Italy, Span, Poland, Sweden, France, Finland and the United Kingdom. Waberer’s has 2,500 lorries and employs 4,000 people. Its fleet travels more than 330 million kilometers, record-

ing almost 5 billion freight ton-kilometers last year.

Waberer’s had EBITDA of €47 million and revenue of €373 million last year.

NOKIA LAYS OFF 900 AT HUNGARIAN PLANT Finnish handset maker Nokia has laid off 900 people at its base in the Hungarian city of Komárom, chairman of the plant’s labor council Zoltán László said. Th is is the second phase of a previously announced layoff of 2,300 at the Hungarian plant. Nokia already laid off 1,200 people on March 29, of which 854 were Hungarian and 343 Slovak commuters. Nokia announced in February transferring production from three of its plants, Komárom, Reynosa in Mexico and Salo in Finland, to Asia, laying off about 4,000 workers in the process.

UNIQA TO BUY OUT EBRD STAKE FROM SUBSIDIARIES IN CEE REGION Vienna-based Uniqa group will buy out the minority stakes held in its Hungarian, Croatian and Polish units from the European Bank for Reconstruction and Development (EBRD), Uniqa has announced. The transaction will be carried out in the coming few weeks. The partners will not disclose the price. EBRD

holds 15% of the Hungarian Uniqa subsidiary, it holds 20% of the Croatian unit and 30% of the group’s two Polish units. Uniqa said it agreed to sell its stake in the German Mannheimer group and focus on purchasing the EBRD stakes in its CEE units. The group plans to focus on its markets in Austria and in Central and Eastern Europe to meet its growth target of doubling the number of its clients by 2020 from 7.5 million in 2010. The Hungarian unit Uniqa Biztosító Zrt was Hungary’s sixthbiggest insurer based on total revenue from premiums of HUF 53 billion last year, earlier Econews information shows. Revenue from premiums dropped 3.6% from 2010, and the company booked a HUF 1.87 billion loss in 2011, compared to profit of HUF 394 million in 2010. It paid HUF 1.6 billion on an extraordinary tax on fi nancial companies.

It managed 761,000 contracts for 543,000 clients at the end of the year. Uniqa Biztosító CEO Othmar Michl recently said that they had Q1 profit of about HUF 500 million, excluding the effect of the extraordinary tax, and aim to break in the full year even after paying the extraordinary tax.

talk of the town WHOSE LAND IS IT? The recently erupted scandal over the unfairness of long-term land-lease tenders has not left public opinion unmoved, and might also boost the trend of the governing Fidesz-KDNP party alliance’s declining popularity (a phenomenon the BBJ’s Digest wrote up two weeks ago).

The piquancy of the land-lease case is that it was sparked off by József Ángyán, a Fidesz MP who, until January, was also a state secretary of the Rural Development Ministry. Then, at that time, he suddenly decided to quit the ministry and turn to the public.

As he keeps saying, the landlease tenders in Borsod county were customized to favor a few wealthy people, while it left farmers living in the area practically without any land. Ángyán was not afraid of using big words in front of a big audience. According to him, a “mafia-like system, which has established itself over the past decades, wants to put its hand on every-

thing: land, resources, subsidies, and markets. They want to take everything from local communities and families and I, my colleagues, and our National Rural Strategy are just standing in the way of this exploitation.”

While the government has been unable to present any reasonable explanations concerning Ángyán’s accusations so far, newspapers come up with new dirty developments every week.

Most recently, daily Blikk revealed that the father of a Fidesz politician, an elderly man on disability pension, won a long-term land-lease contract, and so did the wife of a local Fidesz politician. Also, Fidesz MP Attila Szedlák’s wife, who otherwise works as a special education teacher, was one of the lucky tender winners as well.

However, Bernadett Szedlák subsequently ceded the right of land-lease on June 23, citing the “political attacks” her family had to face.

POLITICS EC ASKS HUNGARY TO COMPLY WITH EU LEGISLATION The European Commission has asked Hungary to bring national legislation on assessing the effects of projects on the environment in line with European Union rules. The Commission said that the Environmental Impact Assessment Directive was incorrectly transposed into Hungarian law, in particular in relation to the project screening process which determines whether certain projects require an environmental impact assessment. Hungarian law established exclusion thresholds and criteria which did not take account of all the relevant selection criteria, resulting in a restrictive application of the directive, it added. The request takes the form of a reasoned opinion, the second stage of an infringement procedure. If the legislation is not brought into compliance within two months, the Commission may refer the matter to the European Court of Justice.

FUNDING SUSPENSION TO BE LIFTED FOR HUNGARY European Union finance ministers have decided to lift a partial suspension of Hungary’s Cohesion Fund allocation introduced as part of an excessive deficit procedure. The ministers approved the suspension in March after Hungary failed to take sufficient measures to plug its budget gap. In May, the European Commission recommended lifting the unprecedented suspension because it said Hungary had taken the necessary action to correct its excessive deficit. The suspension affected €495 million, or 29%, of Hungary’s funding for 2013. In a statement published after their meeting, Ecofin acknowledged that “Hungary has taken measures to correct its excessive government deficit by 2012”, in line with its recommendation from March 13, but noted that the country’s excessive deficit procedure nevertheless remains open. Ecofin noted in particular that official deficit targets and planned fiscal efforts outlined in Hungary’s annual update of its convergence program, submitted on April 23, complied with the recommendation.

DOMESTIC EXPRESS BUDAPEST AIRPORT SHUTTLE IN AUTUMN? A plan to build an express train service connecting Budapest’s Liszt Ferenc International Airport with the

city center could be submitted to the government in the autumn, Hungarian railways MÁV Zrt told MTI. The engineers of China Railway Construction Corporation (CRCC) are working on a pre-feasibility study for the project, preparing two versions for the connection, MÁV said. The investment could cost HUF 40 billion to 80 billion, MÁV said. Designing the train connection would take one year after a government decision according to MÁV. There is a train connection with the airport’s Terminal 1, but Terminal 2 is still not accessible by train.

However, Terminal 1 was closed down for passenger traffic at the beginning of June in the wake of national carrier Malév going bust in February. It still houses offices for airport companies.

MÁV noted that the closure of Terminal 1, planned for five years, would affect the profitability of the project although this effect could drop on the longer term.

BUDAPEST TRANSPORT COMPANY BKV TO SPLIT A Budapest Council Meeting has approved a proposal to either split Budapest Transport Company BKV Zrt into two new companies or to separate the bus division into an independent company. The proposal will not affect either the current debt or assets of BKV as these will be owned by the future units, the council said.

A split of these is yet to be decided according to the document put for vote. Similar to BKV, the new unit or units would be owned by the Budapest municipality, and the assets managed by the Budapest Transport Centre (BKK).

Deputy mayors István György and Gábor Bagdy said the split would make the price of the bus service comparable with the price asked by external bus companies, and would make its cross-financing – namely financing the bus division at the expense of other, non-competitive divisions – impossible. It would be also easier for a smaller and more efficient bus unit to raise loans. In a separate decision, the meeting approved guaranteeing BKV’s loans and the extending the term of a HUF 5 billion loan extended by the city to the transport company from July 31 to October 31.

E-STAR CANCELS CONTRACT WITH HÓDMEZŐVÁSÁRHELY Hungarian energy services company E-Star Alternatív Nyrt has cancelled its district heating contract with Hódmezővásárhely because of the city’s failure

to pay. E-Star said the city had failed to pay “liabilities exceeding HUF 100 million” for almost a year and showed no willingness for talks. The company said it would collect the amount owed plus another HUF 100 million in an exit option fee caused by the termination from the municipality. E-Star said it would take similar steps against its non-paying local council clients until the autumn of this year. E-Star Alternatív is “fi nancing the state budget with more than HUF 1.5 billion and we are unable to augment this amount. From our state-related clients, only 25% of revenues have flown in during the current year.

The actions to be taken will affect almost 300 institutions,” the statement cited CEO Csaba Soós. Commenting on the announcement, Hódmezővásárhely titular chief notary Ágnes Korsós said the city had cancelled its contract with E-Star unit RFV ESCO Kft effective September 2, 2011 because of serious contractual and legal infringements by the company.

Hódmezővásárhely paid the company everything it owed until the time of the contract’s cancellation, she added.

ART CINEMAS TO BE RESCUED Hungary’s National Film Fund has started releasing support for fi lm projects and will grant HUF 66 million to rescue the national art cinema network, business daily Világgazdaság wrote. The shoot of director Márk Bodzsár’s Isteni műszak (Heavenly Shift) is expected to start in August with the help of HUF 205 million from the fi lm fund and a preliminary contract has been signed for HUF 300 million to support Szabolcs Hajdú’s sixth feature fi lm Délibáb (Mirage), the paper said. Andy Vajna, government commissioner in charge of reforming the Hungarian fi lm industry, said at a public discussion at the Balassi Institute in Brussels that he was working to develop a system that “can function in itself without intervention by the government.” The National Film Fund will support fi lms that are likely to attract interest not only by Hungarian audiences but also internationally, for instance by fetching prizes at festivals, he added. The National Film Fund has secured an annual HUF 5 billion in revenues from lottery taxes. ■

06 1 News BBJ

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EU AFFIRMS IRAN OIL BAN, DISMISSES GREEK CONCERNS European Union governments on June 25 formally approved an embargo on Iranian oil to start on July 1, dismissing calls by Greece for possible exemptions to ease its economic problems. Europe and the United States are using the ban to intensify pressure on Iran to scale back its nuclear program, which they say is geared to developing weapons.

Iran says its nuclear works are for electricity production and other peaceful purposes only.

Greece had pushed for a delay in the implementation of the EU ban - originally drafted in January - because it relies heavily on Iranian crude oil to meet its energy needs. At a meeting in Luxembourg, EU foreign ministers said, however, that the embargo would go ahead as planned, although they pledged to review its implementation in the future to ensure European governments have sufficient access to crude.

UKRAINE MAY ABOLISH VAT ON IMPORTED OIL Ukraine’s government is considering abolishing a valueadded tax on imported crude

regional EASTERN LEADERS URGE EU COHESION AS KEY GROWTH TOOL Leaders of four central European states on June 22 singled out the European Union’s cohesion policy as a key investment tool alongside structural reforms to boost growth. “Territorial, economic and social cohesion of the EU is currently challenged due to different levels of growth and competitiveness across the union,” the Czech, Hungarian, Polish and Slovak prime ministers said in a letter to top EU officials quoted by AFP. The leaders insisted that cohesion policy - designed to level out economic differences between richer and poorer areas of the EU - “should not become a victim of possible cuts” in the EU’s financial framework for 20142020. The 27-member European Union has allocated €347 billion ($435 billion) for cohesion and regional development spending boosting jobs, competitiveness or life quality over 2007-2013 period, accounting for 35.7% of its overall budget.

SLOVAKIA RATIFIES CRUCIAL EU BAILOUT FUND Lawmakers in euro zone member Slovakia have ratified

oil to stabilize the market, Kommersant-Ukraine newspaper reported, citing a person with knowledge of the matter from the Energy and Coal Industry Ministry. The tax may be scrapped for 10 million metric tons of oil a year that’s being processed at Ukrainian refineries, the newspaper said.

DANUBE REGION GAS MARKET MODEL PRESENTED IN EP The Danube Region Gas Market Model, which aims to support a joint position on natural gas projects of common interest to countries in the Danube Region, was presented at a conference in Brussels on June 20, Hungarian MEP András Gyürk said. The model, an initiative by Hungary and the Czech Republic, analyses the impacts of new investments into gas transmission pipelines, cross border interconnections, gas storage facilities and their combinations on market integration, prices, liquidity and diversification. “The primary task of this study is to create an economic modeling framework that allows for a consistent analysis of interactions between gas infrastructure investment options and conse-

quent gas market development and integration in the Danube Region,” the conference organizers said. Policy recommendations will be made for the European Commission and the governments of countries in the Danube Region based on the modeling analyses.

GAZPROM SEES BUYERS FOR SOUTH STREAM GAS DESPITE COST Natural gas flowing through the South Stream pipeline from Russia to Europe will be more expensive than hubtraded gas but will win customers by ensuring them a more secure and flexible supply, Gazprom said. Russia’s gas export monopoly aims to supply over 60 billion cubic meters a year, an estimated 10% of Europe’s annual demand, through the South Stream pipeline to Austria or Italy from 2015. Gazprom plans to make its final investment decision on the project by the end of the year. Gazprom would supply the piped gas in long-term contracts, which provide more security and supply flexibility than spot gas through a hub, Sergei Komlev, head of contract structuring and price forma-

tion for Gazprom Export, said during the World National Oil Companies Congress in London on Jun 18.

POLAND ISOLATED IN EU LOWCARBON DEBATE Coal-reliant Poland prevented European Union governments from speaking with a single voice in the bloc’s debate on a low-carbon energy future on June 15, saying proposed regulations may hamper the country’s longterm economic growth. At a meeting in Luxembourg, ministers from 26 EU member countries backed a resolution calling on the European Commission to propose a new policy framework for low-carbon energy up to 2030, but Poland was the only country to oppose the move.

A spokesman for the Danish EU presidency said Poland’s opposition to the resolution would not prevent the bloc from pressing ahead with its low-carbon plans. The EU reached agreement on June 14 on a law to require governments and utilities to improve energy efficiency and lower the bloc’s consumption of fuel.

MFB TO SELL STAKE IN SOUTH STREAM HUNGARY TO MVM The state-owned Hungarian Development Bank (MFB) will sell its stake in South Stream Hungary, a project company fro the Hungarian stretch of the South Stream gas pipeline, to the state-owned Hungarian Electricity Works (MVM) in days, MFB chairman-CEO László Baranyay said on Jun e14. Baranyay said that the national development minister had already approved the sale.

The South Stream pipeline will run from Russia under the Black Sea to Bulgaria, bypassing Ukraine, whose rows with Moscow have interrupted gas deliveries to Europe several times in recent years.

ROMANIA APPROVES ENERGY PRICE DEREGULATION LAW, REPORT Romania’s Parliament has approved an energy law that provides for a gradual liberalization of regulated electricity and natural-gas prices starting this year, news website Hotnews.ro reported. The law, which complies with a pledge by the government to the International Monetary Fund and the European Union under the terms of a precautionary accord, was

approved by 186 votes in favor to three votes against, according to Hotnews.

BULGARIA EASES OIL AND GAS FRACKING BAN Bulgaria’s Parliament has eased a ban on hydraulic fracturing (fracking) to make it easier to allow exploration for conventional natural gas. In January, the European Union country banned exploration for shale oil and gas using fracking after widespread protests against the practice, which involves injecting water mixed with sand and chemicals into rock formations at high pressure. But experts say because the ban also set a specific pressure limit on drilling, it also effectively prevented exploration for conventional deposits that are over 200 meter deep and blocked work dozens of concessions. Initial estimates showed Bulgaria may have significant shale gas reserves, up to 1.0 trillion cubic meters, which could help it cut its almost total dependence on Russian supply.

Economy and Energy Minister Delyan Dobrev said the easing of the ban was only meant to allow companies to explore for gas by conventional methods to boost local production. ■

NEWS FOR THIS SECTION IS TAKEN FROM THE BUDAPEST BUSINESS JOURNAL’S DAILY BRIEFING, REGIONAL TODAY NEWSLETTER AT WWW.BBJ.HU/STORE/NEWSLETTER-PACKAGE

the European Union’s ESM permanent bailout fund, due to come into force on July 1.

The measure passed with the majority support of 118 lawmakers out of 144 present in the 150-member Parliament.

The bailout fund, or European Stability Mechanism (ESM), is a pot worth €500 billion ($634 billion) set up to replace the temporary EFSF fund that was first established to come to the aid of indebted euro zone countries like Greece, struggling to avoid default. Slovakia was the last euro zone member state to ratify the temporary rescue fund EFSF last October, and only at the cost of calling an early election held in March which brought a landslide victory of Fico’s Smer-SD social democrats.

EU TELLS BULGARIA TO END DUTY, TAX RELIEF PROVISIONS WITH US The European Commission has formally asked Bulgaria to put an end to certain duty and tax relief provisions contained in a bilateral agreement with the US on technical assistance, the Sofia News Agency reported. Prior to its accession to the EU, Bulgaria concluded

a bilateral agreement with the United States, which provides for duty and tax-free import of goods financed by US and for goods and services purchased on the Bulgarian market with the funds of the technical assistance program, the Commission said in a statement on June 21. If the legislation is not brought into compliance within two months, the Commission may refer the matter to the European Court of Justice.

ONE FROM THREE ROMANIANS REMIND ABROAD AFTER FINISHING STUDIES Over 30% of the Romanian students that are studying or finishing studies abroad will not come back to Romania in the near future, and 31% are undecided on whether to return, shows a study by the League of Romanian Students Abroad. The big motivations for staying away are opportunities in education, work and business, the responders said.

According to 89% of those taking the part in the survey, attractive career prospects are critical in deciding to return.

Equally, job offers are more attractive if they come with the chance of future promotion

(very important for 73% of respondents) and professional development opportunities are very important for the same percentage, 73%.

CHINA’S YAPP TO OPEN CZECH CAR PARTS PLANT Chinese plastic components manufacturer Yapp Automotive Parts Co Ltd plans to open a new production facility in Mladá Boleslav, Czech Republic, according to a news release from Czech state agency CzechInvest. The planned factory is expected to cost at least CZK 252 million ($12.4 million) and Yapp Automotive will create 80 new jobs at the plant. The plant, which will be the company’s first production facility in Europe, will be operated by its local subsidiary Yapp Czech Automotive Systems. The plant in Mladá Boleslav will make plastic fuel tanks. Yapp Automotive currently has a 50% share of the Chinese plastic fuel tank market, according to data released by the company.

FOREIGN PROPERTY INVESTORS EYE GREEK BARGAINS Greece is back on the radar

of foreign property buyers, particularly as far as holiday homes are concerned, following the major decline in prices that now reaches up to 60% compared with 2008, news site ekathimerini reported.

Foreigners are seeking out bargains in popular summer destinations such as Santorini, Corfu, Myconos and Crete, whose prices are lower than those to be found in Spain, Italy and Portugal, and are in fact edging closer to those seen in Turkey. Competition with other Mediterranean countries is fierce.

BILFINGER TO BUILD €75 MLN POLISH OFFSHORE FACTORY According to a report in Windpower Monthly, German Bilfinger Berger-led consortium KSO has signed a letter of intent with local authorities in Szczecin, northwestern Poland, to build the offshore foundations factory in this town. The construction company Bilfinger Berger owns 62% of KSO. The consortium will invest €75 million in the factory, which will produce 80 foundations annually, the report said. The first founda-

tions, with a 1000-ton weight are due to be manufactured in 2014. Other partners in the consortium are Polish shipyard Crist (25%) and Mars investment fund (12.5%).

PRO-BAILOUT PARTY WINS GREEK ELECTION Antonis Samaras, the leader of the center-right New Democracy beat off a challenge by the radical anti-austerity party Syriza and immediately promised that Greece would honor its commitments to pay off its debts and restore its public finances. With two-thirds of votes counted New Democracy had edged out Syriza by a margin of 30.1% to 26.5% according to official exit polls, with the former ruling party the Pasok holding 12.6% to form a majority in parliament for parties supporting the Euro austerity package. New Democracy’s slight lead over Syriza was crucial because the Greek election system awards a bonus of 50 extra seats in parliament to the party that comes first, so the 2 percentage point New Democrat lead translated into a massive parliamentary lead of 130 seats compared to Syriza’s 70. ■

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The immediate pain of reform is obvious but unavoidable, Human Resource Minister Zoltán Balog told members of AmCham at a business forum. The mid- to long-term picture will look much better, but only if the Fidesz-led government finds the courage others have lacked to bite the bullet.

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Speaking at the business forum on June 22, he described a lengthy period of systemic failure by successive governments (although he glossed over the fact that from 1998-2002, the first Fidesz-led administration was in power and therefore part of the problem). “False compromises have allowed the status quo to survive the last 20 years,” Balog said.

Why have one person in a job, when you could employ three, had been the mantra.

“The same applies to Greece.

We all know that the most

public servants [in the EU] are in Greece, and Hungary follows that.”

He recalled a New Year greeting parishioners would say to his father – like him a pastor; “May the New Year be no worse than the old.”

It summed up “very negative survival strategies” that had resulted in a culture of ever-greater government spending on staff and subsidies, requiring ever-bigger loans to meet the costs and all the while failing to overhaul and reform creaking systems. Now there is a concerted attempt to create a more transparent system that will benefit society and business alike, he promised.

In response to a question on cuts in the national drugs budget, he admitted that, viewed in isolation, it appeared bad. “There are cuts in drug spending but in next year’s budget, if plans work out, we can introduce new funds in the health sector in fields we feel are especially weak, which Hungary has not seen since 2006.” More money for staff, hospital renovations and equipment renewal were in line, he said.

Education was another problem area. Balog claimed Hungary’s was the “only public education in Europe where there is no government, no central control”. Answering a

Photo: Lázár Todoroff/AmCham

A management approach to HR

question on Roma integration, he said much could be learned from US examples, but early engagement was key. “The Hungarian education system in Europe presents the least chances to poor children to do better, whereas our kindergartens are very strong in terms of integration, so we need to support that as early as possible.” Encouraging parents to spend time with their children in after-school clubs could also be an effective way of building community, he said.

Diplomas must be useful and useable, relevant to market needs. Teachers need to teach well, and be paid well. “But who is entitled to talk about raising the salaries of teachers when we do not know how many there are in Hungary?” In the current situation the government “cannot predict how many teachers we will need in 10 years’ time”, he added.

“Once we know this we can talk about raising the salaries of teachers. Without this it

would simply be an irresponsible approach. And the same applies to health and social care. I am looking at figures no one else has looked at in the last 20 years. The ratio between healthcare workers and patients in Borsod county and Budapest, for example.”

Unless and until such detailed analysis is made, real reform is a pipe dream, he implied.

“We need a management approach. We have an opportunity, and it is our responsibility to do so.”

And there was the by now familiar Fidesz appeal to businesses to ignore short-term pain for longterm gain. “I offer my trust and cooperation but in order to really cooperate we need your trust. We need to improve in terms that we do not rush sectors with taxes, but I hope that as the system is consolidated we are better able to coordinate tasks. We are responsible for our future together.” ■

Altera to enter the parquet this fall Altera Asset Management Zrt is hoping to raise in excess of HUF 2 billion from around 500 small and medium investors in an IPO at the Budapest Stock Exchange (BÉT) this coming fall. The company’s listing on the BÉT will mark the second-largest public offering over the past five years, according to Altera executives. The asset manager aspires to move its shares to category “A” by 2015 and to eventually become a dominant investment company in Central Europe.

Altera’s investment strategy is based on a so-called hybrid model, which responds to the investment environment created by the financial crisis.

“In the past 20 to 30 years, there have been no such possibilities for investments like we have today, and we believe these are available without taking significantly high risks,” said

Barnabás Szabó, chairman of the board at Altera, at a recent press meeting in Budapest.

Under the hybrid model, Altera is building a portfolio that consists of a dynamic and a conservative element. The ratio of the value invested in these two, as well as the actual asset classes in both portfolios, are constantly revised and modified in line with changing market conditions.

“The core idea of our hybrid model is to use a flexible investment strategy that uses various types of asset classes that best fit the actual market situation. This is radically different from the strategy of traditional investment companies, espe-

cially that of many investment funds, which tend to apply the same investment strategy for years regardless of changes in the market,” explained Balázs Faluvégi, board member responsible for the company’s investment strategy.

He listed five asset classes, which have been proven to work in the past hectic years, and which are expected to earn profits according to Altera’s forecast. These include corporate bonds, bonus certificates, high-dividend stocks, heavily undervalued bluechips that have been victims of market overreaction, and corporate shares little affected by the crisis. “A balanced portfo-

lio of these can earn a doubledigit annual yield in a few years time,” Faluvégi said.

Szabó expects Altera to be in category “A” at the BÉT, and also to become one of the stocks in the BUX basket, by 2015. Altera wishes to become a dominant investment company in the Eastern European region – with capital of €100 million and high return on equity rates, Faluvégi added.

As for prospective investors, Altera hopes to attract 500-600 small and medium investors who are willing to consider a three-year investment period, are dissatisfied with interest rates on bank deposits, and still insist on maintaining liquidity.

Altera was established by 32 private individuals in the beginning of 2012, with HUF 100 million capital, and an additional HUF 100 million in capital reserve.

The company currently maintains two types of stocks: a so-called sequence “A” with preferred dividends, which belong to three members of the board of directors (Szabó, Faluvégi and member of the board responsible for business development Csaba Bundik), and the stocks from sequence “B” held by the founding investors.

The board of directors work exclusively towards a success fee, set at a flat 20% of after-tax profits. RVW

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A new Hungarian tax practice: Subsidizing team sports Retirement plans

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Kenya within an arm’s reach Students’ cultural exchange programs were taken to another level this spring through a project that involved state-of-theart video conferencing technology and joint virtual classes for a group of Hungarian and Kenyans students. Organizers hope lifelike meetings could be an engine for change.

Stepping into the room, it is just like a regular class in a secondary school: sixteen students sitting around a table, within arms’ reach, talking.

With just two days before the summer holidays in Hungarian schools, the topic is also obvious. But that’s when you spot the first difference: while students fast agree on the most preferred activities, such as dancing, listening to music, bathing and partying, on one side of the table, it is wide-eyed incomprehension regarding an 11-week summer break. “When you go back to school, you forget how to read your name,” as one student put it, laughing.

He is from Kenya, a student of Magnet High School in Ongata Rongai, and is only sitting in the room virtually.

With his seven fellow classmates and eight others from the Dániel Berzsenyi Secondary School of Budapest, they are taking part in a teleclass series, a unique cultural exchange aided by technology.

Cisco’s real-time video conferencing tool Telepresence (three simultaneous high-quality video streams and a high-def-

Photo: István Csákány

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inition, full-motion content sharing stream, plus superior lighting and sound) provides the background for the lifelike classes, while the two distant countries are joined by the One World Learning project initiated by the International Centre for Democratic Transition.

“We knew very little about Kenya before, that people are poor there and some basic information that the media had covered,” a student of Berzsenyi school said. “We heard the people are poor there,” another one adds. Then, over the term, they learned a lot else and a lot more about this part of Africa, where a significant part of the population is still living in the traditional way but has taken up, for instance, mobile technology very quickly and efficiently. Students answer my questions taking up short, to speak about getting used

to the Kenyan accent, about how different being religious is there, and how some tribal traditions like initiation to adulthood still live on. And besides all the differences, they also speak about how similar their lives are, details of which they have been sharing with each other on Facebook and Skype.

The topics of the classes are somewhat determined by what the ICDT considered important, such as knowledge of foreign cultures and universal development issues, but in the end, the students’ interest was the main driving force. Both groups prepared a couple of topics for the meetings, with added multimedia content. “See, this is Hell’s Gate national park, that’s where we spend a lot of time during the holidays,” the Kenyans share, while on the other side of the table, eight Hungarians lean

over their desks to see the pictures on the small screen in the middle. Then the Hungarians show some of the energy developments in their country.

In the beginning, Kenyans had little or no idea what Hungary was about. By now, they know there’s more to this country: from “a place somewhere in Europe,” it became the home both for innovations like the Rubik cube and for the real people they’ve just made friends with. “That is the major motivation to learn more,” says their teacher, Manases Karanja. He is also very proud of his students because they opened up like noone would have expected, and because they were able to show the more optimistic side of Kenyan people.

Stage fright was gone very soon, and in-depth conversation followed on families, girl- and boyfriends, faith,

preserving nature, and even some sensitive discussions on sex, family abuse and orphanhood. “I also had stage fright at first, but then these classes turned out to be a good therapy,” one Hungarian student admitted. Several others claimed the best part of the project was getting to know the Kenyans as real people.

“These students in fact learned how to become acquainted with another culture,” ICDT program organizer István Csákány told us. So with a successful pilot now behind them, the Centre prepares for another round of meetings between Egypt and Hungary, hopefully in 2013. They would like to continue with at least eight sessions on a weekly basis, and with six semesters altogether involving further countries.

Even this way, the project remains a low budget one, as its costs will not exceed $80-

90 per student, personnel costs included, assuming that video equipment is used at 75% capacity on school days only. As the emphasis of the project is on the unique learning experience that proved to be just as effective as faceto-face events, ICDT plans to bring mobile equipment to the schools in the long term.

But for now, it is time for the students to say goodbye, and it is hard indeed. Although everyone has made friends with each other on social media sites, there’s still a lot of sad faces, last messages, and promises of keeping in touch.

With the screens gone black behind them, the Hungarian students are still recalling the nice memories. “We have learned that the famous song from the movie Lion King, Hakuna Matata, was actually used in Kenya and means don’t worry. Our entire childhood finally makes sense.” ■

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When the oligarchs come marching in Ties to big business and shadowy businessmen have always been a contentious issue in post-transition political discourse, but Fidesz excelled at lambasting its predecessor as the ‘banker’s government.’ Since the resignation of a junior minister, József Ángyán, who alleges that oligarchs with strong ties to Fidesz have swept up profitable land holdings sold by the state, Fidesz has been struggling with the critical attention on its own relationship with Hungary’s superrich. The opposition is naturally trying to make Ángyán’s charges and the whole notion of Fidesz being beholden to the oligarchy stick, and the numerous influential billionaires near Fidesz and Orbán offer fertile grounds for this line of attack. Fidesz has responded to these criticisms with a provocative idea: by threatening to withhold public funding from political parties, it will leave the opposition little alternative but to cultivate billionaire supporters of their own.

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Russian thinking once dominated political discourse in Hungary by imposing a cult of Marx et al. Now the influence is much more subtle.

Following the term used to describe the notorious Russian super-wealthy elite with close political ties, the opposition is fervently pushing the notion of “oligarchs” domi-

nating Hungarian economic life thanks to their close ties to Fidesz.

THE OLIGARCHY GOLEM This is actually Fidesz’ own campaign device coming back to haunt the creator.

Referring to a “banker’s government” and “oligarchs,” Fidesz consistently accused the preceding MSzP (previously MSzP-SzDSz) government of catering to the needs of its wealthy backers. Now a series of controversies has made the Orbán government susceptible to precisely the same line of attack.

Fidesz has of course often been accused of favouring the wealthy at the expense

minister in the Ministry of Rural Development. Though Ángyán was not only a member of the government but is also a member of Fidesz, he is actually popular in some circles outside Fidesz, too – at least among those who are aware of his work, which is not a large group.

On the far-right, including Fidesz’ own far-right segments, he is popular because of his commitment to protect Hungarian land from being sold off. Among environmentalists, he is popular because of his devotion to sustainable farming. Even among those who consider him too much of a nationalist, few doubt his integrity when it comes to

agree with Ángyán’s vision, the fact that most of the land sale competitions were won by exactly the type of folks – rich and often politically connected – he had complained about is public record.

WHY IT MIGHT STICK In any case, Fidesz clearly has a very strong interest in not being stuck with the “friend of the oligarchy” label and is obviously mad at Ángyán for providing the opposition with such a convenient basis for its attacks. One of the reasons that the charges work so well is that they have at the very minimum some basis in fact.

The coterie around Orbán and Fidesz is brimming with

have a direct impact on legislation. An act of Parliament colloquially known as “Lex Simicska”, for instance, has substantially hurt the core business of ESMA, a Spanish-Hungarian competitor of Simicska’s advertising agency Mahir, by changing laws on roadside advertising. Similar examples abound, and foreign investors are probably learning that competing with businessmen favoured by the Orbán government is not the smartest way to apply their capital.

NO MONEY FOR DEMOCRACY Inconvenient as the charge of oligarchy may be, the prime minister appears hell-

COMPETING WITH BUSINESSMEN FAVOURED BY THE ORBÁN GOVERNMENT IS NOT THE SMARTEST WAY TO APPLY THEIR CAPITAL of the public. This critique is grounded in the policies of the past two years, such as Fidesz’ trademark measure, the flat tax, or the fixed exchange rates for repaying foreign currency denominated housing loans, among others. Overall, Fidesz’ course is so clearly directed at strengthening the position of Hungary’s wealthier strata that all the opposition parties, including far-right Jobbik, are now centering their attacks around the theme of social justice, which they claim – with some basis in empirical evidence – Fidesz has abandoned.

THE FABULOUSLY WEALTHY Yet wealthy does not equal super rich, and Fidesz is now the subject of massive political and media attacks on account of its alleged ties to a Hungarian oligarchy. These charges are not wholly novel, either, but were given substantial impetus in January 2012 by the resignation and bitter revelations of József Ángyán, formerly a junior

promoting the values he holds dear, some of which are not partisan, such as his opposition to corruption.

END OF THE AFFAIR Ángyán resigned to protest a massive sale of state-owned land, which he thought concentrated extremely profitable holdings in the hands of a few very rich people, i.e. the oligarchy. This, he argued, would create conditions in Hungary much like in some Latin American countries, where a few extremely wealthy landowners control vast swathes of arable land.

Especially with the EU’s subsidy scheme, landowners stand to make healthy profits even if they do nothing with their holdings (Ángyán estimates that the lucky winners of the land tenders could recoup their costs within two years).

In contrast, Ángyán’s vision was for the land to be distributed among folks who would actually use it to farm and live off the proceeds. While one might dis-

extremely wealthy folks, a few of whom are quite prominent: Gábor Széles, the owner of the right-wing daily Magyar Hírlap and of Echo TV; Lajos Simicska, Fidesz’ former treasurer and reigning éminence grise (his company, Közgép, has won numerous construction tenders worth €1 billion since 2010); his business partners Zsolt Nyerges (one of the big winners in the tenders impugned by Ángyán) and Tamás Fellegi, current and former co-owners of rightwing Heti Válasz, respectively; Interior Minister Sándor Pintér; Constitutional Court judge István Stumpf; László Vitézy, publisher of the right-wing tabloid Helyi Téma; Dezső Kékessy, Orbán’s friend and former ambassador to Paris; and the Lázár brothers, owners of the largest Hungarian-owned supermarket chain CBA, whose company also engaged in political campaigning for Fidesz in 2010.

Apart from often winning dubious tenders, some of these people also appear to

bent on fuelling it with his most recent, highly disingenuous proposal: political parties should assume their own share in the efforts to overcome the crisis, argues the PM, and thus their public funding from the treasury ought to be frozen for two years. Apart from saving miniscule amounts as compared to many of Fidesz’ most controversial projects, the cynical suggestion would drive parties even more into the hands of the business elite that controls illegal party financing.

Fidesz of course is banking on popular anti-political attitudes to convince the public that its latest measure to weaken the opposition is in reality a magnanimous sacrifice from the party that ostensibly stands to lose the most from this measure.

Due to its strong ties to the Hungarian oligarchs, Fidesz is of course well-equipped to handle the loss of state sub-

sidies. Though MSzP’s business ties have probably been battered as a result of its massive electoral defeat in 2010, it remains the bestpositioned opposition party to weather such a drastic move and may even profit from the way the proposed measure would afflict LMP. The sources of Jobbik’s funding are nebulous, but it, too, has thus far been doing fairly well financially. While all opposition parties would suffer from the loss of public funds, LMP would take the biggest hit. Either way, if Fidesz manages to pass this proposal without the public appreciating the underlying intention, then this will be an important step towards securing victory in the next election, even as the most recent polls show Fidesz’ popularity to have fallen below 20% of the entire electorate.

OLIGARCHING IS HERE TO STAY This ambition will be somewhat hampered by the opposition’s efforts at keeping the oligarchy issue alive. Jobbik has proposed the establishment of a parliamentary committee to investigate the issues raised by Ángyán, and the other opposition parties support this endeavour. Fidesz, which has a history of scuttling investigative committees initiated by the opposition, has already announced that it does not support the harassment of wealthy citizens by the opposition, though it is unclear what this means for the future of the envisioned committee.

The timing of Orbán’s announcement about the temporary cessation of party funding is not only unfortunate in terms of coinciding with the rise of the oligarchy issue, but is likely also meant to be a provocative response to this very issue – it’s as if he were saying “find your own oligarchs then.”

The opposition is unlikely to ignore the gauntlet thrown down by Orbán and will milk the oligarchy question for what it’s worth. Still, if opposition parties want to stay in the political race, they might have to resort to oligarchs of their own. ■

www.policysolutions.hu Political Research and Consultancy Institute

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Sport mega-events – a great s Hosting the Olympic Games or a major football tournament permanently boosts trade by 30% and enormously speeds up infrastructural developments in the organizing country.

Less than a month from now, London will try to prove that the analysts were right: with a total budget of £9.3 billion, the Summer Olympics can boost the city’s regional power and show a good example to other candidate cities. Budapest could have been one of these cities 10 years ago, and again two years ago.

What had Hungary missed by not bidding to host the games?

“We aim to improve the quality of life for all through cultural and sporting activities, to support the pursuit of excellence and to champion the tourism, creative and leisure industries,” reads the simple mission statement of the hosting department of the London 2012 Olympic and Paralympic Games.

The complex message reflects the core idea: hosting a sport mega-event can provide a unique chance for a country to develop and improve the quality of life for the whole nation in terms of economy and infrastructure. At least that is what most analyses suggest: for instance, PwC’s experts state in one of their studies that investment in mega-event-related infrastructure can accelerate economic development by as much as three decades.

However, advanced planning is more than crucial for real achievements: the transformative effect of well-thoughtout supporting infrastructure for a big sport event has

long-lasting economic, demographic, and social implications for the entire region.

How a government body – national, regional, or municipal – plans for the legacy of supporting infrastructure can have a ripple effect on the development of a region for decades to come.

Hungarian politicians recognized this promise for the first time in the country’s modern democracy 10 years ago, when with the leadership of the well known sportsfan, Viktor Orbán (then Prime Minister as well), the country formulated the intention of applying for the 2012 Olympic Games – at least on the level of public discourse. The government ordered an impact study to estimate the possible cost and rationality of hosting the 2012 Summer Games. The PwC-developed document resulted in a moderately positive answer. The event could had been realized for a total sum of HUF 4,600 billion – including HUF 3,000 billion in central governmental fund-

ing – under some major conditions: the country’s most important economic policy and development priorities needed to be appointed first regardless the infrastructure development for the Olympics. There needed to be an economic environment where Hungarian GDP could produce an average 4% growth annually until 2020. Well, today we know just from the last point that the preconditions obviously could not have been fulfilled. For many, however, the idea of hosting such an event was much more than a campaign phrase, as others had interpreted Orbán’s vision.

WASTED CHANCE The next government decided not to bid for the 2012 games in 2002, but the enthusiasm remained and formed a vibrant civil initiation: with the leadership of Attila SzalayBerzeviczy, former chairman of the Budapest Stock Exchange, in 2005 BOM (Budapest Olympic Movement) was established and in three

years recruited over 34,000 supporters. The movement generated unprecedented media hype with respected public figures and influential businesspeople involved. They could maintain the hope: organizing, or at least bidding for, the following Olympics can be vital for the country’s future, they suggested. BOM financed a new impact study in 2006, also conducted by PwC. The new estimates for the 2020 games included a total budget of HUF 5,164 billion for the whole event. BOM even managed to unite the often divided politicians, and lined them up behind the cause. The effort was still not enough for officially bidding to host the 2020 Olympics.

It was another wasted chance for the country. Members of the Hungarian political elite were preoccupied only with themselves in the past 10 years, so had no time for affairs of the country, and especially the future, as Szalay-Berzeviczy retrospectively commented the decision when the Budapest Business Journal asked him about BOM’s recent activity. He and his movement constantly have been advocating that evidence shows hosting the Olympic Games enhances the business profile of the host city, and acts as a significant catalyst for economic, cultural, and social change. This effect is related to the entire process of bidding, preparing and staging the Games, which can continue to have beneficial economic

impacts for the whole region.

BOM has been relatively silent for the last two years; however, as the BBJ learnt from SzalayBerzeviczy, in the next month they will announce their new strategy to keep the spirit alive for the future.

One can understand the perseverance of the wellknown businessman, if aware of the statistics and figures of the last few decades related to big sport events and their economic impact. Szalay-Berzeviczy is especially passionate since he had been infected through family ties: his greatgrandfather was the first president of the Hungarian Olympic Committee. But as an economist, he also believes in the potential. A study of 196 countries’ economic performance between 1950 and 2006 found that hosting a megaevent, like the Olympics, the FIFA World Cup or the UEFA Euro Cup, permanently boosts trade by 30%. This does not apply to cities like Montreal, where the organizers did not plan the infrastructural needs accurately, and the Canadian town feels the burden of the costs even today. PwC’s study says the Olympics simply sped up the renewal that had already been planned to take place. To orchestrate properly a long-term development, the governmental bodies need to explore private sector options as a way to better manage financing concerns for supporting infrastructure. Recent decades show that some cities have turned to public-pri-

vate partnerships (PPP) as a viable solution. Best suited to large-scale infrastructure assets with ongoing maintenance requirements, PPPs are increasingly used to secure additional financing, better manage risks, and increase transparency and accountability. The best example is Barcelona, where the city spent six times as much on infrastructure as it did on organizing the event itself. As a result, the

A new Hungarian tax practice: Subsidizing team s The finalization of the new legislative background on subsidies to spectator team sports – football, handball, basketball, water polo and hockey – in Hungary has its first anniversary these days. Last year’s tax benefit scheme is quite unique in Europe, and it is expected to boost Hungarian sport life. With a sum of HUF 42 billion coming from the private sector, the first year was a promising start.

Overall, the first year can be declared a success story.

Several private companies decided to use this new tax law, and not just benefited from it, but injected HUF 40 billion-45 billion into the sector, Miklós Fekete, partner at PwC and expert of the topic, told the Budapest Business Journal. The new subsidy system should result in a significant breakthrough in the financing of Hungarian

sports, according to Fekete’s hopes. “The tax incentive could strengthen the activities of sport enterprises and create a more secure legal environment for the sport business and public subsidies as well,” he said.

The government recognized the need to attract financial supporters other than the state itself. They realized that 75% of Hungary’s active sports commu-

nity – professional and hobby athletes – was from these five spectator sports. The Orbán cabinet created the National Sport Institution (NSI) in 2010, a former flagship body tasked with monitoring and sustaining the physical education of the rising generations.

Now it is NSI’s responsibility to keep track of the new system and to monitor the realization of using the new tax benefit scheme.

The most important provision for companies is that as of July 1, 2011, any entity subject to corporate tax has the opportunity to decrease its corporate tax base by the value of subsidies provided to team sports. The Act on Corporate Income Tax explicitly recognizes the deductibility of costs relating to subsidizing team sports and defines these as costs incurred during business

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t stimulus for the economy

1992 Games thrust Barcelona into the top tier of Europe’s tourist and business destinations, and the city experienced a metamorphosis within five years that would otherwise have taken three decades. Not to forget the smoothly organized game as well!

WHAT DOES POLITICS WANT? BOM’s plan to push the campaign forward will probably clash with recent politi-

cal will, since the Hungarian government declared in 2010 that even though they would like to have a sport megaevent in Budapest sometime in the future, in the present economic environment there is no realistic chance for bidding in the next 20 years. Facts point out that financial instability is not the main obstacle for a city or country to bid: Rome and Madrid – both affected heavily by the crisis – officially

made their bids a few years ago for the 2020 Olympics.

PwC research has found that a potential city for hosting such mega-events needs to excel in four essential dimensions to capture attention on the world stage: quality services to residents and businesses, sustainable development, visionary leadership, and consistency of image. In order to prepare for that, it is interesting to examine some examples:

China invested approximately $40 billion in infrastructure alone between 2002 and 2006 to prepare for the Beijing Olympics in 2008 by building some 40 new stadiums and athletic facilities, doubling the capacity of Beijing’s subway system, building roads, and constructing a new airport.

Investing in infrastructure also offers a wealth of opportunities to international investors seeking new markets. Brazil, for example, is expected to invest some $83 billion in infrastructure from 2009 to 2016 to prepare for the football World Cup in 2014 and the Olympics in 2016.

More than 1,200 projects have already been identified for the World Cup, which is expected to draw more than half a million international visitors, many of them private investors from the Middle East, Europe, and the US who have already expressed interest in these infrastructure projects.

Like in Brazil, the South African government, the host of the 2010 World Cup – the first sport mega-event held on the African continent – actively solicited private participation in infrastructure. They specifically provided incentives for foreign companies to partner with local businesses. As a result, much of the planning and development of wider infrastructure in the country was accelerated.

certified amount of the subsidies provided, capped at 70% of a company’s calculated tax liability.

Although there will be a negative cash-flow effect, as the subsidies can result in a reduction of up to 70% of a company’s tax liability, this will represent a financial gain for the company. This gain can nominally exceed the amount of the actual subsidy, since the subsidy

may be reckoned as an expense (hence reducing the tax base), while the incurred corporate tax liability can be also reduced. This in practice results in a realized gain on the supporter’s side equivalent to the corporate income tax rate.

For instance, in case of larger companies, where presumably the 19% corporate income tax rate applies, the entity could vindicate 119 units against 100 units of the subsidy.

“The proof of the necessity and viability of the development program is the financial support of HUF 42 billion, which gives us hope that the initiative can evolve even more in the future,” Gábor Bardóczy, director general of NSI, commented on the first-year report to the BBJ. He emphasized that the sum was distributed in 986 locations in the country; 58.2% of the amount went to football,

London was already a hot spot of European tourism with a well-developed infrastructure when it won the right to host the 2012 Summer Olympics. The real question was how the city will manage to proceed with the preparations during the world economic crisis. The organizers combined three major sources for the total budget of £9.3 billion: 67% came from the central government, 23% from the National Lottery, and 10% from the municipality of London. During the last six years of preparation – when 40,000 people and nearly 2,000 businesses have undertaken one of the biggest construction and regeneration programs in the UK – there were several debates over the issue of overspending. Despite all that, London is ready for hosting the game. They even managed to have most of the venues available one year prior the games. Lloyds TSB Bank estimates that for the 20122015 period, hosting the event will generate £10 billion for the economy and fuel a 3.5% GDP growth.

The long-term benefits are compelling with their promises of new facilities and infrastructure, urban revival, enhanced international reputation, as well as additional employment and local business opportunities. However, one needs to calculate carefully and remain realistic, Tibor Almássy, partner at PwC, suggested to the BBJ when asked if there was any realistic chance

19.7% to handball, 9.7% to basketball, 6.6% to water polo, and 5.8% to hockey community programs. The financial aid was earmarked for the development of sport facilities and for supporting youth teams management.

Experts expect the new model to become an alternative way to boost sport life in Hungary and also to provide other possibilities for publicprivate partnership programs,

for Hungary to bid for a major sport event in the near future.

According to the expert, there is no chance to win any candidacy for a major event as long as Hungary’s credit risk is as high as it is now and unless the current economic environment improves. Almássy also stated that he supports the idea of hosting an Olympics in the future, because Budapest has excellent potential concerning urban planning possibilities with constantly improving infrastructure. “We need to be lucky with the timing, because if another Eastern European city wins the bidding, Budapest will lose her chance for decades,” he said.

Even though the present Euro 2012 in Poland and Ukraine is probably not the most commercially successful enterprise – as the Danish Saxo Bank predicts an estimated deficit of €2 billion –, hosting a major sport event in Eastern Europe still can be beneficial for the region, enhancing the chances of other regional cities to apply for sport mega-events in the future. This is the hope that Szalay-Berzeviczy shared with BBJ: in the upcoming years, relying on the civil society, they want to maintain the public will of hosting the Olympics. Only if the economic environment changes and the conditions in Hungary start to improve will the county eventually be able to submit an official bid. RVW Tibor Almássy, partner at PwC Hungary, has contributed to this article

m sports operations for corporate income tax purposes. So the greatest incentive of the corporate income tax benefit in question lies in the fact that from the supporter’s perspective, it will result in a tax saving. In addition to subsidies being recognized as eligible costs for corporate income tax purposes, taxpayers will also be entitled to a tax allowance in connection with the

especially since the core of the program was established mainly for infrastructural projects. Eventually, the longlasting impact of the program can help Hungary prepare an official bid for a “mega” sport event, be it a major football tournament or even the Olympic Games. RVW

Miklós Fekete, partner at PwC Hungary, has contributed to this article

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Coaching Without Borders – a personal note The Coaching Without Borders project in Hungary was set up in September 2011, and the first season has already seen ten workshops with the participation of widely-known professionals from all over the world. What follows is a personal narrative of the first ten months of the project by one of the founders and chief organizer.

BBJ JUDIT ÁBRI

I was close to 50 when I got acquainted with coaching.

I first heard about shortly before it was recommended to me. My family said it would suit me; I thought so, too.

Actually it was my son who got invited and delegated me a couple of years ago to an October morning promotion event of KPMG Academy, where executive coach and mentor training was announced and introduced for the first time. After 20 years of communication consultancy assignments, I was ready to do something else.

Something close enough but not quite the same. Advisory roles and coaching are sisters to each other but not twins.

With the entrepreneurial spirit still strong in me, I thought it was time for a change. I completed the fourmonth course; I learned the difference between coaching and advising, coaching and training, and coaching and

therapy, and adopted many more tools and attitudes to make me a real professional coach. In my translation of this to real life, it meant that while as a consultant with C-suite corporate leaders I had 30 minutes or even less to convey my ideas, as a coach I got hours alone with executives. As an advisor, I did all the talking, but now that I work as a coach my role is more of a listener who asks the right questions, summarizes, holds up a mirror, and gives constructive feedback.

As a communication consultant with good referrals and ideas, I had access to and could win a new client in a relatively short time, but as a coach it takes time, months and at times even a year before the level of rapport prepares the ground for a coach-coachee type of relationship.

I came to realize that one coaching school is not enough, so I went to another one, also in Hungary. What next? I was still eager and anxious to learn.

So this is how Coaching Without Borders was born.

I thought it was neither economical nor practical to travel abroad every month to study and to attend interesting workshops of big international names from the coaching profession. Why don’t they come over here?

Not a bad idea! But would THEY, the big names, come here? Can we afford them?

Are there enough of us, current or future coaches, HR professionals, and coaching-minded managers who want to learn and are willing to pay for it? A real commitment to learning and selfdevelopment was required.

As the the first year of Coaching Without Borders

nears its end, and after 10 very interesting and valuable coaching workshops, I now know for certain that there are many of us committed to growing in knowledge, to developing, and to discovering new grounds and depths in coaching.

We were the first to bring to Hungary Sir John Whitmore, the father of coaching, who translated coaching from the world of sports to business. British newspapers consider him to be the number one business coach in the world. From him, we learnt the concepts of awareness and responsibility, and came to understand their meaning in the leadership world; of self-awareness and self-knowledge, and the inner wisdom and value these all add to the authenticity of a leader. We also see the leader with a vision for the long term, which vision speaks for the future generation. In its broad sense, this vision covers social and geographic aspects too, and in its depth it is both reflective and purposeful. All these encompass the notion of Future Leadership.

We had team coaching with Marco Buschman, where we learned the essential factors that go into creating a high-performing, sustainable team. An organization is more and more a dynamic matrix of interconnected teams in all shapes and sizes that interact and depend on each other every day. We learned about productivity (refers to the functional part of a team) and positivity (refers to the relational part of a team), and it was our task to describe our team in this context.

February 2012 brought me the discovery that while being a coach, I can also be

a consultant again if I learn from Frank Bresser the art of introducing coaching to the organization and become an advisor on the subject.

Then I can do all the talking again! This brings a systematic approach to coaching in companies, so this is very close to my heart. Especially if I take into consideration that the evaluation and measuring of the outcome of the coaching process is one of the 10 key success factors to introducing coaching that Bresser names, and this coincides with my coaching philosophy and my ROI coaching approach.

The first season of Coaching Without Borders ended this week, and already the next season has been finalized and published. I can talk about it with equal enthusiasm.

Now I finally have lady speakers and prominent coaches on the program.

The motto for the next year: Energy, emotions, life goals.

Among many exciting and new topics, we shall hear about how to develop emotional intelligence. As confirmed by independent academic research, one-quarter to nearly one-half of all job success can be attributed to emotional intelligence. EQ refers to our capacity to per-

ceive, generate, and manage emotions in ourselves and others. A large and growing body of independent scientific research has identified it as the single most important determinant of success in work and life. Emotionally intelligent people succeed because they are better able to read, and deal with, social complexity.

Another subject, energy coaching, deals with the fact that we need to energize both ourselves and our team all the time, to keep ourselves going at the rate that the modern world demands from us.

The question we shall investigate is: “How do you show up for work?”

The workshop will give us insight on how we show up physically, emotionally, mentally and spiritually during the days of our life.

My spirits are high when I talk about Coaching Without Borders, but I am running out of space on this page, and I cannot finish without mentioning the outstanding master coach, Philippe Rosinski. I cannot leave him and his topic out, not here, with the multicultural readers of Budapest Business Journal. Rosinski specializes in intercultural

coaching, that is, making the most of alternative cultural perspectives. His promise for the day is that we will discover how to extend beyond cultural norms, values, and beliefs when working with colleagues or coaching clients, and we will also find creative solutions for leveraging cultural differences and addressing complex and multidimensional challenges.

What I enjoy most in preparing my program is when I get the chance to Skype with these brilliant people. Those are my special moments. I exchange ideas, learn interesting ideas about their special fields, and I get an international perspective on my profession. And then I can meet really nice people in person. Professionally this is all exciting, I wish they could be here tomorrow with their programs!

Following the rule of the business venture, I have to say: see you in May 2013!

One speaker for one month – in terms of business, it would not work otherwise, although at that moment I wish it could be more. All these coaches radiate positive energy, igniting and empowering positive attitudes in me, and I bet they would do

Judit Ábri von Bartheld ACC, International Coach Federation accredited executive coach, organiser “Coaching Without Borders” www.coachinghataroknelkul.hu, and “Leadership Excellence Forum” abri.judit@executivecoach.co.hu www.executivecoach.co.hu

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Mortgage loans

Retirement plans

More money for R&D

Dangerous loans on the rise

Hungarians have only plans, not savings

Companies spend more on R&D, but cautious about future

56%

31%

OF MORTGAGE LOANS HAS A LOAN-TO-VALUE RATIO HIGHER THAN 90%

An increasing number of Hungarians are facing the scary reality that the total amount of their foreign currencydenominated loans exceed the value of the real estate covering the debt, according to recently published data from the National Bank of Hungary (MNB).

The combination of declining property prices and the weakening of the forint has clearly resulted in a deteriorating situation for mortgage loan owners, signalling increasing dangers of a possible loan bomb explosion.

According to data provided by the MNB, 56% of the entire housing loan portfolio denominated in foreign currency has a loanto-value ratio (LTV ratio) higher than 90%.

The number of “dangerous” mortgage loans that need to be watched closely by banks has increased over the past 12 months, as in March 2011, only 34% of mortgage loans had a 90% or higher LTV ratio. By September 2011, this figure jumped to 47%, and reached 56% in another six months. By Q1 2012, out of the HUF 2,050 billion total residential mortgage amount, HUF 1,155 billion had an LTV ratio higher than 90%, and another 10% of mortgage loans had an LTV ratio between 80-90%.

Since the beginning of the mortgage crisis back in 2008, housing prices fell by 13% in Hungary, while the forint depreciated strongly against the euro and the Swiss franc – the latter being the flagship currency of the mortgage loan boom in In the 12 months between the Hungary before 2008. end of March 2011 and 2012, the These factors, aided by number of foreign currencyan unemployment rate of denominated mortgage loans well over 10%, worsened with a loan-to-value ratio over the outlook of mortgage 90% grew 65% due to the loan owners, and their depreciation of the Hungarian forint and falling property prices. situation could deteriorate even more in the near term. Real estate prices are more than likely to fall again this year. KK

3.8 %

Hungarians are more and more concerned about their retirement years, according to a survey carried out on behalf of Aegon in nine countries. Hungarians are not typical savers yet, although the proportion of those planning retirement savings is growing.

After the disappearance of the second pillar of pension, retirement funding issues are increasingly worrying Hungarians, who are very pessimistic about the future.

According to the international research, after the Poles, Hungarians see the future the gloomiest: 55% have serious doubts about future pension benefits and 31% are “very pessimistic.” Only one percent of Hungarian respondents believe that future retirees will live better than current ones — a proportion well under the international average of 5%. 83% of Hungarians believe that state pensions will lose value, while 78% believe that retirement age will increase over time.

The vast majority of Hungarians think that the pension system needs to be reformed in some way, but they firmly reject the idea of raising the retirement age: 68% would find such a measure unacceptable.

Despite the very pessimistic outlook, Hungarians took very few actual steps to change the situation: 37% of respondents had very little retirement savings or none at all, in contrast with the international average of 37%. Regarding the savings, only 1.5% declare themselves “very prepared,” as against 14% of Germans or 11.5% of Americans.

More than the half of These results are Hungarians are aware of selfreflected in the retirement responsibility in securing a readiness index developed retirement pension. Despite the

by Aegon: with 4.8 points, fact that a significant proportion Hungary ranked lowest of respondents, 39%, intend to in the nine countries rely mostly on state pension in their golden years, 76% see the examined. (The index importance of having multiple weighed five aspects: sources of pension. responsibility, awareness, understanding, planning, and saving.) KK

57 %

Ratio of foreign currency mortgage loans with a loan-to-value ratio of over 90%

Do you feel responsible for securing a pension?

(% of total mortgage loans stock)

(In Hungary, the percentage of respondents)

2010.12.

2011.03.

2011.06.

2011.09.

2011.12.

2012.03.

Source: MNB

59%

OF HUNGARIANS ARE “VERY PESSIMISTIC”

Hungarian companies are hoping for a predictable and calculable research and development system, Deloitte’s recently published Corporate R&D report reveals.

For the second time this year, Deloitte conducted the survey on the factors (particularly tax incentives and cash grants) affecting the realization of companies’ R&D activities.

According to the report, R&D activities were getting back on companies’ list of priorities in 2011. While 62% of companies spent less than 1% of their revenues on such activities in 2010, the proportion of companies spending more than 1% grew to 59% in 2011 from 38% in 2010.

However, companies queried in the survey proved to be more cautious when asked about their future plans. The number of companies planning to reduce R&D expenses in the coming two or three years exceeds the number of those intending to spend more.

“In Hungary, companies still think that the most important factor to be considered when planning R&D costs is the predictability of the legal environment,” Csaba Márkus, director of Deloitte’s R&D and government incentives division, said. “This is followed by the volume of incentives and the availability of experienced R&D professionals.”

The survey also scrutinized whether companies would spend more on research and development if the amount of incentives grew or they received bigger tax Deloitte has also conducted a allowances. Similarly to similar survey in Slovakia and the last year’s survey, 63% Czech Republic. These showed that of respondents gave a 65% and 78% of Czech and Slovak positive answer. companies, respectively, spend As of January 2012, the more than 1% of their revenues on regulatory background of R&D activities. In the two countries, firms are most concerned about R&D activities was modified. the availability of experienced One of the most important workforce, while the amount of changes is that the range of subsidies comes only second on available tax allowances has the list of the most important narrowed. PF factors that influence R&D budgets.

65 %

R&D spending in Hungary (%, in proportion to GDP)

45,95 34,70 40,31 47,99 55,70 56,36 Source: Aegon

OF FIRMS SPENT MORE THAN 1% OF THEIR REVENUES ON R&D ACTIVITIES

Source: Central Statistics Office

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4tt4ck3d!

Personifying inanimate objects is so human nature.

People tend to bestow a personality on every item that surrounds them. They treat their cars as if they were horses, curse their broken-down lawnmower like they would their employers, and some even name their fridges Bob. But they hardly ever see their computers as thinking creatures. They are not, obviously, yet computers have far more human qualities than any other electric device. Chief among these is the susceptibility to viruses. Unlike when their health is concerned – when the mere mention of the world flu epidemic sends thousands to drugstores – people do little to prevent their major working tools from being infected.

BUDAPEST, THE CITY OF ZOMBIES Little wonder then that the number of infected PCs is growing every year, or skyrocketing, to use the terminology of IT firms. Even when security is beefed up, the chance for an infection multiplies thanks to myriads of new strains. Last year Symantec, the IT company which protects half of the globes’ computers, registered a 41% surge in unique malware variants

(equivalents for virus variants in human body) from a year earlier. The firm also reported a generous hike in server-side polymorphism, a technique that enables attackers to tailor their malware for each potential victim. Overall, attacks increased by 81% in 2011.

Epidemic data reveals that Hungarians cared more about their own condition last year than about that of their computers. As a result, Budapest was the fifth most infected city in the world in terms of bot networks. The capital is followed by Szeged (8th in worldwide ranking), and Szolnok and Budaörs also place high on the list of zombie networks. “Cities with long-standing internet access and PCs with little protection or sparse security updates have become the most affected,” said László Gombás, security expert of Symantec Hungary. Zombie computers are responsible for 80% of spam, Gombás added. These computers can easily become centers for initiating cyber attacks on other targets, without users being aware of it.

THE NATURE OF THE BEAST How do they do it? Bot worms (the name comes from robot) are self-repli-

WHAT MOBILE MALWARE DOES ON YOUR PHONE

Change settings 7% Collect data 28 % Traditional threats 16 %

Send content 24 % Track users 25 %

WHAT DOES THAT MEAN IN PRACTICE? By downloading an application, you may invite a program that will, for example, send high-tariff text messages from your cell without you noticing it. You can also expose yourself to data theft through screenshot applications if you send sensible data (e.g. bank account number, PIN, etc.) from it. Literally every movement can be tracked on the cell phone, similarly to personal computers.

cating malware programs that reside in memory and turn infected computers into zombies. From there, they transmit themselves to other computers, creating a botnet that functions as a vehicle for the spread of viruses, Trojans and spam. Without regular check-ups, the computer can become a zombie residence.

Still, these threats are relatively less dangerous because they can be detected. More complex strains such as sKyWIper, the recent focus of study of Symantec and Crysys Lab, the Laboratory of Cryptography and System Security of the telecommunications department at the Budapest University of Technology and Economics, pose additional risk due to their complexity. This threat, which has remained under the radar for two years, is able take screenshots, steal documents, disable security software, and spread through USB connections. Early analysis has revealed that its primary targets have been the West Bank (Cisjordan), Hungary, Iran, and Lebanon. Attacks were against individuals due to their personal (and not professional) links and nearly always targeted home computers.

This virus has also been identified as Flame, a datamining virus that in May 2012 penetrated the computers of high-ranking Iranian officials, sweeping up information from their machines. Investigations are ongoing. What is certain is that, in terms of efficiency and complexity, Flame equals Stuxnet and Duqu , two pieces of malware responsible for recent high-level cyber attacks.

(To learn more about these two, refer to Table 2.)

NOT INDISCRIMINATE Another similarity is that all have been used for targeted attacks, the number of which quadrupled in 2011. What is new here is they are not just after large businesses and governments: more than half of all attacks were directed toward organizations with

Computers and human beings have a lot in common, from being prone to infections to potentially becoming virus centers without knowing about it. Hackers seem to capitalize on this feature and the gaps in the protection of many PCs, which resulted in a 100% rise in the number of cyber attacks last year and earned the Hungarian capital fifth position on the worldwide list of most infected cities.

fewer than 2,500 employees, and nearly 18% targeted businesses with fewer than 250, Symantec’s 17th cyber report reveals. Many of these targets were the branch offices or HR consultants of large companies, enabling hackers to get to the big fishes.

Stuxnet has been linked to a series of covert attacks carried out against an Iranian nuclear plant by the US starting from 2010. The specific targets of the virus have been computer controllers made by Siemens to operate industrial machinery – controllers that were sold to the Iranian Natzan plant as

FACTS, FIGURES AND EVENTS IN 2011 ■ 42% of mailboxes targeted for attack belong to high- level executives, senior managers and people in R&D ■ Overall spam rate is down from 85% to 76% (Symantec Internet Security Threat Report) ■ March: spammers exploit Japanese earthquake with 419 scams, fake donation sites, and malicious attachments. (Symantec ISTR) ■ September: spammers exploit the tenth anniversary of 9/11 to harvest email addresses ■ 1 IN 299 OVERALL PHISHING RATE (Symantec ISTR) ■ 403 million unique variants of malware in 2011 versus 286 million in 2010. (Symantec ISTR) ■ Analysis of job functions of targeted recipients

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well. Siemens tested the vulnerability of the controllers in the Idaho National Laboratory, part of the Energy Department, which allegedly took the opportunity to exploit the gaps next year through Stuxnet.

Yet it does not take sensitive industrial data to fall prey to cyber crime. In March 2012, hacker group Anonymous changed pas-

sages of the new Hungarian constitution on the website of the Constitutional Court. The hackers added several passages to the basic law, such as stipulations that those working in IT jobs could retire at the age of 32 and should be entitled to pensions equal to 150% of their salaries. New sections said that Anonymous and other grass-roots IT

groups should fight internal or external threats against the country.

Another seemingly lowkey target in the recent past was a local government. In early June, hackers gained access to the telephone system of Heves county. The invaders initiated high-tariff calls (HUF 30,000 per minute) to Latvia and charged the account of the local

gets. “At the height of competition for market share, social networking sites often relegate security concerns to secondary priority,” explained Zsolt Kocsis, IBM Tivoli and Security Software’s CEE technical manager. “They tend to focus more on the speedy introduction of new features,” he said, adding that the same goes for smartphone, cloud

IF YOU THINK YOU ARE TOO LOW-PROFILE FOR A HACKER, THINK TWICE. YOU MAY IN FACT BE A SMALL FISH, BUT USING YOUR CONNECTIONS, HACKERS CAN REACH HIGHER-LEVEL TARGETS.

mobile devices should be taught from the very beginning, as the high rate of infections is partly due to people’s ignorance. (To see what malware can do to your phone, refer to Table 1.)

THE SUNNY SIDE Risks may abound, but security paid off in some fields.

“I have seen great developments in the system of Hungarian defense bodies,” Teasdale said. “The Hungarian system is connected to many international peers, and together they are really efficient in discovering frauds and attacks.” He added that other sectors such as health care or education could still do much more.

IT giant IBM’s annual X-Force trend and risk analysis is equally positive about certain events in 2011.

Spam rate, for example, saw a 50% drop. (Symantec reported a 10% year-on-year decline.) Software makers responded to security gaps with quick fixes, leaving only 36% of such problems unattended as opposed to 43% a year earlier.

“Operating system and internet browser vendors regularly announce contests

with high rewards for those seeking challenges.”

Rewarding those who report security gaps to developers has also become common practice. This provides the reporting hacker with reputation or even long-term employment and also helps better investigate the security vulnerabilities.

One of the terms that has gained much publicity in the last year was hacktivism, the use of computers and computer networks as a means of politically motivated protests, typically by targeting government websites. However, the change in motivation is not essentially accompanied by groundbreaking technology changes. Most cyber criminals have not applied cutting edge exploits.

“Apart from a few incidents, the majority of cyber attacks are not known for using high-level technology or coordinated cross-continental attacks,” Kocsis noted.

“Apart from a few incidents, hacker attacks are not known for using high-level technology or cross-continental attacks,” Kocsis noted.

It is good to know that at least in this respect, they are not one step ahead. ZsV

GLOSSARY

Stuxnet It went undetected for more than a year. The virus spread through thumb drives, not through the internet. Unlike other malware, Stuxnet’s goal was not theft or gaining access to bank accounts; instead it was working its way through computers and networks in order to decipher information on industrial operations.

Duqu

ANALYSIS OF JOB FUNCTIONS OF TARGETED RECIPIENTS

Recrutiment 6 %

Media 10 % Senior level 8 %

Shared mailbox 12 %

Executive level 25 %

Primary assistant 12 % R&D 12 %

sales 12 %

government. The unusual traffic was noticed by the telephone service providers, who disconnected the phones. Even so, the office can expect a couple of million forints in bills.

HEADING OUT? STAY CONNECTED! The well-known slogan of Facebook encourages people to stay online all the time, and people diligently follow the suggestion, exposing themselves more than ever. If you think you are too low-profile for a hacker, think twice. You may in fact be a small fish, but using your connections, hackers can reach higher-level tar-

and collaboration serviceproviders.

It is not only social networking sites that urge people to use their internet connections on the go. Banks too are busy recommending the option of mobile banking but forget to highlight the possible downsides.

“With the expansion of online mobile tools, the vulnerability of these devices is on the rise,” said Harold Teadale, managing director of Symantec Hungary, who laments the complete lack of information from the banks’ side on the risks involved.

Teasdale claims that threats linked to computers or other

Duqu first appeared in October 2011. A descendant of Stuxnet, it used a zero-day exploit to install spyware that recorded keystrokes and other system information. It presages a resurgence of Stuxnet-like attacks, but more information is required to fully understand its operation. Various long-term attacks against the petroleum industry, NGOs, and the chemical industry also came to light in 2011.

Vulnerability A security exposure in an operating system or other system software or application software component.

Malware Short for malicious software, it is software used or created by hackers to disrupt a computer’s operation, gather sensitive information, or gain access to private computer systems. While it is often software, it can also appear in the form of scripts or code. (Wikipedia)

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SpecialReport

Private healthcare blooming

While Hungarians cut their consumption in almost every field to live through the ongoing crisis somehow, the turnover of private healthcare providers is on the rise. The positive trend stands on several legs, drawing up a bright future for the sector.

BBJ ÁGNES VINKOVITS

Those with a hunger for good news have to read a lot to find a piece that fulfills their desire. However, there is a sector that stands out from the series

of decreasing markets, negative expectations, and budget cuts. The private healthcare supplier sector is just blooming in Hungary.

“The economic environment is falling off indeed, which results in some rearrangements, but life continues to be the most important,” Dr. Elemér Illanitz, the medical director of Dr. Rose Private Hospital, told the Budapest Business Journal explaining the reasons why their clinic shows resistance to the crisis. People are living longer and longer and want to stay active, he said. “Private healthcare is on the rise and remain so for a long time.”

The almost 30% growth that healthcare provider Medicover reached last year might support sector-wide optimism as well,

while Telki Kórház also has no reason to complain.

Although due to the crisis, cheaper diagnostic tests and smaller surgeries have recently outgrown the more complex and more expensive interventions, this negative trend is balanced at Telki by the appearance of patients who, after the tax authority NAV revealed some misuses, have lost confidence in the smaller private healthcare suppliers.

“As we see, there is a circle in Hungary that knowingly stays away from any type of grey or black economy,” Kornéla Boda, marketing director of Telki Kórház, told the BBJ. “These people want a more reliable, experienced institution that works with transparent prices,” she said.

STATE VS. PRIVATE Worsening conditions in the state healthcare system also work in favor of private market players. The more crippled the state service is, the more popular private services become.

And it is crippled beyond doubt. “The long waiting lists and the many shortcomings of state healthcare make patients insecure and finally pushes them to our doors,” Telki’s Boda pointed out. “More and more people got fed up with the state health service,” Illanitz of Dr. Rose agreed, proudly adding that the five-star services of their clinic are said to be unique in Hungary.

But desire for luxury is not even necessary to see the fields where the state service is not competitive

with private assistance.

Meeting twelve patients in a single hour, the capacity required in the state healthcare system, often does not allow time for basic duties such as fully informing the patient about the possibilities, not to mention “extras” such as giving them confidence, talking about their fears, or establishing a good doctorpatient relationship, which is otherwise considered as a fundamental component of the recovery process.

“I cannot blame stateemployed doctors for not being remarkably patient and open to personal aspects, when they work like a mule and have no time even to sleep,” FőnixMed’s commercial manager Gábor Zsolnay said, referring to the extreme level of

state healthcare staff ’s overloadedness. “Here, patients arrive in a nice environment, and do not even have to wait to get into the office of a calm and co-operative doctor who focuses only on the case of the given person,” he pointed out the main difference between the state and the private healthcare services. Dr. Rose’s Illanitz shares this opinion. “The diagnosis is the same as it would be in a state hospital, but here the doctors explain what all those Latin words mean,” he asserted briefly.

The length of waiting lists is another crucial point.

While some types of surgery, or even a free hospital bed, are available only after months of nerve-wrecking waiting in the state system, things obviously go much

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smoother in the private sector where even the special tests or interventions can be made without any time wasted.

“Besides quickness, the fact that there is no need for parasolvency is what we consider the most important,” Telki’s Boda said.

Mónika Herczku, career advisor at job portal Profession.hu agrees saying that “no months-long waiting lists, no parasolvency – these are the biggest advantages of the private to the state healthcare system”.

BECOMING VISIBLE Increasing health consciousness, which was reported by all market players surveyed by the BBJ, also strengthens private suppliers, but what probably counts even more is that, according to modifications in the Personal Income Tax Act that took effect on January 1, 2012, employers can provide their workers with health insurance free of charge and contributions.

The benefits of such insurance are obvious.

“Health insurance packages make health expenditures predictable and calculable while also providing security as patients at Medicover can get any outpatient specialist care at any of the twenty Medicover Clinics and Health Points in unlimited amount for a fixed flat rate,” Péter Grossman, managing director of Medicover, told the Budapest Business Journal.

“Providing health insurance is a good instrument to keep workers – or at least

the key employees – busy,” Herczku from Profession. hu pointed out. “Contrary to the slow service at the state system, private insurers, who are contracted with the healthcare providers, can quickly arrange and finance everything needed to get the employee back to the gears.”

Also, health insurances are not only able to boost efficiency but can support the company’s image as well.

“Providing employees with high-quality health insur-

ance as an extra benefit is a good tool for companies to differentiate themselves from other employers,” Medicover’s Grossman said.

At the same time, while Főnix-Med’s Zsolnay said that “the regulation is promising,” and other suppliers also reckon on an increase in their turnover as a result of the tax law modification, this might be the point where the economic circumstances interpose slightly.

“Compared to last year, almost 10% of employers

have abolished cafeteria benefits in 2012,” Profession. hu’s Herczku pointed out, adding that mostly SMEs had to cut back such figures.

However, apart from the economic environment, any kind of new tendency evolving from the modified regulation will be clearly visible only in 2013. According to Mónika Herczku, “by the time the regulation was made, companies already had their cafeteria budget plans for this year, which, as a result, excluded this benefit.” ■

HEALTH AND PENSION CONTRIBUTIONS

Pension contribution

Health contribution

While more and more employers abolish cafeteria benefits in the name of expenditure cuts, the chart shows how social security contributions paid by employers and employees has shaped in the past years. (given as the proportion of gross salary) source: Egészségügyi Gazdasági Szemle

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Medical tourism in good health Apart from being widely renowned for its unique thermal and medical baths and spas, Budapest is also proud to be on the list of the most significant medical tourism centers of the world.

BBJ KRISZTIÁN KUMMER

Various healthcare services attract tens of thousands of health tourists to Budapest each year, their number constantly increasing.

Dental procedures are by far the most common forms of treatment that tourists travelling to Budapest require; however, there is a growing demand for other healthrelated services such as elective cosmetic surgery or eyesight correction.

The health tourism sector is still in its developing period, but in highly

developed countries, where treatment costs are getting higher and higher and waiting lists are full weeks or even months in advance, news of the possibility to get treatments abroad is spreading far and wide. While there are always some risks involved in taking medical treatment, whether at home or in a foreign country, most clinics abroad follow strict health guidelines and rules, very often more recognized than clinics in the US or the UK. A lot of patients have legal and subsequent treatment issues related to possible complications, but some procedures, such as dental treatment, are guaranteed; so it may well be financially worthwhile to return.

“The outlook is definitely positive, but it largely depends on us, on what steps we can introduce to increase the number of patients. How we, the service providers and the government together, can outline the brand image of Hungary and put the

country on the world map as a serious and reliable medical tourist destination,” said Erika Ladányi, owner and director of accredited medical tourism facilitator BeautyHungary.

Health tourism is indeed a growing industry. According to Deloitte Center for Health Solutions, 1.6 million people are expected to head overseas for healthcare in 2012 from the United States alone. This number may rise by 20% every year, as the majority of Americans gave a C or worse when rating medical treatment in their country.

However, sitting in the lobby of the clinic and waiting for patients to come is not enough to prosper. To gain an advantage over competing countries, more and more aggressive marketing strategies are required – much more than a website in English. On the one hand, facilitators are commonly used to lure patients. Most clinics cannot afford the required

human resources (neither in numbers nor in knowledge and experience) to successfully gather patients from abroad. However, working closely with facilitators could increase customer satisfaction and cost-effectiveness as well.

On the other hand, patients’ own opinion is very important from the arrival through the reception and the treatment process to the subsequent relationship. “A good wine does not need advertisement,” as Hungarians say, and the best advertising is by word of mouth by patients returning home.

And thirdly, on a larger scale, Hungary has to be present very clearly in the international healthcare industry through conferences, exhibitions, etc. The government, the clinics, and related agencies must act together to introduce and promote Hungary before other countries with less capabilities but better marketing presence pass us by, Ladányi says.

Answering the growing demand to link plastic surgery treatments with real touristic features, more and more clinics are opening at or near tourist destinations outside Budapest. In the small town of Hévíz, famous for its thermal lake, Zena Beauty & the Med Center opened a plastic surgery clinic at the end of last year.

There are two kinds of visitors in the clinic, said medical facility manager Mária Boronyák. There are those who at first only want to gather information on medical possibilities and proceed with preliminary investigations while enjoying the nearby thermal bath, and those who do not waste their time and ask for immediate treatment. While in most cases Zena is performing single-day surgeries, it has a number of rooms to meet the requirements of those who stay for a longer period, Boronyák said. Four out of 10 patients arrive from abroad; 35% of them from

Germany, 30% from Austria and, to some surprise, 30% come from Russia and Ukraine.

According to the statistics of BeautyHungary, about 30% of all plastic surgery clients arrive from abroad, mainly from the US, Canada, the UK, Ireland, Italy, and other Western European countries.

They stay in Hungary for one to three weeks on average and spend approximately €4,0005,000. These visitors can save 40-80% on medical expenses, depending on the type of surgery ordered, the accommodation and spending habits of the patient, and the country of origin. However, the bankruptcy of Hungarian airlines Malév can hold back patients from visiting Hungary, worsening the balances of medical clinics. Access to Hungary is narrower due to the cancellation of many direct flights, and airline ticket prices have increased too. These phenomena mean less potential tourists – and less medical tourists among them, Ladányi says. ■

[ EXPERT OPINION ]

Pollen Alert Bad news if you live in one of Europe’s big cities: pollen concentration in the air is increasing up to three percent every year. Nature’s revenge on civilisation, one might think.

On the contrary, it seems to be in our best interest.

Laboratory tests and field research have come to the same surprising conclusion: the more polluted the air, the faster plants grow. This might be nature’s answer to cure the wounds of technical civilisation. Lush vegetation is taking up more CO2, then pumping back oxygen into the air.

German environmentalists analysed data from thirteen countries, and came to the conclusion that pollen concentration shows a steady annual growth – three percent in built-up urban areas, and one percent in rural areas. Figures are expected to increase, due to the effect of global warming. “The more moderate climate prolongs the peak season of high pollen concentration, and helps the propagation of new plant species in the region,” says Prof. Dr. Kristóf Nékám, immunologist at Dr. Rose Private Hospital. “One fourth of the population is already allergic to pollen, but more are expected to develop the condition in the near future.”

City dwellers are worse off, because of the density and higher average temperatures of urban areas. Pollen allergy in their case is complicated with respiratory symptoms caused by air pollution.

“When diagnosing allergy, we need to take several

aspects into account,” says Prof. Dr. Nékám. “The main culprits are not pollens themselves but other particles that attach to them.”

Should you suffer from the annoying symptoms of itchy eyes, profuse epiphora, blocked or runny nose, sneezing, sudden and inexplicable cough, fatigue, and disturbed sleep, or you are short of breath, and all this at the same time of the year, you definitely must consult an allergy expert. “Unpleasant symptoms can be mitigated to a great extent, especially if you seek advice well before the allergy season next time around,” says Prof. Dr. Nékám.

PREVENTIVE MEASURES Needless to say, staying indoors and sleeping with the windows closed helps reduce the affects of allergens.

It is best to keep your car windows wound up while driving, and sparingly use air-conditioning if need be.

Don’t forget to have the AC cleaned, and the filter replaced once every season. With severe pollen allergy, holiday destinations need to be selected carefully: you had better head for somewhere high up in the mountains or the seaside. Mowing the lawn is best left to someone who never had itchy eyes in summer, and avoid even sunbathing on freshly cut grass. Instead of airing, change your bedlinen more often. During the heydays of hay-fever, wash your hair more frequently, and treat yourself to a daily nasal irrigation with saline solution.

www.drrose.hu

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HEALTHCARE NEWS

your medical home away from home

MANDATORY RETIREMENT AT THE AGE OF 62 IN HEALTHCARE IS “NOT FEASIBLE” STATE SECRETARY SAYS Sending all healthcare workers over the age of 62 to mandatory retirement is “not feasible” because that would bust the sector, Health Secretary Miklós Szócska said. He confirmed the information of daily Népszabadság that the State Secretary responsible for health will turn to the government not to make the retirement mandatory. Discussions are ongoing with the government, and a simulation of the process is also in progress.

Further negotiations will decide which segments of the public sector will be affected, and how, by the termination of possibility of employment over the mandatory 62-year retirement age. “Considering the human resource crisis situation in the health sector, this measure is not feasible,” Szócska said.

According to the planned municipal, education, and healthcare reform, 250,000 civil servants will return to central national employment in 2013, and those over 62 will be ordered to retire. This measure will reduce the public sector portfolio by 10,000-11,000 people, generating about HUF 20 billion in savings, Economy Minister György Matolcsy said on June 14 in a press conference about the 2013 budget. The calculations of HUF 20 billion “are very conservative” because possibly much more people will be affected by the measure than the budget draft takes into consideration, Government Spokesman András Giró-Szász said on June 18 in an interview. Negotiations and agreement over which public sectors will be affected and how exactly are still to come, he added.

CAPITAL INVESTMENT FUND INVESTS IN HEALTHCARE The Széchenyi Capital Investment Fund (SzTA) contributed HUF 120 million to a major investment at Fabian Anti-Aging Clinic, a project that is also an important achievement from the healthcare point of view. Through the investment, SzTA acquired a minority share of 40.48% in Fabian in March 2012. The total budget of the project is HUF 333.9 million, for which the company was also granted HUF 94.1 million in non-refundable subsidies. The clinic has just recently started to operate in a new specialized branch of healthcare services, introducing a new anti-aging medicine in Hungary. Anti-aging medicine is a multidisciplinary branch based on medical science and technology that aims at the early prevention, diagnosis, and treatment of different function disorders, diseases, and deficiencies. The investment of the clinic can improve the healthcare tourism of Budapest as well. The capital investments of SzTA are continuous in the Hungarian small and medium-sized enterprises (SME) sector; until the end of 2015, 120-150 SME projects will be targeted using the HUF 14 billion assets of 100% state-owned capital fund management company Széchenyi Tőkealap-kezelő Zrt. Healthcare tourism has shown improvement even in the years of recession, and similar initiatives may give new impetus to this segment in Hungary, the press release of SzTA stated.

HUNGARIANS DO NOT TAKE CARE OF THEIR SKIN WHEN SUNBATHING

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Nearly 50% of the population in Hungary take a sunbath regularly. However, 15% go into direct sunlight at any time of the day, not minding the possible harmful side effects. As age increases, responsibility increases too: under the age of 35, the share of those sunbathing regardless of the hour is 20%. Half of the adult population never uses sunscreen, although many of them avoid direct sunlight. But amongst those who will take a sunbath any time of the day, the proportion of regular sunscreen users is still around 50%. Using active protection is more widespread among women and those between the ages of 26 and 45. The products they use predominantly have medium (15-25) or high (25+) sun protection factors, a fresh survey of Szinapszis Kft commissioned by WEBBeteg.hu reveals.

HEALTH INSURANCE FUNDS SPEND MOST ON DRUGS Members of the national health insurance funds spend most of their savings on drugs, while only one-quarter of the available amount has been devoted to prevention. The average spending was a little bit more than HUF 50,000. Over the past three years, spending rate at health insurance funds has not changed significantly. The number one hit is still drugs, with 46.9% of all spending by fund members, analysis of managed health insurance fund data by Optisoft Kft showed. Last year, all health insurance fund expenditures were split among only 10 different reimbursement types. More than 5% of total spending went on sport activities, specialized care, corrective devices, dentistry, medicine, and medicinal products. The combined expense, HUF 4.1 billion, was 91.7% of the total credit amount.

Data shows that Hungarians prefer immediate benefits over future security and, as their age progresses, would rather spend on restoration of their health than on timely prevention. Last year’s spending figures fit well into the trends of recent years. According to data collected, most of the money has been spent on various drugs each year since 2007, but medicinal products and dental treatments have always been included in the list of favorite health services of fund members. Spending figures broken down by age show that people over 40 spent more than half of the total expenditures. This predominance is typical in almost all categories, with the 31-40 age group spending more than the elderly only in a few healthcare fund categories like ophthalmology, specialized services, gynecological care, herbal teas, sports facilities, and sports activities. A significant difference might be observed between the different regions of the country based on the amount of spending.

The national average was HUF 52,423 spent per member. Spending per capita was highest in Somogy county with an average of about HUF 83,000. Second and third place went to Csongrád and Pest counties with a performance of nearly HUF 77,500, while the capital, Budapest, is only in fourth place. The least money per capita, HUF 5,549, was spent in BácsKiskun county. These figures, of course, are not representative, as the health insurance fund customer base does not show an even distribution nationwide.

RÓZSAKERT MEDICAL CENTER www.medical-center.hu http://www.facebook.com/rozsakertmedicalcenter Rózsakert Shopping Center 1026 Budapest, Gábor Áron u. 74-78/a. 3rd floor Office hours: M-F: 8 a.m. to 8 p.m. SAT: 9 a.m. to 2 p.m.

For an appointment please call: (+36 1) 392-0505

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Parasolvency infecting the Hungarian h Patients’ distrust in the quality of service and extremely low salaries for healthcare workers has made parasolvency (a kind of mandatory gratuity unique to the sector) a fundamental element of the Hungarian health system. How could this phenomenon, which rips off patients and debases doctors, be eliminated?

BBJ ÁGNES VINKOVITS

“While my grandfather was extremely outraged when a patient tried to give him money after a successful intervention, in my mother’s time, who worked as a family doctor in the countryside, it was more accepted to receive eggs or chickens from those healed. People choosing healthcare professions nowadays probably already reckon with parasolvency as a source of income,” says Dr Attila Vereczkey, infertility and endoscopic specialist and current co-head of Versys Clinics Human Reproduction Institute, illustrat-

ing how parasolvency has become so widespread in Hungary. “We are in a better situation in the private sector, as the transparent pricing allows no parasolvency,” he added.

As the budget cuts of recent decades have been hitting the health service harder and harder, pushing it onto the verge of collapse by now, “thank-you money,” estimated at HUF 50 billion-100 billion annually, has become a basic component of the healthcare system. “Everyone hates this,” Vereczkey pointed out.

Hardly suprising, since it imposes a huge finan-

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cial burden on vulnerable patients who are ready to do anything in the hope of recovery, while most doctors feel humiliated by accepting such extra money. “It draws a morally negative picture of healthcare professionals, whereas the doctor-patient relationship should be based on trust and nothing else.”

WHY IS IT SO BAD? The main reasons behind parasolvency are quite clear.

It is widely accepted, even by lawmakers, that wages in the sector would need a significant increase. To draw a net salary of HUF 200,000300,000, for example, a doc-

tor has to hold two or three part-time jobs simultaneously, all of which typically involve night shifts as well.

As a result of the pressure that the Hungarian Residents’ Association put on the government by depositing the resignation letters of thousands of young doctors, the salaries of 86,000 healthcare employees were increased from January 1, 2012. However, experts and professional organizations warn that wages are still too low, both to drive back the incidence of parasolvency and to stop the emigration of doctors. While Western Europe gladly extends a warm welcome to highly qualified Hungarian healthcare staff and offers much higher wages along with better working conditions, those staying behind have to struggle for a living. “Doctors just starting their careers have two options: living in deep

poverty, or being corrupted,” Vereczkey said, adding that a monthly net salary of HUF 130,000, which a young doctor earns at the moment, is far too little to support a family.

Another problem is the varying quality of service from region to region, or even from hospital to hospital. While two-bed hospital rooms or wireless internet access may be available in one hospital under basic state health insurance, such services are offered only for an extra charge at other institutions, if available at all. Also, while patients only have to wait a week or so for a given surgery at some hospitals, in other places long waiting lists might delay operations for months, and in many cases it is already too late for the patient by that time. “This situation is a hotbed for the evolution of parasolvency as an organizing force,” Zsombor Kovácsy, former head of the

Health Insurance Supervisory Authority and a lawyer specializing in health issues, pointed out.

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n healthcare system

NICE TRY However, new regulations soon coming into force aim to fight parasolvency. After

July 1, waiting lists for surgery will be available online. As all patients will be able to keep an eye on the number of people

waiting for a given operation in the entire country, in the region, or in a given hospital, the new and more transparent

system is expected to reduce the possibility that doctors will take non-professional factors such as parasolvency

into consideration when putting people on the list.

Certain paragraphs of the new Labor Code coming into effect on July 1 also affect the issue. The new regulation forbids employees from accepting any payment withouth the approval of the employer, which practically means that health workers can take gratuities only with the permission of their bosses.

Jenő Rácz, director of the Veszprém County Ferenc Csolnoky Hospital, has already made an important statement about this development.

While emphasizing that health service has to keep following basic ethical principles, meaning that healthcare staff are strictly prohibited from asking for money from patients beforehand, Rácz added that the staff of his hospital will be allowed to take gratuity if given after the intervention.

However, while this new regulation is at least a step against

the conspiratorial silence surrounding parasolvency, it ignores the fact that even if the money is not pre-required by the health care staff and is given only after the services, it may still improve the patient’s chances to gain some advantages next time around. In that respect, there is virtually no difference between the function of pre-provoked parasolvency and that of money given after the fact.

When taking a look beyond the country’s borders, there is some reason for moderate hope. “So far, no one has been able to fully eliminate parasolvency,” Kovácsy pointed out, adding that “according to international examples, clearly defined boundaries, patient copayment contributions, and doctors who are motivated by legitimate financial incentives, for example with the involvement of private health insurance, might be effective tools of resolving the problem.” ■

[ EXPERT OPINION ]

Better to receive an invoice than to give the envelope A private health service provider can offer more than the government healthcare system not only in terms of practically no waiting time and quicker recovery but also due to the fact that invoicing ensures accountability on the part of the provider for the quality of the service. What disappoints people most in the government system is that the parasolvency they pay does not guarantee the high level of care they could expect.

DR. JÚLIA MOLNÁR Director TELKI HOSPITAL

Experiences from the past 13 years show that patients are ready to pay primarily for treatment that is delivered quickly and is adjusted to their time schedules, as working time is becoming increasingly precious and less and less people can afford to spend days or weeks in examination or treatment of their health problems. Not to mention cases when someone needs an operation for which there is a waiting list, such as a hip prosthesis or spine surgery – where not only do patients have to endure pain, but their quality of life also declines

as they are impeded in their movement.

Furthermore, in most cases, they are unable to work and, consequently, to make money. For people in such situations, it is out of the question to wait 2-3 years until their turn would come on the list, while their condition would deteriorate, as would their prospects of a successful operation. To avoid all that, people choose to pay for an operation that takes place the following week, and they can go on with their lives free from pain, capable of continuing to make money.

Speed is one of the most important competitive advantages in private healthcare. Thanks to the fact that we have our own laboratory, imaging diagnostic equipment, three operating theatres and blood depots, as well as an intensive care

unit, we can organise operations from one day to the next, and besides the right specialists, we can provide high quality nursing, too.

Also importantly, the Telki Hospital has no contract with the National Health Insurance Fund (OEP), which allows us to provide services and treatment that are not available in the government healthcare system. Due to higher costs and special equipment required, the social security system provides no funding for a large number of new treatments despite the fact that these are usually patientfriendly solutions that make possible faster recuperation and more aesthetic wound healing. Shorter stay in hospital is also a key factor: many patients choose to have surgeries and treatments at weekends to reduce the time out of work. Besides a short waiting time, fast recovery is increasingly an expectation on the part of patients.

Obviously, all this costs money, but we are firmly convinced that it is better to get an invoice than to give an envelope. Meanwhile, many people are still surprised to see the real costs of treatments, as they have never seen the concrete figures involved in health services before. Expenditures are not

transparent in government health care, and since most of the so-called private services provide treatments in government health institutions or in combination with OEP funding, there patients do not pay the full costs.

Transparency also plays a part in the fact that more and more patients choose our services. Here, the patient receives a detailed invoice about the services.

Besides being clear and transparent, this also ensures our accountability for the services we provide – unlike in the case of parasolvency paid under the table.

We attribute the increasing popularity of private health care to these differences, combined with tax-free benefits, and with such extra comforts as single rooms with air-conditioning, optional meals and wi-fi.

www.telkihospital.com www.telkikorhaz.hu www.telkiegeszsegcentrum.hu

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

Considerations of planning and accountability lead patients to increasingly opt for private healthcare services

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Private hospitals and clinics RANK

Ranked by total net revenue in 2011

COMPANY WEBSITE

TOTAL NET REVENUE (HUF MLN) 2011

SPECIALITY AREAS

OTHER SERVICES

3,028

Anesthesiology, internal medicine, dermatology, diabetology, dietetic counseling, endocrinology, physiotherapy, dentistry, occupational health care, ear, nose and throat specialist, gastroenterology, paediatrics (pediatric cardiology, pediatric radiology, child psychology, pediatric rheumatology, pediatric allergies, respiratory medicine), hematology, immunology, infectology, cardiology, nephrology, neurology, gynecology, oncology, osteoporosis, plastic surgery, psychiatry, psychology, rheumatology, spine surgery, ophthalmology, orthopedics, traumatology, urology, vaccination advice

Complex spine care, in-patient care, manager screening, children's screening program, cancer screening, pediatrics, physiotherapy, flate rate packages, research and development

1,572

Occupational health, corporate health programs, GP, manager screening, private clinics, patient transport, medical service, rescue, special rescue

Főnix Medical Resort

1,288[1]

Internal medicine, gynecology, urology, dermatology, paediatrics, ophthalmology, occupational medicine, radiology (X-ray, UH), neurology, cardiology, gastroenterology (digestive diseases), endocrinology (hormonal illnesses), otolaryngology, pulmonology, allergology, rheumatology, orthopedics, psychiatry, sports medical advice, dietetics, physiotherapy, paediatrics, ENT, laboratory tests, diabetology, work psychology

Outpatient care, GP service, health consulting, corporate health development and prevention, screening, hospital VIP care, vaccination campaigns, dentistry (for domestic and foreign citizens), prenatal care

1,169

Andrology, anesthesiology, intensive care, internal medicine, infant and pediatric medicine, diabetology, dietetics, endocrinology, occupational medicine, gastroenterology, pediatric orthopedics, physiotherapy, incontinence management, cardiology, laboratory, obstetrics, gynecology, orthopedics, proctology, surgery, urology, plastic surgery

Operations, baby movie, hospital hotel, tests, subintensive department

879

Allergology, anesthesiology, internal medicine, dermatology, diabetology, diatetics, endocrinology, vascular surgery, pain emergency, ear-nose-throat, gastroenterology, paediatrics, immunology, cardiology, manual therapy, neurology, gynecology, orthopedia, plastic surgery, psychiatry, psychotherapy, pulmonology, proctology, radiology, rheumatology, surgery, ophtalmology, somnology, urology

Outpatient, inpatient care, obstetrics

721

Allergology, immunology, dietetics, obstetrics, occupational medicine, ophthalmology, psychiatry, radiology, urology, cardiology, otolaryngology, internal medicine, office massage, orthopedics, psychotherapy, surgery, dermatology, endocrinology, neurology, oncology, physical therapy, pulmonary medicine , traumatology

Screening tests, prenatal care, aptitude tests, 24-hour service

BUDAI EGÉSZSÉGKÖZPONT KFT www.bhc.hu 1

NO. OF FULL TIME EMPLOYEES ON APRIL 1, 2012

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

240

Medikomp Kft (40), Confident Invest Kft (10), Primátum FCP Investment (50) –

Péter Pál Varga, Kornél Papik – András Kiss

1126 Budapest, Nagy Jenő utca 8.

(1) 489-5200 (1) 489-5210 info@bhc.hu

1990

81

Futurmed Kft (50), Opinion Invest Kft (50) –

Zoltán Takács Laura Csidei Gábor Zsolnai

1125 Budapest, Diós árok 1–3.

(1) 489-0870 (1) 489-0871 kapcsolat@ fonixmed.com

1998

136

– ABC Medicover Holdings B.V. (100)

Péter Grossmann László Benedek –

1037 Budapest, Montevideo utca 5.

(1) 465-3100 (1) 465-3150 info@medicover.hu

133

Bankár Zrt (100) –

Júlia Molnár Olivér Schönek Kornélia Boda

2089 Telki, Kórház fasor 1.

(40) 372-300 (26) 372-267 info@telkikorhaz.hu

»

Individuals (100) –

Elemér Illanitz – –

1051 Budapest, Széchenyi tér 7–8.

(1) 377-6737 (1) 348-0486 info@drrose.hu

31

– American Clinics International Inc. (100)

Dennis Diokno Andrea Vízvári Andrea Zs. Tóth

1015 Budapest, Hattyú utca 14.

(1) 224-9090 (1) 224-9091 info@ firstmedcenters.com

22

Individuals (100) –

Gyula Csermely Zsuzsanna Kadala –

1026 Budapest, Gábor Áron utca 74–78/A (1) 392-0505 (1) 200-6050 info@medical-center.hu

YEAR ESTABLISHED

2001

FŐNIX-MED ZRT www.fonixmed.com

2

MEDICOVER HEALTH CENTER ZRT www.medicover.hu

3

TELKI HOSPITAL KFT www.telkihospital.com www.telkikorhaz.hu www.telkiegeszsegcentrum.hu 4

MERT VAN VÁLASZTÁSA

DR. ROSE PRIVATE HOSPITAL www.drrose.hu 5

FIRSTMED-FMC KFT www.firstmedcenters.com 6

RÓZSAKERT MEDICAL CENTER / BBCS KFT www.medical-center.hu 7

571

Allergy, cardiac surgery, cardiology, chiropractic, clinical genetics, dermatology, developmental therapy, diabetology, ear-nose-throat, endocrinology, gastroenterology, hematology-oncology, internal medicine, maxillo-facial and oral surgery, neurology, Outpatient care, Downnutrition, obstetrics and gynecology, occupational syndrome screening, fetal medicine, ophthalmology, orthopedics, pediatric heart ultrasound, genetic cardiology, pediatric endocrinology, pediatric counseling, stroke screening, gastroenterology, pediatric neurology, pediatric prostate screening orthopedics, pediatric psychiatry, pediatric psychology, pediatric radiology, pediatrics, plastic surgery, proctology, psychiatry, psychology, pulmonology, radiology, rheumatology, same-day surgery, surgery, therapeutic massage, urology, vascular surgery

1998

2007

2004

2001

2 BusinessPartnerWatch 23

BBJ

WWW.BBJ.HU

RANK

Budapest Business Journal | june 29 – july 12

COMPANY WEBSITE

8

RADITEC KFT www.raditec.hu

NO. OF FULL TIME EMPLOYEES ON APRIL 1, 2012

OWNERSHIP (%) HUNGARIAN NON-HUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

–

1996

24

European Radiological Services Ltd (49) Manfred Langner (51)

Hans-Jürgen Daus Anikó Káplár Henrietta Pető

1091 Budapest, Üllői út 47.

(1) 216-4600 (1) 216-4555 raditec@raditec.hu

Individuals (100) –

László Babai Júlia Weszely László Babai

1042 Budapest, Árpád út 47–49.

(1) 799-7986, (20) 554-1498 (1) 799-7989 info.ujpest@ oxygenmedical.hu

»

Zsuzsanna Kövesd (»), Pál Tamás Németh (») –

Tamás Székely – –

1119 Budapest, Than Károly u. 20.

(1) 205-0205 (1) 203-0457 kelen@kelen.hu

SPECIALITY AREAS

510

CT examination and MRI

436

Allergology, angiology, internal medicine, dermatology, diabetology, endocrinology, vascular surgery, occupational health, dental, otolaryngology, gastroenterology, implantology, cardiology, cosmetology, laboratory diagnosis, neurology, gynecology, orthopedics, plastic surgery, rheumatology, sports medicine, ophthalmology, prenatal care, alternative medicine, pulmonology, urology, oral surgery, ultrasound diagnostics

Special outpatient care, beauty spa, preventive tests

2008

37

–

1998

OXYGEN MEDICAL KFT www.oxygenmedical.hu 9

OTHER SERVICES

YEAR ESTABLISHED

TOTAL NET REVENUE (HUF MLN) 2011

10

KELEN KÓRHÁZ KFT www.kelen.hu

301

Allergology, cardiology, dentistry, dermatology, diabetology, food intoleance test, gastroenterology, genetic counseling, gynecology, impotence treatment, internal medicine, laboratory, lasertherapy, nephrology, neurology, occupational health, ophthalmology, orthodontics, ortopaedics, otolaryngology, pediatric orthopaedics, pediatric surgery, pediatrics, plastic surgery, podiatry, psychiatry, psychology, pulmonological counselling, radiology, rheumatology, surgery, ultrasound, urology

11

SEFFER AND RENNER PRIVATE CLINIC KFT www.seffer.hu

164

Vascular surgery, laser surgery, plastic surgery, general surgery, sterile, endoscopic surgery, allergies, respiratory medicine, dermatology, pain clinic, 4D baby UH

–

1992

9

István Seffer (50), Jnr. István Seffer (25), Gergely Seffer (25) –

Tibor Seffer, István Seffer Henrik Schumacher –

7400 Kaposvár, Szent Imre utca 7.

(82) 414-444 (82) 419-100 seffer@seffer.hu

12

ISTENHEGYI PRIVATE CLINIC www.ihklinika.hu

161

Internal medicine, immunology, cardiology, dermatology, dietetics, endocrinology, vascular surgery, otolaryngology, neurology, gynecology, orthopedics, plastic surgery, proctologic, psychology, surgery, ophthalmology, urology

Occupational medicine, gene diagnosis, menopause clinic, cerebrovascular diseases care

1991

14

László Rudas (72.50), Fabian Group Anti Aging Medicina Kft (27.50) –

Emilia Fábián Zsuzsanna Dányi Bernadett Ronyecz

1125 Budapest, Istenhegyi út 31/B (1) 224-5424 (1) 224-5425 info@ihklinika.hu

13

BEAM-ECTO DERMA POLYKLINIKA KFT www.gasparmed.hu

115

Dentistry, oral surgery, implantology, otolaryngology, dermatology, vascular surgery, plastic surgery, urology

–

1998

54

Individuals (100) –

Lajos Gáspár Krisztina Kovács Eszter Gáspár

1085 Budapest, József körút 37.

(1) 317-8175 (1) 235-0025 info@gasparmed.hu

106

Laboratory tests, EIS tests, cardiovascular disease detection, treatment, diabetology, lipid clinic, hypertension clinic, angiology, erectile dysfunction clinic, pediatric cardiology, dermatology, gynecology, urology, ultrasound, massage, manager screening programs

CT laser mammography, sclerotherapy, preparation for breastfeeding and infant care, osteoporosis exam, premium Health Concepts weight loss program, food intolerance test, ear acupuncture

»

Individuals (100) –

András Vértes – –

1133 Budapest, Kárpát u. 7/B I. em (1) 783-6004, (30) 751-3653, (70) 307-3377 – info@medocklinika.hu

62

Asthma, celiac disease, eczema, food allergies, metal allergies, childhood allergies, immunotherapy, psoriasis, dust mites allergy, rosacea, hay fever, dermatology, pulmonology, otolaryngology, endocrinology, immunology, gastroenterology, paediatrics, neurology

6

MediAd Kft (40), László Babai (38), Zsolt Bella (22) –

László Babai Beáta Porgányi Péter Tóth

1015 Budapest, Ostrom utca 16.

(30) 631-9309 (30) 631-9309 info@ allergiakozpont.hu

32

Internal medicine, dermatology, gastroenterology, diabetology, endocrinology, dentistry, otolaryngology, physical therapy, neurology, dermatology, rheumatology, gynecology, dietetics, pediatrics, surgery, psychology, ophthalmology, occupational physician, laboratory

–

1990

3

András László (50), Edit Kelemen (50) –

András László – –

1037 Budapest, Bécsi út 85.

(1) 317-0631 (1) 317-2035 info@ professional-kft.hu

»

Gynecology, dentistry, internal medicine, cardiology, dermatology, allergology, occupational medicine, gastroenterology, dietetics, manager screening

Screening

1991

»

» »

Gábor Szarka – –

1181 Budapest, Üllői út 419.

(1) 291-0539 (1) 290-0921 info@medconnexus.hu

14

MEDOC EGÉSZSÉGKÖZPONT www.medocklinika.hu

BUDA ALLERGY CENTER / T&G HEALTH KFT www.allergiakozpont.hu 15

16

PROFESSIONAL MEDICAL KFT www.professional-kft.hu

NR

MEDCONNEXUS MEDICAL CENTER www.medconnexus.hu

Cosmetology

–

2004

Notes: [1] Data excludes the revenue of Medicover Biztosító [Medicover Försäkrings AB (publ) Hungarian Brach]

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

This list was compiled from responses to questionnaires received by June 26, 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

24 2 BusinessSpecialReport BBJ

WWW.BBJ.HU

Budapest Business Journal | june 29 – july 12

Hungary aims at bigger bite of dental tourism Hungary is a world superpower when it comes to dental tourism. Since 2008, Hungary has been the leading European country in this sector, as its share reaches 40% on the continent according to market estimates.

BBJ KRISZTIÁN KUMMER

The history of dental tourism in Hungary started decades ago, when one dental clinic popped up after another near the western border of the country to meet the demand of Austrian and German patients coming for cheaper treatments. Over the following years, dental tourism evolved into a major attracting force of the country, and Budapest became the dental capital of Europe.

GOING AN EXTRA SMILE According not just to the advertisements of Hungarian dental clinics but to the sending countries’ media as well, the level of treatment available in Hungary is extremely high, with the level of service even surpassing that of the US or the UK. Services are extremely competitively priced compared with western countries, and Hungary is renowned for having a number of excellent dental accreditations and membership in international dental organizations.

There are no exact figures available on dental tourism, so data can be derived only from market estimates, publicly available balance sheets, and the reports of health organisations and the Central Statistics Office (KSH) in Hungary. However, Hungary has been the leading European country in this sector since 2008, as its share reaches 40% on the continent.

Globally, one in five people looking for dental treatments abroad choose Hungary. Worldwide, the country is in a competition with Mexico, the famous dental tourism target of Americans, said Gábor Szakonyi, Vice President of the Association of Leading Hungarian Dental Clinics (ALHDC), and also managing director of the dental center VitalEurope.

According to a report of

the Hungarian central tax bureau NAV, about 500 of the 2,600 domestic dental clinics or companies deal with a high proportion of foreign patients. Each year, some 60,000-70,000 people arrive in Hungary for dental treatments, generating a revenue of HUF 65 billion-70 billion in the dental sector alone. An additional HUF 13 billion-16 billion is generated in related industries such as hotels, catering and other services. In 2011, most of the dental tourists arrived from the UK, Germany, Italy, and France, said László Szűcs, Chairman-CEO of medical tourism office Orvosi Turizmus Iroda Zrt in an interview with DentalNet. FROM ALL OVER THE WORLD Overall statistics are also very hard to derive from the figures of clinics, as the num-

ber of foreign patients varies from dentist to dentist.

At VitalEurope, the proportion of clients arriving from abroad can reach 80%. These visitors spend an average of one week and €4,000 in Hungary and save up to 60% compared to treatment prices back at home. The main sending countries are France, the UK, Norway, Italy and Germany.

However, Fedasz Clinic in Pilisvörösvár, near Budapest, reports only one tenth of its clients coming from abroad.

Arriving from as close as Slovakia and as far as Canada and the US, they spend €1,400 and five days here on average, customer service manager Ferenc Görögh said.

Basically, these clinics try to collect clients on their own, through websites registered abroad or agents working for commission. Either way, clinics receive no direct help from the government. “Dental clinics receive no direct state aid, be it participation on a fair or appearances in the media.

The sector is not in the focus of state marketing either. It achieved all of its progress and successes on its own,” says Dr Attila Kámán, president of ALHDC and director of Implantcenter.

INNOVATION IN DENTISTRY However, the sector being a leading revenue generator accounting for 90% of domestic health tourism revenue, the Hungarian authorities feel the need for continuous development of dental tourism. The first visible benefit of the cooperation between the government and dental

clinics was the HUF 1 billion funding the National Development Ministry reallocated into the tourism target budget for dental tourism development to ensure the necessary budget resources last year.

The decision received great coverage in national media, as it came just a week after Prime Minister Viktor Orbán promised financial support to participants of the first conference on the development of the dental tourism.

The event was organised by the newly-registered program office Magyar Fogászati Turizmus Programiroda, which is co-owned by Orbán’s dentist, Béla Bátorfi. Later Bátorfi claimed that neither him nor any companies owned by him have received any aid from national or EU funds, and added that, on moral grounds, he would not enter any tenders of this kind.

FURTHER FUNDS Beyond the aforementioned HUF 1 billion, government negotiations resulted in another net HUF 3.5 billion becoming available through the “Innovation in dentistry” program for dentists. But being a registered member of the Hungarian Dental Tourism Development Program is a condition for any application for these latter funds – according to Szűcs, this is the only way national targets can be achieved due to their complexity. The program aims to triple the number of patients visiting Hungary in five years, to stop the exodus of Hungarian dentists, and to make Hungary the worldwide leader of dental tourism by the end of 2015.

Participation in the program is voluntary, and EU and national funds can be reached through 15 other tenders, Szűcs pointed out.

The basic membership fee is HUF 150,000, but the price of an “Innovation package,” including all expenses of preparing, assembling and managing the Innovation in dentristry tenders, can reach up to HUF 2.8 million. Dental surgeries, dental technologists and dealers who had joined the Hungarian Dental Tourism Development Program have generated a turnover of HUF 53 billion-55 billion through 600,000 dentist-patient contacts.

But not everyone is happy with state participation in

dental tourism. “VitalEurope took part successfully in EU and national tenders in the past without participation in the Dental Tourism Development Program. However, the membership required to participate in the program entails too many fees and obligations, which are not characteristics of the free market, so VitalEurope and other members of ALHDC do not participate in the program,” Szakonyi said.

NO MARKETING Foreign competition, especially from Croatia, Turkey, Bulgaria, and Poland, is very dominant. These countries could compete with lower prices due to the quality of materials used and touristic opportunities supported by state aids and marketing, said Dr Kámán.

But also in the countries of origin, dentists have reduced their prices in recent years to levels that are often more competitive than those of dental surgeries established in neighboring countries.

However, support coming from Hungarian state institutions is less than those in competing countries. In Turkey, the state pays half of the price of patients’ plane tickets when they arrive out of season for dental treatments.

And in Estonia, the country’s dental tourism opportunities are advertized abroad using the state budget. Dental tourists in Hungary spend half a million guest nights and billions of forints each year in hotels, restaurants, bars, sightseeing buses, museums, taxis, etc., but not a single image where Hungary is displayed as a potential destination for dental treatments was published by the state, Szakonyi added.

Hungarian airlines Malév’s filing for bankruptcy early in February 2012 hit tourism hard, according to experts.

However, the increased presence of low-cost companies like Ryanair, easyJet and Wizzair brought relief, and no impact of the grounding of Malév can be felt. “We felt nothing, patients had come already with low-cost airlines or their own national airlines before Malév went bust,” Görögh said. But the loss of Malév reduced potential travel alternatives, which clearly has no beneficial effect on dental tourism. ■

2 BusinessPartnerWatch 25

BBJ

WWW.BBJ.HU

Budapest Business Journal | june 29 – july 12

Dental clinics RANK

Ranked by total net revenue in 2011

COMPANY WEBSITE

1

VITALEUROPE FOGÁSZATI KÖZPONT (VITAL POINT KFT) www.vitaleurope.hu

2

IMPLANTCENTER FOGÁSZAT ÉS SZÁJSEBÉSZETI KLINIKA www.implantcenter.hu

YEAR ESTABLISHED

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

Oral surgery, implantology, restorative and aesthetic dentistry, computerdesigned and produced prosthesis, paradontology, tooth whitening, conscious sedation, adult orthodontics with invisible and adhesive techniques

Hungarian, English, French, German, Russian, Norwegian, Italian

2006

– VitalEurope Malta Holding (100)

Gábor Szakonyi Tímea Pecsovszky Emese Balogh

1113 Budapest, Nagyszőlős utca 11–15.

(1) 4848-670 (1) 4848-666 info@vitaleurope.hu

X-rays, implants, cosmetic dentistry, tooth-preserving treatments, dentures, oral surgery, orthodontics, ear, nose & throat

»

English, French, German, Russian, Swedish, Norwegian

2003

Attila Kámán (80) Edit Kámánné Bankós (20) –

Attila Kámán – –

1024 Budapest, Margit körút 67.

(1) 422-0808 (1) 422-1120 info@implantcenter.hu

Ultrasonic Scaling, diagnostic screenings, tooth whitening (halogen and LED lamp), aesthetic fillings, root canal treatment, dental surgery, dental implants, general anesthesia, tooth extraction, computer designed and produced prosthesis, periodontology (gum disease treatment), digital panoramic X-ray

Dental implants - Swedish, German brands

English, Hungarian, French, Italian, German

2000

– Assamese S.A. PA (100)

Zsolt Tolnai – Péter Fuchs

1075 Budapest, Madách tér 7.

(1) 267-1600 (1) 266-6057 city@madenta.hu

Milk tooth removal, anterior (1, 2, 3) removal, surgical removal of wisdom tooth, root removal (surgery), root-tip resection, sinus closure, mucosal surgery

English, French, Italian

2010

» »

Aslim Mohamed – –

1122 Budapest, Kék golyó utca 6.

(1) 201-2525 – info@deli-dental.hu

»

English, Spanish, German

2003

Péte Jrancsecz (»), Antalné Jancsecz (») –

Péter Jancsecz – –

1148 Budapest, Örs vezér tere 2. fszt.

(1) 222-9150 (1) 222-7250 info@zugloifogaszat.hu

SERVICES

1,132

Oral surgery, implantology, restorative and arsthetic dentistry, computerdesigned and produced prosthesis, paradontology, tooh whitening, conscious sedation, adult orthodontics with invisible and adhesive techniques

525

MADENTA CITY FOGÁSZATI KÖZPONT www.madentacity.hu [1]

3

MAIN SURGICAL INTERVENTIONS

LANGUAGES SPOKEN BY CLINIC STAFF

TOTAL NET REVENUE (HUF MLN) 2011

493 www.rozsakertdental.hu

4

DÉLI DENTÁL FOGÁSZATI RENDELŐ www.fogorvosi-rendelo.com

302

Diagnostics, ultrasonic tooth cleaning, tooth whitening, dental jewelery, periodontology, cosmetic fillings, root canal treatment, oral surgery, implantology, metal-ceramic crowns, dentures, orthodontics

5

ZUGLÓI FOGÁSZATI KÖZPONT KFT www.zugloifogaszat.hu

252

General dental treatment, cosmetic dentistry, pain-free dentistry, traditional dentures, implantation, orthodontics

26 2 BusinessPartnerWatch RANK

BBJ

COMPANY WEBSITE

WWW.BBJ.HU

Budapest Business Journal | june 29 – july 12

YEAR ESTABLISHED

OWNERSHIP (%) HUNGARIAN NONHUNGARIAN

TOP LOCAL EXECUTIVE CFO MARKETING DIRECTOR

ADDRESS PHONE FAX EMAIL

English

»

(100) –

Béla Bátorfi – –

1161 Budapest, Kenéz utca 36.

(1) 402-0027, (30) 9775-268 – info@implantatum.hu

TOTAL NET REVENUE (HUF MLN) 2011

SERVICES

MAIN SURGICAL INTERVENTIONS

LANGUAGES SPOKEN BY CLINIC STAFF

Tooth extraction, teeth extraction by operation, root-end resection, cyst surgery, sinus-closing, implants, inclusion of sinus (with bone replacement), bone replacement surgery (plastic or implant preparation)

6

BÁTORFI FOGÁSZAT www.batorfi-fogaszat.hu

205

Oral surgery, dentistry, dentures, x-ray: oral camera, oral hygiene and cosmetic dental treatments, bone replacement, soothing relaxation pain relief

7

PROFIDENT FOGÁSZATI KÖZPONT www.profident.com

189

Dental X-rays, scaling, cosmetic dentistry, implants, oral surgery, dentures, orthodontics, pain-free dentistry, children's dentistry, tooth whitening

Tooth extraction, wisdom tooth removal, rooz-tip resection, cysts, implants

French, English, Hungarian, German

1993

– REPOSERA CORP. (100)

Sándor Zsolt Tolnai – –

1075 Budapest, Károly körút 1. (Astoria) (1) 342-2546 (1) 268-1097 office@profident.com

8

KORONA DENTAL www.kronedental.hu

159

Removal of dental deposits by ultrasound, preservative treatments and cosmetic dentistry, implants, prosthetic treatments, oral surgery and periodontology, computerized record-keeping

Implantology, bone restructuring, root resection, teeth extraction by operation

German, English, Japanese

1997

Individuals (100) –

Gábor Máté – –

9400 Sopron, Várkerület 73.

(99) 340-440 – info@kronedental.hu

9

PASARÉT DENTAL KLINIKA KFT www.pasaretdental.hu

158

Surgery, implantation, esthetic dentistry, prosthetic dentistry, dentistry for children, orthodontic treatments, parodontologic treatments, dental examination, digital diagnostics

Extraction, surgical extraction, root apex resection (apiectomy), cysta removal, gingivoplasty, bone substitution, sinus lift, sinus closure, electrosurgery

Hungarian, English, German, French, Dansk

2004

Individuals (100) –

Csaba Székely Andrea Kovácsné Rozmán Márta Szabados

1026 Budapest, Pasaréti út 8.

(1) 488-7919 – klinika@pasaretdental.hu

139

Cosmetic dentistry, tooth whitening, orthodontics, aesthetic dental prosthesis, porcelain crown with cirkon, procera porcelain crown, implantation Nobel Biocare® replace, procera implant bridges, implantation - Alpha Bio®, mini implants for removable dentures, veeners, Lumineers® by Cerinate, consultation, diagnosis, oral hygiene, dental cosmetics, ultrasonic scaling, aesthetic filling, inlay, root canal treatment, oral surgery

Wisdom tooth removal, dental cyst removal, bone replacement, root-tip resection

English, French, German, Italian, Hungarian

»

Individuals (100) –

Péter Gyuricza – Renáta Licskó

1114 Budapest, Móricz Zsigmond körtér 3/A. félemelet 1.

(1) 36-11222 – info@moriczdental.hu

128

Tooth whitening, tooth replacement without grinding, metal allergy, white tooth fillings, porcelain inserts, porcelain crowns, porcelain veneers, temporary crowns, extractions, dental implants, oral surgery, gum recession, scaling, root canal treatment, laser treatments, dental homeopathy

Tooth extraction, root removal, root-tip amputation and curette, cyst surgery, minor oral surgery, implantology, dental implants, sinus surgeries

Hungarian, English, Italian, German

2002

Individuals (100) –

Miklós Némethy – –

1137 Budapest, Szent István körút 10. III/8.

(1) 315-4545, (70) 314-4444 (1) 336-0054 info@budapestdental.hu

107

Implantology, oral surgery, dentures, cosmetic dentistry, tooth preservation, paradontology, oral hygiene, orthodontics, radiology, tooth whitening

»

English, German

2001

Zsolt Halász (100) –

Zsolt Halász – –

7100 Szekszárd, Munkácsy utca 43.

(74) 510-885 (74) 510-886 recepcio@ magan-fogklinika.hu

99

General dentistry, implantology, orthodontics, pediatric dentistry, oral surgery

Mandibular joint disorders, facial fractures, jaw fracture, wisdom teeth, cystic disease, surgical repair of cysts, bone replacement, sinus lift (basic sinus lift), painless tooth extraction, dental trauma, root resection (root end surgery, apicoectomy), oral tumors

Hungarian, English, French, Chinese

»

Csaba Lászlófy (100) –

Csaba Lászlófy – –

1073 Budapest, Erzsébet körút 44–46. fsz/5.

(1) 321-0577, (20) 259-6363 – info@sanoraldentalclinic.com

95

Tooth whitening, cosmetic dentistry, dental implants, implants, periodontal disease treatment, periodontics, preventive treatments, dental hygiene treatment, scaling, orthodontics, pediatric dentistry, oral surgery, oral fluid test, root canal treatment

Tooth extraction, tooth extraction (multiple roots), surgical tooth removal, wisdom tooth removal, wisdom tooth removal (surgical exploration, frenulectomia, resection, sinus lift surgery

English, German, Portuguese

»

Balázs Schatz (50), Dentalcoop DC Fogászati Kft. (50) –

Balázs Schatz Edina Petrus Ágnes Jázmin Harmath

1121 Budapest, Zugligeti út 60.

(1) 398-1028, (30) 228-3199 (1) 398-1029 info@dentalcoop.hu

92

Dental hygienie, esthetic dentistry (tooth whitening, porcelain veneers, tooth jewelry, preventive dentistry (fillings, fissure sealing, endodontic therapy), orthodontic treatment, dental prostheses (remowable prostheses, fixed prostheses), oral surgery procedures (tooth extraction, treatment or surgical extraction of third molars, root apex resection, cyst removal procedures, sinus closure, dental implant placement, sinus lift procedure, bone replacement procedures, preprosthetic surgeries and soft tissue plastic surgeries, treatment of the disorders and the dysfunction of the mandibular joint, treatment or removal of benign tumors of the oral cavity, and benign lesions or tumors of the jaws and the oral cavity), implantation, implantology

Tooth extraction, surgical tooth extraction (removal of root fragments and remnants), treatment or surgical extraction of third molars (if they cause any problems), root apex resection (to preserve teeth that cannot be adequately treated with root canal therapy or root filling, and to eliminate focal infections), cyst removal procedures (to remove benign cystic tumors of the jaws or soft tissues in the oral cavity), sinus closure (if the sinus was opened during tooth extraction), dental implant placement, sinus lift procedure (with bone replacement, to augment bone mass before placing the implant), bone replacement procedures (to prepare a plastic surgery or an implant placement), preprosthetic surgeries and soft tissue plastic surgeries (to create optimal conditions for a dental prosthesis), treatment of the disorders and the dysfunction of the mandibular joint, treatment or removal of benign tumors of the oral cavity, and benign lesions or tumors of the jaws and the oral cavity

Hungarian, German, Italian, English

2009

– (100)

István Vajdovich – –

2220 Vecsés, Lőrinci út 130/A, Vecsés Airport Business Park (29) 557-255 (29) 557-256 info@dentident.hu

78

Orthodontics, preventive treatments, tooh whitening, root canal treatment, aesthetic fillings, inlays, denture preparation, stump protection, temporary crowns, metal-ceramic restorations, crowns, removable dentures, oral surgery, implants, pediatric dentistry, other

Tooth extraction, surgical removal of wisdom tooth, root -apex resection, sinus closure, treatment in narcosis (conscious sedation)

Hungarian, English, Italian

»

Anikó Bakos (50), Art & Trend Kft (50) –

Anikó Bakos – Krisztián Száraz

1111 Budapest, Budafoki út 14 III/2.

(1) 789-7411 (1) 784-6798 info@dentalnumberone.com

»

Hard tissue laser, CT, implantology, general dentistry (root canal treatment, dentures, gum disease treatment, oral hygiene, oral surgery)

Laser tooth drilling, implantology

English, German, French

2011

László Kolozsváry (100) –

László Kolozsváry – –

1132 Budapest, Nyugati tér 5. I/5.

(1) 799-7160, (30) 552-3399 (1) 123-4568 info@westdent.hu

10

MÓRICZ DENTAL KFT www.moriczdental.hu

11

BUDAPEST DENTAL KFT www.budapestdental.hu

12

HALÁSZ FOGPÓTLÁS ÉS IMPLANTÁTUM CENTRUM www.fogpotlasklinika.hu

13

SANORAL FOGÁSZATI ÉS SZÁJSEBÉSZETI KLINIKA www.sanoraldentalclinic.com

14

DENTALCOOP-SCHATZ FOGÁSZATI ÉS SZÁJSEBÉSZETI KFT www.dentalcoop.hu

15

DENTI IMPLANT CLINIC www.dentiimplantclinic.hu

16

DENTAL NUMBER ONE ESZTÉTIKAI FOGÁSZAT BUDAPEST www.dentalnumberone.com

WESTDENT FOGÁSZAT ÉS IMPLANTOLÓGIA www.westdent.hu NR

Note: [1] Data includes the revenues of Madenta City Fogászati Központ and Madenta Rózsakert

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BBJ

WHO'S NEWS

Name Csaba Ember, dr Current company/position Gide Loyrette Nouel Budapest/head of banking and finance group Previous company/position -/-

Ember has been named head of Gide Loyrette Nouel’s banking and finance practice group in the Budapest office. He started his career at the legal department of Erste Bank, then joined the banking and finance group of an international law firm. In 2009, he founded his own law firm, which became the correspondent law firm of Deloitte Hungary. His practice focuses on providing legal advice on banking and finance matters, on corporate and commercial law, as well as on the legal aspects of financial market transactions.

Name Brigitta Prukner Current company/position Viasat/production director Previous company/position -/-

JULY 2

Canada day

Business lunch with Noémi Alexa, General Director of Transparency International LOCATION InterContinental Budapest 1052 Budapest, Apáczai Csere János u. 12-14.

TIME Noon FEE BCCH members: HUF 11,500 + VAT; non-members: HUF 15,000 + VAT ORGANIZER British Chamber of Commerce in Hungary, French-Hungarian Chamber of Commerce and Industry CONTACT www.bcch.com

Centenarian Memorial FEE Free of charge but registration required ORGANIZER Canadian Chamber of Commerce in Hungary CONTACT www.doodle.com

JULY 3 AmCham Seminar & Cocktail – Leadership Resilience: Surviving and Thriving in Tough Times LOCATION Kempinski Hotel Corvinus 1051 Budapest, Erzsébet tér 7-8.

TIME 4 – 7 p.m.

FEE Colleagues of AmCham member companies: Free of charge; Invitees of SpenglerFox: Free of charge; non-members: HUF 15,000 + VAT/person ORGANIZER American Chamber of Commerce in Hungary CONTACT ildiko.takacs-berka@amcham.hu

SEPT 27 DUIHK – Jour Fixe LOCATION Manna Lounge restaurant, 1013 Budapest, Palota út 17 TIME 6 p.m.

ORGANIZER German-Hungarian Chamber of Industry and Commerce CONTACT Marietta Németh; 36 1 345 7626; nemeth@ahkungarn.hu

FASHION

Sweet home, Berlin Dreams come true

Do you know someone on the move?

Send information to research@bbj.hu

JULY 1 DESCRIPTION Celebration of Canada’s 145th birthday LOCATION Margaret Island, meeting point at the

TRAVEL

Prukner takes over the responsibilities of Kati Csényi, who left the company on June 15. Csényi was in charge of local and regional content development of channels VIASAT3 and VIASAT6. Prukner, who previously worked as creative producer at Viasat, took over her role and will act as head of production. She will be responsible for the channel’s own productions.

She has been with Viasat for more than two years.

SEPT 15 AmCham Family Sports Day and Annual Soccer Tournament LOCATION GLOBALL Football Park & Sporthotel,

2089 Telki, Szajkó utca 39.

FEE Registration required ORGANIZER American Chamber of Commerce in Hungary CONTACT ildiko.takacs-berka@amcham.hu

NOV 10 Lobster Dinner LOCATION InterContinental Budapest, 1052 Budapest, Apáczai Csere János u. 12-14.

ORGANIZER Canadian Chamber of Commerce in Hungary CONTACT info@ccch.hu

28-29 30-31

SPONSORED BY

Name Kornél Brassai Current company/position Well Reklámügynökség/ creative director Previous company/position -/-

Brassai has been appointed as creative director of ad agency Well Reklámügynökség. He has been in the advertising industry for nearly 15 years.

He started his career at Scholz & Friends Budapest, later he worked as copywriter at BBDO Budapest for ten years. Brassai completed his university studies at the Attila József University in Szeged and the Budapest Media Institution.

He was a freelancer at the economy column of daily Magyar Nemzet.

Sweet Home,

Berlin wife and a group of Jewish-Hungarian scientists like Jenő Wigner and Leo Szilárd (as well as a Swiss colleague named Albert Einstein). How come Berlin lured some of the greatest minds of the time? The 1920 lines of Sándor Márai pinpoint the alchemy of Berlin’s charm: "Berlin was beautiful this winter – secretive, unfathomable (…) the mixture of the unruliness of a southern port and the discipline of a Prussian city, that merciless momentum and hunger the city showed in seeking balance and satisfaction (…) the reverent and kind approach to every new experiment of art – all this made Berlin, for a short time, the most interesting and most promising city of post-war Europe."

Stonewalled And then came the wars – one that scorched Europe and another one that froze it. The Berlin Wall proved nearly impossible to cross, and East Berlin appealed far less to Hungarians. However, the eventual meltdown of the Eastern Bloc lubricated the encounters with West Berlin. Hungarian writers (like György Dalos, László Földényi and Endre he Hungarian writer György Konrád says that it is very pleasant to live in a city that resembles a café – people drop by and live the atmosphere of a shared space without the need to change or hide their various identities. He meant Berlin, of course. The German capital has always been a point of reference and gravity for Hungarians, the famous and the obscure alike. Close to "Mitteleuropa," Berlin has served as a relay station between the cultures of West and East. The works of outstanding Hungarian, Polish and Czech artists have made their appearances in the western culture mainly via German publishers, and Berlin has rivalled Paris in inspiring and nurturing artists from Eastern Europe. The Nazi era and the Cold War brought a cesure in the love affair, but then a new wave of immigration started. In the years of rejuvenation, freedom and openness have reappeared as core features of Berlin life. Who are the Hungarians who live(d) it?

T

Genius in transit "Born to Jewish parents in Budapest in 1900/1913/1916, s/ he left Hungary…" is a model sentence to start the biography of many famous 20th century Hungarians. Many of them chose Berlin, especially between 1918 and 1930. Photographer László Moholy-Nagy, along with avant-garde artists like Lajos Kassák, went to Berlin in 1920. He worked with other immigrants and with Walter Gropius, training a range of Bauhaus newbies. In one of his best-known films he captured the life of the Roma people in the outskirts of Berlin. One of the best photographers of the century, Robert Capa arrived in town in 1931. He studied, he worked, he fled the Nazis - but he gathered much inspiration from the German capital. Mihály Polányi, a renowned Hungarian chemist, took a job in Berlin in 1920. There, he met his later

I mr e e r te s z k (…) the city has changed much but it has retained this magical atmosphere (…) big culture, good theatres: a city bustling with culture," he said in a recent interview. Today, he plays all around the world but still has a home in Berlin. His example shows that some made the leap as early as in the 80s and settled in West Berlin. However, the fall of the Wall opened the real gates.

The writers Imre Kertész is the most famous Hungarian name in the Berlin phonebook. In his essay, "Why Berlin?" the Nobel laureate writer treats us to an endearing metaphor of the city: "I

D o rgkray l l u s Kukorelly) hung around the Wall in West Berlin and looked Eastwards: the divided city showcased the conflict of deprivation (East Berlin) and lavish freedom (West Berlin). The Wall was still standing when Ferenc Snétberger, a guitarist who had previously lived in the infamous eighth district of Budapest, went to Berlin in 1987. He never looked back.

Instead, he launched a new career in Berlin’s pulsating jazz scene. "Everybody seemed to be there. Brazilians, Arabs, Africans – you could find everybody there and you still can

gy orgy d a l os

SPONSORED BY

Visiting Berlin’s top sights is a must, but by no means is it enough to fathom the versatility of the city. Rumor has it that Berlin offers a range of wonderful oddities, from outlandish hotels to glorious street art and a touch of post-communist romanticism. Ready to leave the beaten track? Then prepare for the unpredictable.

BERLIN FACTS Population: 3.5 million Area: 891.85 km2 Airports: Berlin-Brandenberg Schoenefeld, Berlin-Tegel, and Berlin Brandenberg International (to be opened in 2012) Flight time from Budapest: 1h 25min Summer weather: Temperatures range between 22-30°C, with occasional showers.

Public transport: Very developed. A Tageskarte costs €6.80 and is valid for one day in the A, B, and C zones.

Prices: Berlin is mostly cheaper than Paris or Stockholm; average prices are similar to those in Vienna and Brussels.

the former borderland between East and West Berlin reflects the half-nostalgic approach of an author who wrote extensively about the realities of the divided continent.

The jet-setters Prenzlauer Berg has another famous Hungarian resident, although from a different generation. Actress Dorka Gryllus first worked in Germany on a film with Rolf Schübel in 2002, and she fell in love with the country and started learning its language. A few years later, she settled in Prenzlauer Berg, which she described as "the neighborhood full of young poeple and children." She went on to build her acting career

r o b e r t c apa

sn et b erg er fer e n c

also maintained strong connections with the Hungarian art scene, and she represented Hungary at the Venice Biennial in 2011. Berlin has inspired her work for almost a decade now, and her reasons for living in the city evoke those of Imre Kertész: Berlin’s art community is like its people, whose curiosity makes them inclusive rather than envious and cooperative rather than vying, an attitude that so many Hungarians find invaluable.

admit, I love this city. The autumn that follows the long, hot summer is like a blond girl in the morning: fresh, cool and expectant, like someone who has plans in mind." He goes on to praise the green parks, the long lines of plane trees along the Ku’damm, and the teeming café terraces. Kertész is not the only Hungarian who makes a living out of words in Berlin. In MS Völkerfreundschaft, a café in Prenzlauer Berg, we have a good chance of coming across writer and translator György Dalos, who worked in Berlin in the 1980s and settled in the city again in 1995. His choice of address in

g y o rkg yo n r a d in Berlin, but she has visited Hungary every now ow o w and and then the hen n to play in theaters and feature films. But there iiss mo more ore tto o it d band, band ba n , Rotnd R t-Ro than that: Gryllus also sings in her Berlin-based Front, which unites Hungarian, Ukrainian, American, mer eric iccan an,, GerGerr mas ashi hing hi ng g concon nman, and Australian musicians and gives smashing certs in Berlin’s Kaffee Burger and all around Europe.

Eur urop ope. op pe. Their The heir heir ir c, Polish, Po olilish h, an and d music emerges as a strong cocktail of Balcanic, y hm yt ms. s.

Hungarian tunes as well as reggae and ska rhythms.

l e o s z il ar d

arttisstss H a na aj nall One of the most acclaimed Hungarian visual artists Hajnal Németh started her Berlin career in 2002 with iitth a sc scholarcho h la larrship, and she decided to linger. She has earned ed a na n name me m e by by founding the LADA project, a place for exhibitions, ittio ons ns, in n 2007.

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7 Since then, LADA has become an increasingly ly po popular opu ula lar ar art ar t ar brand in Berlin and in Budapest. Like Gryllus, s, Németh s, Ném é et eth ha h has as

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30 3 Socialite BBJ

WWW.BBJ.HU

Budapest Business Journal | june 29 – july 12

Dreams come true

Many people probably had a childhood dream about what they would become as a grown-up, dreams they later decided to drop and instead choose a more ordinary profession offering a more secure living. But while ideas like building airplanes or travelling to space might remain only sweet memories, others possibly get more and more realistic with the passage of time. The BBJ now introduces two women who, after working for decades in other fields, e finally took the risk of working out their fond dreams and entering the world of fashion and design.

Photos: János Rátki

Photo: Brigitta Cser

"I have always wanted to become a jewelry maker, but I knew a very talented woman who made beautiful jewelry but, as she could not sell enough of them to make a living, she had to waste her talent on pieces that fit the average taste better,” Veronika Lázár told the Budapest Business Journal, explaining why twenty years ago she decided to become an architect instead of following her heart. "My family is rich in architects so my choice was obvious.”

As architectural design is also a creative process, she has not regretted her decision so far. "I still look at buildings with an architect’s eye,” she said. However, as the years went by, she kept feeling the desire for something more personal.

"Architecture is not a feminine profession,” Lázár pointed out. "The scale is so large. And, of course, we plan houses for people to live their lives in, but I still felt that I wanted to do something that was more directly linked to people.”

In the meantime, the crisis has rolled in Hungary, practically knocking over the construction industry. Although Lázár’s employer, A&D Stúdió, was among the lucky few who could keep on working without significant layoffs, the crisis left a mark on the everyday work of everyone in the sector.

"Cost-efficiency has become the new catchword, which practically reduced creativity to zero,” Lázár said. At the same time, the eyes of Hungarians have opened for unique design in the past decade, meaning that the old fear of having all the nice pieces of jewelry left on the shelf unsold might not be valid anymore.

So it was now or never. Three months ago, after having been trained by renowned masters at the Budapest art school center Budai Rajziskola, Lázár finally decided to switch her planning table for jewelry making tools. Her colorful but still elegant necklaces and rings are already available at design fairs such as the monthly WAMP event and at Design Now, an exhibition of the VAM Design Gallery until August 31. "Designing jewelry is very similar to architectural planning,” she said, adding that coming from a different profession sometimes means more freedom. "I look differently on some materials,” she explains referring for example to granulated glass mosaic in rasin, which is an architectural material and had not been used for jewelry until Lázár decorated one of her rings with this.

"It is said that to become a good jewelry maker it is good to be a bit mature,” she continued explaining why she did not feel at a disadvantage for taking up the line with a delay. "Will my new profession accept me?

This I don’t know. But why wouldn’t they?”

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BBJ

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Budapest Business Journal | M Ma Mar a r 23 23 – A Apr ppr r7

she took up several skills that she can take advantage of now as a designer. "I know what casual business means and I know what dress is required for such an event,” Hornok said, adding that a lot of people nowadays have problems finding the balance between elegance, effeminacy and ordinariness. "Everything you wear has a message, and a deep-cut shirt is not something to prevail with at a workplace. And anyway ordinariness has nothing to do with being an attractive woman,” she said when explaining why she designed somewhat classic-tailored clothes that gain freshness through vivid colors and light materials.

While admitting that the Hungarian market is very small and the locally-made design sector is already quite full, Hornok is optimistic as "there is an increasing trend in Hungary to buy clothes from local designers.” Also, if she was a fresh graduate from Moholy-Nagy University of Art and Design, she might have better connections with industry insiders who could help kickstart her career, but she rather sees the advantages of coming from outside. "My independence is one of my strengths, while I am also happy when others succeed." ■

Photos: Gabriel Androczky

Krisztina Hornok left her finely developing career in communications to realize her childhood dream and become a fashion designer. She launched the first collection of her brand, called Design 13 - The lucky wear, three months ago. "At first, some of my distant acquaintances thought that I was responsible for the PR of Design 13,” she said illustrating the surprise of those who did not know that before becoming a journalist and PR agent, she had studied to become a dressmaker.

"As I could not get into the fashion department of the college, I chose communications because I had always been interested in languages, arts and literature.”

While she was very happy with her position as PR manager of Budapest’s Four Seasons Hotel, her thirst for something more artistic has never calmed down. "There are so many things I am interested in that I might be a bit too much sometimes. This is not always an advantage. So I keep looking for someplace where such a Renaissance person can be useful.”

In the meantime, she spent years in a multinational business environment where

Photo: Gabriel Androczky

Private Hospital

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