Budapest Business Journal 23/15

Report 3Special s

BBJ

Relocation

relocation

survey is conducteda The annual Relocation Services, global

by Santa Fe Bettina Zboray, global player. at the firm’s Budapest mobility manager that the results headquarters confirms phenomenon. “Companies underlie a clear relocation a cost−cutting skilled tend to consider think twice to fire tool. They would have realized it costs colleagues. They and bring up to speed a lot more to hire than send experienced new employees have staff abroad.” that terms of stay Fóti points out in the past few years. shrunk significantlybudget reasons, and a to “It is mainly due is developed in large average different approach companies. An instead LEVENTE HÖRÖMPÖLI-TÓTH international a half years about one and to there stay is previously of three season big time, typical period a of peak is for “This interrupt my work four years.” is no way I can “Corporate executives a senior executive Zboray explains: track costs and see on the even five minutes,” relocation firms to be able to in foreign locations at one of the top said, explaining why want office. deploying staff excel sheets will Klára Fóti, left, at the ARC Hungarian marketthe Budapest Business that off. Old−fashioned of case, though. remain, pays the questions clarity in this and would badly related matters of not provide Journal were, and software are the busy state Customized apps has developed its own only in arranging immigrationunanswered. However, of season−bound.

Santa Fe of “Some are interested from far needed. is aspects prefer our full range links all the sector owner and managing tracking system that work permits. Others access to As Klára Fóti, an overview on and grants instant such as residence or Relocation Hungary director of ARC industry trends are relocation for our clients and assignees. home-searches, providing at information highlights, overall can be generated solutions. That includes solve every-day issues such as arranging report costs real−time contains all pointing upwards.in the first half of the A we also help or, in the case of time. It not only provides schooling, but “Our turnover told the any assignment, but of ROI public utility providers some 25%,” she related to the year went up by even a kind permits, dealing with to hire parking detailed KPI and BBJ. interpretation,” it would have cost what providing showing an accident, replacement.” somebody as a

their Companies send as a employees abroad and way to save money, they expect relocation services to ensure high−efficiency a transitions and shop. convenient 1−stop

Photo: Jessica Fejos

SPECIAL REPORT:

ves Bottom line mo

It’s about costs, you

know

with goes hand−in−hand with bundles This optimism According to Better off the industry worldwide expectations. of the Global Mobility crisis years forcednew and more the latest findings empirical set of data The offering to adapt by times of Survey, the largest services. Those players programs of over major covering the related companies, a net personalized left less than 20 in the hardship 1,000 international market.

25% is projected on the Budapest growth of nearly industry in 2015.

How important

is ROI for foreign

postings?

Very important

Quite important

Not very important

Not at all important

0 Source: Global Mobility

10

Survey 2014, Santa

20

30

Fe Relocation Services

40

50

THE RELOCATION BUSINESS

that edge

Finding to use professional on the market “Companies decide the services offered workers can concentrate has help so that their here for from day one, Since a similar nature, competition of experience. on what they are They don’t want their are a focus on the customer on its namely their job. time with placed Relocation prides itself their valuable Settlers time of handling staff to waste notes. matters,” Zboray by not exemplary reaction things. administrative other still try to save problems, among CRM systems Yet, companies services.

“We also have customized state of play signing up for certainleft on their own to keep track of the “Expats are often they forget and there that help Furthermore, work If ongoing matters. developed with our register their car. they wish the job had of been the then processes have adds. is an accident, ensure completing and of by us,” Zboray advise subcontractors that fashion been taken care therefore, services in a timely ordered the says.

Relocation firms, and Sedulyák are bundled services, as high quality,” clientele to use in−house expertise seek to be perceived a Stability and firms themselves to achieve customer contact for addressing other key factors Relocation a single point of for their clients. not only at ARC satisfaction, problems of range only in arranging Kft. “Some are interestedmatters such as Hungary of our counselors have been ated “Most to ten years, Others immigration−rel with ARC for eight work permits.

That working managers do not residence or customer and HR range of solutions. prefer our full providing thus to be faced with frequently changing home−searches, we also need includes they seem to appreciate,” schooling, but generate people here which an overview on issues such as Fóti adds. “Visa and immigration must be which with help solve every−day permits, dealing of particularly high turnover high quality of parking arranging or, in the case to our exceptionally in that field, with public utility providers interpretation,” due professional services a degree in law.” an accident, providing a specialist at Settlers three counselors having Violetta Sedulyák, says.

Relocation Kft.

VOL. 23. NUMBER 15

JULY 31, 2015 – SEPT 03 , 2015

BUDAPEST

BUSINESS JOURNAL HUF 1,250 | €5 | $6 | £3.5

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

NEWS

The refugees’ path through Hungary

Welcome wagon

We follow refugees as they go from the Serb border to Budapest, and then their new home in Debrecen or Bicske. The stories of people fleeing Central Asia, Africa and the Mideast are told in words and images.

6

NEWS

Government happy to tax foreigners more Special levies on the supermarket and tobacco industries have spurred complaints by companies who say foreign firms face unfair burdens.

Hungarian officials counter that local businesses deserve more help. 8

NEWS

Easing cycle called over after big rate cut

SOCIALITE

Photo: Jessica Fejos

Movers are busy this year, according to Klára Fóti of ARC Relocation Hungary, but the nature of foreign postings is changing. Firms watch costs and benefits closer than ever when sending someone abroad. 10

BUSINESS

Analysts were surprised at the size of the central bank’s latest reduction in the base rate, to a record low of 1.35%.

Barring external shocks to the economy, experts say they see no reason for the MNB to cut more.

3

SPECIAL REPORT

A beer revolution bubbles up in BP

Property investment continues to grow

Going back to school in a new country

Despite a tradition of making wine in this country, and contracts that favor the big sponsors, a microbrew advocate is getting Hungarians, and visitors, to try an alternative to the usual suds.

14

Hungary saw a healthy increase in real estate investment in the first half of this year, according to JLL. While yields are high here, Czech Republic and Poland remain the leaders in CEE when it comes to attracting investors. 9

One of the biggest concerns for parents relocating to Budapest is finding a good school. Important considerations include the language of instruction, the availability of places and the price of tuition.

12

WWW.BBJ.HU

Budapest Business Journal | July 31 – Sept 03, 2015

BBJ

3Special Relocation

Report

Bottom line moves

relocations

survey is conducteda The annual Relocation Services, global

by Santa Fe Bettina Zboray, global player. at the firm’s Budapest mobility manager that the results headquarters confirms phenomenon. “Companies underlie a clear relocation a cost−cutting skilled tend to consider think twice to fire tool. They would have realized it costs colleagues. They and bring up to speed a lot more to hire than send experienced new employees have staff abroad.” that terms of stay Fóti points out in the past few years. shrunk significantlybudget reasons, and a to “It is mainly due is developed in large average different approach companies. An instead LEVENTE HÖRÖMPÖLI-TÓTH international a half years to about one and there stay is previously of three season big time, typical period “This is peak interrupt my work for of a four years.” is no way I can “Corporate executives a senior executive Zboray explains: track costs and see on the even five minutes,” relocation firms to be able to in foreign locations at one of the top said, explaining why want office. deploying staff excel sheets will Klára Fóti, left, at the ARC Hungarian marketthe Budapest Business that off. Old−fashioned of case, though. remain, pays the questions clarity in this and would matters badly of not provide Journal were, and software are the busy state Customized apps has developed its own in arranging immigration-related unanswered. However, of Santa Fe of are interested only from season−bound. prefer our full range the sector is far owner and managing needed. system that links all aspects to “Some work permits. Others tracking access As Klára Fóti, an overview on and grants instant such as residence or Relocation Hungary director of ARC industry trends are relocation for our clients and assignees. home-searches, providingsuch as arranging information generated at solutions. That includes highlights, overall issues report can be contains all costs pointing upwards.in the first half of the A real−time we also help solve every-day providers or, in the case of time. It not only provides schooling, but “Our turnover told the any assignment, but of ROI public utility some 25%,” she related to the year went up by even a kind permits, dealing with detailed KPI and cost to hire parking BBJ. interpretation,” it would have showing what an accident, providing replacement.” somebody as a know It’s about costs, you with Finding that edge goes hand−in−hand to use professional with bundles market This optimism According to Better off “Companies decide offered on the concentrate the industry their workers can Since the services worldwide expectations. competition has of the Global Mobility crisis years forcednew and more help so that are here for from day one, similar nature, experience. the latest findings empirical set of data The their are of a offering what they times of on to adapt by They don’t want with placed a focus on the customeritself on its Survey, the largest services. Those players namely their job. prides programs of over time major their valuable Settlers Relocation time of handling covering the related companies, a net personalized notes. staff to waste left less than 20 matters,” Zboray by not exemplary reaction things. in the hardship 1,000 international market. administrative other 25% is projected on the Budapest still try to save problems, among growth of nearly CRM systems Yet, companies services.

“We also have customized industry in 2015. state of play signing up for certainleft on their own to keep track of the “Expats are often they forget and there that help Furthermore, work If ongoing matters. developed with our postings? register their car. they wish the job had of been the then is ROI for foreign processes have adds. is an accident, ensure completing and How important of by us,” Zboray advise subcontractors that fashion been taken care therefore, services in a timely says.

Relocation firms, and the ordered are quality,” Sedulyák bundled services, clientele to use seek to be perceived as high in−house expertise Stability and a firms themselves to achieve customer contact for addressing other key factors Very important a single point of for their clients. only at ARC Relocation satisfaction, not range of problems only in arranging Kft. “Some are interestedmatters such as Hungary of our counselors have been “Most to ten years, immigration−related permits. Others with ARC for eight Quite important work That working managers do not residence or customer and HR range of solutions. prefer our full providing thus to be faced with frequently changing home−searches, we also need includes they seem to appreciate,” schooling, but generate people here which an overview on Not very important issues such as Fóti adds. “Visa and immigration must be which with help solve every−day permits, dealing of particularly high turnover high quality of arranging parking or, in the case to our exceptionally in that field, with public utility providers interpretation,” due professional services a degree in law.”

Not at all important 50 an accident, providing 40 a specialist at Settlers three counselors having 30 20 Violetta Sedulyák, 10 0 says.

Relocation Kft.

their Companies send as a employees abroad and way to save money, they expect relocation services to ensure

Fejos

high−efficiency a transitions and shop. convenient 1−stop

Photo: Jessica

SPECIAL REPORT:

THE RELOCATION BUSINESS

BUSINESS JOURNAL Source: Global Mobility

Survey 2014, Santa

Fe Relocation Services

VOL. 23. NUMBER 15

BUDAPEST B

HUF 1,250 | €5 | $6 | £3.5

JULY 31, 2015 – SEPT 03 , 2015

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

NEWS

The refugees’ path through Hungary

Welcome wagon

We follow refugees as they go from the Serb border to Budapest, and then their new home in Debrecen. The stories of people fleeing Central Asia, Africa and the Mideast are told in words and images.

6

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NEWS

Government happy to tax foreigners more Special levies in the supermarket and tobacco industries have spurred complaints by companies who say foreign firms face unfair burdens.

Hungarian officials counter that local businesses deserve more help. 8

NEWS

Easing cycle called over after big rate cut

Movers are busy this year, according to Klára Fóti of ARC Relocation Hungary, but the nature of foreign postings is changing. Firms watch costs and benefits closer than ever when sending someone abroad. 10

Analysts were surprised at the size of the central bank’s latest reduction in the base rate, to a record low 1.35%. Barring external shocks to the economy, experts say they see no reason for the MNB to cut more.

3

BUSINESS

SOCIALITE

SPECIAL REPORT

A beer revolution bubbles up in BP

Property investment continues to grow

Going back to school in a new country

Despite a tradition of making wine in this country, and contracts that favor the big sponsors, a microbrew advocate is getting Hungarians, and visitors, to try an alternative to the usual suds.

20

Hungary saw a healthy increase in real estate investment in the first half of this year, according to JLL. While yields are high here, Czech Republic and Poland remain the leaders in CEE when it comes to attracting investors. 6

One of the biggest concerns for parents relocating to Budapest is finding a good school. Important considerations include the language of instruction, the availability of places and the price of tuition.

12

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EDITOR-IN-CHIEF: Tom Popper ASSOCIATE EDITOR: Robin Marshall DEPUTY EDITOR: Aniko Fenyvesi NEWS EDITOR: Christian Keszthelyi EDITORIAL STAFF:

Zsófia Czifra, Jessica Fejos, Levente Hörömpöli-Tóth, Bence Janek, Nóra Krokovay, Robin Marshall, Gary J. Morrell, Nick Pongratz, Diana Sefton, Zsuzsa Szabó, Rob Smyth, Zsófia Végh LISTS: BBJ Research (research@bbj.hu) NEWS AND PRESS RELEASES:

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THE EDITOR SAYS

Fear those who stir fear of outsiders The enemy is at the gate! Or so the government would like us to think. Whether they are talking about keeping refugees out of the country, or promoting protectionist tax policies, the Fidesz government appears to want Hungarians to believe that we are surrounded by bad people who would do harm to the country if it were not for our heroic government. This tactic of distraction is obvious and harmful.

The huge influx of migrants, mostly refugees, pouring into the country is a real problem, caused by the civil war in Syria and continuing humanitarian disasters in Afghanistan, Iraq and elsewhere. The solution to this does not involve paranoid measures like the construction of a 175−kilometer−long fence on the Serbian border, or the insistence by the prime minister that Hungary must break from Brussels by flaunting European Union policy on immigration.

The United Nations High Commission on Refugees is doing what it should in handling the current crisis by supporting asylum seekers and helping them to integrate into Europe. In fact, although refugee camps are full beyond capacity, the system is still working reasonably well. What Hungary needs to be building now is more refugee camps, not a fence. Refugees are not an enemy but neighbors in need, and attempts by Brussels to encourage more assistance from reluctant European governments is not, as the prime minister tells us, a betrayal of Europe.

But refugees are not the only outsiders that the government wants to defend us from. Using protectionist fees and taxes, our leadership is seeking to interfere with free competition, and to make things easier for local companies. The government even acknowledges that this

is the point behind fees and “special taxes” targeting supermarkets and tobacco distributors.

According to the head of the Prime Minister’s Office, János Lázár, the government is actively seeking “to recapture the markets in Hungary for Hungarian businesses, to send foreigners out of Hungary, and to enhance Hungary’s national industry, economy and trade as much as possible”. Another government spokesman told the Budapest Business Journal that it is “the firm intention of the government to re−distribute the disproportionate and unfair excess rights and privileges in a fair manner which is beneficial for Hungarian society”.

It is certainly ironic to hear such Marxist−sounding talk from a party that first gained notoriety by opposing communism. It is also worrying to hear the government openly telling foreign firms that they should not expect a level playing field when doing business here. Hungary is a small country with an economy that is heavily dependent on foreign direct investment. The last thing we should be doing is scaring foreign business away.

It is a classic populist trick to create enemies where they don’t exist. The scare tactic is supposed to distract us from a lack of progress, and possibly plain old inept leadership.

In fact, those who want to frighten us with tales of big, bad outsiders are the real enemies – and they have been well inside the gate for a long time.

Next edition September 4 The Budapest Business Journal’s print publication will take a break in August. Our next print edition comes out September 4, but our website at bbj.hu will continue to publish daily, as always.

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Then and now Above is a military display in Szent György tér of the Castle District during a celebration of St. Stephen’s Day, Hungary’s biggest holiday, on August 20, 1938.

At left is a more recent celebration of August 20 in Budapest’s Heroes Square.

BBJ

1 News

NEWS

Following the trail of refugees through Hungary 6 NEWS

Government stands by special levies despite probe 8

macroscope

Monetary easing cycle ends In what was described by most analysts as a surprise move, the National Bank of Hungary cut the key rate to a record−low 1.35% at its latest meeting, and also announced the end of the second easing cycle. Experts believe a tightening cycle is unlikely to start before next autumn.

3.0 Second easing cycle begins in March

2.5 2.0 1.5 1.0

Hungary’s base lending rate

0.5 0.0 J F M A M J J A S O N D J F M A M J J 2014 2015

ZSÓFIA CZIFRA

After some marginal easing, the strengthening of the forint continued on July 21, as the central bank announced that the latest 15−basis−point rate cut was the last one and the base rate will be maintained at 1.35% for an “extended period”.

In reaction to the rate cut and the following announcement about the future policy of the Monetary Council of the National Bank of Hungary, most analysts agreed that the base rate might stay in the lower register for an extended period of time. Many expressed surprise that the cut was so steep.

Takarékbank analyst Gergely Suppan reasoned this by saying that the Hungarian government’s medium− term inflation target of 3% is not likely to be reached before 2017, and the

“Almost exactly a year ago Mr. Matolcsy promised an end to the rate cycle and they are now a whole 75 bps lower.” international interest rate environment is likely to remain supportive – even if the U.S. Federal Reserve (Fed) raises its interest rate in the fall. Therefore Suppan thinks that the earliest date for the start of a tightening cycle in Hungary could be the fall of 2016. By the end of next year, Suppan projects a base rate of 1.75%.

Experts in general expected the pace of the rate cut to slow down, so the decision

to maintain the 15−basis point pace surprised analysts at Erste Bank, too.

Good results seen According to Gergely Ürmössy and Vivien Barczel, the second easing cycle of the Monetary Council (which started this March) had a great effect on the economy – namely, it fostered growth, increased employment and reduced interest rate costs.

The latest figures suggest that inflation has started to speed up a little, and it seems that the central bank is not worried about the falling raw material prices influencing consumer prices significantly, therefore the Monetary Council thinks that the current base rate level is in accordance with the medium−term inflation target of

the MNB, Erste analysts explained.

As for the international environment, they mentioned that while the United States is preparing for a possible key rate raise, the bond auction program of the European Central Bank persists until September 2016, and this provides an opportunity for the MNB to maintain its low base rate for a “very long period”, Erste analysts suggest. They think that the central bank will not raise the key rate before the last quarter of 2016.

Nomura analysts, however, weren’t taken by surprise as they expected that the MNB would keep its rate−reducing pace of 15 basis points, but they are cautious about the MNB announcement of ending the easing cycle. After the press conference held by bank governor György Matolcsy, they wrote in a note: “He [Matolcsy] gave a soft pre−commitment to hold rates for “a very long time” at this level. Having said this, we would be totally unsurprised if the MNB wanted to cut rates again in the future for any reason at the time (growth or inflation shock), and hence we take the announcement of the end of the cycle with a pinch of salt.”

Overall, Nomura analysts think that the base rate will remain unchanged until the end of next year, but their underlying risk forecast is still the same: “The MNB will continue to loosen underlying, ‘true’, monetary conditions as much as possible on a permanent basis.”

Nomura analysts mentioned that risks of future cuts could come from large further administered price cuts, a eurozone−related growth shock or excess strengthening of the currency feeding into inflation. They also warn: “We should remember of course that almost exactly a year ago Mr. Matolcsy promised an end to the rate cycle and they are now a whole 75 bps lower.”

Retail sector cut workers since Sunday law CHRISTIAN KESZTHELYI

The law requiring larger retailers to close on Sundays seems to have taken a bite out of employment in the retail sector.

The number of people working in retail in May dropped by 2,600 compared with February, data collected

by Hungary’s Central Statistical Office (KSH) indicates, according to a July 22 report in Népszabadság. The Sunday closure law took effect on March 15,

so February was the last full month of seven−day operation for all stores.

Those who kept their jobs in retail have apparently had to work harder.

Figures show that employees in the sector worked 388,000 hours of overtime in May, approximately 70,000 more than the amount worked in the same month a year earlier. Since the measure took effect, retailers have been operating with extended opening hours on the other six days of the week in order to make up for the lost traffic of Sundays.

Apparently Zsolt Semjén, Hungary’s Deputy Prime Minister and the leader of junior coalition governing Christian Democratic People’s Party (which came up with the law) was too optimistic in his comments in early July, when he told HírTV: “It has been proven that Sunday closures did not lead to lower traffic and nobody was made redundant; what is more, due to growing traffic more people are being employed in the retail sector.”

Although retail sales in Hungary saw a year−on−year rise of 4.4% in May,

according to a July 23 report by the Central Statistical Office (KSH), some of the slowest growth reported was in the type of stores that were impacted by the new Sunday closure law.

Critics have said that the law hurts foreign hypermarkets and favors local supermarket chains, such as CBA, which has a franchise ownership structure that technically means each shop is individually owned. The head of CBA is known to be a major contributor to the ruling Fidesz party.

WWW.BBJ.HU

04 News

Budapest Business Journal | July 31 – Sept 03, 2015

NEWS

Campaign for earlier retirement

KSH: Jobless rate at 6.9%, a ten-year low

OECD report: Hungary has highest wage deductions

The unemployment rate in Hungary saw a 1.2% year-on-year decrease to 6.9% in the period of April-June, with the number of unemployed people dropping by 49,000 to 310,000, Hungary’s Central Statistical Office (KSH) reported on July 29. The jobless rate, reaching a ten-year low, was down from 8.1% in the same period a year earlier and down from 7.1% in March-May. A total of 48.5% of the unemployed had been seeking work for one year or more.

The average time spent looking for work was 19 months. There were 3,028,300 economically inactive Hungarians – those neither employed nor seeking work – in the age group during the period, down from 3,143,000 a year earlier. The data also includes those employed in public work schemes, such as so-called “fostered workers” and those working abroad for less than one year. Fostered workers are employed by the government and paid less than minimum wage to work at jobs such as street sweepers or metro ticket collectors. Under the budget plan for 2016, the allocation for fostered work programs will rise by HUF 70 billion to HUF 340 bln.

Among OECD countries, Hungarians on the minimum wage paid the highest percentage of gross wages toward taxes and social contributions in 2013 – 35%, followed by Latvia’s 27%, Poland’s and Germany’s 26%, and Slovenia’s 23%, the OECD’s Employment Outlook 2015 reveals. The calculations by the OECD (Organization for Economic Co-operation and Development) are based on a full-time worker in a single-person household being paid the minimum wage at a standard adult rate. The 2015 survey reviews labor market trends and short-term prospects in OECD countries, looking at: recent labor market developments, especially around the minimum wage; skills and wage inequality; activation policies and inclusive labor markets; and job quality.

Government to accelerate permit process for nuclear upgrade The Hungarian government reportedly declared the obtaining of permits for an upgrade of Hungary’s sole nuclear power plant Paks a matter of “elevated significance for the national economy”, which will accelerate the process, Hungarian news agency MTI reported, citing the latest issue of the official gazette Magyar Közlöny. The power plant is being expanded by another two blocks, with the bulk of the project being financed

by Russia’s Rosatom through a €10 billion credit line from Russia.

U.S. Embassy welcomes tax chief’s resignation The U.S. Embassy in Hungary welcomed the resignation of Ildikó Vida, the former head of the National Tax and Customs Authority (NAV), Hungarian online daily origo.hu reported on July 23. Vida admitted last year to being among six officials who were restricted entry to the United States on suspicions of corruption. Although Vida denied any wrongdoing, media reports in Hungary recently revealed that she first offered her resignation when the scandal surfaced, however, Hungary’s Prime Minister Viktor Orbán rejected it at that time. The new NAV chief is Árpád Varga.

“We welcome every decision, especially from alliance and friend countries, which improves the transparency of the country and strengthens the trust of citizens,” spokesperson Elizabeth Webster said in a letter to origo.hu. She added that the United States has long been in a dialogue

Photo: MTI/ Csaba Krizsán

IN BRIEF

Activists for the LIGA Trade Union League gather signatures for a referendum that would allow men to retire and collect their pensions after 40 years of employment, in Győr on July 27. The effort to hold a referendum was originally rejected by the National Election Committee of Hungary, but a court overturned the committee’s decision. Organizers of the referendum were given 120 days following the court’s decision to collect the necessary signatures. National Economy Minister Mihály Varga said on July 23 that earlier retirements would put a strain on the pension fund, which would mean pensions would have to be lowered. with the Hungarian government on democratic principles and corruption.

“We have phrased our concerns with our European partners towards the Hungarian government. Aside from that, we publicly expressed our opinion on the issues that harm democratic institutions, civilian society and the freedom of press in Hungary,” Webster wrote.

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Report: Hungarian university rankings fall back The Center for World University Rankings (CWUR), one of the most recognized university ranking organizations, published its annual 1,000 best universities in the world list last week, in which six Hungarian universities were ranked significantly lower than last year.

Of the Hungarian institutions, Eötvös Loránd University (ELTE) ranked 458 (last year 371), Semmelweis University (SOTE) ranked 617 (598), University of Debrecen ranked 667 (673), University of Szeged ranked 731 (712), Budapest University of Technology and Economics (BME) ranked 819 (811), and University of Pécs ranked 892 (862). From the Eastern and Central European region, several universities outperformed Hungarian, universities such as the Medical

University of Vienna, ranked 265, the Charles University in Prague (270th), the Innsbruck Medical University (395th), and the Jagiellonian University in Poland (451st). From the top ten institutions, eight are U.S. universities, led by Harvard University, Stanford University and Massachusetts Institute of Technology, while two are British universities: University of Cambridge and University of Oxford.

Government plans assistance for borrowers with FX car loans The Hungarian government is planning to offer assistance to borrowers with foreign currency-denominated car loans, similar to that received by households with FX home loans, National Economy Minister Mihály Varga said on July 23, according to Hungarian news agency MTI. The cabinet will soon decide on the conversion of FX vehicle loans into forints, and will ensure more favorable conditions than those currently available, Varga said at the Bálványosi Summer University in Baile Tusnád, Romania. He noted that Hungarians have more than 200,000 FX vehicle and personal loan contracts, which have a value of almost HUF 300 billion.

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News 05

Budapest Business Journal | July 31 – Sept 03, 2015

Migrant advocates question government rhetoric Activists say the government’s tendency to confuse immigrants and refugees, and to use inflammatory language, are stirring hatred.

CHRISTIAN KESZTHELYI

Photo: MTI/ Zoltán Máthé

CHRISTIAN KESZTHELYI

Although the number of asylum−seekers has dramatically increased in the past two years in Hungary, and refugee camps are operating well over capacity, experts say that refugees flocking to Hungary do not pose a threat to the country’s security, despite the Hungarian government’s anti− immigrant rhetoric.

“The government uses migration and refugees as a political propaganda tool,” Júlia Iván the legal officer of Hungary’s Helsinki Committee tells the Budapest Business Journal. “Facts and figures are completely left out from the public discourse and very dangerous tendencies are already visible: Incitement to hatred – and even hate crimes against migrants, persons of color or those volunteers who help refugees by distributing humanitarian aid. All this follows an extremely long government campaign with huge billboards with anti− immigrant slogans.”

Refugees arrive in Hungary from war−torn countries, many risking their lives in order to seek asylum. Once they are granted refugee status, they have many of the same rights as citizens of a country, only they cannot vote, and their travel may be limited. The government is apparently confusing the issue by talking about “illegal immigrants”, according to Ernő Simon, UNHCR spokesperson for Hungary.

“Nobody is ‘illegal’. A person cannot be illegal, but a criminal action or an act can,” Simon says. He adds that refugees, who may have a legal right to asylum, are not committing “illegal immigration” but rather “irregular border crossing”.

Orbán: Brussels lax on immigration

Government spokesman Zoltán Kovács speaks at a July 27 press conference in which he said most of the one million recipients who responded to the eight million questionnaires sent out by the government agree with its stance that illegal immigration is a problem.

“Hungary only hosts around 140,000 immigrants, most of whom are from Europe. This is one of the smallest proportions EU-wide.”

of protected status; in 2012 some 2,157 people sought asylum and 415 were granted, in 2013 some 18,900 people sought asylum and 415 were granted, in 2014 some 42,777 sought asylum and 512 Few immigrants, many refugees were granted, while until June 20, this Furthermore, in contrast to the influx year some 59,059 people sought asylum of refugees, Hungary has relatively few and 152 have been granted,” Lilla Zentai, immigrants. “You can compare the figures a social worker at Hungarian Association and the ratio of immigrant population for Migrants, tells the BBJ. within the EU by checking Eurostat data.

The total number of asylum seekers in According to our information, Hungary Hungary is around 80,000, according to only hosts around 140,000 immigrants, Zentai and Iván. Both, however, point most of whom are from Europe. This is out that the majority of these asylum one of the smallest proportions EU−wide,” seekers leave the country soon after their procedure is started – even while the Iván says.

With refugees, it is another matter. As procedure is still underway. one of the first EU borders on an overland Still, the government insists that route from the south and east of Europe, building a 175 km fence on the Serbian Hungary’s border with Serbia has become border is the best way to keep asylum a major destination for refugees, and the seekers out.

Iván disagrees. “Statistics show that numbers of applications for asylum has grown this year dramatically, along with walls or fences will not stop migrants the number of refugees worldwide. from coming in the long−term; the same “In 2011 some 1,693 people sought could be seen in Bulgaria and Greece,” asylum and 191 were granted some kind she said. “Unless the situation and

root causes change, this fence is not an effective tool and it is way too expensive – both according to the UNHCR, NGOs and military (security) experts. Plus, this will perhaps deviate migrants from Hungary to Romania or Croatia, and then they will cross the borders at sections without a fence.”

Both Iván and Zentai maintain that the fence “costs as much money as Hungary has spent on migration in the past six years”, and say that money would be better spent on building more accommodation at the refugee camps.

“The camp in Debrecen (originally hosting a maximum of 823 people) accommodates around 1,800 applicants, while Bicske (originally for 439 persons) hosts more than 1,400 at the moment,” Iván said. “The same tendency can be witnessed everywhere; many sleep out in the courtyard in the open air because there is not enough space inside the buildings, and also, military tents are being set up, which offer very basic accommodation conditions,” she adds.

While Iván says that accommodation needs to be expanded and improved, the government has said it is considering closing some camps and moving the refugees to tent cities. But Iván maintains that this would be illegal. “Hungary renovated and refurbished many of the reception facilities with EU support, and it is questionable if these facilities can be closed without the consent of the EU, which contributed significantly to improve those facilities,” she says.

In the face of the current “migration period”, Europe should remain a place for Europeans, and a “Hungarian Hungary” should be preserved, Prime Minister Viktor Orbán said on July 24 in an address at the Free University in Bálványos, Romania, that mostly addressed immigration.

Speaking at the same venue where he shocked the world last year with a speech promoting “illiberal democracy,” the prime minister once again was critical of the status quo in the European Union.

He said Brussels should do more to defend the EU from the influx of immigrants: “It should be acting as a sovereign power, for which it should further narrow its national sovereignty.”

Orbán added that Hungary was doing the right thing by building a 175 km−long, four meter−high fence on the Serbian border to keep out illegal immigrants, and he promised that the fence would be completely built by the end of August.

“What Hungarians are doing is successful but does not match the ideals of the Union, because it strengthens and not weakens national sovereignty, but Hungarians are interested in a strong European Union,” he said.

Orbán maintained that, for both Hungary and Europe, illegal immigration is a threat to security and a clear drain on the economy. “The influx of immigrants raises unemployment numbers in countries, where those numbers have already been high,” the prime minister said, adding that this is an obvious problem.

He also said there is a “correlation” between the influx of immigrants and the spread of terrorism. According to Orbán, “Anglo−Saxon countries” already know that terrorists cannot be filtered out of the masses of immigrants. Citing British Prime Minister David Cameron, Orbán said that this crisis cannot be stopped unless we can stop immigrants at the borders.

The prime minister also spoke about the “national consultation” on immigrants, a survey that was mailed to citizens with questions about immigration. Sent in late April, the questionnaire was criticized for containing leading questions, such as: “Some say that mistaken immigration policies by Brussels contribute to the spread of terrorism. Do you agree?”

In his July 24 speech, Orbán said that out of eight million posted questionnaires, Hungarian voters sent back more than a million. He said two−thirds of the respondents consider the question of terrorism important and three−quarters believe that immigrants pose a threat to their security and their ability to make a living. Four−fifths of the respondents encourage the government to take a different direction from the tolerant policy of Brussels. For example, Orbán said, respondents would support legislation on treating immigrants more strictly and sending them back to their countries in the shortest period of time possible. Some 95% of the respondents believe that Hungarian families should be supported rather than immigrants, Orbán said.

06 News

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Budapest Business Journal | July 31 – Sept 03, 2015

The refugee trail through Hungary The Budapest Business Journal joins refugees as they head for the camps that they hope will be their homes for a while.

JESSICA FEJOS

Ramin, a refugee from Kabul, was at the Debrecen train station with his wife and two small children, waiting to find out what bus would take them to a nearby refugee camp called Sámson.

Their journey from the Afghan capital to the crowded quarters awaiting them in Debrecen was more than 3,000 miles, and they had covered much of that on foot, but Ramin was glad they had taken it. In Afghanistan, he said, bombings, explosions, rape and kidnapping happen regularly. His three−year−old daughter could not attend nursery school because Ramin had a decent−paying job with a Norwegian NGO, so there was a constant threat of someone kidnapping the girl for ransom. “To brighten the future for my child, I would accept being a refugee in any country,” he said.

Like tens of thousands of others, Ramin made the difficult journey to Hungary with the hope of being taken into an official refugee camp, where he could apply for asylum and, eventually, the right “In the day we slept and at night to live and work in the European Union.

The Budapest Business Journal followed we continued,” a 16-year-old boy the refugees in late July as they traveled said of his one-month, 22-day from the Hungarian border to the camps where they would live while applying for walk from Afghanistan. official status as asylum seekers.

“In the day we slept and at night we continued” said a 16−year−old Afghani six−month−old and waiting at Nyugati for boy waiting alone at Budapest’s Nyugati a train to Debrecen. She said it is “very (Western) station for the train that would difficult to travel with child” and added take him to the camp in Debrecen. He that she was not going back.

Officials of the United Nations High At top is a refugee boy in Debrecen. said he had walked for one month and 22 days, and he didn’t even know which Commission on Refugees (UNHCR) Above is Ramin, center, with a relative countries he traversed on the journey. register refugees who successfully cross and his daughter – also shown at right.

“The Iranian Army says ‘Stop! Stop! the Hungarian border as asylum seekers.

Stop!’ We don’t stop the car and they They are allowed to stay in a refugee start shooting,” a Pakistani man outside camp while they apply for the right to day looking for a bus. On their arrival the camp in Debrecen said, as a group of live and work in the EU, a process that at Sámson, the travelers are sheltered Pakistanis pantomimed firing guns. can take several years. When they are in simple structures in an overcrowded registered as entering Hungary, they camp. Still the accommodation is are given a train pass and are informed appreciated. A group of Nigerians seated Record refugee numbers that they have 48 hours to make it to the at a small outdoor bar near the camp’s These people are part of a worldwide crisis refugee camp. entrance spoke of fleeing the terrorist that has seen the number of refugees soar organization Boko Haram and of having to a record 52 million, including four To Budapest and back difficulties en route. “We were attacked million from around Syria. They describe by hoodlums on the road,” one member the EU as a peaceful place to make a The journey generally involves walking of the group, Joseph, said. But as for new life. Until recently, many seeking to from the Serb border to the southern Sámson, Joseph and his companions enter the EU from Central Asia, Middle Hungarian city of Szeged, taking a were mostly positive, their one complaint East and North Africa ended up on boats train from there to Budapest and then being a lack of potable water inside the heading from Libya to Italy, but mass getting on a train to Debrecen, to find campgrounds. drowning and Italian coastal enforcement the Sámson camp. During their stopover The group was seated on Sámson út, have made that route less popular. in Budapest’s Nyugati station, volunteers a thoroughfare lined with internet cafes, Now the most common way for refugees give the travelers food, water, soap and from which camp residents can call home. to reach the EU is overland, through clothes, as well as directions to the train By 3 PM, the internet cafes are full, and Turkey, Greece and various Balkan routes for Debrecen. customers waiting to use the phone form to the Serb−Hungarian border, the last At the Debrecen train station, refugees a queue that will run all night long. stop before the promise of a better life in often go without guides, and they end up While most of the incoming refugees the European Union. in Petőfi tér Park, across the street from are now being sent to Debrecen, some Most of the travelers are young men the station, learning how to reach the end up at the camp at Bicske, which has who hope to find work in Europe. All of Sámson camp by word of mouth. Taxi a capacity of 439 but a current population them seem determined to stay. drivers at the station charge desperate reported at 1,400. One Bicske resident, “If we do not find one solution, we will refugees HUF 3,000 for the 4.6 km drive Ali Mohamed, said he was eager to find another,” said a woman holding a to the camp, but most walk, or spend the finish integration and continue to a

Scandinavian country to start his new life.

“This is a camp, not a country,” he said of the facilities in Bicske.

Khalid, a young Afghani living in Bicske, said conditions there were “really bad – a lot of people sleep in the road”.

But he said he cannot live at home, even though no one from his village wants conflict. “We are normal, simple people, farmers. We don’t impact the war,” Khalid said. “Muslim or Christian is no problem.”

Unfortunately, both Taliban and American soldiers claim his village, so peace is impossible. For now he sits in Hungary, awaiting a “normal, simple” life.

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Budapest Business Journal | July 31 – Sept 03, 2015

News 07

An internet cafe near Sámson Camp, above. At left is the camp.

Choosing a taxi from Debrecen train station, above. Below are residents of Bicske camp. At right, a Pakistani family at Nyugati station.

Above, left and right: Waiting at Nyugati station.

From right, an Afghani who came with his family; a boy who walked from Afghanistan; a Nigerian who fled Boko Haram.

ALL PHOTOS ON THESE PAGES: JESSICA FEJOS

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08 News

Budapest Business Journal | July 31 – Sept 03, 2015

Government backs Hungarian-friendly taxes Special levies impacting supermarket chains and tobacco sellers are being challenged at a European level, with critics saying they single out foreign firms. But the government says it’s OK to target foreigners, and insists it will fight to preserve the levies.

ANIKO FENYVESI

Even as the European Commission investigates new sectoral taxes levied against supermarkets and tobacco companies, the Hungarian government is not denying claims by critics that these taxes may be harder on foreign companies than their domestic competitors.

“Hungary suffered considerable losses between 1990 and 2010; we gave up our own national markets and interests to a great extent, and the task and mission of this government is to recapture the markets in Hungary for Hungarian businesses, to send foreigners out of Hungary, and enhance Hungary’s national industry, economy and trade as much as possible,” János Lázár, head of the Prime Minister’s Office said at a July 16 press conference.

Interviewed by the Budapest Business Journal on July 24, another government spokesperson sought to refine those comments: “Hungary does not intend – and has never intended – to oust multinational companies from Hungary; it is, however, the firm intention of the government to re−distribute the disproportionate and unfair excess rights and privileges in a fair manner which is beneficial for Hungarian society,” the spokesperson said.

The EC launched two separate probes in mid−July: One regarding the supermarket chain supervisory fee and the other, the healthcare contribution payable by tobacco companies. The two companies that brought their complaints to the Commission, Spar and Philip Morris International, consider the taxes steeply progressive and discriminatory.

The EC has frozen the collection of the levies until the investigation is complete, a move that could cost the government tens of billions of forints. The government spokesperson told the BBJ that these actions were “unlawful”, given that the “Commission did not observe the relevant procedural requirements”. Still, the government has agreed, for the time being, to honor the EC’s decision and will suspend the collection of the levies until the end of the investigation, which, according to the spokesperson, could take up to one year.

In the end, though, the spokesperson interviewed by this publication said the firms targeted by the new levies will be taxed: “If the European Union wishes

Cabinet chief János Lázár speaks at his weekly press conference; spokesman András Giró-Szász is in the background.

“They will have to pay more and the fee will be increased by an amount that will discourage these companies from prosecuting us next time around.” to eliminate this tax, it will be replaced with another one which will permit the collection of a tax revenue at the planned rate from the tobacco industry and retail chains.”

Supermarket fee Spar brought a case against the progressive supervisory fee on supermarket chains, passed last year and used to finance food chain safety and the activities of the food chain authority.

It took effect from the beginning of this year, and those companies with high turnover, many of them foreign−owned chains such as Spar, Auchan and Tesco, were the hardest hit.

The progressively increasing fee regime means that those companies must pay 6% of all turnover exceeding HUF 300 billion. This fee was previously set at 0.1% of turnover. Spar has said the fee means the chain’s yearly expenditures have gone from HUF 900 million to HUF 9 bln. It sees the measure as a real blow, given its strong presence in Hungary over the past 23 years and investments in the country amounting to a net EUR 500 mln.

Critics have noted that the law provides a loophole to chains that have a company structure which gives ownership to

franchise holders. This allows CBA, a Hungarian supermarket chain whose owner is a major donor to the ruling Fidesz party, to remain in the lowest bracket.

The EC also had a problem with the supervisory fee. “The progressivity of the rates based on turnover provides companies with a low turnover a selective advantage over their competitors, in breach of EU state aid rules,” the Commission said in its press release of July 15. The suspension in the case of the supervisory fee would create a HUF 23 bln deficit in the budget, cabinet chief Lázár said.

Health tax on tobacco firms Philip Morris’ complaint to the EC was regarding the one−time healthcare contribution payable by large tobacco companies doing business in Hungary.

The measure, which came into force in February of this year, is also steeply progressive, and companies must pay a contribution of 4.5% on revenue exceeding HUF 60 bln.

Philip Morris declined to comment, saying that the investigation is in progress. But Lóránt Dezső, executive director of Imperial Tobacco, said that “Hungarian firm Continental Zrt., after a rebate on investments, hardly has to pay any contribution at all, while Philip Morris, which is eight times larger with a turnover of HUF 183.8 bln, will have a burden of HUF 6.3 bln, in other words, more than 130 times that of the Hungarian firm.”

According to Lázár, “Philip Morris’ largest grievance is that it is paying

the most. Undoubtedly, if Hungarians smoke cigarettes, most of them consume cigarettes produced by Philip Morris.”

The government’s most prevalent argument for imposing what critics are calling a highly discriminatory tax is that the funds amassed from the healthcare contribution are needed to pay for the construction of a new hospital in Budapest.

At the July 16 press conference, spokesperson András Giró−Szász echoed the cabinet chief’s sentiment that the damaging effects of smoking on one’s health warrant the extraordinarily high tax.

“Philip Morris’ Hungarian activities cause a loss of HUF 60 bln a year to the Hungarian state,” Giró−Szász said, but he did not say how these figures were obtained or how the burden was solely the responsibility of the tobacco industry.

According to the EC press release, the Commission “has doubts that the effects of tobacco products on public health increase progressively with the turnover of companies selling them”.

Revenue is clearly a factor in the government’s effort to preserve these taxes, as all budget allocations have been confirmed for this year, and the government has made it clear that it intends to get this money one way or another.

Lázár even threatened those who took matters to the EC with an additional fine for complaining about the issue.

“They will have to pay more and the fee will be increased by an amount that will discourage these companies from prosecuting us next time around,” Lázár said.

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2 Business

Budapest Business Journal | July 31 – Sept 03, 2015

BBJ

EXPERT OPINION

Property investment keeps growing

“As prime European real estate market returns become increasingly tight, other investment locations look more attractive. The positive economic news from CEE, coupled with healthy yields, is attracting capital and re−pricing, with investors especially focusing on Poland and Czech Republic. Other CEE capital cities along with Poland’s regional markets will also be highly sought after. The weight of international capital seeking core CEE opportunities has provided increased liquidity for

Others 2%

Attracting capital

0.5 % Ro ma nia

11%

Hungary has concluded €280 million in real estate investment deals – or 11% of Central and Eastern European property investment volume – for the first half year, according to JLL. With the country continuing to attract interest from local and international investors, the global real estate services firm anticipates a total of €700− 750 mln for the year. The renewed investor appetite for Hungarian assets is seen as due to improving economic fundamentals, market conditions and the relative pricing, making prime assets particularly attractive.

However, Hungary has yet to catch up with the thriving Czech investment market, where €3 billion+ in deals is expected to be completed this year.

Furthermore, Hungary faces competition from the emerging Romanian investment market. “We expect a much stronger second half that should translate into 2015 full year numbers 20−30% above the 2014 level,” commented Benjamin Perez−Ellischewitz, head of capital markets at JLL Hungary. “The good news is that the liquidity is coming back across all asset classes and for different investment ticket sizes.”

Investment deals worth €2.55 bln have been concluded in the CEE real estate market in H1. Czech Republic leads with €1.2 bln or 47% of transactions, followed

by Poland with a total volume of €813 mln or 32% of CEE volume, Hungary with 11%, Romania with 7.5%, Slovakia with 0.5% and the SEE markets with 2%. In general, liquidity is seen as increasing as an influx of capital is coming into CEE. The question is when will major international investors consolidate their interest in Hungary with concrete deals.

Slo va kia

ary ng Hu

GARY J. MORRELL

Volume of real estate transactions in CEE

7.5 %

Czech Republic 47%

Poland 32%

Source: JLL

large lot−size properties and portfolios.

In addition, attractive and more easily attainable financing has widened the pool of investors who are able to offer more competitive pricing,” said Troy Javaher, head of CEE capital markets at JLL. Czech Republic, a similar sized market to Hungary, saw a transactional volume of €1.2 bln, with the momentum from 2014 showing no signs of abating. An 89% increase on the same period of the previous year’s figure was underpinned by the sale of Palladium according to Stuart Jordan, head of capital markets at JLL Czech Republic. The most significant transaction of the year, and one that boosted investment figures for the first half year, it involved the acquisition of the Palladium shopping center in Prague by Hannover Leasing for €570 mln.

In Hungary 34% of transaction volume was in the office sector, followed by retail at 26%, industrial at 22% and 18% comprised of a mixture of vacant assets ready for redevelopment. A notable office transaction was the purchase by Europa Capital and Convergence of a value−add office portfolio including three foreclosed offices of Volksbank Austria – Kálvin Center, Duna Office Center and the B52 office building.

The largest retail transaction was the disposal of two phases of the Premier Outlet Center on the outskirts of Budapest by Aviva to Lone Star. The most significant logistics deal was the acquisition of the M1 Logistics Park close to Budapest by Prologis.

Yields for Hungary are put at 7% for prime office and retail, and 8.75% for prime industrial and logistics. This compares to Czech Republic where prime office yields are heading below 6%, prime logistics are sub−7%, and retail yields 5.25%.

The private - government sector relationship Ronald Keller Business Optimization Expert We have seen it time to time. Wall Street, Enron, Greece and so many others have found themselves in an impossible position because of bad, greedy decisions from executives. Yet the relationship has never been stronger when it comes to the private and government sectors of a country. In fact, it is so important that like we recently observed in Greece, the failure to expand the private sector was a key factor in the failure to grow and survive for Greece.

But it’s also a love-and-hate relationship; one that can easily save a country billions but the next day becomes a negative talking point in an opposition politician’s agenda. Why is this relationship so looked down upon?

The shared vision We need to first start with one very important aspect: the future. Or more importantly for all of you, MBA graduates: the vision statement. Is it possible for private and government sectors to have the same vision statement? The simple answer is no. But this is not an easy situation.

Government and private companies can have a “shared vision”; one that benefits them both and allows for a more steady and secure environment in which both can work. It’s kind of like honey bees. Flowers and other flora need the bees to cross-pollinate to provide and breath life into an isolated environment. Private companies do the same. With reach beyond the geographical borders, companies are able to diversify quicker and take advantage of key indicators in the market where governments would be too slow to respond to. Why? Simply it’s the nature of the beast.

Companies have to be quick to survive.

They follow Porters 5 forces, risk management, cost/benefit and many more evaluation criteria to make their decisions. Decision times are compressed and risk is accepted to make profits for their shareholders. If they don’t return profit, the company risks a quick death or internal revolution, in which the current leadership is kicked out of position for someone who can provide the prescribed results.

Government on the other hand has much more responsibility to its “shareholders”, we, the taxpayers. The decisions they make require consensus, approvals and negotiations.

Governments in many occasions lose the initiative due to the overwhelming beauracracy of the system. What this translates to is a formula of risk avoidance that is: time + distance = safety. The longer it takes something to be approved and acted upon, the safer it is. But this is not how the business environment works.

Making decisions Business is about quick decisions and profit. Yet it is always an easy target for groups in the government to criticize this relationship quickly and often. But without this relationship governments would lose out all too often. In Europe, it is common for domestic governments to own partially or completely companies that operate like businesses. But this does not forgo the beauracratic slowdown that the normal branches of government experience and transfer to these companies.

Thus on many occasions it becomes necessary to partner with truly private sectors to avoid risk

and make a profit. Government “companies” all too often lack the global exposure and experience. And though many times they can stay in the positive when it comes to their books, it does not mean they are the quickest to pull the trigger and make the most profits for their investment and shareholders. This is where the relationship between private sector and the government becomes something special.

Your favorite hero Imagine a situation where you could sit down with an elite level athlete team and get all the secrets of their success. They would tell you the strategy, tactics, mindset, and drive that make them who they are. They would take you onto the practice field and show you first hand how it’s done. Then they would say, “Go execute”, “show me you have learned what I showed you”. The same applies for the private and government relationships. Information is shared, knowledge is transferred and the government sees first hand what it is like to make hard decisions for its own companies.

But one problem still remains; the government doesn’t own the money, the people do. And it is at these times when the relationship becomes one of trust and commitment.

Let’s go back a second and discuss what I brought up earlier: government and quick decisions. It’s kind of an oxymoron when you think about it. Nothing is fast in the government.

But this is not a bad thing when you think of it. I want arguments and conversations when it comes to my individual freedom. What I don’t want is prolonged decision making processes when it comes to making money. I want my tax dollars and the money the government has an opportunity to make the most out of it. This is again where the great relationship comes into play. When the market is volatile it is many times in the best interest of the state and its shareholders (don’t forget, that’s us the tax payers) to default to the experts. In these times it allows the state to mitigate the risk, still make some profit, or at least maintain the status quo, while passing on to the private sector an opportunity to create profit. And once again that is what companies are about. Many will say this is wrong that the government lost out on big profits while the business made out big.

But think of it this way: what if the government missed the opportunity and had to absorb the losses? Would you be willing to see an increase on your energy, trash, and cable bill?

No, you would be upset, and rightly so. But it all washes out in the end. The government collects its taxes on the deal, the risk was shifted to the company, and in the end we the taxpayers were not negatively affected.

Who to blame?

Before we go blaming companies for making money off of government deals let’s take a step back and look at what they did for the big picture. It’s easy to criticize the potential for lost revenue but not so easy to understand the risk that was avoided. Simply government and we the taxpayers need this relationship. It gives our government a model to follow and rely upon and it allows us to shift the risk to them. In the end if they make some profit, so what, who cares. It didn’t affect us anyhow. Be happy that the relationship is as old as democracy is and that it provides one more tool in the toolbox of government.

NOTE: ALL ARTICLE S M ARKED E XPERT OPINIONS ARE PAID PROMOTION AL C ON TEN T FOR WHICH THE BUDAPE S T BUSINE S S JOURN AL DOE S NOT TAKE RE SP ONSIBILIT Y

Business 2 While Hungary still has a way to go to catch up with its neighbors, high yields here attracted interest in the first half of the year.

09

BBJ

3Special Report Relocation

Companies send their employees abroad as a way to save money, and they expect relocation services to ensure high−efficiency transitions and a convenient 1−stop shop.

LEVENTE HÖRÖMPÖLI-TÓTH

“This is peak season big time, there is no way I can interrupt my work for even five minutes,” a senior executive at one of the top relocation firms on the Hungarian market said, explaining why the questions of the Budapest Business Journal were, and would remain, unanswered. However, the busy state of the sector is far from season−bound.

As Klára Fóti, owner and managing director of ARC Relocation Hungary highlights, overall industry trends are pointing upwards.

“Our turnover in the first half of the year went up by some 25%,” she told the BBJ.

It’s about costs, you know This optimism goes hand−in−hand with worldwide expectations. According to the latest findings of the Global Mobility Survey, the largest empirical set of data covering the related programs of over 1,000 international companies, a net growth of nearly 25% is projected in the industry in 2015.

The annual survey is conducted

by Santa Fe Relocation Services, a global player. Bettina Zboray, global mobility manager at the firm’s Budapest headquarters confirms that the results underlie a clear phenomenon. “Companies tend to consider relocation a cost−cutting tool. They would think twice to fire skilled colleagues. They have realized it costs a lot more to hire and bring up to speed new employees than send experienced staff abroad.”

Fóti points out that terms of stay have shrunk significantly in the past few years.

“It is mainly due to budget reasons, and a different approach is developed in large international companies. An average stay is about one and a half years instead of a typical period previously of three to four years.”

Zboray explains: “Corporate executives want to be able to track costs and see that deploying staff in foreign locations pays off. Old−fashioned excel sheets will not provide clarity in this case, though.

Customized apps and software are badly needed. Santa Fe has developed its own tracking system that links all aspects of relocation and grants instant access to information for our clients and assignees.

A real−time report can be generated at any time. It not only contains all costs related to the assignment, but provides detailed KPI and even a kind of ROI showing what it would have cost to hire somebody as a replacement.”

The crisis years forced the industry to adapt by offering new and more personalized services. Those times of hardship left less than 20 major players on the Budapest market.

Very important

Quite important

Not very important

Not at all important

10

Klára Fóti, left, at the ARC office.

“Some are interested only in arranging immigration-related matters such as residence or work permits. Others prefer our full range of solutions. That includes home-searches, providing an overview on schooling, but we also help solve every-day issues such as arranging parking permits, dealing with public utility providers or, in the case of an accident, providing interpretation.”

Better off with bundles

How important is ROI for foreign postings?

0

Photo: Jessica Fejos

Bottom line moves relocations

20

30

Source: Global Mobility Survey 2014, Santa Fe Relocation Services

40

50

“Companies decide to use professional help so that their workers can concentrate on what they are here for from day one, namely their job. They don’t want their staff to waste their valuable time with administrative matters,” Zboray notes.

Yet, companies still try to save by not signing up for certain services.

“Expats are often left on their own to register their car. If they forget and there is an accident, then they wish the job had been taken care of by us,” Zboray adds.

Relocation firms, therefore, advise clientele to use bundled services, and the firms themselves seek to be perceived as a single point of contact for addressing a range of problems for their clients.

“Some are interested only in arranging immigration−related matters such as residence or work permits. Others prefer our full range of solutions. That includes home−searches, providing an overview on schooling, but we also help solve every−day issues such as arranging parking permits, dealing with public utility providers or, in the case of an accident, providing interpretation,” Violetta Sedulyák, a specialist at Settlers Relocation Kft. says.

Finding that edge Since the services offered on the market are of a similar nature, competition has placed a focus on the customer experience.

Settlers Relocation prides itself on its exemplary reaction time of handling problems, among other things.

“We also have customized CRM systems that help keep track of the state of play of ongoing matters. Furthermore, work processes have been developed with our subcontractors that ensure completing the ordered services in a timely fashion and high quality,” Sedulyák says.

Stability and in−house expertise are other key factors to achieve customer satisfaction, not only at ARC Relocation Hungary Kft. “Most of our counselors have been working with ARC for eight to ten years, thus customer and HR managers do not need to be faced with frequently changing people here which they seem to appreciate,” Fóti adds. “Visa and immigration generate particularly high turnover which must be due to our exceptionally high quality of professional services in that field, with three counselors having a degree in law.”

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11

3

Budapest Business Journal | July 31 – Sept 03, 2015

When expat admin gets complicated Corporate requests come “Finding low-budget rentals in a wide variety when under the current market it comes to relocation conditions is very demanding.” services, but sometimes even the professionals Requests often go well beyond the have a hard time in−house expertise of relocation firms, accomplishing what they however wide their range of services might be. Language courses or cultural are charged with. training sessions are normally outsourced LEVENTE HÖRÖMPÖLI-TÓTH

“Relocation companies are requested to get engaged in a growing number of activities by corporate clients as tasks are ever more interconnected. In order to get immigration−related things done, for that matter, a tax certificate is needed. Now that’s when we enter the picture and are asked to arrange it in a smooth and cost− effective manner,” Bettina Zboray, global mobility manager at Santa Fe Relocation Services says.

to external subcontractors.

Certain tasks are tough to complete even with a dense network of experts.

Employees are often put on a local payroll, but have above−average needs in terms of housing. This creates tension. “Finding low−budget rentals under the current market conditions is very demanding,” Zboray reveals.

Another unexpectedly curious issue is registering a car owned by third−country residents; they are not allowed to register them in their own name, but an operator with a local residence is required. And that can be complicated.

Bettina Zboray of Santa Fe.

Violetta Sedulyák of Settlers.

Finding jobs for expats’ spouses is no less burdensome, according to industry professionals, due to the language barrier. A recent law implementing a European Union directive doesn’t seem to make life easier either. It was supposed to speed immigration up by permitting an application for residence and work permit in one go.

“Due to the lack of communication between the competent authorities,

however, the follow−up of the status of permits has become a lot more time− consuming,” Violetta Sedulyák, a specialist at Settlers Relocation Kft., says.

Apparently, the implementation of EU rules will not do the trick by itself.

But if it’s a relocation firm charged with getting the administration done, at least it’s not your staff having to deal with it.

And that alone should be a relief.

Smooth Transition 5 healthy ideas to make your relocation abroad a breeze Working and living abroad for a while might be your next logical career choice. Moving countries, let alone continents, is not without health risks though. You’d better watch out for the usual pitfalls and get prepared before you make the big move.

1. Duplicate your IDs and health records Making sure that you receive the same level of healthcare out there can be a challenge. Once you secured a health service provider they are likely to ask for your full medical history, including the records that show the diagnosis and treatment of acute or chronic diseases, prescriptions, etc. You might have forgotten to copy and pack that jumble of documents. Never too late, ask your relatives to courier it after you.

check in with them. Shop around, see what you get even if you had been recommended a particular service provider beforehand.

3. Get to know the local bugs Health authorities in every country provide up-to-date information about the most common health hazards and epidemics of your destination. All the same, you can do your own homework: trawl the internet for frequently asked questions about relevant health and climate issues. You can only enter certain countries if you can prove to 2. Health comes first “I know it’s important but not that have been immunised against particular urgent,” you like to think about diseases. You should also consider for registering with a GP straight after how long each vaccination gives you arrival. Not quite so. Don’t wait until immunity. Seasonal vaccination – such you regret it when it’s urgent to see as the usual flu shot before winter – a doctor. It is worth keeping it your is best to be administered at your priority to sort out medical coverage. destination.

Do your homework early on: ask your colleagues or HR manager, browse the 4. First aid kit in your bag web, ask around in the neighbourhood Fingers crossed you will never need or check your community hub. Schools to use it but it pays off to have a basic and universities usually have their first aid and medicine kit at hand in your own GP or nurse, you might want to new home, such as simple bandages,

common drugs to treat cold or give fever and pain relief. The Red Cross website is a handy resource to pick the right kit for you and your family.

Bear in mind your known allergies that the unfamiliar environment might aggravate. Your new GP will subscribe whatever you ran out of or forgot to take with you.

5. Screen before you board There’s plenty to do when you are settling in your new home and new job, and the last thing you need is some unexpected health issue. It’s busy times before you board that plane but squeeze in some time for medical check-ups and screenings. Should you need a new filling or insoles for your fallen arches? Now is the time.

If you run out of time for treatment at least you know what to do upon arrival.

If you missed your check-ups at home make it your priority over there.

Make the right move, jump the queue and get your health in order before you leave. Dr. Rose Private Hospital

is a premium health service provider in the heart of Budapest, offering a wide range of medical check-ups and treatment for the whole family.

TEL: (+36) 1 377-6737 WEB: www.drrose.hu ADDRESS: Széchenyi square 7/8, 1051 Budapest

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

PROMOTION

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Budapest Business Journal | July 31 – Sept 03, 2015

A range of schools for foreign kids Choosing the right school for their children is one of the toughest decisions parents relocating to Budapest must make. The big variants include the price of tuition and the level of Hungarian – or English – that students are expected to have.

For Kati Gerencser’s family, a language barrier that had developed between her English−speaking husband and their daughter decided where their child would go to school in Budapest. “My husband thought the best solution would be to send her to the British School. In his native New Zealand, he already knew the British education system and this was preferred, too,” says Gerencser, who now has two kids at the school. She adds that the school’s teaching methods are very appealing, but she misses the tighter−knit community at Hungarian schools. There is a lot of transition, with kids and teachers leaving and new ones arriving, so “there are too many teary good−byes”, she says.

Choosing the right school for their kids is one of the tougher tasks parents face when relocating to a foreign country. While there are special education consultancies focused on helping parents every step of the way, the final decisions are usually made after extensive “school shopping”, which cannot be done online.

Getting into some of these schools can be difficult, and they charge a range of prices. Tuition fees run from approximately HUF 500,000, at the lower end, to HUF 5.4 million per year.

The British International School is on the more expensive end of the scale, but in exchange it provides modern technology, like personal iPads for each child, as well as a lot of personal attention, Gerencser says. Although parents grumble about rising fees, Gerencser says that the family also chose the school when their son reached school age.

Aside from quality and cost, another major consideration for foreigners choosing a school in Hungary is the language of instruction.

Hungarian may be required Even many bilingual schools have a Hungarian−language curriculum and require some level of Hungarian from students. Some of these schools run a “zero−year” language program, to help kids cope with the language. In most cases the headmaster decides on admissions on a case−by−case basis, but it is rare that foreign pupils with no

Photos: Jessica Fejos

NÓRA KROKOVAY

At top is the new British International Academy. Immediately above is the British School. At right is the International School’s play area.

“At the moment, doing anything in Hungary on a bilingual program in grades 9-12 is difficult because of all the regulations.”

Hungarian background would choose this option.

“We take foreign students at our school, but they must join our regular courses, taught in Hungarian. The teachers are flexible and helpful to a certain extent, but our foreign students usually take extra tutoring in Hungarian, so they can follow the course material,” said Géza Barta, deputy headmaster at Közgazdasági Politechnikum, a foundation−financed school promoting entrepreneurship.

At the Lauder Javne Jewish Community School and Kindergarten, a popular Jewish school, the English Plus program caters to bilingual children who speak some basic Hungarian or are willing to learn. With oversubscription running at 200−300%, the school can be selective.

Zsuzsanna Heller, elementary school administrator at Lauder, says the school is liberal with regards to religious views, but with competition to get in so fierce, it does give priority to students with a Jewish background when it comes to the English curriculum. “Since we’ve been getting so many applications, we had to start to apply this filter,” she said.

There are a number of schools run by foreign foundations or embassies that do not follow a Hungarian curriculum.

These schools are different from Hungarian ones by offering competence

in an international setting, multicultural attitudes, enhanced student support and close cooperation with parents. A lot of the best−known private international schools have been around for some time, such as the American International School in Nagykovácsi, the British School and Britannica International School. Along with being among the most expensive, these schools also have a waiting list for entry, which means they can be choosy about the students they accept.

The newest school in this group is the Budapest British International Academy, which will open its doors to primary students in August 2015. Its school fee starts at HUF 2.66 mln per year for the first two years and increases to just above HUF 3 mln in the higher grades. At these prices, Budapest British International Academy is in the mid− range among fee−charging international schools in the city. The school features small classes and qualified teachers who follow the English National Curriculum, according to its website.

More affordable alternatives The International School of Budapest is a fairly small school that is open to students up to the age of 14 and is owned by a Hungarian training school called Számalk. Unlike the British School and the American School, it must follow Hungarian regulations. “At the moment, doing anything in Hungary on a bilingual program in grades 9−12 is difficult because of all the regulations,” an education expert for foreign schools told the Budapest Business Journal. Finding teachers for the school is hard because of the Hungarian regulations, which require a specialist teacher for each subject,

rather than someone who specializes in a subject group, like the sciences or the arts. Most of the teachers at International School of Budapest are American, and the school pays just above Hungarian salaries for teachers, which makes for some fluctuation among staff, according to the education expert. At around HUF 2 million a year, the fee is high for Hungary but is lower than a lot of other English− speaking schools, the expert adds.

That package includes food, teaching materials, day trips and supervision and extracurricular activities until 5 PM. The SEK Budapest International School is another alternative, where Spanish is also taught to a high level, though the curriculum is more oriented towards the Hungarian system. Some British families send their kids to the French or German international schools, too, and the lower tuition fees at these institutions are part of their appeal.

Out in Budapest’s District X, the Orchidea Bilingual School offers tuition fees at HUF 900,000 a year and takes on the challenge of bringing pupils from varied cultural and linguistic backgrounds onto the same page. The school is run by a Turkish foundation, but children from many nationalities attend, and they tend to have highly involved parents, Zsuzsa Várnai, the school’s director says. Although the language of instruction is English, kids get tuition in Hungarian, too. The level of English and indeed Hungarian that they speak as they enter the school is extremely varied. “It is our job to bring them to the level they need, with support from parents for whom bi− or trilingualism is a priority,” Várnai says. She adds that the school is thriving, and expanded a few years ago to cater for all grades up to age 18.

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Budapest Business Journal | July 31 – Sept 03, 2015

EXPERT OPINION

Helping families settle here Branch Manager AGS BUDAPEST The lobby of the Chinese-Hungarian Elementary School.

Chinese school draws students from all over The majority of the children at the state−run bilingual elementary school are Hungarian, though that wasn’t always the case.

ZSÓFIA VÉGH

The Hungarian−Chinese Bilingual Elementary School, set up 11 years ago in Budapest, has grown so popular that Hungarian students now outnumber their Chinese peers. Business and cultural ties account for the school’s growing popularity.

Fifteen years ago, Chinese business people living in Hungary sent their kids to English−language schools. Now it is the children of native English speakers, along with other large nationalities, who learn Mandarin. Evermore Hungarian parents also realize what an advantage the Chinese language may mean to their children in their future professional life.

Edit Vida, mother of two, has both her children enrolled in the state− sponsored Hungarian−Chinese School.

When looking for potential places, Vida shortlisted it because of the language – she came across Chinese years ago when working as an English interpreter with a Chinese group – but it was the atmosphere during an open day that ultimately lead her (and her children) to choose the school. “I am obviously aware of the edge speaking this language gives someone in Hungary. Yet if it hadn’t been for the friendly and open environment, we would have selected another school,” Vida told the Budapest Business Journal.

Many of the kids’ parents who attend the bilingual elementary are connected to China – business people exporting to the country, diplomats previously deployed there, higher management of international firms. “Some parents are simply interested in Chinese culture, others have worked there and want their children to continue to study the language,” Zsuzsanna Erdélyi, the school’s headmaster told the BBJ.

Established by two governments The Chinese and Hungarian governments established the bilingual elementary school in 2004 in Budapest’s District XV. It is tuition−free, as it is run by the state. In the opening years, it was mostly Chinese students who attended; today, Hungarians outnumber them. Of the 354 students currently enrolled, 102 are Chinese, nine are other foreigners, and the rest are Hungarians. “All Chinese applicants gain admission but Hungarian applications over quota are turned down,” said Erdélyi.

Although the curriculum is Hungarian, the school celebrates both nations’ national holidays. China also influences extracurricular activities – sports like taekwondo and kung fu are popular with students. The meals in the canteen are Hungarian, and this is at the request of the Chinese parents, who cook traditional food at home anyway, Erdélyi explained.

More than two−thirds of the Chinese students speak Hungarian well enough to follow the classes in Hungarian. Those arriving from abroad and joining classes later have the chance to study Hungarian as a foreign language in a crash course.

Vida’s daughter and son, fifth and sixth graders respectively, already speak Chinese well. “Reading books and newspapers takes more time,” Vida said. “With more than 1,000 characters to master, Chinese is a difficult language to learn.” That’s why students in lower grades study arts and handicrafts in Chinese; chemistry is added to Chinese subjects only from the seventh grade. Only the most diligent pupils, and those who study in private classes, can take an intermediate exam at eighth grade.

According to Erdélyi, this level is better attainable at high school. Yet currently there is no secondary institute in Hungary teaching Chinese.

The Hungarian Ministry of Foreign Affairs and Trade is looking at ways to solve the problem; one obvious choice would be the expansion of the existing school. It has been promised that there would be progress with such plans, Erdélyi said, but no specific timeframe has been given. Parents like Vida are looking forward to a high school: “I would definitely enroll my children in it,” she said. “They don’t have a hard time at all integrating, they are open and handle different cultures and people much better than my generation did.”

What are people looking for when they come to your company? A mover, help in relocation, or a complete package of assistance?

It really depends on the nature of the customer, ranging from students up to Ambassadors and corporate clients. Each client has their own needs and expectations and we adapt ourselves accordingly. That is why our identification of the need is so important, in order to offer the tailor-made corresponding service. Sometimes our customers do not know exactly what they would need, and AGS’ skilled removals and relocations consultants assist them in this identification.

What are the services you most often provide? What kinds of questions do customers typically ask?

We offer full relocation services. Apart from technical questions regarding our methods of packing, dismantling, where we keep the screws/keys to avoid them being lost, it may seem strange but they also often ask how we contribute with our industry to keep our planet green and achieve our environmental sustainability policy. AGS’s environmental projects include our collaboration with Planet Urgence, our policy of ‘One Move = One Tree’ (where we plant one tree for every international removal) and we are also a proud signatory of the United Nations’ Global Compact.

What are the biggest challenges (and/ or surprises) people can face when relocating to Hungary? How can you help them?

Since my first year in this country 24 years ago, the first challenge has been the language barrier; and the second – depending on which field your activity is – is “another way of thinking”. We help clients with their preparation, providing them with advice before they arrive in Hungary and non-stop support even after they have moved in!

What are some of the more funny or unusual challenges you have dealt with?

Two things come to my mind. Firstly, we were tasked to move out of Europe by plane the aquarium and the preferred fishes of one of our clients. The second was the occasion we had to move one full big flat from the second floor to the ground floor’s flat, which had exactly the same distribution of rooms and replacing exactly at the same place all the belongings – including frames, decoration items, clothes in the cupboards, vegetables in the fridge etc... In one word, the customer wanted to come back in his new flat finding it back exactly as he left

the old one, but 2 floors down with no difference at all! We fully photographed the flat, including the inside of the drawers, to ensure that it was returned exactly the same as a “photocopy”!

How is your company especially equipped to help with all the challenges of moving to Hungary?

I would say the worldwide background of the AGS Group and our know-how is constantly updated.

The quality accreditations in the moving industry that year after year we have proudly acquired – not only at the Group level but here in Hungary – include industry-leading specifications such as ISO 9002 and FIDI FAIM (FIDI Accredited International Mover) Plus. AGS is the first FIDI FAIM Plus accredited moving company in Hungary.

Another significant factor is that in Hungary we continuously monitor our service providers, and our employees understand not only the technical side of the moving industry but also the human side.

Where do most of your customers come from? Any particular countries or regions?

Any particular types of work? How different is Hungary from their homeland?

Has your business been growing lately? If so, can you say why you think that is?

Yes, we feel that the crisis has gone and that the economy is strengthening. Our clients include quite a lot of returning Hungarian citizens. New investments are also being made, and other incoming nationalities include Koreans and Japanese people as well. Hungary is opening!

With all the challenges, would you recommend that people move to Hungary, and why?

Having a personal overview of 24 years in this country, and nominated this year as Vice President of French Hungarian Chamber of Commerce of Budapest, I can confidently say that it is a country that has tremendously evolved in a positive manner in all fields. Hungary has a beautiful soul and so many possibilities to explore still. It is affordable financially to live here, with a high quality of life that you would not find easily somewhere else. If you have ideas, projects and energy you are now given the chance to try and succeed. All AGS’ customers are sad to leave and often return for holidays, and some settle here.

Is there anything else you’d like to add?

It is worthwhile learning a bit of the Hungarian language, even if you will not stay here forever, because this will help you to better appreciate more Hungarian people and this fascinating culture.

They also know it is an effort and they are grateful for it!

www.agsmovers.com

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

Ingrid Lamblin

BBJ

5Socialite Beer! Here? Why not?!

Hungary has always had more of a wine culture, but microbrewers are changing things.

NÓRA KROKOVAY

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Élesztő, an oasis of microbrews. competition at first ended up putting you ahead in the game within a few months,” Tóth said about the start of what he now calls a concept pub.

Along with selling the beers, he also is involved in distribution of microbrews.

Although Élesztő and other creative caterers with like−minded beer menus are often off the regular pub− crawl maps, tourists who are into the “movement” will be drawn to these places, whose charm is also in being among the locals.

“We don’t advertise. We don’t want to end up in Lonely Planet or something similar, although sometimes you can’t avoid it. After the Guardian wrote about us we did get swathes of tourists.

But mainly it’s word−of−mouth. What we can offer people who come in is a certain guaranteed quality. While we like to experiment with new brews all the time, you will not find bad beers here,” Tóth explains his quality control strategy.

Cozy Élesztő has expanded over the two years since its opening, and Tóth and his team have added a food bar to the offering. But the 17 types of small−scale brews on tap in a suitably industrial type of setting remains the main attraction.

A new location is opening near Keleti (Eastern) railway station soon and Tóth’s team has just bid successfully to run Budapest Marriott Hotel’s new bar on the Danube embankment. They

Photos: Jessica Fejos

Gerilla beer, experimental beer, extreme beer, community beer, microbrews – whatever it’s called, something’s brewing in Budapest.

“Guys who picked up home−brewing techniques through the internet are suddenly making the finest drafts. It’s never quite what you expect, not like with a bottle of the big brands you buy in a shop,” says Imre Tóth, one of the people behind what he calls the beer movement of the post−Millennium years.

Co−owner of Élesztő (Yeast), an oasis for beer geeks in Budapest’s District IX, Tóth tells the Budapest Business Journal how the movement grew.

“It all started when some of us got tired of the rules of the game: That every pub that operated in Budapest signed up with a big beer wholesaler, and in return for the distributor’s multi−million−forint support, they were tied to that brand. We wanted something else, independence, without funding from the big labels, the opportunity to try something new.” Élesztő was one of the first bars to let go of the support of the big beer manufacturers – so it had the freedom to sell whatever kind of beer it wanted – and others followed suit a few years later. “Our business model worked.

What seemed like a disadvantage in

also keep tabs on what the brewers are up to, organizing beer festivals and tasters everywhere.

“We are very happy to be moving into the fifth district, where there are not so many good bars,” he says. But Hungary is a very small market and Tóth says his beers are already flowing beyond the borders.

“We are inventive and London, the United States and Mexico like this and buy our beers,” he adds.

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5 Socialite

Budapest Business Journal | July 31 – Sept 03, 2015

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Hungarian Wine Route Rally In the weeks leading up to the 20th annual Wine Route Rally being held between August 28 and 30, organizers are planning all the details of the routes that will pass through many of Hungary’s top wine regions, including Tokaj, Mád, Eger and Mátra.

Although drivers are encouraged to explore the wineries, they’ll have to save their sampling until the end of the race. More information is available here: www.regokft.hu/rendezvenyek/Magyar_Borok_Utja_Rallye ADVERTISEMENT

Robbie Williams on the ‘Minus One’ day of the Sziget Festival Robbie may have heard that Sziget is Europe’s Best Major Festival, and thought that he shouldn’t miss it. We don’t know if that’s true or not, but it’s sure that on the “minus one” day at Sziget, one of the biggest stars of the world’s pop scene, Robbie Williams will take over the central Main Stage of the Island of Freedom.

Robbie has regularly filled stadiums during his tours so far, and now he will be playing a few festival concerts, so the audience of the Sziget will be one of the first to enjoy the greatest hits of RW in this region.

During his solo career, Robbie has published 11 studio albums and conquered the world from stage to stage with his album-related tours. He has also acquired 17 BRIT Awards. In 2006, he managed to sell 1.6 million tickets in just one day – which is still a record, but his name is connected to the largest open-air concert as well: three of his concerts in Knebworth were attended by a total of 375,000 people.

Sziget World Music: the world’s best dance music This year, the MasterCard World Music Stage of Sziget favors dance music from all over the world, guaranteeing carefree fun. The internationally acknowledged venue will supply a colorful program that puts gypsy music in focus, with performances from India (Dhoad Gypsies from Rajastan) Romania (Taraf de Haïdouks), Serbia (Goran Bregovic, Boban i Marko Markovic Orkestar) and Egypt (The Egyptian Project). Of course there will be stars from the domestic Roma scene (Romengo, Parno Graszt).

Tickets and information: www.szigetfestival.com

GRUPPO T.F.M. KFT. 1068 Budapest, Király u. 102.

1ST DISTRICT

2ND DISTRICT

7TH DISTRICT

4TH DISTRICT

12TH DISTRICT

15TH DISTRICT

79 SQM – 3 ROOMS + HALL, FAZEKAS STREET

154 SQM – 4 ROOMS, HIDEGKÚTI STREET

210 SQM – 6 ROOMS, HOMOKTÖVIS SUBDIVISION

95 SQM – 3 ROOMS, MURÁNYI STREET

84 SQM – 4 ROOMS, MÁRVÁNY STREET

73 SQM – 2 ROOMS, RÁKOSPALOTA

Close to the Danube, this very sunny, high floor corner apartment has balcony, air conditioning system and it is situated in a building with elevator.

In a new built building, this duplex, well divided apartment has open kitchen, separate rooms, 2 bathrooms, 60 sqm of terrace, 2 car garage and beautiful private garden.

This new built, three storey, luxury terraced house has 410 sqm of lot, 3 bathrooms, air conditioning system, well kept garden, swimming pool and garage.

Very close to the City Park, this completely renovated, spacious, street facing apartment is situated in a period building with renovated facade and elevator.

In a completely renovated, beautiful period building with elevator, this bright, street facing apartment in good condition has separate rooms and private gas heating.

This family house in good condition has 468 sqm of lot, terrace, parking space in the courtyard and it is located in a quiet side street.

28.900.000 HUF

65.000.000. Ft

66.900.000 HUF

25.500.000 HUF

29.900.000 HUF

24.990.000 HUF

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1ST DISTRICT

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2ND DISTRICT

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5TH DISTRICT

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10TH DISTRICT

+36.1.789.2846

13TH DISTRICT

+36.70.398.8754

BAJA

76 SQM – 3 ROOMS + HALL, TOLDY FERENC STR.

283 SQM – 9 ROOMS, BOGNÁR STREET

84 SQM – 3 ROOMS, MOLNÁR STREET

143 SQM – 4 ROOMS, MARTINOVICS SQUARE

42 SQM – 1 ROOM + HALL, HOLLÁN ERNŐ STR.

161 SQM – 4 ROOMS, KÁLVÁRIA STREET

Next to the Buda Castle, this very bright and quiet, well divided apartment has balcony and it is situated in a nice building with elevator.

This semi-detached house consists of 2 separate two storey apartments with separate entrances, 2 terraces, 50 sqm of roof terrace, garage and private garden.

This apartment is situated within a renovated period building at the very heart of the city, perfectly positioned between the pedestrian Váci Street and the Danube.

This very well divided, spacious apartment that needs renovation has private gas heating and a fireplace in the living room. It is situated in a small period building.

This high floor apartment with view over a pedestrian street has private gas heating and it is situated in a well maintained period building.

This luxury villa house has 3 bedrooms, living room with open kitchen, air conditioning system, terrace, outdoor swimming pool, garage and wine cellar.

37.900.000 HUF

79.900.000 HUF

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32.000.000 HUF

18.500.000 HUF

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In a nice, pedestrian street, this street facing, bright apartment has separate rooms and private gas heating. It is situated in a well maintained period building.

34.900.000 HUF

+36.1.336.1706

2ND DISTRICT

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3RD DISTRICT 27 SQM – 1 ROOM, KENYERES STREET

In a very nice, well maintained building, this bright apartment in good condition has private terrace and private gas heating.

13.750.000 HUF

+36.1.430.1403

3RD DISTRICT

+36.70.3156.087

6TH DISTRICT 135 SQM – 4 ROOMS, FELSŐ ERDŐSOR

This street facing apartment that needs renovation benefits of separate rooms, 2 entrances and it is situated in a period building with beautiful courtyard, close to the Andrássy Boulevard.

36.990.000 HUF

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6TH DISTRICT

+36.70.268.5017

10TH DISTRICT 200 SQM – 4 ROOMS, KŐÉR LANE

This three storey terraced house in good condition built on 320 sqm of lot, has 2 bathrooms and garage. The house is “A” energy rating.

44.900.000 HUF

+36.70.268.5017

11TH DISTRICT

+36.70.701.2348

13TH DISTRICT 65 SQM – 3 ROOMS, ST. ISTVÁN PARK

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FOR RENT 75 SQM – 2 ROOMS, TIVADAR STREET th

Beautiful view over the Danube from the terrace, this high floor, very bright apartment has another balcony and it is situated in an imposing Bauhaus style building with elevator.

7 district: This very bright, completely renovated apartment has 2 separate rooms and it is located close to the renewed Almássy Square.

54.900.000 HUF

500 EUR/month

+36.70.701.2348

15TH DISTRICT

+36.70.322.3697

FOR RENT

69 SQM – 3 ROOMS, BATYU STREET

68 SQM – 2 ROOMS, DEREGLYE STREET

111 SQM – 4 ROOMS, IZABELLA STREET

130 SQM – 4 ROOMS, TORMA STREET

883 SQM – LOT, RÁKOSPALOTA

84 SQM – 3 ROOMS, HUSZÁR STREET

This completely renovated, garden facing apartment has 2 separate bedrooms, living room, balcony, garage and it is located in a quiet, green area.

This well divided, sunny, high floor apartment is situated in a well maintained building, in a green area.

In a renovated period building with elevator, this completely renovated, street facing, high floor apartment has 2 bathrooms and it is located a few steps from the Andrássy Boulevard.

This two storey family house that needs renovation has 650 sqm of lot, 2 bathrooms, nice veranda and parking space in the courtyard.

In a family house area, quiet side street, this lot has 25% coverage possibility, gas, electricity and water on it.

30.900.000 HUF

22.900.000 HUF

7th district: This spacious, very bright, furnished apartment has 2 separate bedrooms, living room, 2 bathrooms, kitchen and it is situated in a nice building, close to Rózsák Square.

38.900.000 HUF

+36.1.376.6080

2ND DISTRICT

23.900.000 HUF

+36.1.430.1403

3RD DISTRICT

37.000.000 HUF

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6TH DISTRICT

+36.1.720.2433

11TH DISTRICT

89 SQM – 3 ROOMS, PASARÉTI STREET

215 SQM – 5 ROOMS, RÓMAIFÜRDŐ

121 SQM – 4 ROOMS, NYUGATI SQUARE

156 SQM – 5 ROOMS, MAJOR STREET

This completely renovated, well divided apartment benefits of 2 separate bedrooms, 1 living room, balcony and it is situated in a well maintained condominium, in a green area.

This new built, three storey, luxury apartment has living room with open kitchen, 2 bathrooms, terrace, balcony, private garden and garage.

This penthouse apartment has been completely renewed, situated in a beautiful, renovated period building, benefits of a fully fitted modern kitchen and air conditioning system.

This three storey semi-detached house in good condition has 160 sqm of lot, 4 bathrooms, balconies and garage and it is located in a quiet garden suburb area.

39.900.000 HUF

74.900.000 HUF

69.900.000 HUF

46.900.000 HUF

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+36.70.3156.087

+36.70.398.8754

800 EUR/month

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The Moment when you think of an ecological home

+36.1.720.2433

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144 SQM – 5 ROOMS, KELETI KÁROLY STREET

98 SQM – 4 ROOMS, PÖLTENBERG ERNŐ STREET

226 SQM – 7 ROOMS, TERÉZ CIRCIUT

262 SQM – 8 ROOMS, SZENTPÉTERY STREET

This very spacious, nice style, top floor apartment has beautiful view overt the Mechwart liget, 4 separate bedrooms, 1 living room and 2 bathrooms.

In a quiet, garden suburb area, this family house that needs renovation built on 522 sqm of lot and has private gas heating, front garden and parking space in the courtyard.

This apartment is situated on the top floor of a period building. Actually is used as a hostel, benefits of independent bedrooms.

In a quiet side street, this 2 storey family house in good condition built on 1296 sqm of lot, has terrace, roof terrace, nice garden and parking space.

52.900.000 HUF

25.000.000 HUF

69.900.000 HUF

155.500.000 HUF

+36.1.336.1706

+36.1.782.7275

+36.70.3156.087

+36.1.720.2433

www.tecnocasa.hu CONTACT US: INFO@TECNOCASA.HU

EACH AGENCY INDEPENDENTLY OWNED AND OPERATED. • THESE OFFERS ARE VALID, TILL THE APARTMENTS ARE SOLD. • THESE INFORMATION DO NOT CONSTITUTE A CONTRACTUAL ELEMENT.