Budapest Business Journal 2812

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

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BUSINESS JOURNAL BUDAPEST

VOL. 28. NUMBER 12

JUNE 19 – JULY 2, 2020

SPECIAL REPORT Healthcare

SPECIAL REPORT

COVID-19: How did State Sector Cope?

Hungary has “defended itself successfully” against the coronavirus pandemic, Prime Minister Viktor Orbán declared on state radio. But not everyone in the sctor is happy with how it was handled. 9 SPECIAL REPORT

Drugs, Repurposed Drugs, Vaccines and Serum Never before has a disease triggered so much research in such a short amount of time in the field of drug development.

Groups of researchers, pharmacists and physicians all over the world are working flat out to find a cure or a vaccine, including several Hungarian teams. 13 SOCIALITE

Driving the Digital Change

‘Feed the Doctors’ Becomes Permanent Non-profit An initiative founded by members of Budapest’s restaurant scene at the height of the pandemic, has evolved into a nonprofit to support those most impacted by providing healthy meals made using donated ingredients. 16

COVID-19 has taken its toll on all EU economies: the average setback in industrial output was 27.2% in April on an annual basis. Hungary was among the hardest hit: industrial production was down by 36.8% from a year ago, and by 30.5% from the previous month.  3

N E SS

In an exclusive interview, Telenor Hungary’s Czech CEO Jan Hanus details his company’s response to the coronavirus pandemic and how he sees the future recovery. 8

NEWS

Industry Edures Unprecedented Collapse in April

BUSI

BUSINESS

OECD: COVID 2nd Wave Would Mean 10% hit to Hungary’s Economy The OECD has predicted Hungary’s economy will suffer a contraction of between 8-10% this year, depending on whether there is a second wave of the COVID-19 virus (the so-called “double-hit” scenario), the organization says in its latest Economic Outlook, entitled “World Economy on a Tightrope” .  5

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Budapest Business Journal | June 19 – July 2, 2020

BBJ

THE EDITOR SAYS

EDITOR-IN-CHIEF: Robin Marshall EDITORIAL CONTRIBUTORS: Zsófia Czifra, Kester Eddy,

TIME TO GIVE HEALTHCARE HEROES THE FUNDING THEY DESERVE

Bence Gaál, Gergely Herpai, David Holzer, Christian Keszthelyi, Gary J. Morrell, Nicholas Pongratz, Ekaterina Sidorina, Robert Smyth, Zsófia Végh.

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As the gradual reopening of the Hungarian economy continues, careful step by careful step, it becomes increasingly clear that this will not, cannot be a quick process.

Normalcy, if it ever returns, will depend to a great degree on the development of a vaccine. MarketWatch.com in one article dated May 6, listed 23 companies working on coronavirus treatments or vaccines. The World Health Organization says there are 70 coronavirus vaccines under development, three of which are already in human trials, in at least one case after skipping the usual animal trials to try and speed up the process. This is extraordinarily fast. It can take a decade or more to bring a vaccine to market; the efforts now, apparently dubbed Operation Warp Speed by the White House, hope to bring that down to one year.

But even that unprecedented turn around makes a vaccine before next spring, at the very earliest, highly unlikely.

And while COVID-19 is new to us, and therefore our understanding of it is limited, what the scientists know from other types of coronavirus mean they are confident, if not certain, that a second wave is highly possible this fall.

Hospitals are only just opening up their non-COVID wards; private clinics, having accelerated their use of video consultations, are receiving patients again in limited numbers and under highly controlled circumstances.

Several countries that released lockdown measures ahead of Hungary have seen infection levels begin to rise again. We are not, by any stretch, out of the woods.

International concerns over the breadth of the emergency powers handed to Prime Minister Viktor Orbán aside, and viewed through a purely domestic optic, Hungary’s government has had a relatively good crisis, to use a horribly cold description. (Indeed, the same could be said

of many of the governments across the region, but most especially Slovakia, which has been rightly lauded for its outstandingly low COVID fatality rate of 0.51 deaths per 100,000 inhabitants; Hungary’s rate is 5.72.) The Hungarian business world has certainly welcomed the economic support on offer from the state. This issue includes a rare and extremely detailed interview with Telenor Hungary’s CEO Jan Hanus, which included this comment we were unable to fit into the main piece due to space limitations: “I’m a Czech citizen, so at least I had a chance to compare the Czech and the Hungarian approaches. Hungary did pretty well, understanding that economic help is really the name of the game. For me, it’s better that the company I’m leading is situated in Hungary, honestly speaking,” he told us.

And yet, there are question marks concerning public healthcare, most especially around testing, transparency over some of the reporting, and the decision to reserve large numbers of hospital beds for COVID patients that, fortunately, weren’t needed, but were also denied to those with other illnesses. The Hungarian Medical Chamber has been especially unhappy, others have pointed to decades of underfunding. Quite why the army should be put in charge of civilian hospitals was never clear to me. But the Hungarian healthcare system is the one we have. It is the system that will have to get us through a second wave, should it come, and keep us safe until that vaccine can be found. At its heart, it is staffed by some remarkably talented and dedicated men and women, who deserve our gratitude, a decent wage, and a system that is fit for purpose. It’s time to bring funding and transparency to healthcare.

Robin Marshall Editor-in-chief

BBJ’s Business Lunch Recommendations P O W E R E D B Y F I N E R E S TA U R A N T S 2 0 2 0

DNB Budapest

Caviar&Bull Budapest

With the best view over the Danube, this iconic natural power of not just immense beauty but our livelihood, DNB Budapest explores the culinary essence of our immediate regions to serve simply sensational fare prepared from locally grown ingredients.

Address: 1052 Budapest, Duna-korzó • Phone: +36 1 737 7377 • E-mail: dnb.budapest@marriott.com • Web: www. dnbbudapest.com • Opening hours: 06.30-23.00 (all day)

Porcellino Grasso Address: 1024 Budapest, Ady Endre u. 19. • Phone: +36 1 886 7881 • E-mail: porcellino@porcellino.hu • Web: www.porcellino.hu • Opening hours: Monday to Sunday 12AM to 11PM

Textúra Textúra is the place where playfulness, experiments and new discoveries are part of the everyday life. Our kitchen uses local produces and brings back old, traditional cooking methods with techniques and ingredients of international cuisines.

Address: 1051 Budapest, Sas utca 6.

• Phone: +36 1 617 9495 • E-mail: textura@texturaetterem.hu • Web: www.texturaetterem.hu • Opening hours: Monday-Sunday 12:00-24:00

A Mediterranean export with an unmistakeable Hungarian twist.

Local fresh ingredients, sourced from the best suppliers harmoniously mixed with Caviar&Bull signature dishes and key staples of Hungarian cuisine such as the use of the local grey cattle, Mangalica pig, Foie gras, paprika, and Tokaj wine.

Tokio Tokio offers a culinary experience in an exciting interior designed by talented young Hungarian designers. Tokio still presents excellent and upmarked food, but the selection has been extended to the perfectly constructed cocktails, and dj’s entertain after dark.

Address: 1073 Budapest, Erzsébet krt.

43-49. • Phone: +36 30 832 3232 • E-mail: budapest@caviarandbull.com • Web: caviarandbull.hu • Opening hours: 12.00-22.00 (all day)

Address: Budapest, Széchenyi tér 7-8.

• Phone: +36 70 333 2176 • E-mail: info@tokiobudapest.com • Web: www.tokiobudapest.com • Opening hours: 12:00-24:00

Jardinette Kertvendéglő Address: 1112 Budapest, Németvölgyi út 136. • Phone: +36 1 248 1652 • E-mail: info@jardinette.hu • Web: www.jardinette.hu • Opening hours: Tuesday - Sunday 12:00-23:00

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News///macroscope

Industry Edures Unprecedented Collapse in April

The coronavirus pandemic has taken its toll on all economies: in the EU, the average setback in industrial output was 27.2% in April on an annual basis. Hungary was among the countries hardest hit by the crisis: industrial production was down by 36.8% from a year ago, and by 30.5% from the previous month.

Industrial production in Hungary, 2001-2020 (January-April) Producer volume index, same period of previous year equals to 100

Source:

ZSÓFIA CZIFRA

As the Central Statistical Office (KSH) reported, Hungarian industrial output plunged by an annual 36.8% in April and shrank by a massive 30.5% from the previous month.

The fall was heaviest in vehicle production, while production of computers, electronics, optical products and food, beverages and tobacco declined to a lesser extent, the KSH said.

The output of pharmaceuticals, however, increased. Working day-adjusted data showed April output falling by 36.6% year on year. The volume of industrial export dropped by 43% year-on-year.

Transport equipment exports, representing a 15% weight within export sales in manufacturing, fell outstandingly, by 77%, while exports in manufacture of computer, electronic and optical products (accounting for a 19% weight of the overall total) declined by 23%.

Industrial domestic sales decreased by 18.6%, within which domestic sales in manufacturing were 25% lower compared to the same month of the previous year.

In the first four months of the year, output was 9.2% lower than in the same period last year.

Analysts in shock

Industrial production contracted way above expectations, such a huge setback is unprecedented, Gergely Suppan, head analyst at Takarékbank, commented on the Central Statistical Office (KSH) data.

He thinks, however, that there is a possibility for the sector to pick up sharply

in May. He said demand might pick up gradually due to soaring unemployment, wage cuts and cautious consumer spending.

According to him, a possible second wave of the pandemic might further delay the recovery of the industry; however, due to a higher level of preparedness in the healthcare sector, a sufficient supply of medical appliances and some promising drug trials, closures similar to the previous months are not expected.

drop for two consecutive months had been unprecedented.

Although he thinks that the reopening factories and production facilities have not been able to counterbalance the lockdown, May will likely to bring a correction.

However, he does not expect the production level seen at the beginning of the year for the time being. K&H Bank analyst Dávid Németh said that with April’s sharp drop, industrial performance was only 73% of 2015 levels.

2nd Wave Fear ING Bank analyst Péter Virovácz said that April data showed the largest drop ever seen in industrial production and added that a double-digit monthly drop for two consecutive months had been unprecedented.

Suppan expects a fall of 6-7% in the industrial production this year, followed by a notable, 12-13% growth in 2021.

ING Bank analyst Péter Virovácz said that April data showed the largest drop ever seen in industrial production and added that a double-digit monthly

For now, April is seen as the lowest point, but a second wave of the pandemic, if one emerges, could change that, the analyst added.

The same fear is being reflected in the latest forecast of the OECD, which says that Hungary’s GDP might fall back by 8% this year, but if there’s a second wave of the pandemic, the setback could be as high as 10% (for more on this, see our detailed report on page 5).

However, not everyone is as pessimistic as the OECD: London-based analysts say that the value of Hungary’s GDP will reach its pre-crisis level by the end of 2021.

According to Morgan Stanley, Hungarian GDP will fall back by 6.7% this year but will bounce back again in next year and will produce a 4.6% growth. With this, analysts at Morgan Stanley said that their GDP-forecast for Hungary for 2020 is 2.6% lower than the consensus but is also 0.6 percentage points above the expectations for 2021.

Morgan Stanley analysts add that the growth trajectory of Hungarian GDP will still be determined by domestic consumption, as investments are only likely to liven up from the second half of 2021. On an even more positive note, the April lockdowns had little impact on the construction sector, as the latest KSH data shows.

Output of Hungary’s construction sector edged down 2.1% year-on-year in April; the decline slowed from a 3.4% drop in March and was just a fraction of the contraction seen in the industrial sector.

KSH noted the impact of a high base on the figure: in April 2019, construction sector output soared 39.7%.

Numbers to Watch in the Coming Weeks A relatively calm period lies ahead in the next couple of weeks when it comes to macroeconomic releases.

On June 29, KSH will publish employment and unemployment figures for the March-May period; the data is expected to highlight all the negative effects of the coronavirus pandemic, following a slow but steady increase in the unemployment rate over the past months.

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Budapest Business Journal | June 19 – July 2, 2020

Atenor Completes Latest Phase of Váci Greens The 25,000 sqm building “F” at the Váci Greens office development, designed

by TIBA Architects Studio, with a preopening occupancy of close to 70%, has received its occupancy permit, with the first tenants set to move in. The handover of the sixth and final building at the complex in the Váci Corridor is due in September, which will complete the project, according to developer Atenor.

GARY J. MORRELL

Most developers say the office market continues to function according to schedule from a development and leasing perspective, although permitting can take longer and physical office viewings have not been possible in many cases.

Váci Greens F, completed by Atenor.

“The past oversupply has caused developers to be cautious, which is apparent in the low level of new stock delivered since 2011. Whilst the pipeline for 2020-2022 shows an increased level, more than 60% of this amount is already prelet and therefore availability in modern class ‘A’ stock is expected to remain unchanged,” says consultancy Cushman & Wakefield.

The phased Váci Greens project has been ongoing for seven years and was planned and conceived at a difficult period for the Budapest office market. From the total area of 123,000 sqm, 100,000 sqm has already been leased and five of the six office buildings have been sold to domestic and international investors.

Tenants at the complex currently employ close to

8,500 staff

and with the handover of the last phase (Building “E”), the number of employees

State of Emergency Brought to an End

The proposal was submitted by the Prime Minister’s Chief of Staff Gergely Gulyás, who said the state of emergency could be lifted as early as midnight on June 17 (i.e. just after this issue went to print).

The efforts the government has undergone to achieve this end are not insubstantial, it says. Due to the epidemic control and economic protection measures, the central subsystem of public finances closed with a deficit of HUF 324.1 billion in May, bringing the overall deficit to HUF 1.051 trillion for the first five months of this

Attractive Market

“The Budapest market remains attractive for SSC and BPO businesses where new potential market entrants have been registered. None of our construction

the

23,500 sqm

Eiffel Square office complex in a deal structured off-market by JLL. The transaction was signed in May and closed in early June.

“This deal was […] mainly negotiated during the lock down period. Our teams are now back in the office and we work hard to revive the dynamic of the market we had before the outbreak,” says Benjamin Perez Ellischewitz, head of capital markets at JLL. “With regard to investment, the travel possibility is the key. Once all borders are open across Europe, the investment will get back to normal,” Püschl concludes.

Coronavirus ///roundup

Parliament unanimously approved the proposal to lift the state of emergency ordered by the government on March 11 due to the coronavirus epidemic and approved related legislation on transitional rules and epidemiological preparedness, according to state news agency MTI. NICHOLAS PONGRATZ

will increase to 12,000-13,000. In Atenor’s other major project, Aréna Business Campus building “A” has received an occupancy permit and deep foundation works have been completed at building “B.” “There is a temporary slight slowdown in the field of new office enquiries as some of the occupiers now prefer a ‘waiting strategy’, but we have still experienced that all in all the demand is there and will be there,” says Zoltán Borbély, country director of Atenor in Hungary.

works have stopped or delayed, all four projects are being built continuously,” Borbély adds.

Regarding a possible exit strategy with a sale to domestic or international investors, sales transactions are ongoing.

“It is true that those negotiations which were in the due diligence phase are ongoing slower, but we do not expect a freeze of the investment market,” explains Nikolett Püschl, leasing and development director at Atenor Hungary.

“Soon, when travel will be allowed, we believe these transactions will speed up again. Fortunately, the current pandemic situation did not result in any delay of our office projects, neither building-wise nor leased premises wise,” she says.

In a positive development elsewhere in the capital, Germany’s Allianz Real Estate has acquired

year, the Ministry of Finance said in its preliminary report.

By the end of April this year, purchases of medical devices related to the coronavirus epidemic amounted to nearly HUF 400 bln. Of the HUF 359.2 bln paid out of the balance sheet to foreign missions, HUF 328.1 bln was for the procurement of medical equipment directly related to COVID19. In addition, HUF 53.1 bln was also booked at the State Healthcare Center as the cost of equipment purchases related to the virus.

Despite these efforts, the economy still struggled significantly; the volume of industrial production and retail trade

turnover in April fell by 36.8% and 10.2% respectively, according to the Central Statistical Office (KSH).

Due to the epidemic, a third of Hungarians said they were more willing to postpone a larger investment, but at the same time the majority have continued to pay their loans, writes Világgazdaság (Global Economy, the leading conservative economic daily), citing Cofidis’ latest representative research conducted in May.

Loan Moratorium

By the beginning of June this year, 65.5% of retail debtors and 79% of corporate customers had decided to use the moratorium on loan repayments introduced on March 19, the National Bank of Hungary (MNB) wrote in a statement, affecting HUF 3.855 tln of the total HUF 6.796 tln household loan portfolio entitled to the moratorium, and HUF 5.208 tln of the total HUF 9.692 tln corporate loan portfolio.

As a consequence, the credit institution sector achieved a profit after tax of just over HUF 20.5 bln in the first quarter of 2020, a fraction of the HUF 134.8 bln earned a year earlier.

However, signs of improvement are also appearing, with a survey of

1,000 SMEs

indicating an improvement in the drop in demand from 72% in April to 64% in May, and GKI’s consumer confidence index rising from -38.5 in May to -32.8 in June.

With the first wave of the coronavirus waning in Hungary, many forecasts have been made about its economic recovery prospects. Cambridge Econometrics expects a 3.2% decline in GDP in Hungary due to the shock caused by the coronavirus, which is lower than the global impact and could be reduced to as much as 2.9% by government measures, according to Forbes.hu.

According to the World Bank in its latest report, the economic downturn in Hungary could be 5% this year, which is an eight percentage point difference from its January forecast, but could rise to a 4.5% increase next year.

The OECD projects Hungary’s economy will contract 8-10% this year, depending on whether a second outbreak of the novel coronavirus occurs towards the end of the year, according to state news agency MTI. The OECD puts the contraction at 8% in a “single-hit scenario” and at 10% in a “double-hit scenario.”

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Budapest Business Journal | June 19 – July 2, 2020

Business

In the more optimistic single-hit scenario, economic activity is projected to decline by 8% in 2020 but then rapidly grow

by

4.6%

The OECD has predicted Hungary’s economy will suffer a contraction of between 8-10% this year, depending on whether there is a second wave of the COVID-19 virus (the so-called “doublehit” scenario), the organization says in its latest Economic Outlook, entitled "World Economy on a Tightrope", published on June 10.

ROBIN MARSHALL

In its chapter on Hungary, the OECD report acknowledges the actions taken by the government to try and alleviate the crisis, and makes suggestions for future policy steps, noting that “the pandemic is causing severe economic disruptions due to closures in manufacturing and large parts of the service sector, and an abrupt decline in international trade.”

In both the single- and double-hit scenarios, the OECD predicts a recovery in economic activity in 2021 “bolstered by the release of pent-up demand”, although it notes it would be faster in the former than latter case.

COVID Contained

The OECD says the COVID-19 outbreak reached Hungary relatively late, with the first cases reported only in early March.

“Strict measures have helped to contain the number of new cases […]. The capacity of the health system has been scaled up rapidly. This helped to keep the health crisis under control,” the report says It notes that the government introduced restrictions in parts of the economy on March 29 to fight the virus. In consequence, large parts of the services sector remained closed in April. Moreover, a large part of manufacturing ceased or slowed production as foreign demand weakened.

Short-term indicators show that economic activity was already slowing before the

Photo by Dana.S/Shutterstock

OECD: COVID 2nd Wave Would Mean 10% hit to Hungary’s Economy

shutdown, OECD says. Business and consumer confidence fell to all-time lows in April, before picking-up in May. The number of registered jobseekers rose sharply,

by

26.5%,

in April compared to the same month in 2019.

Yields on 10-year Hungarian government bonds were very volatile, before stabilizing around 2% in May. The forint depreciated strongly against the euro at the beginning of April, in line with other Central European currencies, and has since then partly recovered.

“The automotive sector accounts for nearly a third of manufacturing output and was particularly hard hit, with production ceasing as international supply chains were disrupted and demand collapsed,” the OECD finds.

Automotive wasn’t the only important field badly hit, however. “The tourism and supporting sectors, which have a high share of small firms and employ around 10% of the workforce, are heavily affected, notably hotels and hospitality services.”

Prompt Policy

The report praises the government for reacting “promptly.” Under its emergency law (in place until June 20), the government has introduced measures amounting to HUF 223 billion and announced a HUF 663 bln Epidemic Prevention Fund to step up healthcare capacities.

Indeed, the OECD says the government has put together a fiscal package worth

4.4% of GDP,

including wage and investment subsidies, tax deferrals, and cuts to employers’ social

security contributions. In addition, a HUF 3.6 trillion moratorium on loan payments offers debt relief until the end of 2020.

“A total of HUF 2.5 tln (5.4% of GDP) in state loans and guarantees were made available to struggling businesses,” OECD says.

At the same time, the National Bank of Hungary (MNB) has launched a HUF 1.3 tln (2.7% of GDP) bond-purchasing program. The MNB also provides more than HUF 1.5 tln (3.2% of GDP) of state loans and guarantees, including HUF 1 tln in the new “Funding for Growth Scheme Go”.

Outlook Uncertain

In the double-hit scenario, GDP will fall by 10% in 2020, with a recovery to 1.5% predicted in 2021, largely based on a projected release of pent-up demand.

However, the OECD also warns “as international supply chains will be difficult to restore, the economy will be left with large under-utilized resources by end-2021.”

OECD Explainer The Organization for Economic Cooperation and Development was officially created on September 30, 1961, but its roots go back to the formation of the Organization for European Economic Cooperation (OEEC), established in 1948 to run the U.S.-financed Marshall Plan for the reconstruction war-torn Europe, the OECD website explains.

Canada and the United States joined OEEC members in signing the new OECD Convention on December 14, 1960, giving the body a more

in 2021.

“A strong rebound is projected for investment, which is supported by higher inflows from European and national funds.”

The difference between the two is wide, which has led some to think the OECD is being too cautious.

“What is interesting is that almost all prognoses are aligned around a Hungarian GDP growth of 4-4.8% for 2021, but there are huge discrepancies (from +3% to -10%) with respect to 2020,” points out PwC Hungary country managing partner Tamás Lőcsei.

“One could think that indeed there are factors outside economics influencing those numbers or there must be many forms of crystal balls. I believe the OECD outlook is too pessimistic on Hungary’s automotive manufacturing hit, speed of reopening and domestic consumption. If you look at their previous outlooks they are traditionally very cautious,” Lőcsei adds.

For both OECD scenarios, the main downside risks are longer lockdown periods and more lasting harm to the economy through unemployment and business closures.

“A sharp contraction of the global automotive sector would hit Hungary hard, given the economy’s dependence on the sector,” the report warns.

“Labor misallocation risks becoming a larger problem as the short unemployment benefit period may encourage jobseekers to take on less qualified jobs.”

Upside risks include a faster-than-expected recovery of international supply chains, which would help restore production faster.

Having praised the speed with which the government reacted to the start of the crisis, the OECD says there should be an equally timely withdrawal of support measures once the recovery starts. “This concerns in particular state loans and guarantees to avoid supporting nonviable firms and ensure the reallocation of resources to the most productive firms.”

To avoid otherwise solvent firms going bankrupt, the OECD says the government should ensure that existing loan schemes are accessible to all firms, in particular capital-weak SMEs. In addition, policy should gradually shift from temporary measures towards demand support. Notably, the new short-time work (Kurzarbeit) program should include employees without regular contracts, such as “leased” employees or contractors. A longer duration of unemployment benefits is another priority to support incomes and encourage job mobility.

global outlook. Other countries soon joined, starting with Japan in 1964.

Today, the OECD is a 36-member body working to identify, discuss and analyze problems, and promote policies to solve them.

Brazil, India and the People’s Republic of China, along with Indonesia and South Africa, are so-called Key Partners of the organization, meaning that in total OECD brings together 39 countries that account for 80% of world trade and investment, giving it, the organization says, “a pivotal role in addressing the challenges facing the world economy.”

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Budapest Business Journal | June 19 – July 2, 2020

Les Nemethy and András Hanák look into a new law that aims to protect “strategic” Hungarian companies from being acquired by non-Hungarian parties, and its potential effect on foreign investment.

On May 25, the Hungarian government promulgated a decree requiring its de facto approval with respect to ambiguously defined “strategic” transactions whereby interests in Hungarian companies are acquired by foreign entities, which fulfill (in our opinion excessively broad) criteria, ADVERTISEMENT

The Corporate Finance Column Photo by Florence-Joseph McGinn/Shutterstock

New Hungarian Legislation to Screen Foreign Investment

for example where (i) a majority interest in a Hungarian company is acquired or (ii) the amount of the transaction surpasses HUF 350 million (a little more than EUR 1 mln) and where a mere 10% or more of the equity of a company is sold.

Deterrent Effect

Negotiating a purchase and sale agreement requires considerable effort (company staff, lawyers, possibly financial advisors, due

diligence investigations, etc.) as well as related costs. This decree will add cost (for example, in preparing the government submission), while greatly adding to the uncertainty facing the investor.

Furthermore, the time between signing a purchase and sale agreement and closing (assuming the transaction is approved) will be extended, adding further uncertainty (it becomes trickier to deal with risks like currency fluctuations, loss of one or more clients, etc.)

Investors always abhor uncertainty; given they are usually in a stronger position, through astute negotiation, they typically pass on most risks to sellers, which ironically, would make the Hungarian parties bear the cost of the decree, precisely the parties whom it was supposedly designed to protect.

An investor, when analyzing whether to put in an offer on a company, always weighs the costs and benefits of doing so, and this legislation skews the equation toward avoiding Hungarian targets.

While this may satisfy some nationalist desire to keep Hungarian companies for Hungarians, it will serve to diminish capital available to Hungarian corporations and their owners.

This deterrent effect may be particularly significant for investors in smaller companies. It is already extremely difficult for these players to find investors (typically transactions of up to a few million euros) because a small investment rarely “moves the needle” but transaction costs are pretty similar to larger transactions.

Effects on Valuation

Whenever the number of potential willing investors is curtailed, valuation suffers. In our opinion, generally the most favorable way to sell an interest in a company is a competitive process.

Should one or more potential bidders decline to participate due to the decree, valuation will suffer.

The decree may, in certain cases, negate the case for a competitive process.

It is difficult to estimate the percentage by which valuation might be impaired: For some companies, it might make the difference between being saleable versus non-saleable, for others it might suppress valuation by a percentage well into the double digits.

Ambiguity and Vagueness

The way strategic sectors are defined by the decree is, in the view of most observers, too broad, or at the minimum too ambiguous, which leaves room for discretionary application by the Hungarian ministry that has authority to block transactions.

The decree supposedly tracks recent EU legislation permitting screening of non-EU investment on grounds of genuine national security concerns and public order considerations. In an effort to overzealously protect Hungarian companies from unwanted raiders, the decree covers sectors where no such concerns may arise.

As an illustration, the sale or investment in an agricultural milk producer, an IT startup, a limousine car service, a hotel or even a restaurant may be subject to a reporting obligation (which requires disclosure of a host of sensitive and proprietary information) and leaves 45 days for the minister to deny or approve the deal.

Further, as both direct and indirect acquisitions of control or minimal (10%) interest are subject to the reporting obligation, it is entirely possible that transactions of parent companies outside Hungary may trigger a filing obligation in Hungary by a Hungarian company and its indirect parent.

Some observers note this hypothetical case: if Multinational A were to acquire Multinational B, any Hungarian leg of the transaction could be blocked by the minister.

Conflict with EU Laws?

One cannot escape the first impression that the decree runs afoul of EU laws when it is also applicable to investments by EU companies whose ultimate beneficial owners are also EU entities.

This regulation is contrary to specific EU legislation permitting the screening of foreign (i.e. non-EU) investments in narrowly defined sectors for specific national security/public order concerns and is a violation of one of the fundamental freedoms of the European Union: freedom of movement of capital.

We do not understand the strategic intent of the legislation. To the extent that there are legitimate strategic interests that need to be protected, legislation could be better targeted to apply to a narrowly defined strategic interest.

The Hungarian government announced that the operative provisions of the decree will be incorporated into an Act of Parliament in the coming weeks. We hope that some of the concerns raised by this blog and by other observers may be addressed in the meantime.

Les Nemethy is CEO of EuroPhoenix (www.europhoenix. com), a Central European corporate finance firm, author of Business Exit Planning (www. businessexitplanningbook.com) and a former president of the American Chamber of Commerce in Hungary.

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Sanitation: a Global Business Opportunity While the world recovers from the shock caused by the coronavirus pandemic, some future trends are emerging defining our life and the global economy. What could be the trending opportunities for innovative companies in the post-COVID world? In the first of a short Budapest Business Journal series presented in cooperation with the Tungsram Group, president & CEO Joerg Bauer shares his vision on sanitation as a global business opportunity.

BBJ STAFF

Disinfection and contamination avoidance stand at the core of the battle against the coronavirus: we need masks, protective gear, and disinfectant liquids to slow down the spread of the virus.

Sooner or later, a vaccine will be available. For a long time to come, however, fear of pathogens will remain with us. The existence of multi-resistant bacteria (pathogens that can resist different kinds of antibiotics and on top of that, are proliferating in hospitals, of all places) that had already caused problems even before the coronavirus pandemic also contributes to this fear.

The disinfectant, sterilization, and hygiene industry offer considerable growth opportunities. The demand will be huge: Sterilization equipment on its own generated a USD 6 billion turnover in 2016, and within five years, the market will probably double.

The methods of doing away with viruses are well-known: UV-C, a type of ultraviolet light, as well as ozone or heat, are reliable methods.

The development of certain casings and special cover layers is also directed at killing pathogens, or at least making their survival more difficult. Several companies have come forward with innovative developments in this area.

Virus Killer UV-C Before the outbreak of the COVID-19 epidemic, it was estimated industrial UV-disinfection would become a USD 2.8 billion market, with Europe at its obvious focal point.

With UV-C technology Tungsram has been developing since its independence gained in 2018, water, air, and surface materials, even foods and developing plants, can all be disinfected.

Joerg Bauer In most cases, UV-C renders traditional procedures unnecessary. A technology that it is possible to permanently integrate, it is also applicable as a mobile solution, transferable to the venue to be disinfected. In special Tungsram cabinets, it can free materials, medical equipment or protective gear from infectious viruses and bacteria.

Self-disinfectant Floors and Walls Several years ago, Hungary's Graboplast caught sight of the opportunity in developing disinfectant surfaces. By applying its patented TECH Surface technology, it developed a flexible floor covering, one that offers a solution to the most urgent healthcare problems: infections that are burgeoning in hospitals.

This is the first photocatalytic self-disinfecting surface. Its selfdisinfecting quality is guaranteed by a double defense system consisting of nanosilver and NanoTiO2 particles. Graboplast has also devised and manufactured a wall covering possessing a surface that has proven to be effective.

New Methods for Clean Water Access to safe drinking water is one of the most effective methods to maintain human health and diminish poverty. According to the World Health Organization’s 2017 report, 2.1 billion people don’t have a proper quality of drinking water in their home.

Beyond the utilization of traditional chemical-based disinfectant methods in the water industry, in recent years the Hungarian company Aquaprofit has placed a great emphasis on research and development work.

As part of a R&D tender, it developed what it calls Intelligent Water Aid Technology, mobile water cleaning equipment, particularly aimed at offering clean drinking water in regions where the infrastructure serving clean water has not been established, or electricity is absent.

Since October 2019, in Tunisia, its IWAT equipment running on solar energy has been cleaning the water of a contaminated mountain brook.

Tungsram welcomes innovative companies and startups within the infection protection field, from all over the world, to find solutions that are important for Hungary and the global market. We are seeking areas of application, references in hospitals, hotels, in the food industry, in public transport.

For this, we need a partnership between companies, universities, and research centers in our country; alone, we cannot manage it.

For many more healthcare related issues, see our Special Report, pages 8-15.

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Starting a Post-COVID Recovery Revolution phase. The lockdowns and closing a lot of stores were not a good choice, it is almost killing a lot of industries. We should rather focus on very basic healthand safety-related measures. Basic hygiene, social distancing and maskwearing are the three most important measures, I believe. So, hopefully, whatever wave might come, it’s not going to be such a disaster from an economic perspective.

I’m a Czech citizen, so I had a chance to compare the Czech and the Hungarian approaches. Hungary did pretty well, understanding that economic help is really the name of the game. For me, it’s better that the company I’m leading is situated in Hungary, honestly speaking.

Telenor Hungary’s Czech CEO Jan Hanus gives a rare and exclusive interview to the Budapest Business Journal on his company’s response to the coronavirus pandemic and how he sees the future recovery.

“Where I see a potential driver of change is the behavior of the big companies. I think many of us see this situation as an opportunity to do things differently; now is the time to do something revolutionary and in the upcoming months there will be a stronger shift towards more digital and less physical services.”

ROBIN MARSHALL

BBJ: How has Telenor coped with the COVID crisis?

Jan Hanus: I guess we were pretty lucky, since we spent some meaningful time defining our core values prior to the crisis, and one of those values is to give guidance on how to approach unpredictable situations. That helped us a lot, so at the very beginning of the COVID crisis we had a clear guidance.

“People First” was the first value, and it helped us decide that, after basic health precautions, we need to start coronavirus measures by creating existential security. At the beginning of the crisis, we outlined three main contingencies that the coronavirus may have on the company: normal, bad, and worst. There was one thing in common in the three plans: no lay-offs. Because we believe that employees are always the greatest asset of a company, and in the new situation, recognizing the new opportunities created by the crisis, they will help us win in the market. So, I wanted to take a big question mark out of people’s minds: “Will I have a job tomorrow?”. Yes, you will.

Then we quickly decided to protect our people, get out of the HQ and move to home office, protect our customers by wearing masks in the retail stores, etc.

So, from that perspective it was really smooth and much faster than I ever expected. It helped strengthen the unity of our employees and the position of the brand as such, because, since we are a rather exposed company, our activities were visible.

Of course, there was a struggle in retail stores, because the footfall has inevitably dropped quite substantially and we had to invest in and really speed up the shift from retail to digital. But again, it got full focus and support from our team, which has done an amazing job. In a few weeks, we implemented tools and features that would otherwise have taken a few months.

Jan Hanus, CEO of Telenor Hungary.

Another super-quick change in our operation was that we moved the whole call center to home office. In the quarantine period, we realized a 20% increase in incoming calls and cases. Under home office, we managed to protect the team and serve our customers, who also experienced uncertainties and were more sensitive than usual, but we took care of them from this aspect, too.

BBJ: We hear a lot that "the world will never be the same again" and we will need to embrace a "new normal". How do you view this?

JH: People have a natural tendency to return to the old routine, especially when the vaccine for COVID comes and people feel safer. There will be a higher ratio of digital sales and digital services, but I don’t see that as a key driver on the customers’ side. Where I see a potential driver of change is the behavior of the big companies. I think many of us see this situation as an opportunity to do things differently; now is the time to do something revolutionary and in the upcoming months there will be a stronger shift towards more digital and less physical services.

The other area where I expect change is the way of working. Telenor has functions many, if not all, of us can perform very well from home office, without seeing each other every day. That is an element which is very interesting because home office is less costly than a headquarter regime, so it sounds good from a cost perspective. And it’s also a win-win situation because employees appreciate very much that they don’t have to come to the HQ every day.

Full HO mode was a new situation not only for employees, but also for the managers. It required a higher level of trust. At the beginning of mass home office, a lot of questions emerged, followed by real resolutions which will stay with us for a long time. We have already announced that we will not insist on returning to the previous regime, and we are happy to offer better work-life balance to our HQ employees.

BBJ: How does Telenor see the Hungarian and global economic recovery?

JH: It’s yet to be seen whether the second and third waves of COVID are coming or not. Hopefully, governments globally took the learnings from this

When you look at it from a helicopter perspective, nothing was ruined.

I mean the assets are still there and the money is still there in the economy, and there is a huge push and willingness to get back to normal as soon as possible.

And I’m sure the government also took the learnings from the previous crisis more than 10 years ago, so the recovery will come much faster.

BBJ: There have been calls internationally for governments to ensure a "green industrial revolution" is at the heart of any recovery plan.

What is your take on this?

JH: The top priority is basic recovery and as some very big industries were affected, I think going green will not resonate as a goal for those steps and programs.

But my perception is that green and the positive moves towards green will go hand-in-hand. I’d perceive it not as a goal but as a side effect, a positive bonus that’s going to happen, rather than a top priority. Digital is green as such, so the overall shift to home office, online shopping, etc. are green in themselves, because it means less traveling and less energy consumption.

And whatever we as Telenor do, we support those green moves. You know we have a smart building which is consuming a very limited amount of energy, and we support home office like crazy. Those are the moves that can help the overall situation and help society get closer to that direction.

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Special Report Healthcare

COVID-19: How did State Sector Cope?

Hungary has “undoubtedly defended itself successfully” against the coronavirus pandemic, Prime Minister Viktor Orbán declared on state radio on May 22. He added that the country had performed “far better than materially wealthier and more fortunate countries”, although, sadly that success was still only relative, marred as it was by a loss of life.

KESTER EDDY

The prime minister continued with lavish praise for Miklós Kásler, who, as Minister of Human Capacities is responsible for healthcare. Indeed, the reason why Hungary avoided mass infection was “mainly due to the timely work performed by the healthcare team led by Miklós Kásler, and the hospital directors, doctors and nurses working under them”, he added.

The facts, in terms of confirmed “the case numbers are not reliable at all”, infections and deaths during the first because the healthcare service was unable three months of the COVID-19 pandemic, to carry out enough tests, especially in the certainly show that Hungary averted first month of the pandemic. mass infection. On June 15, coronavirus “State financing [for public healthcare] fatalities in the country had climbed to 563, has been very, very low by [successive] with a cumulative total of 4,076 infections.

Orbán governments – the lowest in the These numbers mean Hungary suffered EU countries. That’s why there was, at the a mortality rate of 5.72 per 100,000 beginning, just one micro-biological lab in inhabitants, according to the Johns Hungary that could carry out the reliable Hopkins University website. This result PCR test,” she said. puts Hungary in good standing compared Although the number of accredited to Romania (7.16) and Austria (7.65), but laboratories was raised to eight in total, outperformed by the Czech Republic this was still insufficient for the needs.

(3.09) and especially Slovakia, which Austria, for a smaller population, has 40 logged an astonishingly low 0.51 deaths accredited testing laboratories, she said. per 100,000 inhabitants.

Level of Infection But as far as fatalities per infection Subsequent research, led by the was concerned, a measure of how well Semmelweis Medical University appears to the health service performed in treating support this claim. News website Index, in infected patients, in early June Hungary a surprisingly low-key manner, reported stood at 13.8%, double that of Romania on May 19 that first results of testing and close to four times the ratio in the indicated that between 0.6 – 0.7% of the Czech Republic.

Deep Knowledge

In view of these metrics, which indicate a median performance by the healthcare sector, it is perhaps surprising that Hungary ranked as high as 18th worldwide in the COVID-19 risk assessment tables compiled by the Deep Knowledge Group, a Swiss-based analytics company.

Yet while this placing surely pleased the government, many in the general public, health sector itself and political opposition remain critical of how the public health service was managed in the pandemic, with arguments raging over every subject from preparedness of the sector and reliability of statistics to the Easter evacuation of hospital beds (see separate box).

Gabriella Lantos, a former director of a private Budapest hospital, says that while the data on the deceased is accurate,

Hospital Evacuations Provoke Rage and Confusion Soon after Easter, several independent media reported that hospital directors had received instructions the previous week from the Ministry of Human Capacities to evacuate 60% of their patients’ beds by April 15. The plan was to free up some 36,000 beds in preparation for a feared mass of COVID-19 infection cases that were predicted for early May. But the evacuations meant many patients undergoing treatment or recovering from operations being turfed out of hospital beds and sent home at short notice.

Two hospital directors who voiced opposition to the move were fired by the ministry.

Many of their receiving families were reportedly clueless as to how to look after their relatives, although in the confusion, and lack of transparency from official sources, stories of dubious authenticity gained credence.

“Official numbers [of evacuated patients] haven’t been released, but health experts calculate from the data of National Health Insurance Management that about 25,000 patients were sent home,” Gabriella Lantos, a former director of a private Budapest hospital, told the Budapest Business Journal.

Miklós Kásler, the minister responsible, added fuel to the

Miklós Kásler, Minister of Human Capacities. Photo by Kormany.hu

fire when, on May 25, he declared that the original April instructions included the order to continue treating all patients whose condition necessitated it.

Anyone disregarding these orders had “violated the Hippocratic Oath”, he said.

Health professionals were outraged. In a sharply worded retort, the Hungarian Medical Chamber responded: “On behalf of the entire medical community, we reject Kásler’s statement that doctors were responsible for the professional and ethical consequences of his order to vacate hospital beds while simultaneously accusing them of violating their Hippocratic Oath.”

Katalin Cseh, Momentum MEP. Photo by Momentum.hu population over 14 had been infected with the COVID-19 virus.

While this figure appears almost insignificant, when multiplied by the 8.2 million individuals at risk, it translates to some 52,000 people – a figure 13 times greater than the official number.

Katalin Cseh, a member of the European Parliament (for opposition party Momentum) and qualified doctor who volunteered for hospital work during the crisis, said: “The transparency around the data is very… well, I’d rather not say, but it’s in a very bad shape.”

Cseh’s principal complaint centered on the government’s unwillingness to engage with the Hungarian Medical Chamber, and subsequent allegation that it was providing political propaganda for the opposition.

“I think it’s really unfounded and unprecedented to accuse the highest body of Hungarian doctors with claims [of political motivation]. They were not consulted and their demands were very much in line with international standards and guidelines,” she emphasized.

Bertalan Tóth, Socialist party president, demanded an enquiry into the affair from both Kásler and Interior Minister Sándor Pintér. He received a reply denying any claims that the evacuation put the lives of patients at risk.

Gabriella Lantos denounced the entire affair as “a real scandal”, adding the need for 36,000 beds was wildly excessive.

“The lack of laboratory capacity [to test for COVID-19] in the first place is the main reason why they didn’t know how to calculate accurately [the spread of infections]. They then prepared for the worst case. But this didn’t happen in Hungary. We don’t even have enough doctors [to attend] so many patients” she said.

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Private Healthcare Expands Online Private healthcare in Hungary has been gradually improving in the past few years, both in terms of the breadth of services on offer and competition.

Emergency restrictions introduced with the arrival of COVID-19, however, have accelerated a new practice: video consultations wherever possible.

CHRISTIAN KESZTHELYI

Private healthcare generally means shorter waiting times, better access to specific doctors and higher quality facilities when compared to public medicine. It all comes at a price though: private healthcare is significantly costlier than its public counterpart.

“Clearly, the one advantage of the public system is its cost, which should be free.

The advantages of private healthcare is quick access to medical care, usually through scheduled appointments,” FirstMed-FMC Kft. founder and CEO Dennis A. Diokno tells the Budapest Business Journal.

It seems for many the convenience of the service outweighs the costs, as private healthcare has been picking up in the past decade, emerging as a worthy competitor to social security provided by the state.

“The boom in private clinic development over the past 10 years has created a good competition which has encouraged clinics to provide better customer service,” Diokno points out.

This tendency is well-supported by private providers’ growth.

“In our 21 years, we’ve seen our patient numbers increase in all but four years. In 1999, we had

2,620 patient

DR. ROSE PRIVATE HOSPITAL EXCELLENCE IN HEALTHCARE Dr. Rose Private Hospital works with leading physicians who are accomplished experts in their profession. Whether you come for a check-up or a treatment, book a consultation without any waiting time in more than 30 medical fields to cover all your needs. Dr. Rose Private Hospital offers comprehensive, premium quality healthcare services with state-of-the-art medical equipment, in an exclusive setting right in the heart of Budapest.

visits. Last year, we had nearly 15,000,” the founder says.

At launch, FirstMed’s services were limited to general practice, gynecology, pediatrics, and orthopedics. Gradually, the hospital added further specialties such as cardiology, dermatology, ENT, surgery, urology, and others, now taking in more than 20 other areas. Most recently, it added gastroenterology services provided from their new endoscopy center.

Rózsakert Medical Center (RMC), another provider that has been around for almost two decades, have seen similar growth.

Growing Base

“The story of RMC began in 2001 with a single clinic. Today, we have 110 physicians serving 40,000 patients annually on a space of 1,000 square

meters. Our patient base, 40% of which comprises expats living in Hungary, has grown steadily over the 19 years of our existence,” RMC founder and managing director Gyula Csermely tells the BBJ.

Dennis A. Diokno RMC started out providing basic outpatient services, internal medicine, pediatric care and OB-GNY (obstetrics and gynecology) treatment. Today, it says it covers the entire spectrum of outpatient services, serves patients across 54 specialist areas and has its own radiology department, in addition to a dental clinic and an operating theater for one-day surgical procedures.

With the advent of the novel coronavirus, inevitably, private healthcare providers have also changed their ways when it comes to receiving and treating patients.

“Until recently, we could only receive patients with urgent medical needs. People could not come for elective procedures or regular medical checks. This situation reduced our patient volume by

nearly

65%,

with a corresponding decrease in revenue,” FirstMed’s Diokno explains.

“FirstMed’s financial situation was very strong prior to the start of the pandemic,

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“Private healthcare had been changing even before COVID-19. There was a lot of consolidation in the industry with numerous mergers and acquisitions. The pandemic may slow some of this activity, but we are likely to see a continued evolution of the market.”

makes it possible to book online consultations; video conferences can also be accessed through the app.

Although the restrictions are being eased, and people are practicing social distancing less strictly, telemedicine services may well remain popular with private healthcare patients due to their speed and ease.

For in-person consultations, additional precautions are being implemented to minimize risks to patients and staff.

“Pre-screening, temperature checks, and additional disinfecting will likely become standard operating procedure,” Diokno believes.

With the easing, RMC has also returned to providing all its services in person at their clinic. “However, we have kept the strict preventative procedures in place to ensure the maximum safety for our patients. Our entire service portfolio is therefore now available, but maximum safety has been maintained,” Csermely insists.

“We had begun developing FirstTelemedicine some months before the pandemic. We were able to expedite the launch and provide online consultations immediately after the government implemented restrictions,” Diokno said.

App-phobia or Real Threat? dr. Dorottya Gindl Attorney at Law SCHOENHERR HETÉNYI ATTORNEYS AT LAW

COVID-19 makes us realize that a pandemic does not only constitute a serious risk to human health, but is also likely to have a serious impact on personal data protection too.

Decision-makers aim to stop and control the pandemic by various means, and by commissioning and launching new applications. These apps serve different purposes in the fight against the pandemic. While some of them assist in documentation (documenting the health status of the infected people or their location), others aim to model the spread of the pandemic and assisting with contact tracing.

Specialist Pre-screening

Contact Tracing Apps

Gyula Csermely The coronavirus has been a significant disruptor to all aspects of our lives, and while it may slow down the consolidation the Hungarian private sector had been experiencing before, it shall not come to a halt.

“Private healthcare had been changing even before COVID-19. There was a lot of consolidation in the industry with numerous mergers and acquisitions. The pandemic may slow some of this activity, but we are likely to see a continued evolution of the market,” Diokno concludes.

Photo by PopTika/Shutterstock

RMC adopted a similar approach to the COVID-19 restrictions. “Since the state of emergency began, RMC has shifted to a new way of providing services, we effectively opened a new clinic to serve our patients as safely as possible online, or even in person. Most of the services were switched to video consultations, but, where possible due to the nature of the examination, we were able to welcome patients following specialist pre-screening and subject to stringent rules,” Csermely said.

“Our objective was to not leave people, our patients and colleagues battling heroically in state healthcare, alone in this situation, as well as to stay on our feet as a business without having to lose any staff,” Csermely added.

Video consultations are not new to RMC either. “Our service portfolio has included online consultations for several years now. Demand for these has intensified in recent months due to the COVID-19 pandemic, and we can report that they passed the test with flying colors,” Csermely adds.

The private clinic operates an RMC Smart Clinic mobile application that

INSIDE VIEW

From a privacy perspective, some of the most questioned applications are contact tracing apps. These increase the effectiveness and swiftness of interruption to the infection chain.

Instead of personal interviews conducted by the relevant agencies, the app lists the locations where users have been in a given period of time and those with whom they have met. In the case of a confirmed infection, the application is able to notify potentially infected people. The app may store users’ identification data, health and location data. With this, the state is able to draw further conclusions regarding users’ lifestyles (hobbies, habits), social status (from places visited), health condition and social network, which may violate users’ right to privacy and serve as the basis of future decisions.

Compulsory or Voluntary App?

To protect users’ right to privacy, users must have a choice to decide whether they are prepared to allow such wideranging insight into their private lives through contact trancing apps in the interests of disease control. In the lack of common European regulation, the dilemma of “voluntariness” was solved by the European Commission and the European Data Protection Board by issuing guidelines in which they took a position on the voluntary use of these apps. Voluntary use does not only mean that the app shall be downloaded voluntarily, but also means that users must have the right to freely choose whether or not they share information

as to their infection with others.

European bodies made a number of recommendations in light of the current common data protection regulations, which set out the regulatory framework for the operation of such apps. Among these, it must be highlighted that the European bodies clearly state that contract tracing apps shall not collect users’ location data for contact tracing purposes, considering the principle of data minimization and data protection by design and default, because the proximity data may be gathered in another way, via Bluetooth technology.

The proximity data shall be stored on the users’ device to notify potentially infected people, without disclosing any personal data, in the case of a confirmed contamination.

Hungary

In Hungary two COVID-19 related applications are currently available, both on voluntary basis. VírusRadar is a contact tracing app which allows the user to inform the apps’ community about his or her infection by sending a notification. The notification reaches out to those who have been in contact with the infected person within the previous two weeks for at least 20 minutes within 2-meter distance. Thereby, the notified contacts are encouraged to carry out tests or to be placed in self-isolation in line with the pandemic protocols.

The other application, called Házi Karantén Rendszer (“HKR”), facilitates the assessment of compliance with the home quarantine rules remotely. Home quarantined people are free to decide whether they would like to be subject to a personal official control carried out by authorities or instead they may agree to use this application. The application of HKR may substitute the personal inspection. This app tracks the motion of the user and is capable of transferring facial image and health data of the user to the respective authorities for monitoring purposes, which are stored for 60 days after the end of the home quarantine. *** The necessity and the lawfulness of the surveillance of citizens is not a newborn concept. A survey carried out by Comparitech(1) in 2019 found that London was the most observed city, having 68.4 cameras to watch over every 1,000 Londoners; this ratio was significantly lower in Hungary, at only 3.4 cameras per 1,000 inhabitants.

However, using these kinds of apps extensively increases our digital imprint and decreases our private sphere, thereby we may lose the control over our personal data.

(1) https://www.statista.com/chart/19268/ most-surveilled-cities-in-europe/

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so we made it through the crisis without having to lay off or fire staff,” Diokno adds.

To counter the loss in volume and revenue, FirstMed, like many of its peers, started relying more on telemedicine services than before.

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In a Pandemic, Everyone Must Adapt to Ensure Safe Food COVID-19 has affected the way our food is supplied, traded, and purchased, which gives rise to new or different risks that must be considered to ensure it is safe at all times.

Mary Kenny is the Food and Agriculture Organization’s food safety and consumer protection officer for the Europe and Central Asia region, based at the regional office in Budapest.

She spoke with FAO communication officer Victoria Kalinin to mark World Food Safety Day (June 7), about how FAO is helping countries in the region within this effort.

BBJ STAFF

What specific food safety concerns have arisen in Europe and Central Asia due to COVID-19 pandemic?

Mary Kenny: When the lockdowns started, two main concerns immediately emerged: does food transmit the virus and will there be enough food available? Globally trusted scientific assessment bodies stated that there was no evidence that food can transmit the virus.

While some industries shut down, the food industry had to continue working as much as the situation allowed. In some countries, food business operators were concerned that some ingredients or raw materials may be unavailable or in short supply, or essential staff may not be able to work due to public health restrictions.

Concerns of the competent authorities included distribution of unsafe food due to adjustments in supply patterns, sale of food in unhygienic conditions, and an increase in food fraud.

The pandemic highlights the importance of applying sound principles of sanitation, personal hygiene, and established food safety practices to keep our food supply safe, which gives a special emphasis to this year’s World Food Safety Day.

equipment for personnel, and guided staff on best practices to minimize the risk to spread the virus.

As for official controls, Norway, for instance, has increased the use of electronic certificates for import control of animal and plant products and prepared a rapid risk assessment of possible increased food crime related to the pandemic, which also aims to prevent illegal online sales of products that are falsely advertised as preventing or curing COVID-19.

Mary Kenny The need for effective communication and collaboration among everyone in the food chain (academia, government, producers, operators, consumers) to prevent hazards and minimize risks, has become more evident.

I assume people are seeking trustworthy information, which in the case of food safety, can come from international organizations and national authorities. Can you give us some examples from the region?

MK: Competent authorities have a critical role to play during this pandemic in informing consumers on the practices to be followed, as well as working with the food industry to ensure continued safe food supply.

Many countries have established informative websites and shared COVID19 guidelines developed for food producers, importers, the catering sector, and consumers. Examples include Norway, Hungary and Turkey, which have prepared sector-specific guidelines covering food, aquaculture, and livestock, while Ireland has launched a frequently asked question style website and a consultative e-mail advice line. Norway has also resourced inspectors with guidance on conducting good digital audits and obtaining sensitive information from companies electronically.

Romanian authorities have organized videoconferences for food retailers and restaurants to inform them on the measures necessary for reopening, and safe production, preparation, delivery, and serving of food, and on how to train their personnel on general hygiene practices and disinfection plans. North Macedonia published practical advice to food business operators to prevent staff and consumers from spreading the virus, along with the adoption of measures for safe and uninterrupted flow of food, goods and animals, and guidance on safe online purchasing of food.

At the global level, FAO and WHO has also developed “Food Safety in the Time of COVID-19” guidelines for food safety authorities, food business operators, and consumers.

What habits have changed and what are the implications for food safety?

MK: Everyone has had to adapt. People reportedly started cooking more at home and changed the way they buy food, for example by shifting to home deliveries and online food shopping as restaurants and coffee shops have closed. This highlights the importance of increasing consumers’ awareness of safe food handling practices.

Many have also started to purchase food from local sources and at times directly from the farmer. So small-scale food businesses need to be informed as well and follow food safety management systems and practices.

Certain community initiatives have also sprung up to replace school meals for children, directly providing the food to their homes. There are also innovative methods arising to reduce food waste through food baskets, food banks, and electronic platforms, linking suppliers to buyers and consumers.

Food businesses and food production facilities have upscaled on disinfection and sanitation, introduced physical distancing requirements and protective

The Food and Agriculture Organization of the United Nations was established in October 1945. According to the Encyclopedia Britannica, that makes it the oldest permanent specialized agency of the UN. It is tasked with eliminating hunger and improving nutrition and standards of living by increasing agricultural productivity. The

Some of these habits are likely to stay.

What can we expect in the food safety field in the near future, and what does it entail for food regulators and competent authorities?

MK: I know that food safety authorities across the region are actively considering potential food safety impacts and adapting how they work, as remote working due to movement limitations affects their staff, too. Balancing restrictions on staff with the need to maintain the safety and integrity of the food supply chain and support international trade, food safety regulators need to prioritize critically important services during the ongoing COVID-19 pandemic and eventually reduce some routine activities. The experience gained from the pandemic may give a boost to use of information technologies for food safety such as e-certification, blockchain data, and increased use of electronic documentation.

Some changes in food supply chain are likely to continue beyond the pandemic, such as online ordering and third-party delivery, e-commerce, and bringing new food safety risks and challenges that need to be analyzed well and addressed appropriately. Traceability, information sharing, data generation, and analysis are crucial here.

In addition to selling more food online, food business operators may continue to adapt, or even change, their business models, for instance, from restaurants to takeaway sales. There may also be an emergence of volunteer groups that establish new food operations. As the lockdown measures lift, the food business sector will revive and adapt; implementing physical distancing measures and increasing sanitation facilities to protect the health of their personnel will be part of the day to day routine.

What is FAO doing in the region?

MK: FAO supports measures that ensure the continuity of supply chains so that people have access to safe and nutritious food during the pandemic. This includes helping countries assess the short- and medium-term impacts, providing policy guidance for agricultural and food systems highlighting food safety, organizing thematic webinars, and facilitating mutual learning and sharing of good practices.

regional office for Europe and Central Asia has been based in Budapest since 2008 (the Hungarian capital had been home to the Sub regional Office for Central and Eastern Europe from 1996). An SSC also opened here at in 2008 to provide a centralized administrative support system for FAO offices and employees worldwide.

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New Drugs, Repurposed Drugs, Vaccines and Serum Never before has a disease triggered as much research in such a short amount of time in the field of drug development as coronavirus has. Groups of researchers, pharmacists and physicians all over the world are working flat out to find a cure or a vaccine, including several Hungarian teams.

ZSÓFIA VÉGH

Universities and labs as well as players in the healthcare industry have teamed up to deliver results fast. Here we present a roundup of some of the work and the progress made so far.

At the start of the coronavirus outbreak, the Ministry of Innovation and Technology (ITM) gave several research centers and universities the mandate to develop a drug that could prevent the development of the disease.

The goal of the drug, developed jointly by players including Richter Gedeon Nyrt., the University of Pécs and ImmunoGenes Kft., is to prevent the virus from binding to the ACE2 receptor and thereby infecting it.

Another area of research is identifying existing drugs that could be repurposed for new therapeutic goals. During a pandemic such as this, when researchers are hard pressed for time to deliver results, drug repositioning can offer a time and costefficient means to doing so.

This is due to the fact that with the use of an active ingredient whose human safety and biological properties are supported by potentially decades of therapeutic experience, researchers can shorten the pre-clinical phase of drug development and can move on to clinical trials. Reposition-innovation is also much less costly than developing a new molecule.

In Hungary, the University of Pécs, headed

by Ferenc Jakab is focusing on identifying active ingredients that have already been used successfully for other diseases.

Set up in March, the Coronavirus Action Group of which Jakab and his team are members, is not only looking

at the mechanisms of virus entry or replication and interaction with the host, but also host reactions, immune responses and inflammatory processes, infection and its consequences.

Multi-target Ingredient

In this way, they can create a multitarget ingredient or drug combinations that can lead to wide-spectrum therapy substances. So far, the team has selected about 30 drug molecules for testing in the project, and biological studies have also begun.One drug with potential is Favipiravir, which is a broad-spectrum antiviral drug developed in 2014 in Japan against influenza infection. Clinical trials conducted by the research team with several Hungarian universities and hospitals aim to demonstrate the efficacy and safety of Favipiravir against coronavirus.ITM assigned four projects to the Hungarian Clinical Research Infrastructure Network (HECRIN) related to the coronavirus epidemic. One of these is the clinical trial of Favipiravir. Another study analyzes the genetic characteristics of COVID-patients, examining whether there is a genetic reason for the huge differences in the course and severity of the infection between individual patients.

In the absence of a specific drug, several existing drugs are now being used by physicians to treat coronavirus infections all of which have been developed for a different disease.

A step down from the repurposing process, these drugs seek to treat similar symptoms. Among these are chloroquine, hydrochloroquine, and lopinavir and ritonavir that have been shown to be effective against, for example, malaria. These can and have been used for the treatment

Researchers of the Szeged Biological Research Center (SZBK) together with its international partners at the U.K.’s Bristol University have discovered a receptor through which the virus can enter the host cell. The discovery is crucial as many researchers in the world are trying to better understand the process of the infection to provide effective treatment. of patients whose condition is less severe but still need hospitalization.

Researchers of the Szeged Biological Research Center (SZBK) together with its international partners at the U.K.’s Bristol University have discovered a receptor through which the virus can enter the host cell. The discovery is crucial as many researchers in the

world are trying to better understand the process of the infection to provide effective treatment.

AI and Plasma

Besides Angiotensin-converting enzyme 2 (ACE2), which has already been identified as a means through which the virus can enter the cell, the neuropilin-1 (NRP1) receptor can be another target that opens a new path in the defense against the coronavirus.

The team has developed a method that is unique in the world, based on artificial intelligence and deep learning. A serum prepared from the blood plasma of recovered COVID-19 patients is another treatment under development and, in fact, already at use.

The immune system of a coronavirus patient produces an antibody, which can help fight defeat the disease. A ready-made antibody can be extracted from the plasma of healed and already healthy people by a special procedure. This is a great help for patients with a weakened immune system, as they are ready to receive the antibody that kills the virus in their body.

To date, several recovered patients have donated their plasma in various parts of the country. That has been processed and a serum prepared that can last up to two or three years. Plasma therapy has been used on several coronavirus patients in health facilities in the country who have been removed from the ventilator and whose treatment has accelerated after receiving plasma, the doctors say.

14 | 3

Special Report

www.bbj.hu

Budapest Business Journal | June 19 – July 2, 2020

private Hospitals and Clinics

aFFidea diagnosztika www.affidea.hu

mediCoveR egészségközpont

8,922

8,470 (2018)

8,240

www.medicover.hu

4

5

dR. Rose magánkóRHáz www.drrose.hu/hu

RóbeRt káRoly magánkóRHáz

3,071

2,411 (2018)

www.robertkorhaz.hu

6

duna mediCal CenteR kFt.

7

k-med kFt.

www.dunamedicalcenter.org

www.sasszemklinika.hu

2,201 (2018)

1,543 (2018)

otHeR seRviCes

no. oF Full-time staFF on may 1, 2020

3

www.bhc.hu

aReas oF speCiality

yeaR establisHed

2

budai egészségközpont

name oF opeRating Company

1

Company Website

total net Revenue in 2019 (HuF mln)

Rank

Ranked by total net revenue

oWneRsHip (%) HungaRian non-HungaRian

Budai Egészségközpont Kft.

Addictology, allergology, anesthetics, audiometrics, internal medicine, dermatology, diabetology, dietetic counseling, life style consulting, endocrinology, vascular surgery, food intolerance, physiotherapy, dentistry, obstetrics, gastroenterology, geriatrics, spine surgery, spine surgery, pediatrics, hematology, hepatology, neurosurgery, immunology, infectology, cardiology , nephrology, neurology, gynecology, oncology, orthopedics, osteoporosis surgery, plastic surgery, proctology, psychiatry, psychology, pulmonology, radiology, rheumatology, sports cardiology, surgery, ophthalmology, traumatology, urology, travel consulting, vaccination

Complex spinal reflexology, inpatient care, preventive screening tests, management screening, arteriography, laboratory tests, company health programs, R&D

2000

460

Medikomp Kft. (40) Bonitas 2002 Zrt. (60) –

péter pál varga Anett Végh –

1126 Budapest, Nagy Jenő utca 8.

(1) 489-5200 info@bhc.hu

Affidea Magyarország Kft.

Imaging diacgnostics, CT, MR ultrasound, x-ray, mammograpgy, osteoporosis, isotop diagnostics, allergology, internal medicine, dermatology, diabetology, labor medicine, ear-nose-throat, cardiology, gynaecology, rheumatology, aviation medicine, surgery, sports medicine, eye doctor, urology, laboratory tests

Outpatient care, corporate health programs, prevention screening, male and female screening packages, manager screening, lab screening

1991

477

– Affidea Diagnostics B.V. (100)

györgy leitner – –

1054 Budapest, Szabadság tér 7.

(1) 803-6464 –

Medicover Egészségközpont Zrt.

Laboratory tests, internal medicine, dermatology, bone densitometry, ODM, CT examinations, dietetics, endoscopy, physiotherapy, dentistry, ear nose healing, gastroenterology, pediatrics, physiotherapy, gastric mirroring, cardiology, mammography, MR examinations, neurology, gynecology, orthopedics, proctology, psychiatry, pulmonology, rheumatology, surgery, colon cancer screening, ophthalmology, traumatology, ultrasound tests, urology

Hospital operations, health insurance, dentistry, vaccination center, MRI, CT, ODM international medical tourism

1993

507

MI Hungary Kft. (100) –

lászló benedek, katalin Juhász, János Rózsás – –

1134 Budapest, Váci út 29–31.

(1) 465-3100 info@medicover.hu

Dr. Rose Magánkórház Kft.

Allergology, anaesthesiology, internal medicine, dermatology, diabetes, dietetics, endocrinology, ear nose, gastroenterology, immunology, cardiology, manual therapy, neurology, family planning, gynecology, pregnancy, obstetrics, orthopedics, plastic surgery, aesthetic interventions, psychiatry, psychotherapy, pulmonology, proctology, radiology, rheumatology, surgery, ophthalmology, somnology, urology, pediatrics, vascular surgery

Complex inpatient care, diagnostic tests, prevention screening tests, annual card packs, surgeries, rehabilitation, corporate health services, health insurance packages, occupational health care, international vaccination center

2007

141

– Cross Border Management Holding GmbH (100)

kornél papik – –

1051 Budapest, Széchenyi tér 7/8.

(1) 377-6737 info@drrose.hu

Róbert Károly Magánkórház Zrt.

Dermatology, diabetology, endocrinology, gastroenterology, hand surgery, sexual diseases, gynecology, orthopedics, surgical examination, ultrasound diagnostics, urology andrology, ear and nose archeology, cardiology

Gynecology, infertility center, aesthetic restoration surgery, hand surgery, gynecological oncology surgery, vascular surgery, spine surgery, thyroid surgery, proctology, perineology, abdominal surgery, plastic surgery

2011

155

MedAlliance First Kft. lajos károly Fábián (100) – – –

Duna Medical Center Kft.

Allergy, internal medicine, diabetology, hematology, dermatology, dietetics, vascular surgery, occupational health, ear and labyrinth arthrosis, gastroenterology, child gastroenterology, pediatric cardiology, cardiology, infertility, neurology, gynecology, oncology orthopedic traumatology, proctology, psychology, psychiatry, rheumatology, ophthalmology, pulmonary and respiratory allergology, urology, anesthesiology, bariatric surgery

Hospital (inpatient) and oneday surgery in the following fields: vascular surgery, ear and nose arthrosis, gastroenterology, general surgery, neurosurgery, gynecology, orthopedic traumatology, proctology, ophthalmology, urology, bariatric (obesity) laboratory tests, molecular diagnostics, bone density test, ultrasonic tests, comprehensive screening rehabilitation physiotherapy and physiotherapy

2014

105

– International Medical Centers B.V. (100)

János bartók – –

1095 Budapest, Lechner Ödönv fasor 7.

(1) 790-7070 info@ dunamedicalcenter.com

26

Varga és Társa Befektetési Kft., PMSZO Holding Kft. (100) –

botond Halmai – –

1118 Budapest, Ménesi út 57.

(1) 250-5505 info@ sasszemklinika.hu

K-Med Kft.

Refractive surgery (laser eye operation)

–

1997

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone email

1135 Budapest, Lehel utca 59/C (70) 377-4845 info@robertkorhaz.hu

3

www.bbj.hu

9

FiRstmed - FmC kFt.

11

emineo magánkóRHáz

12

istenHegyi magánklinika

13

www.firstmedcenters.com

www.emineo.hu

www.ihklinika.hu

medoC egészségközpont egészségügyi szolgáltató kFt.

15

kelen kóRHáz www.kelen.hu

spRingday mediCal magánoRvosi központ

gáspáR mediCal CenteR

17

pRoFessional oRvosi kFt.

www.gasparmed.hu

www.professionalrendelo.hu

A = would not disclose, NR = not ranked, NA = not appliacable

A

A A

RMC Group

1,406 (2018)

PozitronDiagnosztika Kft.

Cancer diagnostic PET / CT coronaria CT, computer tomograph (CT) examinations, complex cardiology, psychiatric and endocrinological diagnosis, labordiagnostics

Radiopharmacon production

2004

50

– Cross Border Management Holding GmbH (100)

1,138

FirstMedFMC Kft.

A

A

2011

45

– American Clinincs International Inc. (100)

dennis diokno Andrea Vízvári –

1015 Budapest, Hattyú utca 14.

(1) 224-9090 info@ firstmedcenters.com

1,085

Emineo Kft.

Orthopedics, traumatology, anesthesiology, internal medicine, diabetes, ear and nose surgery, cardiology, neurology, neurophysiology, urology, radiology, rheumatology, dermatology, surgery

Screening, weight ambulance, research and development, health insurance consulting, rehabilitation

2009

21

Zsolt Knoll, Kálmán Fábián, Veronika Börzsei-Knoll (100) –

veronika börzsei-knoll, zsolt knoll Krisztina Csernok –

1117 Budapest, Nádorliget utca 8/B (1) 773-3333 emineo@emineo.hu

653

Istenhegyi Magánklinika Zrt.

One day surgery, outpatient care, aspiration citology

–

1994

13

(100) –

mihály kollár, lászló Rudas Gábor Szlaukó –

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

406 (2018)

MeDoc Egészségközpont Egészségügyi Szolgáltató Kft.

Allergology, angiology, internal medicine, dermatology, diabetes, dietetics, breast imaging, endocrinology, vascular surgery, occupational health, ear nose, gastroenterology, paediatrics, immunology, cardiology, neurologay, gynaecology, pulmonology, radiology, rheumatology, surgery, ophthalmology, urology, lymphatic ambulance

Laboratory tests, shock waves therapy, manager screenings

2008

19

Andrea Szegedi, Tamás Módos, Rock Data Kft. (100) –

ádám bálint, tamás módos – –

1132 Budapest, Visegrádi utca 74.

(1) 783-6004 www.medocklinika.hu

378 (2018)

Kelen Kórház Egészségügyi Ellátó és Szolgáltató Kft.

Andrology, angiology, internal medicine, diabetology, endocrinology, gastroenterology, cardiology, nephrology, pulmonology, dermatology, laser therapy, IPL, dietetics, food intolerance examination, dentistry, nose and throat, genetic counselling, pediatric surgery, orthopaedics, plastic surgery

–

1998

39

Zsuzsanna Kövesd, Pál Tamás Németh (100) –

tamás székely, zsuzsanna kövesd – –

1119 Budapest, Than Károly utca 20.

(1) 205-0205 kelen@kelen.hu

291

Oxygen Medical Kft.

Allergology, internal medicine, dermatology, diabetes, endocrinology, vascular surgery, physical therapy, dentistry, occupational health, otorhinolaryngology, gastroenterology, cardiology, laboratory testing, ophthalmology, rheumatology, ultrasound, urology, phsysiotherapy, manager screening, neurology, gynaecology, orthopedics, plastic surgery

–

2008

19

Kornél Sándor, Katalin Éva Bohn (100) –

katalin brigitta putz – –

1042 Budapest, Árpád út 47.

(20) 554-1498 recepcio@ springdaymedical.hu

161 (2018)

Gáspár Medical Center Egészségügyi Szolgáltató Kft.

Allergology, ear and nose surgery, dermatology, soft laser therapy, plastic surgery, vascular surgery, gynecology, urology

–

1996

12

Lajos Gáspár, Eszter Gáspár, Máté TóthGáspár (100) –

eszter gáspár, lajos gáspár – –

1085 Budapest, József körút 37-39.

(1) 317-8175 info@gasparmed.hu

117

Professional Orvosi Kft.

Gastroenterology, children's gastroenterology, internal medicine, endocrinology, diabetology, dermatology, neurology, rheumatology, surgery, proctology, ophtalmology, labor medicine

Physiotherapy, psychology, dietetics

1990

9

Edit Kelemen (50) András László (50) –

andrás lászló – –

1037 Budapest, Bécsi út 85.

(1) 317-0631 info@ professionalrendelo.hu

www.springdaymedical.hu

16

2001

1,486 (2018)

info@medocklinika.hu

14

24-hour pediatric care, emergency care provided by internist and pediatrician during office hours, RMC Health Maintenance Screening Program, services for mom & baby, services for expectant mothers health and beauty services

Allergy, audiology, cardiology, center of pediatrics, chiropractic, dental center, dermatology, diabetology, dietetics, earnosethroat, endocrinology, fetal medicine center, gastroenterology, gynecologic oncology surgery, headache clinic, hematology, immunololgy, infectious disease medicine, internal medicine, international vaccination center, lifestyle change programs, nephrology, neurology, obesitology, obstetrics, gynecology, oncology, ophthalmology, orthopedics, plastic surgery, proctology, psychiatry, psychology, pulmonology, radiology, rheumatology, same day surgery center, therapeutic massage, urology, vascular surger

www.pet.hu

10

oWneRsHip (%) HungaRian non-HungaRian

aReas oF speCiality

www.rmc.hu

pozitRon-diagnosztika kFt.

no. oF Full-time staFF on may 1, 2020

RózsakeRt mediCal CenteR

otHeR seRviCes

yeaR establisHed

Company Website

Special Report | 15

name oF opeRating Company

8

total net Revenue in 2019 (HuF mln)

Rank

Budapest Business Journal | June 19 – July 2, 2020

top loCal exeCutive CFo maRketing diReCtoR

addRess pHone email

gyula Csermely – –

1026 Budapest, Gábor Áron utca 74–78.

(1) 392-0505 info@rmc.hu

Félix gábor gombos, andrás kókay – –

1117 Budapest, Hunyadi János út 9-11.

(1) 505-8888 info@pet.hu

This list was compiled from responses to questionnaires received by June 17, 2020 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time.

The list is based on companies' voluntary data submissions. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu

4

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Budapest Business Journal | June 19 – July 2, 2020

Socialite

food and drink producers and other members of the industry. Etesd partners with restaurants and catering businesses so chefs and staff whose employment may not be secure are still able to work, then these meals are delivered to families and children who need it most.

‘Feed the Doctors’ Initiative Becomes Permanent Non-profit

“We are convinced that an environmentally conscious lifestyle is crucial, now more than ever. This is why, as soon as circumstances allow, we will initiate knowledge sharing projects on the topic for young people, the most affected and receptive target audience.”

DAVID HOLZER

50,000 portions

of food had been delivered to healthcare workers providing COVID-19 related medical care.

Iain Lindsay, British Ambassador to Hungary and one of the people behind the Highlights of Hungary initiative was a keen supporter of “Feed the Doctors” and helped spread the word about the campaign.

Quoted on the Xpatloop.com website, he said “I am delighted that the British Embassy has joined the British Chamber of Commerce in Hungary to support the ‘Etesd a dokit!’ campaign...

We at the British Ambassador’s Residence have provided support by

390 meals

as part of the #KIOSK Angel program.

Etesd aims for zero waste.

As Etesd says, “We are convinced that an environmentally conscious lifestyle is crucial, now more than ever. This is why, as soon as circumstances allow, we will initiate knowledge sharing projects on the topic for young people, the most affected and receptive target audience.”

Although the general public has welcomed the idea of restaurants providing food for free to the less fortunate, some members of the food and drink industry have reservations.

“Feed the Doctors”, the initiative founded by members of Budapest’s restaurant scene at the height of the pandemic, has evolved into non-profit Etesd, which means “to feed.”

Chef Márton Keve started “Feed the Doctors” in early March. He had returned home to Hungary after many years working all over the world in restaurants of the caliber of Copenhagen’s Noma to work at Budapest restaurant Easy Wine Budapest. The week Keve arrived, the restaurant closed because of COVID-19.

Keve’s idea with “Feed the Doctors” to support healthcare workers fighting the virus by providing them with fresh, healthy meals. With the help of well-known Hungarian blogger András Jókuti, he started a Facebook group that soon had more than 4,000 members.

Food was prepared by volunteer chefs and kitchen staff who had lost their jobs because of the pandemic.

Other restaurants, supermarket chains and small and multinational food manufacturers joined the initiative. They donated high quality ingredients, including meat, organic vegetables, and even personal hygiene packages. Automotive dealerships provided vehicles and taxi drivers helped deliver food.

By the beginning of June, around

Sustainable Meals

Meals are prepared in an environmentally friendly and sustainable way and delivered in biodegradable packaging. In the week beginning June 5, Etesd delivered

Zita Pancsovay cooking meals for delivery to healthcare workers at Szent László hospital where medical staff tried their very best to save the life of my late deputy, Steven Dick as he fought against this terrible virus. This is a small, but an effective way in which we can say thank you to these brave healthcare staff.”

Highlights

Founded by Tibor Remete of Super Channel, Highlights of Hungary has been bringing good people and good causes together and building a value-creating community in Hungary

since

2013.

Each year, Highlights of Hungary collects outstanding stories and achievements that set an example, raise awareness and benefit society.

Zita Pancsovay, of the highly regarded Borganika gastro space at Klauzál Market Hall on the Buda side just up from the Danube is one of the co-founders of Etesd. along with Keve, Kata Farkas, Márta Serfőző and Xénia Drégelyi.

Although Borganika is famous for its dinners, events and cooking classes, it also holds a restaurant license. When the crisis hit, Borganika was forced to close.

Delivering food was Pancsovay’s first idea. But she realized she’d have to compete with other Budapest restaurants doing delivery and building up their online systems. Also, she explains, “our team and kitchen were not set up to deliver small portions to people ad hoc throughout the day.” She decided she’d rather help the healthcare workers, even if it meant not being paid.

After spotting the Facebook page, Pancsovay became a driving force in “Feed the Doctors.” Now, as part of the Etesd Non-profit Public Benefit Company, Pancsovay is a member of what she describes as “a dream team with great spirit.”

Etesd came about because the team wanted to continue with an initiative that “touched and motivated so many.”

The non-profit aims to support people impacted by the pandemic by providing healthy meals made using donated ingredients from supermarkets, grocers,

Their argument is that the restaurant sector has been among those hit hardest by the pandemic. They suggest that restaurants were caught up in a wave of unfair, irrational expectations driven by social media which led them to use up reserves they needed to survive in future. This will have consequences now that restaurants are reopening and, certainly in Budapest, having to fight to survive.

With her economist’s background, I’m sure Pancsovay is well aware of business realities. How will she bring Borganika back to life while helping to drive Etesd and help the needy?

Pancsovay doesn’t see it as a problem.

“I’ll start slow and manage the event space in such a way that I can handle Etesd’s work as well,” she says. “With good organization, I’m sure I can handle both.

Everyone is talking about a second wave of COVID-19 coming in the fall, we need to be ready to help people all over again if that happens.”

If you would like to contribute to the great work being done by Etesd, go to their Facebook page, Etesd.hu, which is also its own website address.

4

www.bbj.hu

Budapest Business Journal | June 19 – July 2, 2020

Small is Very Beautiful in Somló BBJ columnist Robert Smyth’s tour around Hungary’s wine regions this issue takes us to the smallest of the lot, found in Veszprém County, northwest Hungary: Somló.

Approaching this region is a sight to behold as the 435-meter-high Somló Hill, a sawn-off, flat-top volcanic peak, capped off by the ruins of a castle, rises dramatically out of the surrounding plain.

As you get closer, you can see the patchwork of tiny vineyard plots that pack the hill, with press-houses scattered around. Its wines are equally dramatic. Somló may be the smallest of Hungary’s 22 wine regions, but it makes some of the country’s biggest whites.

It is a delight to walk up Somló Hill with its basaltic rock formations. These include the Barát Szikla (Monk’s Rock), which actually does resemble a monk. Further up and to the right of it, the Kőkonyha (Stone kitchen) is where the local hill dwellers used to cook.

Somló Hill was created when the surrounding land was carried away by erosion while the igneous basalt tuff stood firm.

The region also comprises two other hills: Kissomló (literally Small Somló) and Ság.

The earth here is predominantly based on that prized volcanic basalt and tuff bedrock.

Loess, Pannonian sand, ferrous clay and black “nyirok” soils make up the topsoil.

Somló Hill resembles the similarly-formed and also basalt-based Badacsony Hill, just half an hour’s drive away, but Somló doesn’t have Central Europe’s largest lake strongly influencing it; Badacsony Hill overlooks Lake Balaton directly. Subsequently, Somló makes it wines from, for the most part, a quite different set of grape varieties from its lakeside brother-in-basalt.

The region is densely planted with vines on

550 hectares

of bijou plots that yield powerful, fullbodied, acid-driven, age-worthy wines from indigenous varieties on perfectly situated vineyards, which often ensure ripe fruit. The region is highly fragmented in terms of the ownership of those plots.

The Somló Wine Region

Budapest

While Somló has the Furmint and Hárslevelű grapes in common with Tokaj, far away in the northeast of country, there’s also Olaszrizling which on its day can certainly match the usually more illustrious aforementioned pair for quality in this terrific terroir. However, it is the untamed, ultra-acidic yet highly unique Juhfark grape that is pretty much exclusive to Somló and is as distinctive as it rare.

Femle Imbibers

Literally translated as Sheep’s Tail, Juhfark currently accounts for around 12% of Somló’s total plantings, and was once prized for its supposed knack of aiding its female imbibers in the pursuit of conceiving male offspring; Queen Victoria a great fan and frequent Juhfark drinker.

While under-ripe Juhfark can be rustic beyond belief and aggressively acidic, at its best, when it is able to ripen fully on the best sites to bring sufficient fruit to counterbalance that acidity, Juhfark has impressive body, structure and substance, revealing distinctive notes of rhubarb, banana and pineapple, and a stony character.

There are also other hidden gems to uncover here, such as Imre Györgykovács’ Nagy-Somlói Tramini 2017, which flies in the face of the assumption that you can’t make high quality wine from this aromatic grape.

The hand-picked Tramini, which is always the first grape to be harvested, in order to preserve all important acidity, went into the old Kossuth press, which meant no sleep for Györgykovács, who tightened it every hour throughout the day and night.

Spontaneously fermented in old barrels, it certainly does capture the rosewater, lychee and floral aromas associated with the grape, but without overpowering the olfactory senses. Then, it gives and gives on the sublime, structured and very long palate that balances out the aromatic appeal of the nose.

It is currently on sale with a

30% reduction

at HUF 4,300 a bottle from Bortársaság; I expect that few consumers expect Tramini capable of producing fine wine. Györgykovács has been gradually selling off his plots as he moves towards retirement and his remaining wines are to be savored while we can.

In addition to excellent white wines and an award-winning Syrah, the Kreinbacher winery also makes the finest traditional sparkling wines in the country. Having now completed nine harvests, Kreinbacher has a whole

host of base wines to play with when blending, some of which come from further afield.

Real Substance

Kreinbacher’s Prestige Brut is 100% Furmint and spent a lengthy 24-30 months on the lees as part of the second fermentation in the bottle. It is yeasty with lots of brioche and biscuit notes, from the autolysis, whereby the lees integrate with the wine, though there is lots of juicy quince to give the wine real substance and drinkability, on top of its complexity (HUF 5,900 from Bortársaság).

Socialite | 17

As with most wineries, Kreinbacher decided to close the doors on March 20 due to COVID-19, and only started to welcome guests again on May 29. Cellar visits and tasting are going ahead, although with limited number of participants and extra care.

Thankfully, the whole of its hospitality team has been kept on while Accent Hotels, which operates the Kreinbacher designer hotel, has established its exacting Always Clean Program to ensure guests’ health.

The first weekend of the reopening (the Pentecost long weekend) saw a full-house and many á la carte guests in the restaurant, which is very spacious with a good distance between tables, as well as a terrace. Meanwhile, similar occupancy is expected for weekends with plenty of bookings from the springtime that guests wish to reschedule now.

A great place to gain an overview of Somló wines, and of wines from the wider volcanic world in general, is the Somlói Borok Boltja (located on the south side of the hill), run by the inimitable Eva Cartwright, who is a fountain of knowledge on volcanic wines.

She has between 20 and 40 bottles of wine open for sampling by the glass at any one time, and a total of

180 wines

by the bottle (she’ll open anything for a group of 10 or more people). Flights of wine can be arranged on request.

Somlói Borok Boltja is having its Midsummer Night tastings from 10 a.m. on June 19 to midnight on June 21, with Feri Tar of FineWines bringing wines from around the world.

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30 YEARS OF FREEDOM Socialist Party (the MSZP, basically the larger reform wing of the old MSZMP; the hardliners formed the Hungarian Workers’ Party, or MMP, which still exists today but is an electoral irrelevance and has never won a seat in parliament).

The 1st Government

Hungarian Prime Minister József Antall giving a speech during a campaign event in the 1990 Hungarian municipal elections. The photo was taken by Péter Antall. From the Antall-család archívum (Antall family archives).

The 1st Free Elections and the Formation of the Antal Government Thirty years ago, on May 23, 1990, a few weeks after the formation of the first freely elected Parliament in 43 years, the government of József Antall took the oath of office. With this, Hungary reached a huge milestone along its path of regime change.

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József Antall, Jr. with his two sons, György and Péter at Kékes in 1970. From the Antall-család archívum (Antall family archives).

Following the collapse of the Soviet Union, Hungary transitioned from a oneparty, socialist regime to a multi-party democratic system in 1989-1990. The processes of change, however, had started well before, and in parallel with the erosion of the communism.

Despite the best efforts of the Hungarian Socialist Workers’ Party (MSZMP), by the end of the decade the one-party system was badly cracked. In 1989, there was so much pressure on the government that it finally bowed to the opposing forces and split into two. The 1949 Constitution (more properly Act XX of 1949 on the Constitution of the Republic of Hungary) was modified and the Hungarian Republic was proclaimed on October 23, 1989.

Six months later, the first pluralist elections were held in Hungary, and a new government was formed. The run-up to the elections saw a series of events including the formation of the Opposition

Roundtable, formed by intellectual groups and movements. Among the leading parties was the right of center (although it was initially a fairly broad church) Hungarian Democratic Forum (MDF) which, by October 1989, had become Hungary’s largest opposition party.

The Forum was led by the Budapestborn József Antall, who, according to Wikipedia, rejoiced in the full name of József Tihamér Antall de Dörgicse et Kisjene, and was from an ancient Hungarian family from the lower nobility.

Antall duly became the MDF’s candidate for prime minister next spring, during the general elections which, following the dissolution of Parliament on March 16, 1990, were scheduled for March 25.

Of the more than 50 political parties and associations established prior to polling, 12 contested assembly seats at the national level. The most relevant among them were the MDF, the Alliance of Free Democrats (SZDSZ), the Independent Smallholders’ Party (FKGP, which had roots going back to inter-war years) and the Hungarian

The first round of polling on March 25 ended with only five definite results in the 176 local constituencies. Six parties participated in the run-off elections of April 8; the MSZP ran alone, but the SZDSZ allied with their fellow liberals the League of Young Democrats (FIDESZ), while the MDF, agrarian Smallholders and the Christian Democratic People’s Party (KDNP) formed an electoral pact.

Of these, MDF, led by Antall, emerged as the largest single party, taking 164 seats.

A coalition government was formed by the above three parties and Antall became the prime minister of the first government after the regime change.

“The new Antall government wants to be the government of freedom, the government of the people, the government of economic turnaround, and a European government.” These were the four key principles laid out at the beginning of the party’s program speech that Antall delivered on May 22, one day before the formation of the government.

He also stated some of the qualities of governance as he and his party members envisioned them, including the avoidance of extremes, the tolerance, and the circumspect but committed pursuit of progress.

“The speech was very sober and realistic wherever it touched on such details,” author Gyula Kodolányi, the writer of many of Antall’s speeches said in an interview with the Hungarian Review. “Antall did not make empty promises then or on any other occasion. He thought that freedom and democracy and the regaining of national self-determination are our cardinal rewards, and the rest will depend on talent, perseverance and the international constellation,” added Kodolányi, who was the son-in-law of poet Gyula Illyés, and the son of novelist János Kodolányi.

The 1st Prime Minister

The first prime minister of the country after the regime change was anything but a typical politician. He had the attitude and approach of the academic he was, with a unique vision. In an introduction to a book compiling Antall’s speeches, Géza Jeszenszky, the Minister of Foreign Affairs of his cabinet and also his brotherin-law, cites an obituary that describes Antall as “the unsung hero of transition in Central Europe whose vision, grasp of world affairs and performance were much appreciated by the political leaders of the early ’90s, but who was not given due recognition by the world press.”

In fact, Antall wasn’t popular with the foreign press at all: in a piece by the New York Times reporting on Antall’s death, the journalist called him a rather uncharismatic leader. “The Prime Minister of the first non-communist government

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The Government in Action

The Tomb of Antall József, by sculptor Miklós Melocco. Photo by hu:User:Ineptus represents a kind of legendary figure, the well-intentioned, decent, but oldfashioned, not too successful first leader following the regime change,” Jeszenszky writes. “But today even his former political opponents give belated recognition and praise for his personality and politics.”

“The new Antall government wants to be the government of freedom, the government of the people, the government of economic turnaround, and a European government.”

While he may not have been a typical politician, politics were not foreign to Antall at all. His maternal grandfather was a deputy secretary of state. His father, József Antall Sr., a jurist and civil servant, was one of the founding members of the Smallholders’ Party, and served as Government Commissioner for refugee affairs between 1939 and 1944 and helped saved the lives a of tens of thousands of people, mostly Poles. He resigned when Nazi Germany invaded Hungary (by then

looking for a way out of the war and its alliance with the Axis forces) and according to Wikipedia was even arrested by the Gestapo. He received official decorations from Britain, Poland and Israel after the war and continued to work for the government after 1945, but withdrew from politics after the Communist takeover in 1948.

Antall witnessed all these crucial moments of history and become an active part of it. During the 1956 revolution he was arrested several times and, while he escaped prison time, he was barred from the teaching profession and lost his job in a Budapest gimnázium (grammar school).

He found a job as a librarian and became the director of the Semmelweis Medical History Museum, 10 years after he joined it in 1964. He did not give up on history and politics either; along with many members of his later cabinet, he contributed to the formation and the strengthening of the opposition forces that led the country to the regime change.

When forming the government, Antall relied on the huge network of people he had built up throughout the years whose abilities he knew quite well. As Kodolányi put it, he carried around a personal encyclopedia in his head, containing the name, training, skills, character and family background of several thousand Hungarian intellectuals and professionals, of whom several hundred were personal acquaintances.

Hungarian Prime Minister József Antall with British Prime Minister Margaret Thatcher in Budapest, September 1990. From the Antallcsalád archívum (Antall family archives).

Many praised him for being able to assemble a cabinet with like-minded people, which was challenging in an environment full of politicians of the previous regime. Others, however, criticized him for assigning teachers with political cabinets, whose abilities they consequently challenged.

The Antall government’s “performance”, too, has been highly debated ever since by both right-wing and left-wing forces.

Depending on their inclination, they cite the lack of its firmness in general political questions or its grasp on economic issues.

What many fail to take into consideration is the heritage of the previous 40 or so years: the obvious economic and social difficulties, the enormous amount of state debt, the crippled industry or the loss of its major market, the Soviet Union.

These, together with a country that expected its new democratic political elite primarily to resolve economic difficulties and halt the deteriorating standard of living, soon led to dissatisfaction.

Tension rose as the economic difficulties became more apparent: in the first year of the Antall government, GDP fell by more than 10% and inflation was running as high as 35%. Probably the most memorable event during the Antall era was the taxiblockade in the fall of 1990, a subject we will return to in this series in a later issue.

In the Parliament as well there were heated debates, many revolving around symbolic issues, for example the instruction of theology in schools. The government’s inexperience in the democratic political practice or the novelty of new legal framework also served a cause for criticism.

There was a lot of friction within the coalition as well with the Smallholders Party taking a different approach in the questions or reparation (of lands), and eventually leaving the coalition altogether.

Despite the numerous negatives tied to his name, there were some highlight of his governance. It was thanks to Antall’s effective contribution that the Warsawpact and Comecon (the Council for Mutual Economic Assistance, known in Hungary by the initials KGST) were abolished. It was during his time in office that the last Soviet soldier left Hungary in June 1991.

Perhaps most importantly, he was able to ensure political stability in Hungary.

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The Death of Antall Antall and his government probably had little chance of being reelected but his party would have certainly done better in the 1994 elections had the prime minister lived to see that date, Jeszenszky writes. Soon after he took office, Antall was diagnosed with non-Hodgkin lymphoma, a type of cancer of the lymph glands. Though he received chemotherapy treatment his condition did not improve. On December 12, 1993, he died at the age of 61.

His funeral began on December 18, at noon: his coffin was taken from where it had laid in state in the Dome Hall of Parliament to a bier erected in front of the building. Speaker György Szabad, writer András Sütő and Abbot Pál Bolberitz made the formal farewells. From here, the procession left for the National Burial Garden on Fiumei út, where Cardinal László Paskai, Primate Archbishop of Esztergom, Reformed Bishop Lóránt Hegedűs, Lutheran Bishop Béla Harmati, Chief Rabbi József Schweitzer and László Tőkés, Reformed Bishop of Oradea, all spoke.

Many foreign leaders attended the state service: U.S. Vice President Al Gore and U.S. Ambassador to the United Nations Madeleine Albright, German Chancellor Helmut Kohl, President Lech Walesa of Poland, and many prime ministers and deputy prime ministers from the former Eastern Bloc and Europe.

His successor in the Prime Minister’s seat was his Minister of the Interior Péter Boross, but the 1994 parliamentary election saw the MDF suffer a serious defeat (it was never to be the same force again in politics) and, to the surprise of many, a win for the Socialist Party.

U.S. President George H. W. Bush with Hungarian Prime Minister József Antall in the White House garden in October 1990. Photograph was provided to the Antall family archives by the Bush Archives.