Focus on Hungary 2019

Hungary DI PLOM ACY

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COM M E RC E

PR E S E N T S

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C OW B OY S ( C S I K O S )

W I N E R EG ION

G U LYÁ S

Hungarians rode into Europe on horseback, and still today, you can see the cowboys in the plains of Puszta.

King Karoly made official Hungary’s Tokaj region - where wine has been produced since the 5th century.

It’s a world-famous Hungarian dish, but you haven’t tasted the real deal unless you’ve been to Hungary.

H U NGA R I A N SEA At almost 600 square kilometres, Lake Balaton is the largest lake in Central Europe.

PA P R I K A Today more than 1,000 tons of the spice are produced annually in Hungary. There are two paprika museums, Szeged and Molnar.

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The best Time to be a Hungarian Ambassador to Serbia

I N T E RV I E W

I believe that this is a special opportunity in history when the two countries and their political leaders embark on a collaboration that will likely have long lasting results ungarian Ambassador Attila Pinter speaks about the fact that the image of Serbia in Hungary has long been radiating positive, political, economic and cultural interstate relations nave never been better.

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Serbian President Aleksandar Vučić recently visited Budapest and talked with Hungarian Prime Minister Viktor Orbán about further improving bilateral relations, which he estimated had already reached the highest level in the history of the two coun-

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tries. What does our relationship look like to you?

— I believe that, this is a special opportunity in history when the two countries and their political leaders embark on a cooperation that will likely have long lasting results. The way I see it, the reconciliation between our countries is a definite success story not just on a political level, but it presented an opportunity to bring our people closer.

Since then, the political, economic and cultural activity between Budapest and Belgrade has intensified bringing new

H . E . AT T I L A P I N T É R Ambassador of Hungary

In the past years, we have built many bridges, now we need to use them for the benefit of both countries

momentum to the already established cooperation. Not to mention that Hungary also supports Serbia on its journey towards the European Union. It is a great thing to be a part of this, since Hungary has relevant experience in accession negotiations that can be beneficial for Serbia. As a personal note that I might add, this is probably the best time to be a Hungarian Ambassador in Serbia.

This year, 11 agreements were signed between Serbia and Hungary. Can you tell us what these agreements mean for our two countries?

— Negotiations bear fruit when they end with some well-determined result, such as the signing of an agreement.

The number of our bilateral agreements is growing every year and they create bridges between our countries. If com-

panies, public administration bodies or citizens wish to cooperate with a Serbian or a Hungarian partner, need help or assistance in the respective country, they have a strong legal basis to rely on.

I also want to indicate that there is a significant interest to cooperate from both the public and the private sector.

The agreements we signed encompass various fields like economic cooperation, political consultations, border management, military cooperation and infrastructure. As neighboring countries, we have many areas to exploit for our joint success. It is not just a question of geographical proximity but also a strong feeling of friendship and trust that we managed to establish in the past years.

The agreements reflect these efforts.

tive tender to rebuild the Hungarian section of the rail line between Budapest and Belgrade has been won by a Chinese-Hungarian consortium; construction could start early in 2020 and be completed within five years. A total of 350 kilometers of railways line will be refurbished, with 166 kilometers on the Hungarian side. As a result, the journey time for passenger trains between the two capitals will be reduced to 3 hours, and will offer the fastest freight route between China and the Western half of Europe via the Greek ports. This investment will significantly strengthen Hungary’s and Serbia’s position in the competition for the route along which goods are transported towards Western Europe.

How much progress has been made in Hungary when it comes to realizing plans to rebuild the Belgrade-Budapest railroad?

— The modernization of the Budapest-Belgrade railway line is one of the largest infrastructure development projects in the Central European region.

An investment of this magnitude requires due care and diligence, in the best interests of the participating countries, while also striving to find the most favorable financing facility available. I can confirm that the cooperation between the partner countries are exemplary and relies on mutual respect and determination to create a corridor of international significance. The respec-

How would you assess cooperation between the two countries when it comes to the rights of minorities?

— The protection of the Hungarian minority’s rights is of outmost importance to the Hungarian government. Overall, there are millions of Hungarians living outside the borders of Hungary, with a sizeable community residing in Serbia.

It is our will to support them in leading a successful life in their place of birth – the place they call home – while they should have the means to preserve their national identity. The Serbian government did outstanding efforts to safeguard the rights of the Hungarian minority in Serbia. The minority action plan is the legal basis for all efforts,

which also complements the EU accession agenda of Serbia in that field. Furthermore, Hungarians have good representation on all levels of public administration and in politics as well. The rights they enjoy here in Serbia show a good example of coexistence in a region that has a difficult history and a rich ethnic background.

The modernization of the BudapestBelgrade railway line is one of the largest infrastructure development projects in the Central European region

How do you see our relationship in the future?

— I think that Serbian-Hungarian relations are looking towards a bright future in which our cooperation can extend to even more areas. In the past years, we have built many bridges, now we need to use them for the benefit of both countries. Regular consultations, high-level meetings and expert level coordination will continue in the future.

We also hope to organize the joint session of the two governments in 2020 as well. At the same time, I am optimistic that we can contribute even more to the EU accession agenda of Serbia. It is our firm belief that the negotiations should move forward in a quicker pace and we offer our support in that venture. Finally yet importantly, our rapidly growing bilateral trade and investment agenda will also open up a new perspective for the benefit of both parties. Hungary considers Serbia a strategic partner and that is why we wish to invest more in the country and build new connections for the better exchange of goods and services.

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In the Top 15 Companies in Serbia

An increasing number of consumers trust us, which can be easily seen from the sales and the growth in the number of transactions C O R P O R AT E

A N T E A RA L I C A CEO of MOL Serbia

OL Serbia has appointed Ante Aralica CEO of MOL Serbia in May. Mr Aralica is expert for corporate restructuring and organization of the sector with the view of improving the operations of large corporations.

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The press release, following your appointment as the CEO of MOL Serbia, states that you will contribute to the company’s further development by utilizing the knowledge gained in leading positions in the tobacco and retail industries. Could you tell us about your plans?

— MOL has been present in the Serbian market for 15 years. Our customers recognize us for our high-quality additive EVO and EVO PLUS fuels, which increase engine performance and reduce gas emissions, as well as for our aspirations to follow and meet their needs in the non-fuel segment. By expanding business activities, MOL Serbia has positioned itself as second in terms of the volume of oil derivatives it puts out in the market. Also, recently we have opened a new fuel terminal in Sremski Karlovci, intending to secure the supply of high-quality fuel to the market, which will directly be coming from the MOL Group refineries. Apart from the fuel, our portfolio meets the customer needs for different products in the lubricants, bitumen and petrochemicals segments.

The goal for the upcoming period is improving our business results. In

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addition to having a quality product, it is important to provide superior service and approach your customers in the right way if you want to have a successful business. This is why, in the following period, our focus will be on our customers - meeting their needs, introducing the technological innovations at service stations, and continuing the employee development following MOL values and our corporate culture.

Where do you see MOL Serbia in the next five to six years?

— The world, the way of life, customer needs and even the oil industry – everything is changing. Changes in customer habits are driven by rapid technological development and increased environmental awareness. MOL Serbia is a part of MOL Group, which has a clearly defined 2030 Strategy, which recognizes the expected changes in the oil industry, as well as the importance of technology and innovation. Part of the 2030 Strategy is diversifying the portfolio and entering new industries, such as petrochemicals, but also bringing customers closer to services such as the Fresh Corner Concept, which has been present in Serbia since 2015.

Fresh Corner is a regional concept that involves top quality product offering - coffee that makes us recognizable, but also fresh food, crispy pastries and sandwiches. The popularity of Fresh Corner and our coffee is best illustrated by the fact that, in 2018, more than 47 million cups of coffee were sold at

Fresh Corners across the region.

For all of us who work at the company, the 2030 Strategy defines the direction and path we take in meeting the market challenges, but also helps us lead the changes that lie ahead. The ultimate goal is to remain the number one choice of our consumers.

What share of the Serbian market is set as the company’s ultimate goal?

— An increasing number of consumers trust us, which can be easily seen from the sales and growth in the number of transactions. That is why, for us, it is important to be as close as possible to them; accessible in all parts of Serbia.

With that in mind, the priority for the upcoming period is the retail network expansion and the opening of new service stations, both in Belgrade and in cities across Serbia. With the expansion of our retail network and the introduction of new personalized services tailored to customer habits, we are convinced that success will follow, further contributing to boosting our market share.

MOL has been present in the Serbian market for 15 years

How satisfied are you with the business results so far?

— In 2018, in terms of operating income, MOL Serbia was among the top 15 companies in Serbia. Our stations are, for a long time now, not simply places where you can only buy fuel – there you can also drink coffee, have lunch, pay your bills… Our loyal customers care about their cars and that is why they opt for high-quality fuel that enables high engine performance. To reward their loyalty, we have launched MOL Plus club loyalty programme, whereby interested consumers can collect points easily when making purchases at MOL Serbia stations. We are proud of having 200,000 loyal customers.

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No Limitations There are really no limitations when doing business in a neighborly country I N T E RV I E W

e talked about the success of Serbian-Hungarian economic relations with Mr. Tamás BAKÓ, Head of Office Deputy Head of Mission for Economic Affairs Embassy of Hungary.

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How do you see the current state of the economic and the political relations of our two countries?

— The recent years brought substantial improvement in our bilateral relations. The volume of bilateral trade broke all records and in 2018 exceeded 2.5 billion EUR. This dynamic boost is a result of the excellent political relations and well-grounded state incentives provided by the Hungarian and Serbian governments, aiming at ensuring an unfettered market access and steady flow of goods and services. The regular high-level visits accompanied by business delegations, the annually organized Hungarian-Serbian intergovernmental summits and the sessions of the Joint Economic Commission, together with the excellent chamber relations will provide great contribution fora positive business climate. These endeavors are complemented by a special focus on promoting Hungarian investments in Serbia. I would highlight two of the recent investments made by Hungarian companies: in September this year the internationally renowned petrochemical company MOL opened an oil-storage and logistic center in Sremski Karlovci – so far the company’s biggest investment in Serbia – while the Hungarian OTP Bank Group just recently closed the deal on the acquisition of Societe Generale Srbija. These success stories are a clear indication of the long-lasting economic partnership established by the Hungarian and Serbian Governments.

Hungary is one of Serbia’s most important trade partners. According to your data, what did the trade between Hungary and Serbia? How many Hungarian companies do currently do busi-

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TA M Á S BA KÓ Head of Office Deputy Head of Mission for Economic Affairs, Embassy of Hungary

The recent years brought substantial improvement in our bilateral relations

ness in Serbia? How present are Serbian companies in Hungary?

— The volume of bilateral trade has been showing a steady growth, which can be illustrated with the following figures: in 2013 the value of trade totaled 1.6 billion EUR; last year the respective volume reached 2.5 billion EUR. That is a remarkable 52.5% increase in just five years. This tendency continued in 2019 and in the first six months the volume of bilateral trade already reached 1.3 billion EUR, an increase of 7.1% compared to last year’s data. Based on the account balance, the Hungarian surplus is still prominent; the share of the Hungarian export from the total trade is 63.3%. However, the Serbian contribution is gradually increasing, meaning that we are on a trajectory leading to a more balanced bilateral foreign trade. The most important product imported from Serbia to Hungary is electricity; in 2018 this single commodity counted for 28.4% of the total import volume. On the other hand, petroleum products, electric current and medicinal and pharmaceutical products are the main export commodities shipped from Hungary to Serbia. Along with the big investors, there are a couple of hundred Hungarian companies operating in Serbia. A substantial amount of them are joint ventures that represent the Hungarian company throughout the Western Balkans.

How often do Hungarian businessmen turn to you for advice as to how

to reach the Serbian market and how do you present Serbia as an investment destination to potential investors?

— Addressing inquiries coming from Hungarian businesses and assisting their endeavors on the Serbian market have always been a dominant part of the assignments of the Embassy’s Economic Section. With the intensification of the Hungarian-Serbian economic relations we experience an increase in these type of requests. There are several factors that make Serbia an ideal export destination for Hungarian companies: the close proximity, its central location in the Balkan Peninsula, along with the growing stability and competitiveness of the economy creates an excellent business climate where Hungarian companies can thrive.

In which fields can companies from the two countries establish cooperation?

— The bilateral trade relations in the fields of agriculture and manufactured goods are traditionally strong and long-established, and the business ties in the energy sector are also illustrious. Water management is a particularly relevant sector, as Hungarian companies have internationally recognized references and competitive technologies that provides an excellent opportunity to capitalize on. ICT and digitalization are dynamically emerging fields that also reserve notable potential for future cooperation. There are really no limitations when doing business in a neighborly country

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C O R P O R AT E

Hungarian OTP Group Assumes a Leading Position in the Serbian Banking Sector

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n May 2019 Vojvodjanska banka and former OTP banka Srbija have officially completed one of the most complexed integration process at the local financial market and continued with successful operations in our country under the name Vojvodjanska banka. The merged bank is currently the 6th largest bank in the Serbian market, with almost six percent of market share, more than a million clients and the 3rd largest branch network. Recently, the OTP Group acquired Societe Generale Bank in Serbia which is now operating with the new name – OTP banka Srbija AD Beograd. In this way OTP bank brend is re-introduced at the local market.

With this transaction successfully closed, OTP Group further strengthens its market position in Serbia as the integration process of these two banks will result in creating the leading banking institution on the Serbian market by size of assets, number of branches and loan and deposit portfolio.

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SUCCESSFUL FIRST HALF OF 2019 In the first 6 months of 2019 Vojvodjanska banka achieved net profit of RSD 5.9 billion, which is growth of 100% compared to the same period last year.

The Bank achieved in the first half of 2019 exceptional results in the area of lending, with growth in both the retail and corporate banking segment. Loans to households and entrepreneurs increased by 3.7% compared to the end of 2018 and reached the level of about 66 billion dinars, primarily as a result of cash and housing loans. Loans to legal entities recorded an even more dynamic growth of 5.0% compared to the end of the previous year reaching amount of RSD 70 billion. Despite the fact that in the previous period there was a significant decrease in the general level of interest rates, net interest income increased by 7% compared to the same period last year and amounted to RSD 3.78 billion.

This year Vojvodjanska banka has received two significant awards from leading international banking and financial institutions. Commerzbank and Deutsche Bank have awarded prestigious awards for commercial payments and financial transfers, confirming exceptional quality, high standards and efficiency in this category of business.

The Bank is a member of OTP Group, the largest financial services provider in Hungary and a dominant regional banking group in the CEE market. The

banking group is present in 11 countries in the region including Hungary, with a client base of almost 18.5 million and nearly 36.000 employees in Hungary and in its subsidiaries in Albania, Bulgaria, Croatia, Moldova, Montenegro, Romania, Russia, Serbia, Slovakia and Ukraine. OTP Group’s consolidated accounting after tax profit in the first half of 2019 was HUF 178 billion (EUR 550 million), which is 15% more y-o-y. In 1H 2019 OTP Group posted HUF 202.6 billion (EUR 626 million) adjusted after-tax profit underpinning a 19% y-o-y increase, whereas the profit contribution of foreign subsidiaries increased y-o-y (1H 2018: 39%, 1H 2019: 45%). In 2Q 2019 OTP Group posted HUF 112.2 billion (EUR 347 million) adjusted after tax profit (+23% y-o-y, +24% q-o-q) which is an all-time high quarterly result. At the end of 2Q 2019 gross operative liquidity reserves of the Group comprised EUR 7.2 billion equivalent.

At the end of June 2019 the consolidated Common Equity Tier1 ratio under IFRS – including the semi-annual net result less dividend – was 15.9%.

NEW INTEGRATION - VOJVODJANSKA BANKA AND OTP BANKA SRBIJA In the next period, both OTP Group member banks’ main focus will be to maintain the highest level of service quality, while working with clients, and the successful implementation of the integration process. With this

In the first 6 months of 2019 Vojvodjanska banka achieved net profit of RSD 5.9 billion, which is growth of 100% compared to the same period last year

transaction, OTP confirmed not only its long-term and serious commitment to the Serbian banking market but also demonstrated that OTP Group has a solid foundation, it is well capitalized, has an outstanding liquidity, and the management is committed to strengthening regional presence.

The process of integration of OTP banka Srbija and Vojvodjanska banka is starting now and it is planned to be achieved by 2021. Until the merger, the two banks will operate as separate legal entities, but their clients can already withdraw money from wide network of more than 300 ATMs of both banks in Serbia without fees for debit cards.

Corporate social responsibility as an important aspect of success For many years the Bank has been very active in CSR activities and has participated in support of local community projects as well as investments in social, educational, cultural and sports development. Cooperation with the Olympic Committee of Serbia lasts for five Olympic cycles and continues with the support of athletes on route to the 2020 Tokyo Olympics.

The Bank has supported quite a few programs implemented by UNICEF in Serbia which take care of the most vulnerable children and their families.

Through long-term cooperation with the Gallery of Matica Srpska, the bank is continuously working to preserve the rich cultural heritage and to introduce new technologies in service of art.

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More Than Just a Neighbour The value of the external trade between the two countries is expected to reach 3 billion euro any people in Serbia remember the 1990s as a period when Serbia was under economic sanction and people went shopping in Hungary. Both Hungary and Serbia have come a long way since then.

Hungary has become a member of the European Union and NATO, and Serbia is a candidate for EU membership.

Yet the relationship between the two states transcends the fact that they are neighbours. We are not only neighbours from across the border but also peoples who have lived together for centuries.

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Throughout history, Serbs have been educated in Pest, Szentendre, and other parts of Hungary. Today, there are many more Hungarians in Serbia than Serbs in Hungary, but there are also very few ethnic problems, while the official visits of the Hungarian PM, Viktor OrbĂ n are always considered friendly.

Judging by the official visits and statements from top officials from both countries, the cooperation between Serbia and Hungary is getting increasingly stronger. The value of the external trade between the two countries is expected to reach 3 billion euro. Since 2013, the

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The value of last year's external trade amounted to 1.7 billion euro

trade between the two countries has grown. In recent years, Serbia and Hungary have been focusing their cooperation on agriculture and the IT sector, but now, the cooperation is taking place in almost every segment of the economy - from industry to environmental protection and finance. The value of last year's external trade amounted to 1.7 billion euro, with the figures going up year-on-year not only in terms of import and export but also working on joint projects.

Last year, the two governments signed bilateral agreements in the field of infrastructure, and this year they are beginning to implement the agreed projects. Serbia mainly exports automotive components and parts for the machine industry to Hungary, and imports mostly medication and gas oils. The opportunity for increased business cooperation lies in the food and environmental sectors, as well as in the machine-building industry.

Looking at the statistical data on both sides, we can see an increase in virtually every segment. Good results have been accomplished in terms of export and import of electricity, but also agriculture. OTP acquiring Vojvodjanska Banka in late April was an important event for the economy of Hungary and Serbia, as was the merger between Societe Generale Bank and OTP. Hungarian oil company MOL Kooja is also planning to expand its operations in Serbia.

According to the Statistical Office of the Republic of Slovenia, in the Janu-

ary-March period of this year, the total external trade in goods with Hungary amounted to 453 million euro. The value of total exports of goods to Hungary in this period amounted to 186.5 million euro, while Serbia imported 266.5 million euro worth of goods from Hungary. The export-import ratio stood at 70 per cent. According to the Agency for Business Registers, there are 899 active economic entities registered in the territory of Serbia, which are majority-owned by Hungarian nationals or legal entities registered in Hungary.

Serbia and Hungary are also preparing an intergovernmental Comprehensive Strategic Partnership Agreement.

Our countries have no open and unresolved political issues. Hungary is Serbia's third most important external trade partner among European countries. Eleven new agreements have been signed covering almost all areas, from infrastructure and education to environment, defence and security.

The Rabe-Kibekhaz crossing will also be opened this year. In 2020, the Horgos border crossing will be extended.

Another thing worth noting is that Serbia and Hungary are hoping to merge electricity exchanges by the end of this year - Serbian SEEPEX and Hungarian HUPX. The merger will create a powerful regional stock market for the benefit of the entire region and allow the two exchanges to have a unique presence in the electricity markets in the countries of Central-Eastern and Southeastern Europe.

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Strong Growth for Several Years GDP growth was expected to have remained robust at around 4%

ECONOM Y

ungary has experienced strong growth for several years. GDP growth was largely supported by the surge in the disbursement of EU funds and rising disposable income. A strong cyclical recovery in domestic demand has enabled Hungary to mitigate the slowdown of the international economy in 2018. GDP growth was expected to have remained robust at around 4% (4.8% according to Hungarian Central Statistics Office, with a quarterly growth reaching up to 5% in the last three months of 2018).

However, the domestic cycle has peaked, while export growth has remained modest, which could bring economic growth down to 3.4% in 2019 and 2.6% in 2020.

Investment grew rapidly across all sectors, supported by high capacity utilisation rates, the recovery in the housing market and pro-cyclical fiscal expansion. It should stabilise at a high level relative to GDP in the coming years, in line with the absorption of European funds and the reduction of value added tax on new homes. External debt has declined significantly in recent years, as has public debt, but at a much slower pace (down from 73.6% to 71.3% in 2018 according to IMF forecasts). The increase in domestic demand has resulted in a moderation of the external current account surplus from its record level of 2016 and the forint has recently depreciated against major international currencies. Growth in private consumption is supported by a strong labour market, a high level of business confidence and relaxed credit conditions. Strong growth in demand and labor costs supports core inflation, but the decline in global oil prices and the subsequent drop in energy prices in Hungary are expected

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to keep headline inflation around 3% between 2019 and 2020. S&P and Fitch upgraded Hungary's credit rating early 2019, lauding the country's "resilient export-driven economy, strong external profile, low private-sector debt, and the flexible exchange rate regime". On the political front, Viktor Orban won a third straight term in the general election of April 2018 as his anti-immigration campaign secured a strong majority for his Fidesz party in the Parliament by granting two-thirds of the seats. Freedom House reduced the status of Hungary to partially free in 2019, denouncing "sustained and ongoing attacks" against democratic institutions of the country by the government.

Employment had risen to new levels and the unemployment rate was expected to have dropped to 3.9%. Unemployment rate should drop further in the coming years to stabilise around 3% by 2020. Labour shortages, amid the population decline, and minimum wage increases should continue to lift real wages.

Hungary's economy is very open, with trade accounting for about 172% of GDP (World Bank, 2018). Car and spare parts industry account for the highest share of exports and imports.

Medicine and data processing machines are also among Hungary's main exports whereas electronic circuits and petroleum products are among main imports.

The European Union is by far the largest economic partner of Hungary, with Germany being the main trading partner both for imports and exports (27.3% of exports, 26.5% of imports).

Romania is Hungary's second receiver of goods and products (5.2%), followed

by Italy, Austria and Slovakia. Austria is the second supplier of goods and services in Hungary (6.2%), followed by Poland, Slovakia and China. Hungary's trade balance, which was traditionally in deficit, started posting surpluses more recently owing in particular to the good health of the German economy.

Car and spare parts industry account for the highest share of exports and imports

MAIN SECTORS OF INDUSTRY The agricultural sector, which has been the dominant force in the country's economy for many years, now represents 3.3% of GDP and employs 4.75% of the working population today. Cereals, fruits, vegetables and wine are the main crops.

Industry accounts for 26.44% of the country's GDP and employs slightly less than 30% of the working population and is very open to foreign investment (manufacturing almost consistently ranks top receiver of foreign direct investment). The automotive and electronics sectors are the two main industrial sectors, representing 30% of exports and 15% of GDP. The services sector contributes 54.85% of GDP and employs almost 65% of the labour force. S&P and Fitch upgraded Hungary's credit rating early 2019, noting that the services sector has become competitive and boosted exports.

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A Tale of Two Cities

Going with its size is its beauty and is considered a master piece from all angles

he capital city of Hungary is known to be one of the world's most beautiful cities. Cut in half with the Danube, the river takes a striking place in the make up of the city as well as being one of the natural highlights for visitors.

Prior to the formation of the city now known as Budapest, the cities were actually separated by the river into their comparably and aptly named parts: Buda and Pest.

The segments of the city are not just separated by the river, but make up unique features in the city of Budapest based on the history from long ago.

If Buda could be described as having sites relating back to years past, Pest would symbolize all things present and future in being the home of Hungary's Parliament and modern government.

Those wanting to stay longer by renting one of the many apartments in Budapest might want to keep the following sights in mind when deciding on which half of the city to stay in during an extended stay.

The most famous visiting spot in Buda (Western Budapest) is the district known as Castle Hill, home of the Royal Palace. Unlike many palaces in the world, which have enjoyed relative stability throughout the years, the Royal Palace of Buda has only seen unrest.

Times of trouble for this particular palace includes a full destruction in the

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Prior to the formation of the city now known as Budapest, the cities were actually separated by the river into their comparably and aptly named parts: Buda and Pest

late 1600s after being built for 300 years, damage during rebellions in the 1800s, and partial destruction during WWII when being occupied by German soldiers. Interestingly enough, the palace has never actually been occupied by the Royal Family and is now a historical relic of years past. The nearby Fisherman's Bastion is not a royal monument but rather a monument dedicated to the fisherman who defended the city during the centuries of preceding wars.

The wall of the city, as it is said, was protected in various segments by merchant classes as de facto troops with ingrained bonds of fellowship.

Now the structure is one of the most beautiful monuments in the city visited for its design as well as amazing views of the Danube and neighboring Pest.

If you have limited time in Budapest and can only pick one spot to visit, this is it. The Parliament building of Pest is famous in its own right as it is the largest Parliament building in Europe and said to be just 1 meter wider and longer than England's own building of similar design.

Going with its size is its beauty and is considered a master piece from all angles. After appreciating the architectural brilliance of Budapest's Parliament, visitors are encouraged to go inside and see the Hungarian Crown Jewels which were last used in 1916 and only put on display in 1978 after a long chain of in-

ternational possession to avoid theft during WWII. Getting in to the actual hall, however, is a bit more difficult as tickets are sold for designated tour slots each day and often sell out prior to 11am.

The easiest way to get tickets is to line up infront of the security fence when the ticket office opens in the morning.

The only notation visitors have to go by is a small sign that says “Buy Tickets” where to begin the queue.

Waiting is a leap of faith that someone will come and let you in, but rest assured tickets do go on sale and the line progresses at a snails pace. When returning the process is similar with the line beginning at the “With Tickets” sign and very little announcements to when tours actually begin. So when visiting Budapest's Parliament, it is best to be alert as to what is going on, as you might just get passed up in the process.

When visiting Budapest, getting into the historical separation of the old cities of Buda and Pest will yield a valauble perspective into the development of the city that we all know today. With the contrasts between the old palace and the new parliament, the difference between the two sides becomes incredibly striking. In having two unique sides to the story of Budapest, the old cities are a perfect place to spend some extra time in one of the many Budapest apartments, and really get to know the city.

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T R A DI T ION

White Gold Every process of forming the porcelain mass through melding and burning to the painting is done manually in Herend, even today he Herend Porcelain Manufactory has been following the same traditions in its craft since its foundation. The Herend Porcelain Manufactory specializing in luxury hand-painted and gilded porcelain, was founded in 1826 by Vince Stingl with a focus on earthenware pottery making. He went bankrupt later on and his creditor Mór Fischer began running the company from 1839.

He seized an incredible opportunity, by manufacturing porcelain items that matched the designs of traditional Far Eastern and German Meissen tableware, to serve as replacements for broken items. Very soon Hungarian’s wealthy became regular clients.

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Hungary presents a Herend porcelain set as official gift to the newborn British Crown Prince George

Some time ago this porcelain was called “white gold” and it was an honourable privilege to own some of this precious treasure. Every process of forming the porcelain mass through melding and burning to the painting is done manually in Herend, even today. The porcelain of Herend is a Hungaricum, a part of the Hungarian Heritage. Herend Porcelain Manufactory became the royal producer of porcelain during the time of the Austro-Hungarian Monarchy. The Hungarian aristocracy ordered the replacement of their china sets only from Herend.

Porcelain Manufactory was represented in many world exhibitions — in London in 1851 and 1862, in Paris in 1867 and 1937, in Vienna in 1873 and in Brussels in 1935 — and it was often awarded. The turning point was its first World Exhibition in London, where the chinoiseries met with great acclaim.

Queen Victoria purchased a set with butterflies and purple peonies on it for her castle in Windsor. This pattern became the symbol of Herend afterwards.

Herend Porcelain Manufactory resides on three main pillars: profitable economy, social responsibility and solidarity. The brand symbolizes luxury, ele-

gance, constant renewal, the best quality and uniqueness. History did not always appreciate the manufactory’s art: during World War I, for example, most of the workers were recruited by the army, so the workshop was running at a minimum.The manufactory was busier during World War II, as electric insulators and medical equipment were produced there at that time. Herend Porcelain Manufactory was nationalized in 1948 and it was operating as a part of the Fine Ceramic Works until 1981.

Herend Porcelain Manufactory operates today as the world's largest porcelain manufactory and as a profitable enterprise. Herend achieves the balance of tradition and innovation passing on its 19th Century traditions into the 21st Century.

Hungary presents a Herend porcelain set as official gift to the newborn British Crown Prince George.

The birth of the new princess is also celebrated by sending Herend porcelain to the British Royal Court. Herend has been the embodiment of the balance between tradition and innovation for more than a century. This way, Herend’s traditions managed to live on in the modern world of the 21st century.

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ungary may lack ocean access, but it has its own brand of water wealth. The landlocked nation is teeming with thermal water springs—more than 1,300, with 123 in Budapest alone—which bring infinite opportunities for year-round bathing in spas all over the country.

These water sources are rich in dissolved minerals, with the exact mineral content varying depending on the location. They are curative as well as luxuriously calming. Some are sulfurous-smelling, some are salty, and some

H The Land of TOURISM

Thermal Spas Soaking in the warm mineral waters is part of a balanced life in Hungary 14

have other special properties; they are each specifically recommended for healing certain health conditions. Wellness and spa culture have been a part of the Hungarian lifestyle for hundreds of years. Soaking in the warm mineral waters may feel decadent, but these spas aren’t seen as indulgences. In Hungary they are just part of a balanced life.

Hungary’s spa culture began in Roman times, but some of Budapest’s most stunning bathhouses were built during the 150 years of Ottoman rule. These 16th-century bathhouses have similar

Wellness and spa culture have been a part of the Hungarian lifestyle for hundreds of years

of socialism thermal water got associated with old people suffering from rheumatoid arthritis. Perhaps this also had to do with the state our baths were in back then, but luckily the situation changed a lot in the last 20 years. In a Hungary where the middle class is rising again, thermal spas keep opening, from the Zala region to the Great Hungarian Plain, and not only old people visit them to heal as on a cloudy day the thermal spas around Lake Balaton are full of families with children, thanks to the many waterslides and other amusements, and to the cleanliness of these places. For the tourists that come to see Budapest, it has become an almost obligatory part of the programme to visit one of the many traditional baths. Those who go on hiking tours in the mountains of the Bükk or the Mátra can relax their tired muscles in the pools of a spa. The quiet wellness section of a thermal spa is also perfect for a romantic rendezvous. Cold winter days are a real stress for our body, not to mention that five days of hard work can drain the soul, so the weekend is just the right time to sit in the sparkling water pool with a couple friends, discussing all the important things in life.

structures with central octagon-shaped pools topped by high domed ceilings through which rays of light pierce the water. There are smaller pools surrounding the main one, and saunas and steam rooms beyond. Budapest’s Turkish bathhouses—the Rudas Fürdő, Király Fürdő, and Veli Bej Fürdője—are all located near the Danube bank on the Buda side, close to the thermal sources. Besides the Turkish bathhouses, Budapest boasts many other historic baths, earning it the moniker “Spa City.”

For some reason during the years

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HUNGARY D I D YO U K N OW

Dobos Torte he legend of dobos torte started in 1885, when the Hungarian confectioner Jรณzsef C. Dobos introduced his pioneering cake at the National General Exhibition of Budapest. Dobos torte is among the most prominent Hungarian dishes, made from sponge cake layered with chocolate buttercream and topped with caramel. Both the technology, form and taste was groundbreaking in its time. The main ingredient, the buttercream, was unknown and was used for the very first time. Dobos kept his recipe secret until his retirement, although now dobos torte has many more variations.

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