Diplomacy&Trade 2021 September

’TRAFFIC LIGHTS’ OR ’JAMAICA’ OR...

SEE ANALYSIS ON page 08

Switzerland

The intensification of the high-level political dialogue between Switzerland and Hungary, as demonstrated by three recent ministerial visits, reflects the developments which have taken place and still take place in both countries and in Europe. That is according to the old-new Ambassador of the Swiss Confederation in Budapest, Jean-François Paroz. He also highlights to Diplomacy&Trade the importance of cooperation with all stakeholders in bilateral relations.

see compilation on pages 10-25

The Bonds of Friendship

‘Triangle’, an English-Hungarian co-production graduation film at the Arts University Bournemouth by Hungarian director Péter Engelmann has attracted international interest. Now, he tells Diplomacy&Trade about this movie described as “a sci-fi pseudo-docu drama exploring the dark realms of the human mind.” His graduation film attempts to positively affect real life situations of three strangers who are about to become friends for life. see article on page 30

GERMAN VOTERS GO TO THE POLLS TO ELECT SUCCESSOR TO CHANCELLOR MERKEL

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letter from the publisher

The end of this September sees the German parliamentary elections that will decide the successor of Chancellor Angela Merkel who leaves behind a controversial legacy. The most popular candidate for next Chancellor is Olaf Scholz, who is currently Vice-Chancellor and finance minister. He is likely to head a coalition with the Free Democrats and the Greens. Whatever the outcome may be, our analyst predicts that the Bundestag elections are likely to produce a ‘pedestrian leadership’ while Germany would need a charismatic leader.

The country in focus this month is Switzerland that is represented in Hungary by an old-new ambassador who returns to Budapest after a posting in Japan. He highlights that both countries are determined to dialogue in bilateral and European affairs as well and he is glad to see the growth in Swiss investments in Hungary.

The other occasion for the Swiss Focus is the visit to Budapest by the head of the Federal Department of Foreign Affairs, the Swiss ‘foreign minister’. He was one of the speakers at this year’s Ambassadors’ Conference. Of course, we share with you the views of the leaders of the Swiss-Hungarian Chamber of Commerce, a summary of a webinar on the prospects of the Swiss economy and we also present several Swiss businesses.

The culture page presents Hungarian director Péter Engelmann and his graduation film at the Arts University Bournemouth, “a sci-fi pseudo-docu drama exploring the dark realms of the human mind,” experimenting the bonds of friendship.

The WittyLeaks column is authored by the Chargé d’Affaires of the United States Embassy, an enthusiastic and experience hiker who stresses that there is more to see than Budapest. Hiking the Blue Trail, he says he has been fortunate both to experience the natural beauty of Hungary and to meet interesting Hungarians along the way.

The apropos of our wine article this month is that the Gróf (‘Count’) Degenfeld wine estate and castle hotel celebrates its quarter-century anniversary. The family, deprived of all their estates and possessions after World War II, returned in the 1990s to rebuild the family business in the Tokaj region. Soon we will see the beautiful colors of fall. Take some time and enjoy the outdoors before the cold weather sets in.

Peter Freed PUBLISHER

cont en ts

05 ON THE RECORD

06-07 COMPANY BRIEFS

08 ANALYSIS

Bundestag elections in Germany

10-25 SWISS FOCUS

Interview with Ambassador JeanFrançois Paroz; Councilor Cassis visits Hungary; Swisscham; Roche; Eisberg; Novartis; Givaudan; Philip Morris; Stadler; Swiss economic outlook; Nestlé; Btech

26-27 TAIWAN NATIONAL DAY

28 WITTYLEAKS by the Chargé d’Affaires of the United States

29 WHAT’S ON Concerts, festivals, events and exhibitions in and out of Budapest

30 CULTURE

page 28

page 31

PUBLISHER: Peter Freed EDITOR: Sándor Laczkó PHOTO EDITOR: Dávid Harangozó

SALES & MARKETING DIRECTOR: Tamás Varga ADMINISTRATION: Éva Madarász

CONTRIBUTORS: Sándor Laczkó, Tamás Magyarics, Marc Dillard

PHOTO CONTRIBUTORS: depositphotos.com (cover), Csaba Bántó (cover), Sebastian Heck, btk.elte.hu, Brain Bar, depositphotos.com, Budapest Airport/Róbert Baranyi, lhss.co.uk, Magyar Suzuki Zrt., Horizon Development, Givaudan, Philip Morris International, Stadler, Attila Vörös, SwissCham, Twentyten, Nestlé, U.S. Dept of State, Marc Dillard, Design Without Borders, Liszt Ünnep/Péter Rákossy, Attila Kleb, Katja Ruge, Joseph Szabó, Csaba Bántó, Gróf Degenfeld Wine Estate & Castle Hotel, Chris Garamvolgyi, Ferenc Gotsik, Zoltán Máthé/MTI

‘Triangle’, a graduation film by Hungarian director Péter Engelmann 31 WINE Degenfeld Winery celebrates 25th anniversary

FRENCH FOCUS – COMING SOON

Diplomacy&Trade is going to present a special Focus section on relations between Hungary and the Republic of France on the occasion of France taking over the Presidency of the Council of the European Union in the first half of 2022. France is the 5th largest investor in Hungary. Just over 700 French-owned registered companies operate in the Hungarian market, employing more than 35,000 people. The leading article of the compilation will be an interview with the French ambassador to Hungary, Pascale Andréani about the main aspects of bilateral relations and also as allies within the European Union and NATO. We also present the activities of the 30-year-old French-Hungarian Chamber of Commerce and Industry (CCIFH) and several of the French ventures operating in Hungary.

Degenfeld Winery built on traditions

American diplomat hiking in Hungary

Event guide to the Hungarian capital page 29

AUGUST 20, HUNGARY'S NATIONAL HOLIDAY

The national holiday of August 20 commemorates Hungary's first king, St. Stephen (ca. 975 –1038) and it is also the day of the foundation of Hungary. It is celebrated with programs all over the country. This year, in the capital alone, twenty venues awaited visitors from Buda Castle to the City Park. The central event, the inauguration of new officers, was held in front of the Parliament building. In his speech, the President of the Republic, János Áder stressed that “after decades and centuries, our national holidays are still a testament to our unity. They give us faith, make us proud, confront us with ourselves. They are important only for us Hungarians.”

He stated that “in the time of the epidemic, many suffered losses that were hard to comprehend. More than 30,000 of our compatriots fell victim to the coronavirus epidemic. … During the siege of the epidemic, when we had to endure new trials of strength day after day, when we lived from wave to wave, the liberated joy of celebration seemed more than a light-year away.” Fireworks have long been a traditional event on August 20 in this country. This time, the government prepared a gigantic – and the most expensive ever – display with light shows shot from over four kilometers of fixed points along the Budapest stretch of the Danube and from barges.

on the record

a long history in Hungary. With its East Asia Institute, it was the first university in Hungary in 1934 to teach Japanese, and in 1986, the Japanese Department was established. After the English Department, the Japanese Department is the second most popular. A number of students from the Japanese Department are currently pursuing their studies in Japan on Japanese government scholarships, but Eötvös Loránd University is also actively involved in exchange programs with Japanese partner universities.

September

HUNGARIANS PREFER NOT TO LEAVE THE EUROPEAN UNION

According to an August survey by the Medián public opinion research institute, the majority of Hungarians do not want to leave the European Union and they do not want to stay just for the money received from the EU. The opinion of the Hungarian people has remained unchanged for many years: the vast majority – even 79% of the supporters of the ruling Fidesz party – want to stay.

Hungarians want to stay in the EU also because of the free movement of people, goods and services, for example. “There is hardly a Hungarian family left that does not have someone studying or working outside the EU in its immediate or wider environment," Medián Managing Director Endre Hann said. He added that Hungary is much more dependent on the EU than, say, Britain, and even there, the situation after Brexit has been disappointing and it has been difficult to reach agreement on the retention of certain privileges. Hungary is in a much worse, more subordinate position: it is a small, vulnerable economy.

BUDAPEST UNIVERSITY AWARDED BY JAPAN'S FOREIGN MINISTRY

The Ministry of Foreign Affairs of Japan has announced that the 2021 Foreign Minister's Award is conferred on Eötvös Loránd University on August 20, 2021.

As a statement from the Japanese Embassy in Budapest says, Eötvös Loránd University (ELTE) is a prestigious university with

Also, the resumption of Japanese teacher training in September 2020, which was temporarily abolished due to curriculum changes in EU higher education institutions, or the visit of Princess Kako to Eötvös Loránd University in 2019 are examples with which ELTE contributes to the promotion of mutual understanding and friendship between the two countries as an institution that promotes the study of Japanese language and Japanese studies.

October

AFGHANS, WHO HELPED HUNGARIANS, BROUGHT TO HUNGARY

96 Afghan citizens who were threatened with reprisals following the Taliban takeover of Afghanistan and who had previously cooperated with Hungary and its allies were evacuated from Afghanistan and arrived at a facility run by the National Directorate-General for Aliens Policing in Röszke, SE Hungary on August 23, the Interior Ministry said. According to the information, the oldest of the Afghan citizens concerned is 64 years old, while the youngest was born just 144 days before. All of them were placed under official quarantine and their full care is being provided by the Hungarian state.

“Upon arrival, each person received a cold food package and a health, hygiene and sanitation package adapted to the epidemiological situation. Their medical examination, the organization of their seasonal clothing, and the collection and verification of their data necessary for the implementation of the tasks of the immigration authorities have started," the Interior Ministry said in a statement.

KATALIN KARIKÓ

MURAL COMPLETED IN BUDAPEST

The slogan "The future is written by Hungarians" were painted on the giant fire mural with which the organizers of the Brain Bar Future Festival pay tribute to the Hungarian scientist, Dr. Katalin Karikó who played a key role in the development of Pfizer-BioNTech's coronavirus vaccine. The finished work is on display at Krisztina körút 30, on the

National day 7Brazil Independence day

8North MacedoniaIndependence day 16Mexico Independence day 18Chile National day

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Buda side of the Hungarian capital. The 220-square-meter painting was commissioned by Brain Bar and created by the Colorful City Group in just 11 days using 197 liters of paint. "Working in a public space is exciting because many people immediately give their opinion on the work in progress. It was particularly surprising here that as we filled in the drawing with colors and the picture started to come together, almost everyone knew who it was about," the general secretary of the Colorful City Group, Péter Flór said.

CEREMONIAL RECEPTION FOR HUNGARY'S OLYMPIC ATHLETES

The Hungarian athletes, medalists and medal winners of the Tokyo Olympics were welcomed by officials and fans at the BOK Hall in Budapest on August 9. At the ceremony, which was attended by hundreds of supporters, the President of the Hungarian Olympic Committee, Krisztián Kulcsár, underlined that "the Hungarian Olympians are now being welcomed with the same love as they strived to please everyone in the country in Tokyo. It was good to be Hungarian in Tokyo! Thank you to the athletes, their coaches, the departments, the clubs, the family members, the fans and the Hungarian government."

Films were shown of the medalists and runners-up – as well as those finishing 4th, 5th and 6th – and each of them was greeted on stage.

Hungarian athletes won six gold, seven silver and seven bronze medals at the Tokyo Olympics.

company briefs

FIRST EUROPEAN MANUFACTURING UNIT BY LHSS

Britain-based Leyland Hose & Silicone Services (LHSS) has established its first European manufacturing unit in Szigetszentmiklós, just south of Budapest. As an automotive supplier, the company has been engaged in the manufacturing and sales of silicone hoses for more than 30 years.

LHSS decided in 2019 to open a new plant in response to market demand. The company had already a manufacturing unit in India but they were looking for a European location for their second

site. They decided in favor of Hungary at the end of this process, where they are opening their manufacturing plant in Szigetszentmiklós as a brownfield investment.

The manufacturing equipment were installed early 2020, the trial operation started in the spring of 2021, so that everything is ready for launching the production and exports. The unit currently employs 20 people, and this headcount will be further increased by 28 persons by autumn, the Hungarian Investment Promotion Agency reports.

NATIONAL BANK: A FURTHER STEP TOWARDS A GREEN ECONOMY

The National Bank of Hungary (MNB) has published the notice setting out the technical conditions of the Green Mortgage Bond Purchase Program and the Mortgage Bond Rollover Facility and has decided to fine-tune the collateral management framework by improving the conditions of green securities.

Ferenc Liszt International Airport, operated by Budapest Airport, won the recognition in the category of ‘Best airport in Eastern Europe’ this August for the eighth time running. As in previous years, the award was decided by the passengers themselves, recognizing the work of the Budapest Airport community.

World Airport Awards is one of the most prestigious aviation accolades. The Skytrax Award is decided every year – independently of airports – based on a satisfaction survey completed by tens of thousands of passengers, who evaluate airport services, including the check-in procedure, the quality of passenger services and safety levels.

A press statement quotes Edward Plaisted, the CEO of Skytrax, by saying that “with many airports around the world having seen a 70-80% drop in passenger numbers during our survey period, we considered that our 2021 awards should reflect these conditions, and whilst many customers voted for their favorite airport without visiting there in the last year, we had a very large survey response for airports where users have been travelling during COVID-19.”

Chris Dinsdale, the CEO of Budapest Airport pointed out that “it is a great honor that Budapest Airport became the best airport in Eastern Europe for the eighth time in a row, based on the votes of the passengers. Especially in the light of the fact that the last 18 months has been the most challenging period for the aviation industry, requiring extra effort from everyone. This year’s award is therefore of special importance for us, since passengers did not only recognize the general performance of the airport, but our response to the pandemic as well.”

Budapest Airport aims is to provide the safest possible environment and excellent services for its passengers. Thanks to its health protection measures in line with international protocols, the airport operator is constantly working to ensure a risk-free stay at the airport for passengers.

In July 2021, The Monetary Council reviewed and approved the MNB’s Green Monetary Policy Toolkit Strategy and decided to launch the Green Mortgage Bond Purchase Program. The new program is a targeted and effective tool to contribute to the development of a domestic green mortgage bond market and to promote green mortgage lending. This August, in line with the Monetary Council's decision, the MNB published the notice on the Green Mortgage Bond Purchase Program on its website. To

promote green mortgage bond issuance and thereby support the construction and purchase of new and modern residential real estate, the MNB will purchase fixed-rate mortgage bonds with a green rating in accordance with international standards, denominated in HUF and issued with an original maturity of at least five years on the primary and secondary markets from August 2, 2021 onwards. To increase transparency in the green securities market, the MNB expects issuers and banks participating in the program to publish regular sustainability reports and to develop customer information practices on green aspects, in addition to the market making obligations applied in the previous mortgage bond purchase program. To support the stability of the mortgage bond market, the Mortgage Bond Rollover Facility will become available again.

The decline in sales of some contraceptives, the absence of major acquisitions and the exchange rate movements reduced the profit at the Hungarian pharmaceutical company Gedeon Richter Plc. The after-tax profit of Gedeon Richter Plc. fell by 9.3% to HUF 54.9 billion in the first half of this year. Yet the company's revenue rose to HUF 296 billion,

exceeding all analyst expectations, a 6.5% increase compared to the beginning of 2020 – but it is considered realistic that it will still manage to bring last year's result from here. Of course, this was only a decline compared to the very strong first half of last year – the three most profitable quarters in Richter's history were the first and second quarters last year and the second quarter this year.

Richter’s CEO, Gábor Orbán evaluated the first half results by stating that “partly in response to limitations caused by the pandemic, we kept our marketing and admin expenses in check while further raising our

R&D spending to develop our portfolio. Those R&D efforts are starting to bear fruit: by midyear we reached very important regulatory and technical milestones in building the product portfolio across all business focus areas. Most importantly, we are now wholly prepared for the planned innovative product launches in the Women’s Health Care space in the coming months, while Evra® integration is well on track. We are also very excited about the steps we have taken to extend the cariprazine franchise to Japan by deepening our collaboration with AbbVie.”

LESS PROFIT BUT STILL GOOD FIRST HALF YEAR FOR RICHTER

FERENC LISZT INTERNATIONAL AIRPORT WINS SKYTRAX AWARD

company briefs

INCREASING PROFIT FOR GRAPHISOFT PARK

According to the Interim Management Report by Graphisoft Park, the company managing an industrial park primarily occupied by offices and laboratories of information technology and biotechnology companies in the north of Budapest, the 2021 H1 pro-forma net results, in line with the previously published forecasts, are EUR 2.45 million, which is nearly EUR 310,000 higher than the same period of the previous year.

ANOTHER CAR PLANT FORCED TO HALT PRODUCTION IN HUNGARY

Like the Mercedes factory in Kecskemét, the Suzuki factory in Esztergom is also forced to shut down due to the global microchip shortage, the company told the Hungarian language Slovak daily Új Szó, which reports that the factory will be closed between September 6 and 18. During the shutdown, the factory will provide rest days to all affected employees, which will be made up later within the working time frame through transferred days.

"By taking advantage of the production break, our company is implementing a number of innovation programs included in the annual investment plan. We will continue to exploit developments related to the ‘smart factory’ concept, automate new material handling tasks and improve the immediate working environment of our employees. And in line with our parent company's environmental objectives, we are taking further steps towards carbon neutrality," company spokeswoman Zsuzsanna Bonnár-Csonka said. Suzuki switched to a one-shift production for a while in July, also due to the shortage of microchips, according to the news site telex.hu.

The Szervita Square Building in downtown Budapest will house the first Laborpont medical outpatient care and laboratory diagnostics center from October 2021 on the premium property’s ground floor area.

A statement by Horizon Development says that the healthcare provider will offer 1,000 different types of pain-free, non-prescription blood tests to the general public (adults and children alike) in a variety of highly customizable packages, based on specific individual needs. As highlighted in their mission statement, Laborpont sampling services are offered in a stress-free and comfortable yet highly professional environment, applying cutting edge healthcare technology and working with highly experienced medical staff. The first benchmark center launched in Szervita Square Building will be followed by many more, at other easily accessible urban locations of the Hungarian capital.

As Kitti Kecskés, managing director of Laborpont pointed out, “thanks to its architectural excellence and downtown location, Szervita Square Building is the best choice for us to start our professional healthcare mission in Hungary. The October opening of the first Laborpont diagnostics center on the street level of Szervita Square Building is our initial step on the longer road to create a large network of future Laborpont centers.”

Kata Mazsaroff, leasing director at Horizon Development, added that “Szervita Square Building’s ideal city center location certainly served as a great foundation for our collaboration with Laborpont. We look forward to welcoming Laborpont in our building, hoping to add to their experience-based, caring retail service with our centrally located, high-quality property. Laborpont greatly contributes to our already diverse mix of retail tenants who represent the food, fashion, healthcare and wellness industries.”

The report adds that the epidemic caused by the new coronavirus resulted in a protracted economic downturn, while the Park’s tenant base, remained stable. Utilization of office space after a slight decline in the previous year stabilized at 94% from 2020 Q4, while in 2021 Q2 the average vacancy rate in Budapest continued to rise, partly due to the growing office supply. The transformation of office use – and the rise of the ‘home office’ due to the pandemic – has a noticeable impact on the demand for offices, however, no significant space reduction needs have arisen among Graphisoft Park tenants so far, and smaller reductions have allowed to meet growth needs of other tenants.

Based on the company’s calculations, it continues to maintain the previously published forecast for 2021: considering the current level of occupancy, the expected development of operating costs and depreciation, and the level of interest payable on existing loans, Graphisoft Park expects EUR 14.5 million rental income and EUR 4.3 million pro forma result.

In June 2021, based on a resolution of the Board of Directors acting on behalf of the General Meeting, a dividend of approximately EUR 10 million was paid out, which meant an additional dividend of EUR 6 million from the available funds in addition to the EUR 4 million dividend corresponding to 90% of the 2020 pro forma net profit.

The cash from operations and the remaining available cash balance (around EUR 9 million at the end of the period) ensure the further safe operation of the Company, as well as the financing of the preparation of certain refurbishments requested by tenants and potential future developments.

FIRST LABORPONT OPENS IN SZERVITA SQUARE BUILDING

’TRAFFIC LIGHTS’ OR ’JAMAICA’ OR …

BY TAMÁS MAGYARICS

The outcome of the upcoming German Bundestag elections on September 26 is as uncertain as can be. Observers think there may be more than a dozen different possible coalitions. It is only the AfD that is counted out as a potential coalition partner among the various political parties that expect to get seats in the new Bundestag.

Controversial legacy

There is another certainty: Angela Merkel, who has been Chancellor since 2005, is stepping down. Her legacy is more than controversial. Being the head of the German government, and being the de facto leader of Germany and, to a large extent, the European Union, for 16 years is a major achievement in itself any time. Her tactical instincts are beyond dispute. She has outmaneuvered her political rivals within her own party, the CDU, and its sister party, the CSU, as well as her political opponents in the SPD – the latter by mostly coopting their ideas. She has pursued, by and large, similar tactics on the European scene too. However, the question arises about longer term impacts

of her policies; in other words, whether she has had an overall strategy, or – as it seems to be –she has been predominantly a crisis manager, whose horizon was not very high. In fact, she has been presiding over some glaring failures in Europe, first and foremost over Brexit and the handling of the migrant crisis in 2015. Briefly, with the departure of the U.K., Germany has lost one of its most important allies in a number of questions within the EU and, at the same time, the strategic positions of the EU has been further eroded globally. As for her Willkommenskultur, she has opened a sort of Pandora’s box of social, economic, political, and cultural tensions both within Europe in general, and in Germany in particular. In domestic politics, the CDU she is handing over to Armin Laschet is in much worse shape than when she took over from Helmuth Kohl and Wolfgang Schäuble in 2000.

A status quo candidate

Despite all the above, Angela Merkel is still the most popular politician in Germany. Her first choice to be her successor, Annagret KrampKarrenbauer was a flop; in fact, Armin Laschet, the Premier of North-Rhine-Westphalia is not a charismatic politician by any count either.

He has dropped behind the SPD candidate for Chancellor, Olaf Scholz to the second position in terms of popularity. His asset and drawback are the same: he is a status quo candidate. Nevertheless, the Union parties are more popular than Mr Laschet, so he may become the next Chancellor at the head of a ’Jamaica’coalition, that is one between the Union parties, the Free Democrats (FDP), and the Greens.

Olaf Scholz in the lead

The most popular candidate for next Chancellor is Olaf Scholz, who is currently Vice-Chancellor and finance minister. He is seen as a steady head, and has been conducting a successful campaign so far. His problem is his party: the SPD has been a junior party in the last couple of years. It has lost a lot of voters partly because of the adoption of a sort of neoliberal economic policy (cutting back pensions, unemployment benefits, etc.) during Gerhard Schröder’s chancellorship when Mr. Scholz was the Secretary General of the SPD, and he supported Agenda 2010. His potential coalition is dubbed the ’traffic lights,’ that is one with the SPD, the FDP, and the Greens, though the Free Democrats indicated that they would prefer the CDU/CSU to the SPD.

As their choice is ’perhaps’, in accordance with the age-old diplomatic adage, it might mean ’yes’ as well. Anyway, a number of observers believe that the FDP will be the ’kingmaker’ –and their price for supporting either the CDU/ CSU or the SPD would be more liberal economic policies than pursued by Angela Merkel.

The Greens lagging behind

At one point, the up-and-coming Green coleader, Annalena Baerbock was enjoying a kind of honeymoon with the public and the media, and became the most popular politician (aside from Angela Merkel), and was seen as a potential successor to Ms. Merkel. However, her chances imploded to some extent because of suspicions that she had ’doctored’ or ’sexed up’ her autobiography, that she had committed plagiarism (which has been plaguing a number of politicians in Germany recently, starting from Karl-Theodor zu Guttenberg, who was even regarded to be a potential successor to Angela Merkel a few years ago). Her party was leading the pack in Spring 2021, but now it is lingering at the third place behind the Union parties and the SPD.

Other possible combinations

The continuation of the current ’grand’ coalition with the Union parties and the SPD cannot be ruled out altogether, though there is only a remote chance that their ’marriage’ of convenience will survive the elections. So is there a remote chance to bring the Left Party (Die Linke) in from the political cold – but again, the ’pragmatism’ and the ’flexibility’ (using polite language) of the SPD for the sake of getting into power again after 2005 may as well result in a red-red-green coalition – which, in essence, will be a red-red-red one as the Green Party’s core policies are rather reddish. True, the co-leaders of the party, Annalena Baerbock and Robert Habeck have tried to distance themselves from the successor party of the East German SED, their comments recently to this effect can partly be discounted as electoral tactics.

A pedestrian leadership?

Amidst the lot of uncertainties about the composition of the government after September 26, 2021, one thing looks quite certain. A potential three-member coalition which, by definition, means a series of compromises is bound to be middle-ofthe road (except for an SPD-Green-Left combination). The likely Chancellor, either Armin Laschet or Olaf Scholz, is anything but a charismatic politician; at best, they are competent managers. Unfortunately, current challenges would demand that both Germany and the EU had forceful leaders with strategic visions. The EU does not have any, and the most likely scenario is that Germany will also have a pedestrian leadership in the next few years. It will be bad for Germany, and it will be bad for Europe as well.

Tamás Magyarics is a foreign policy analyst

GERMAN VOTERS GO TO THE POLLS TO ELECT SUCCESSOR TO CHANCELLOR MERKEL

COOPERATION WITH ALL STAKEHOLDERS

INTERVIEW WITH THE AMBASSADOR OF SWITZERLAND, JEAN-FRANÇOIS PAROZ

BY SÁNDOR LACZKÓ

Jean-François Paroz served the Swiss Confederation as ambassador in Hungary between 2012 and 2016. After a term as the Swiss Ambassador to Japan, he is back in Budapest again. He presented his credentials to the Hungarian President in December 2020. Now, he tells Diplomacy&Trade that he is “very happy to have obtained a second tenure as Ambassador of Switzerland to Hungary and I am conscious that it is a rare privilege. At the same time, I know that I will not and cannot have the same tenure as the first one another time: since 2016, Switzerland has changed, Hungary has changed and I have changed, too.” He stresses that the developments in the relations of his country with the European Union, for instance, create a new situation so that the bilateral relations with the individual EU Member States, including Hungary, have become even more important. The Ambassador is of the view that “Hungary is a country which has developed a new self-confidence within the European Union and has developed further its economy, with a substantial economic footprint in the region. It is a country with new ambitions and resources, which create new opportunities for the bilateral relations. With regards to myself, I have changed too, as my experience as Ambassador of Switzerland to Japan has enabled me to develop further as a diplomat and also to set new priorities in my diplomatic action. And last but not least, the COVID-19 pandemic has changed us all, in many ways.”

Determined to dialogue

The Hungarian Minister of Foreign Affairs and Trade was received by his Swiss counterpart, the Head of the Federal Department of Foreign Affairs (FDFA)

this April and the Federal Councilor reciprocated the visit at the end of August. In June, the two finance ministers met in Budapest. The Ambassador highlights that the intensification of the highlevel political dialogue, as demonstrated by these three ministerial visits, reflects the developments which have taken place and still take place in both countries and in Europe. “These high-level dialogues happened in a post-COVID Europe (or at least a post-third wave), when borders have started to reopen after they were closed, sometimes hermetically, and in a post-Brexit Europe, when the sense of community is tested. They have also taken place in a time when my country, Switzerland, and the European Union, are tested in their dialogue about the future of their relations and in a time when Europe and European countries and people face a growing cultural divide in their visions of society and family, and of freedom and liberties. In this special context, both Switzerland and Hungary are

swiss focus

determined to dialogue and to explore and use all the opportunities for countries of their size to shape the future of the continent and to contribute to its peaceful and prosperous future without losing their sovereignty and identity.”

Strong business relations

Despite the pandemic circumstances, SwissHungarian economic relations have developed on the corporate level over the past year as well with Stadler, Roche, Nestlé, etc. hitting the news headlines with their activities. Ambassador Paroz points out that bilateral economic relations between Switzerland and Hungary are strong, and Switzerland ranks 5th among all foreign investors. “Even if some companies (especially in sectors without exporting activities) are subject to special taxes and other restrictive measures and if the predictability of legal decisions is not always given, in general, our investors are happy with Hungary as a business location. In the last years, Hungary succeeded in shifting away from being mainly a country with production lines of the manufacturing industry to a country where research and development, innovation and digitalization play a major role. The recent developments in Hungary and in the region offer new opportunities. We have new important investments and an expansion of the presence of our companies. Greenfield investments of Sensirion and Flisom and other large investments like the expansion of Nestlé’s pet food factory in Bük are ongoing. The enlargement of the Roche Service Center in Budapest is another significant example for this trend.”

It is also in view of these developments that Switzerland Global Enterprise has established a new Swiss Business Hub for Central Europe in Warsaw, which also covers Hungary. Establishing this Hub emphasized the importance of strengthening economic relations with the Visegrád four (V4) region. The role of Swisscham in Hungary has been dynamically increased during the past years. Switzerland Global Enterprise recognized these efforts in 2019 and accredited Swisscham as its official partner and as the Hungarian representation of Swiss Business Hub Central Europe. In this context, it is one of the priorities of my mission, to actively support this cooperation, he adds.

The memory of Carl Lutz

On June 10, Ambassador Paroz attended – in the presence of other dignitaries – a ceremony at the U.S. Embassy in Budapest as Chargé d’Affaires Marc Dillard dedicated a room in the Chancery building to the memory of Carl Lutz, the Swiss Vice-Consul credited with saving the lives of over 62,000 Jews in the Hungarian capital between 1942 and 1945. Regarding this wider recognition of Lutz’s activities, the Ambassador highlights that Carl Lutz and all the Righteous Among the Nations who helped to save the lives of thousands of Hungarian citizens persecuted as Jews by the Nazi regime as well as by their own government during the Second World War deserve a wide recognition in Hungary and in the entire world. “In the Federal Palace in Bern, which is the building hosting the Swiss Parliament and several ministries, a conference room is named in honor of Carl Lutz and of the other Swiss diplomats who are recognized as Righteous Among

the Nations. It reminds me and my colleagues that a diplomatic mandate is also about protecting and sometimes even saving lives. On June 10, with my colleagues of the United States and Israel, and with President András Heisler of the Federation of Hungarian Jewish Communities (Mazsihisz), we shared the same feelings of humility, admiration, but also responsibility.”

The 1956 intake

Speaking of history, this year, is the 65th anniversary of the 1956 uprising in Hungary against Stalinist rule. The events marked deeply the relationship between Switzerland and Hungary: after the failure of the revolt, about 12,000 Hungarians found asylum in Switzerland. Regarding the contribution to the development of the Swiss society made by these people, Ambassador Paroz notes that together with the action of Carl Lutz

and of other Swiss diplomats in Budapest during the Second World War, Switzerland’s intake of Hungarian refugees is indeed another significant event shaping the bilateral relations. “The tradition of Switzerland as a host country for refugees was strengthened and the fact that the refugees did not come from the developing world, but from a European country which is almost a neighbor had a special resonance. At the same time, I believe that compared with the presence in Switzerland of hundreds of thousands of Italian and later Portuguese seasonal workers, many of whom durably settled in Switzerland, the impact on the Swiss society was not as significant. But these people and their descendants certainly have contributed in a decisive way to the strength of the interpersonal contacts between the two countries, which remains strong until today.”

Cooperation with all stakeholders

An important aspect of Swiss-Hungarian cooperation is by civilians, NGOs that provide great contribution to relations between the two peoples. “I am deeply convinced that if the relations between two countries are excellent at governmental level, but the people ignore and have no true interest for each other, the bilateral relations remain superficial and cannot be strong. Thus, it is part of the Swiss vision of foreign policy, as described in the document ‘Switzerland's 2028 Foreign Policy Vision’ (which Federal Councilor Cassis introduced during the Hungarian Ambassadors Conference this August), that Swiss embassies must cooperate with all stakeholders of the bilateral relations. We therefore fully recognize the contributions and merits of city partnerships, friendship associations, associations such as the Schweizer Verein Ungarn or the Swiss Business Club, as well as student associations, in the development of the bilateral relations. Furthermore, the social media offers new opportunities for interaction between the various stakeholders of the bilateral relations and the newly set up Facebook page of my embassy (@SwissEmbassyBudapest) sets a special focus on this platform function,” the Ambassador says.

Cultural ties

As he points out, cultural relations are an integral part of the bilateral relations and he is very pleased to see that the vaccination campaign in Hungary allows cultural projects to take place again with the presence of the public. “The performance of the Ballet du Grand Théâtre de Genève at the National Dance Theater Budapest on September 18 and 19 is a highlight of the Swiss cultural presence in Hungary this year. The German-speaking film festival Sehenswert/Szemrevaló gives the audience the opportunity to see the most successful films from Austria, Germany and Switzerland. The festival starts in Budapest on October 7 to be followed by smaller film weeks with some selected movies from this year’s program in Debrecen, Pécs and Szeged. I am also happy that our embassy has good cooperation with Art Market Budapest where the fresh and creative A-space Gallery from Switzerland will have a boost again this year.”

Besides the promotion of the cultural presence, Swiss foreign policy also puts a special emphasis on the promotion of a strong bilateral cooperation in science, research and innovation. In the recent years, Hungary and Switzerland both have developed new ambitions in the field of science diplomacy which offers new opportunities for exchanges and cooperation. “With the Andrássy University of Budapest, we have a special relationship, which dates back to the year of establishment in 2001, when we first started financing activities of this common project of the governments of Hungary, Germany, Austria and the federate states of Baden-Württemberg and Bavaria. I was delighted to attend the inauguration ceremony for the new Rector of the University, Professor Dr. Zoltán Tibor Pállinger, who is a Hungarian-Swiss citizen. During my mission in Hungary, I will do my best to promote the cooperation with this university of national excellence,” Ambassador Paroz concludes.

swiss focus

SWISS FEDERAL COUNCILOR CASSIS VISITS HUNGARY

SWITZERLAND AND HUNGARY ARE ENGAGED IN AN OPEN DIALOGUE ON COMMON EUROPEAN VALUES

Federal Councilor Ignazio Cassis, head of the Federal Department of Foreign Affairs (FDFA), paid a working visit to Budapest at the end of August and gave an address highlighting Switzerland's foreign policy strategy at the Hungarian Ambassadors' Conference. During the visit, he also held working meetings with Minister of Foreign Affairs and Trade Péter Szijjártó and Minister of Justice Judit Varga of the Hungarian government.

His address to the Hungarian Ambassadors' Conference in Budapest focused on Switzerland's foreign policy strategy. He also explained the importance of adopting a methodological approach to developing the strategy, stating that "this three-stage strategy cascade means our foreign policy is more coherent, as well as raising Switzerland's global profile. It shows everyone what we stand for, what our strengths are, and where there are opportunities for close cooperation." He went on to explain that as a highly interconnected country and host to a number of international organizations, it was essential that Switzerland focus on its strengths.

Open dialogue on common European values

The Councilor stressed the importance of Switzerland's diversity as a basis for its foreign policy by saying that "our country is characterized by regional autonomy – political, linguistic and cultural. But that is also why we are united, because each region is independent and allowed to express its individuality." He also emphasized how such diversity requires a good deal of awareness, understanding and tolerance – values that also characterize Swiss foreign policy. The strong ties between Switzerland and Hungary were also addressed by Mr Cassis, who stated that "in addition to growing bilateral trade, our two countries are engaged in an open dialogue on common European values."

Official working meetings centered on European policy and global affairs

Talks with Minister of Trade and Foreign Affairs

Péter Szijjártó and Justice Minister Judit Varga also focused on European policy, according to an FDFA press release. Ignazio Cassis underscored the fact that Switzerland would continue to act as a partner the EU could rely on, as well as "working side by side with the EU for the stability and prosperity of Europe." To this end, the Federal Council has requested Parliament to release the second Swiss contribution, which includes Hungary as a beneficiary country. Mr Cassis reiterated that Switzerland remained part of the European community of values, which are also cornerstones of Swiss foreign policy: promoting human rights, democracy, freedom of expression, the rule of law and protecting minorities.

Meeting with Swiss businesses

Councilor Cassis also met with representatives of Swiss companies operating in Budapest. The one-hour discussion focused on the conditions faced by Swiss businesses in Hungary, Switzerland's third biggest trading partner in

Central Europe. For Hungary, Switzerland is its fifth largest investor. In 2020, trade between the two countries amounted to CHF 2.4 billion.

The importance of predictability and compliance

The Swiss councilor’s official program in the Hungarian capital concluded with a press briefing in the Ministry of Foreign Affairs and Foreign Trade held jointly with Minister Péter Szijjártó. There, Ignazio Cassis began his statement by saying that ”if the past year has taught us anything, it is that such physical meetings with counterparts are by no means a matter of course anymore.” He stressed that relations between Switzerland and Hungary are “indeed good. My esteemed colleague and I are

therefore united in continuing to nurture them.”

He noted that Switzerland and Hungary are historically closely linked. In 1956, after the failed uprising against communism, 12,000 Hungarian refugees found a new home in Switzerland. The Swiss councilor also highlighted that “I pointed out to my colleague the importance of predictability and compliance to ensure that Hungary remains an attractive market for Swiss companies and investors.” In addition, the two parties talked about topics “that are of particular interest to all of us at the moment. We talked about the situation in Afghanistan, which is of great concern to both of us. We know how important solidarity and cooperation are in such crises. Together, such challenges can be overcome more easily and better.”

Swiss commitment to Europe

The Councilor added that “Europe was another topic that was very close to my heart in our conversation today. In May, after long negotiations, the Swiss government decided not to sign a planned framework agreement with the European Union. A weighty step in my country's relations with the EU. However, Switzerland's European policy goals remain the same. Switzerland remains a strong, reliable and committed partner of the EU and its member countries. It is at the heart of Europe and shares European values. That was also my message to my Hungarian counterpart.” He stressed that “Switzerland's commitment is not just lip service – on the contrary: the second Swiss contribution to selected EU member states, including Hungary, is to be deblocked quickly. This is what the Federal Council, the Swiss government, is working for. But this also requires a Memorandum of Understanding with the EU and this should now be finalized as quickly as possible.”

GRADUALLY ON THE BUSIEST RAILWAY LINES OF HUNGARY TRAVEL ON THE UPPER DECK

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No major pandemic problems at Swiss firms in Hungary

The Swisscham leaders agree that the chamber’s member companies reacted very quickly to the pandemic conditions. Mentioning an example, Dr. István Béres highlights that in one very large Swiss company, a very high-level factory visit was scheduled from the Swiss headquarters to see the new developments in their Hungarian factory. “In the end, it was all done online. It was not only a zoom meeting but the whole factory tour was done on the scheduled date without any delay – obviously, with more cameras, more movement, but it was done. In general, production was running smoothly everywhere, health and safety measures were introduced immediately in all factories of our member firms, usually much stricter than the general measures, but it worked.” Swiss-Hungarian business relations have not stopped over the past year, either. “An example of this was achieved in our chamber when a Swiss company (Roche) opened its Center for European Pharmacovigilance (PV HUB) in Hungary. The various reports are received here, analyzed, evaluated and used to prepare reports for the development center,” he adds.

Back to events of physical presence

ADAPTING TO THE CIRCUMSTANCES

The Swiss-Hungarian Chamber of Commerce (Swisscham Hungary) celebrated the 25th anniversary of its foundation last year in a limited way due to the pandemic restrictions. A lot of anniversary-related and other events had to be canceled or postponed but the chamber adapted to the circumstances to serve its members and partners.

Swisscham Director Júlia Lipovecz tells

Diplomacy&Trade that while, unfortunately, many planned events had to be canceled, they are proud to have been able to organize a special tree-planting event to celebrate the anniversary: 25 trees were planted in the Népliget park (in Budapest’s District IX) with support from Swisscham members. “We managed organize this outdoor event but, on the other hand, we were not able to hold the anniversary gala we had long planned and it was also the case with the Swiss Business Day planned for the fall of 2020. These ideas were suspended as we saw that we would not be able to hold them this year, either. During the pandemic period, we mainly operated online. However, we managed to have a reception at the end of September 2020 that sort of made up for the gala with many of us gathering for a little celebration and saying farewell to Ambassador Burkhard. The online programs included several thematic events every month – something that goes on for the moment, the latest one on the current

prospects of the Swiss economy but these, of course, cannot replace our main profile, that is, networking.”

Presenting the region to Swiss investors

The President of Swisscham, Dr. István Béres says on the chamber’s website that “Always looking for new ways, our Chamber is a bridge between Hungarian and Swiss businesses. It is a pleasure to serve this dynamic, innovative community.” He explains to Diplomacy&Trade that “we have created closer cooperation with the Swiss chambers operating in the other Visegrád Four (V4) countries, that is, the Czech Republic, Poland and Slovakia, in order to establish a continuous, live connection with them and have jointly carried out programs. This system of relations is very beneficial for Swiss investors because we are able to present ourselves on a regional level for possible investments. This is important because Swiss investors are in competition with those from other parts of the world. The first fruit of this joint effort is already here as a Swiss

investor examined all the V4 countries and decided to set up a company in Hungary and start production here.”

In conjunction with this, Swisscham has very close cooperation with Switzerland Global Enterprise, which is in charge of supporting Swiss private ventures. “The very big advantage of this new network is that there is now an organization in Switzerland that is collecting investment enquiries that are coming into Eastern Europe. When someone comes to them, they are not only directed to the country where the request is made, but they send it to all V4 countries as soon as they receive it. Poland being four times the size of us and a little bit of a star, most of the applications went there but now, we get this information automatically – via the Warsaw-based V4 Swiss Business Hub, one of the regional hubs of Switzerland Global Enterprise around the world,” he adds.

Growing interest about the Hungarian market

As Júlia Lipovecz points out, more and more Swiss companies are contacting Swisscham, asking for information

about the Hungarian market. “Earlier, we had a lot of Hungarian companies asking about the Swiss market. That is less common now, it's more the Swiss companies that come in with this or that kind of question. This means that we are somehow on their radar, so I am confident that this will continue to develop and bring investors. Therefore, we have started to focus more and more on that and on individual enquiries from members. If there was something about the situation during the pandemic that they saw that we could help with, we got involved – mainly individual enquiries.”

Dr. István Béres finds it important to mention that “besides our outstanding relations to the Swiss Embassy in Hungary we have an increasingly close and effective relationship with the Hungarian Embassy in Bern too. This helps us in the sense that if a Hungarian company wants to start some kind of activity in Switzerland, we can immediately establish contact with the economic affairs division of the Embassy. The bridge has two pillars: we support the Swiss in Hungary and we support the Hungarians in Switzerland.”

As regards future plans at Swisscham, Júlia Lipovecz notes that “as far as the next Swiss Business Day is concerned, we would like to organize it next year, probably in the fall, as there are parliamentary elections in the spring. After the online conference on the outlook for the Swiss economy in September, we will have a reception at Buda Castle for members and other interested parties, bringing us back from the online space to the physical reality. We had a conference on e-governance for the first time in June in an online format and we would like to organize a live conference on this topic later this year in the framework of the Netzwerk Digital initiative, which we have set up together with the Austrian and German Chambers of Commerce in Budapest.” Dr. István Béres adds that in addition to its usual activities, there are two areas Swisscham focuses on. “One is digitalization, which is where this Netzwerk Digital e-governance online and live events fit in. The other topic is health, which we also started two years ago and we plan to make it a regular feature. We are preparing an event for November, which will focus on Healthcare, the recovery from the crisis, but more importantly, on the new opportunities for healthcare created by this pandemic and the potential of the lessons learned in the economy during the epidemic. This will be the focus of a full day event with speakers from Hungary and Switzerland in partnership with the Embassy of Switzerland and some main companies in this field.”

photo by DÁVID HARANGOZÓ

SWISS CHAMBER LEADERS HOPE EVENTS RETURN TO PHYSICAL PRESENCE FROM THE ONLINE SPACE

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special auditing system is in place to secure the quality, so harvested products are ready to eat. It is expensive still, but we are sure that the higher losses will be in the fields, the more interest will go towards vertical farms,” the Managing Director points out.

Another ‘green’ element at Eisberg is the use of the newly installed solar panels. The whole roof surface of the factory is covered with them and they supply 25-30% of the annual electricity consumption. Zoltán Gazsi highlights that they are constantly searching for solutions on how to make their operations more environmentally friendly. “We have already changed the material of the bowls used to reusable plastic. In most of our products, we no longer enclose plastic forks: we use wooden forks, instead. In the factory, we also initiated many steps to decrease plastic usage. In 2022, we plan to install a water recycling/cleaning unit, which will help to decrease our water use significantly. Those investments clearly show the dedication of the Eisberg Group towards sustainability.”

Helping the helpers

FROM SOLAR PANELS TO VERTICAL FARM

EISBERG HUNGARY RENOWNED FOR GREAT WORKING CULTURE AND INNOVATION

‘Freshness is an art’ – perhaps this is the slogan that best describes the Hungarian salad producer firm Eisberg's everyday life, according to its Managing Director, Zoltán Gazsi. “Nature is capricious, presenting our professional raw material suppliers with new and ever-increasing challenges especially during the last years. However, the combination of our strict quality assurance requirements, the modern technology available and our motivated team ensures that we can provide our customers with the crisp, high-quality salads they are used to every day of the year,” he says.

Eisberg Hungary is a firm renowned for great working culture and innovation, one that has maintained its market leader position for almost 30 years. It is part of the Swiss Bell Food Group that also owns the gastro firm Hügli Food and the Zimbo brand in Hungary. Revealing the ‘secret’ of success, the Managing Director points out to Diplomacy&Trade that they really take seriously the basic fundamentals of lean work: respect people – without that, nothing works. “The newly initiated TOPX lean program by Bell speeds up the lean work we started in 2009: continuous improvement day by day, harmonizing the processes to maintain high quality and supply, to get the best out of the raw materials by engaged workers and up-to-date technology.”

The COVID-19 effect

In April 2020, Eisberg Hungary lost close to 30% of its sales volume. “It was a drastic decrease. We managed to weather the crisis okay, we didn't lay off anybody. We hoped

the downturn would end soon, people need good food whatever happens… Except for the gastro part of the business, it turned out to be true. This year, sales boom continues, –even gastro in the countryside –, due to local tourism. Most hotels were fully booked, prices sky high… Budapest is still missing tourism, a lot of restaurants still suffer, those who do well lack waiters and chefs. This situation increases the need for convenience, readyto-eat products,” Zoltán Gazsi explains. Although sales run well, the profitability is under strong pressure due to weak HUF, high inflation, strong price increase of many crucial items: raw material, foil, cardboard, manpower, electricity. “We were actually lucky that we just finished a big building extension project before this big wave of building material price increases: the extra 2,000 sqm production surface consist of a new allergen room to handle cheese, meat, fish etc., ingredients of our new salad bowl range produced by our new salad bowl production line,” he adds.

Vertical farm cooperation

Vertical farming is an innovative method that not only eliminates agricultural runoffs, but also creates new employment opportunities in the urban areas. Escalating global population and its concerns for food security in limited arable land will positively drive the vertical farming industry size. Vertical farms exist in the United States and Asia, but not so much in Europe, yet. Global warming is making very big problems, losses for the suppliers, not only the heat itself but also heat combined with very hectic, big changes. So, one day most veggies will be grown protected, not only tomatoes and peppers, as it is now.

“I happened to meet the head of Tungsram Innovation, Ferenc Pongrácz and we agreed that Eisberg, as innovative market leader, is the best to test and market their products from the newly opened farm. Firsthand we test microgreens, and the most sensitive items like baby leaves. Workers are wearing hair nets, masks, using fertilized scissors, etc. and a

“Our Swiss mother company, Bell Food Group, is a really huge enterprise but it still has many family elements: focus on people, mutual trust, we get freedom at our work. I'm very proud to be personally involved in most CSR initiatives. Just to mention a few from the past ten years, we supported ‘Bátor tábor’ (that helps chronically ill and diabetic children); blind children; diabetic children; birth programs; hospitals; the Edison Platform that support organizations that develop various skills of children to prepare them to cope with the future challenges. We have also bought presents from organizations employing autistic and handicapped children. Salad trading for us is a good ‘tool’ to help those who really need support. We keep high standards not only in quality, but also in values: we do our best to create a valuable community around us,” the Managing Director says. During the most severe pandemic times, the public benefit organization ‘Etesd!” (‘Feed!’), served 100,000 meals for nurses and doctors in different hospitals. “This organization contacted us that there is a fantastic performance by Hungarian world champion magician Soma Hajnóczy to be attended by 7,000 people. We bought 1,000 tickets and offered them free of charge to families of nurses and doctors at the National Ambulance Service (OMSZ). It was a really popular move and we got so many messages of thanks. Soma also came to our factory in Gyál, just SE of the Budapest, and – assisted by OMSZ salad tricks in front of the workers,” he says.

“As managing director of Eisberg Hungary, I can tell that our ‘trick’ is that there is no trick. There is hard and precise work done by a great team, day by day, to sustain our high quality in the mid of constantly changing environment,” Zoltán Gazsi concludes.

photo by DÁVID HARANGOZÓ, EISBERG

Changing the practice of medicine

At Novartis, we harness the innovation power of science to address some of society’s most challenging healthcare issues. We are passionate about discovering new ways to improve and extend people’s lives.

Novartis Group Hungary

swiss focus

GIVAUDAN: COMMITTED TO GROWTH, WITH PURPOSE

Ten years ago, Switzerland’s Givaudan laid the first stones at its European savoury flavours manufacturing facility near Makó, SE Hungary. The global leader in the creation of flavours and fragrances opened its factory the following year.

FMCG companies through which it is much more present in everyday life than people might think.

of East Central Europe, so it can serve customers efficiently throughout the EMEA region. “The basic strategic consideration was that this factory needed be built in a location where the logistics would enable efficient and sustainable customer service for customers in Western Europe, Central Europe, Turkey, as well as Russia and its neighboring countries. “Given that Central European and Eastern European markets are developing at double-digit growth rates, it’s a decision that has served the company well,” the Company Manager stresses.

As Head of Operations and Company Manager at the plant, Mihály Karkas tells Diplomacy&Trade, the company's management and shareholders are very satisfied with the performance and added value of the Hungarian facility. In recent years, the Makó plant has continuously developed, increased its production volume, and widened its product range. Now it is a regional manufacturing facility of excellence for powdered flavours within the international operations network at Givaudan. Since 2011, production volume has increased by almost 40% and the number of products manufactured in Makó has reached the level of 4-5,000 per year. The number of employees has also grown from 300 at the beginning to more than 500 people today.

Collaborating and cocreating with stakeholders

In January 2021, Givaudan introduced its 2025 strategy ‘Committed to Growth, with Purpose,’ which is designed to deliver growth in partnership with customers and achieve ambitious financial

targets, while also making progress on the company’s longer-term purpose ambitions in the areas of creations, nature, people and communities.

At the heart of Givaudan’s strategy is its purpose: ‘Creating for happier, healthier lives with love for nature. Let’s imagine together’. The ‘Let’s imagine together’ aspect of the purpose reflects the company’s inclusive approach toward collaborating with employees, customers, suppliers and partners to achieve goals that reflect shared values.

The company has translated its purpose into four focus areas with specific, measurable goals:

• Creations – “Imagining together that through our creations more people will enjoy happier, healthier lives.”

This goal is supported by Givaudan’s ambition to double its business through creations that contribute to happier, healthier lives by 2030.

• Nature – “Givaudan builds upon the strong sustainability approach and commitments to reduce its carbon emissions from its operations by 70% and supply chain emissions by 20% by 2030, as well as its commitment to use 100% renewable electricity by 2025.”

• People – “Imagining together that Givaudan is a place where everyone loves to be and grow.” Building on the significant progress that Givaudan has made to ensure a safe working environment, the company has also committed to reducing its total recordable injuries cases by a further 50% by 2025. This is aligned with Givaudan’s ambition to further improve the way the company supports its peoples’ physical and mental health before 2025.”

• Communities – “Imagining together that all communities benefit by working with Givaudan. Progress towards this goal will be measured against ambition to improve the lives of millions of people in communities where the company sources and operates by 2030.” (See photo)

Supplying a wide range of products

Givaudan offers its products to global, regional and local food, beverage, consumer goods and fragrance companies and can even meet religious food requirements (kosher, halal). It is a supplier to the world’s top 150

“The Makó plant here in Hungary handles and produces a very broad portfolio of powdered flavorings. For example, we produce flavourings for snack products like potato crisps and extruded snacks product for a wide range of small companies both in Hungary and around the world. A very important segment of the Makó factory's portfolio is also its ‘savoury range’ for products like dry soups. For these, we produce flavour components in large quantities and in a wide range of flavours. In addition, we also supply the meat industry with spicy flavours for various sausages and processed meat products,” Mihály Karkas explains. At the center of the company’s work is the ever-changing needs and preferences of consumers. For example, the company is very active and innovative in the development of plant-based meat. In Europe, these products are manufactured at the Makó plant. “In addition to plant-based products, we produce many flavours for bottled sauces and soups, we serve the baking industry with our products, and we also sell flavourings from Makó for instant noodles,” he adds.

Strategic location

The company chose to build the plant in Hungary because it is at the heart

Human capital, the key to success

This factory has long enjoyed mutually beneficial cooperation with the nearby University of Szeged. As Mihály Karkas puts it, “In many ways, the greatest asset is not the factory itself and the physical assets, but the intellectual capacity that we have built and developed here. We are very proud of the fact that the intellectual capital of the Makó factory team remains the most important success factor in our business.” In fact, the young people who have graduated –and are graduating – from the University of Szeged, often join the Makó factory team as trainees for their first job. “Of the more than 100 graduates we have, almost 90% graduated from the University of Szeged. I believe that higher education, a universityeducated workforce, is extremely important for us, and I repeat: it is the key to our success. We are in contact with the University of Szeged through many channels. We participate in mentoring programmes, provide student scholarships, and run summer internship programmes. We have also taken on a very large number of students as factory staff immediately after graduation,” the Company Manager concludes.

photo by DÁVID HARANGOZÓ, GIVAUDAN

“CREATING FOR HAPPIER, HEALTHIER LIVES WITH LOVE FOR NATURE. LET'S IMAGINE TOGETHER”

Sal d magic eisberg.hu

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HOW COULD A SMOKE-FREE FUTURE BE SUSTAINABLE?

Today sustainable means smoke-free

Leading tobacco companies of the world are working towards achieving a smoke-free future and their aim is none other than to ensure that as many adult smokers give up cigarettes as possible. The objective is clear: tobacco companies, different stakeholders and the society should work hand in hand together on accelerating the end of smoking. More than one billion people worldwide smoked cigarettes or other combustible tobacco products in 2020, and, according to the World Health Organization (WHO), around the same number will smoke in 2025. The best choice for any adult smoker is to quit nicotine altogether.

PEOPLE WHO DO NOT SMOKE SHOULD NOT START. THOSE WHO DO SMOKE SHOULD QUIT, AND THOSE ADULT SMOKERS WHO OTHERWISE WOULD NOT QUIT SHOULD HAVE ACCESS TO INFORMATION ABOUT LESS HARMFUL ALTERNATIVES TO CIGARETTES.

What is the problem with cigarettes?

It is common knowledge that cigarettes are harmful to health. However, it is less obvious that the substances found in the smoke and created during the burning of the cigarette are the primary causes of smoking-related diseases. These are harmful to the health of smokers and non-smokers alike. Cigarette smoke contains several thousands of toxic chemicals, such as arsenic, formaldehyde, cyanide, lead, nicotine and carbon-monoxide, many of which have been proven to be associated with – or directly responsible for – the development of various diseases.

Harm reduction is key

It is clear that governments should continue their prevention and cessation efforts in order to ensure that people who do not smoke never start smoking and those who already smoke are encouraged to quit smoking as soon as possible. It is also important that adult smokers who, for some reason, do not quit and continue smoking should have access to information about harm reduction and smoke-free alternatives. However, it is important to be aware that these technologies

are not safe or risk-free either and they are not substitute for quitting. The best thing to do to reduce smoking related harm is to stop smoking or using any nicotine containing products.

Research and development of smoke-free alternatives

There are already several R&D centers around the world where experts, scientists and engineers are researching smoke-free technologies in the hope that these alternatives will ultimately replace cigarettes in the near future. According to industry forecasts, given an appropriate regulatory framework and the support of the civil sector, the sale of cigarettes could cease in several countries within 10-15 years.

Sustainable strategy must be a corporate strategy

It is clear today that the biggest positive impact tobacco companies can have on society is doing everything they can to ensure that for those who do not quit for whatever reason replace cigarettes with less harmful alternatives. Therefore, it is becoming more and more important to invest as much of their available resources as possible into researching scientifically substantiated, less harmful alternatives to cigarettes.

Developing more environmentally friendly products

Contributing to the circular economy means developing more environmentally friendly products by improving their recyclability, efficiency, and repairability. Building sustainability considerations into product design is a way to control environmental and social impacts across a product’s life cycle – from development and manufacturing to use and disposal. Companies should continue to advance these technical environmental assessments earlier into our development cycle, understanding the impacts and sustainability potential of new innovations at the earliest stage.

DISCLAIMER

This article is a public service advertisement financed by Philip Morris Magyarország Kft.

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TRAM-TRAINS AND DOUBLE DECKERS

STADLER VEHICLES DOMINATE SUBURBAN TRAFFIC AROUND BUDAPEST

Stadler Trains Hungary Ltd., head office of Stadler Rail in this country, is a Swiss manufacturer of railway rolling stock, with an emphasis on suburban, regional and high-speed multiple units and trams. The company’s Managing Director, Zoltán Dunai tells Diplomacy&Trade about the company’s latest project, Hungary’s first Citylink tram-train, their successful cooperation with MÁV Hungarian State Railways as well as the latest innovations presented by Stadler Rail.

The first Citylink tram-train in Hungary – connecting Szeged and , supplied by Stadler, arrived in the country early this year. “It's a very interesting project, a real challenge and one of the most important projects of my career as well. The concept is to connect and interconnect the two cities to become practically one city or one agglomeration if you like,” the Managing Director points pout.

Zero emission in the cities

The Citylink contract was awarded to Stadler in 2018. Basically, it is a contract for eight vehicles with an option of four more vehicles, which has already been already been called as well. Six of the first eight vehicles arrived physically in Hungary “and very soon, the seventh and the eighth will arrive as well. They are now undergoing the homologation process under the supervision of the National Traffic Authority. They must fulfil 50,000 kilometers of test runs – approximately half of it on the city lines in both settlements and the other half on the main line. We have all the expectations that the trams will start carrying passengers in the late fall and the other four vehicles will join the fleet next spring, making it possible to have a 10-minute sequence in the timetable, which is very important for passengers especially in Szeged that has significant rush hour requirements. The project also has an ecologic aspect, because it will replace the diesel buses on that line. The diesel engine on these vehicles is there only to develop electricity for the electric traction motors. In the city areas, there is zero emission as the tram-train runs on electricity from the overhead lines. Between the cities, the diesel engine is running at steady low sequence because it is not driving the traction, it is just producing the electricity for the motors through a generator,” Zoltán Dunai explains.

KISSes on the track

Stadler is a major supplier for suburban transport in Hungary and it is in the middle of a very important project, worth over HUF 200 billion, being delivered to MÁV Hungarian Railways. These are the double decker, electric, multiple units bearing the fantasy name ‘KISS’: huge, 156 meters long, six-carunit trains accommodating 600 passengers, performing the service in the suburban lines when a passenger flow is high. 17 out of the 40 trains have been handed over to MÁV

while another four are in the process of being delivered. All the 40 units are expected to be in commercial traffic by the end of 2023. “It is not only a huge project from our point of view, but also a huge development for public transport and railways in Hungary. When this contract is

complete, we will have a 70-75% ratio in the suburban traffic of Budapest with our modern trains of high passenger comfort,” he adds.

Upgrades

Stadler delivered the first Flirt trains 14 years ago and since then, technology and the standards have had major development. “We are in performance of a significant upgrade contract for the first ‘Flirt’ vehicles previously supplied to MÁV. We are upgrading to the current requirements and standards, also adding all the passenger comfort elements, which are present in the later series. The same is true for the KISS trains as well. For instance, passengers will be able to charge the battery of their phone or their laptop from the newly installed outlets or have access to a wheelchair lift. Numerous upgrades are not visible for the passenger, such as those affecting the drive system, the passenger information system, etc. The trains will also receive a facelift from the original red coloring to blue and white (with yellow doors) currently in use at MÁV. We have already completed about 40% of the project. We are also looking at the possibility to assist the customer with the maintenance of newly delivered KISS vehicles and the newly delivered tram-trains using our expertise for maintenance support and quality control in the form of an advisory contract.”

Challenges from Belarus

Stadler Rail has several factories outside Switzerland. One of these is in Belarus where the political situation has been problematic in recent years. As to how much this affects the Stadler assembly plant near Minsk, Zoltán Dunai says “the challenges are quite big because it is obviously very difficult nowadays to win public procurement of just any variant in the European Union with Belorussian product or with substantial Belorussian delivery scope. At the moment, this situation does not directly affect our business here in Hungary. In the KISS project, there is a substantial delivery scope coming from our factory in Minsk because that factory is the competence center for double decker vehicles. At the moment, the EU sanctions are not affecting the simple deliveries of goods. So, we are able to perform the contracts with no substantial delays. What already has been very, very difficult is to travel here from Belarus. So, for our Belarussian colleagues who are coming to work on this project and are involved in the putting into operation and handing over the train, it's very difficult to get to Hungary because direct flights from Belarus are stopped and the Belorussian airspace is blocked. The only way they can come now to Budapest is through Istanbul, which does not seem to be the most suitable solution but what can we do?”

Award-winning double decker

Stadler Rail is present at all major railway related expositions in Birmingham, Gdansk and Milan just this September alone. Of these, the Managing Director highlights the Trako International Railway Fair in Gdansk, Poland, which is “basically the first notable event of this profession since the start of pandemic restrictions.” He is happy to report that Stadler’s KISS electric double decker multiple unit, sold to Slovenia, has been awarded as the most innovative product of the exhibition. “It's a three-car unit, very much designed and tailor-made to the needs of the Slovenian customer. In Hungary, there are some operators who might use such a smaller double decker train now that basically the public is used to the idea that there are double decker trains on the line.”

swiss focus

franc that is often used as a safe haven currency, which leads to difficult work environment for the Swiss export industry. The last main risk remaining for the Swiss economy is international policy or rather geopolitical tendencies. “We have seen an ongoing trade conflict between the United States and China and their overall different protectionist, nationalist tendencies taking place in different countries, in different regions.” Also, the difficulties in Swiss-EU relationship could potentially have an impact on the Swiss economy. In conclusion, she stressed that “there is progress going on, there is growth going on, and the Swiss economy looks rather positive given the last few months. And if no further big impacts happen, then we will have hopefully a growing Swiss economy that will, over the long term, go back to pre-crisis level.”

Positive signals

THE RECOVERY PHASE OF THE SWISS ECONOMY

THE GOVERNMENT APPLIED A COSTLY BUT EFFECTIVE TREATMENT DURING THE PANDEMIC

Early this September, the Swiss-Hungarian Chamber of Commerce (SwissCham) organized the webinar ‘The Recovery Phase of The Swiss Economy’ for those interested in the Swiss economy and/or looking for a way to enter the Swiss market. Professional speakers from various institutions from Switzerland outlined trends, challenges and opportunities of the Swiss market. The main lecture looked at the state of the Swiss economy in the second half of 2021.

Following an introduction by Swisscham Director Júlia Lipovecz, the Swiss Ambassador to Hungary, Jean-François Paroz, welcomed participants and underlined that the economic relations of Switzerland and Hungary are based on treaties that have been set between Switzerland and the European Union. “As you know, they were meant to be shifted on the basis of an institutional agreement. However, this treaty turned out to be a step Switzerland was not ready for. This is why the Swiss government decided to end the negotiations, but our relations therefore remain on the same basis as before. Nevertheless, markets are moving and there is always potential for further collaboration, the Swiss economy is integrated in the international economy, capitalizing on an open trade regime for industrial products, while the EU is Switzerland’s main trading partner.”

Coming back even stronger

The most comprehensive lecture at the webinar was presented by Catia Capaul, International Relations Research Fellow at Economiesuisse, a Swiss corporate union that represents some 100,000 companies that employ two million workers. She talked about the state of the Swiss economy in the second half of

2021 “where we stand after one and a half year of pandemic and how we will move further.” She stated that Switzerland is very strong in exports, “we make most of our GDP from exporting products,” adding that the way the international situation is developing has a big impact on how the Swiss economy is doing as well. Compared to last year, 2021 saw a big rebirth in the global economy. By increasing vaccination rates in most of industrialized countries, restrictions on economy and on activities have been eased. “So, the international global economy was able to grow this year compared to last year, especially in the two biggest markets, the United States and China have really served as a growing engine for the whole global economy, which also had a lot of positive impact on the European economy that is a bit lagging behind in this overall trend of economic growth.” Speaking of a few challenges, she stressed that we are not back to the pre-crisis level. There are also a few logistical problems and sluggish demand in a few important export markets for the Swiss economy. “But overall, we can see this year a positive trend compared to last,” she stated, adding that mainly the chemical pharmaceutical industry and the medical technology industries were able to maintain or to even expand their value added during the crisis for

obvious reasons. However, most of the economy obviously had a difficult year in 2020 but now coming back even stronger. This applies equally to the export industry as well as to more domestically oriented sectors.

Costly but fruitful treatment

Catia Capaul also highlighted four reasons why the Swiss economy has done relatively well, the first of which is the unprecedented financial support by the government: guarantees and loans given to individual companies, so that they are able to keep on working. “It cost a lot of money but it proved its effect last year.” Another important reason was the moderate state intervention as compared to other countries, Switzerland has seen a bit less restriction on doing business than other countries, which has really helped the economy to keep on working. The third reason is that the Swiss economy has, in recent years, gone through several difficult years and challenges so, they have had a lot of experience in rather difficult circumstances over the last few years, even prior to the pandemic, which has really helped them to adapt to those difficult circumstances. The last reason she mentioned is the already good framework conditions, such as, for example, the short time work

compensation, which have really helped companies during this difficult time.

Remaining risks

The research fellow ended her lecture by mentioning the still remaining risks that might have an impact on the Swiss economy going further forward. The biggest risk is still posed by the COVID-19 pandemic that is not over yet and could result in further restrictions and a fall in demand, which will also effect the Swiss economy. The second major risk is the long-standing low interest rate policy, something that has already been an issue before the pandemic. There has been a high debt rate further increased by the pandemic. A further crisis in the Eurozone may result in the resurgence of the Swiss

In the rest of the webinar, Doris Anthenien, Head of Department at Swissmem, the Swiss association of mechanical and electrical engineering industries (MEM industries), spoke about trends and challenges in the Swiss MEM industry in this second half of 2021. She also noted that the economy and especially the MEM industry seems to be recovering as “mainly we have a positive signals from our member companies regarding their actual economic situation.”

In his remarks, Raoul Keller, Member of the Management Board in charge of Central Eastern European issues at SEC Chamber of Commerce Switzerland also emphasized the importance of being present on the American and/ or Chinese market and stresses that the key to more success for the Swiss economy is further diversification.

Katalin Dreher-Hajnal, Senior Consultant for Central Eastern Europe at Switzerland Global Enterprise, outlined how her organization assists Swiss SMEs for which East Central Europe is a growth market. Swiss exports –more than 50% going to Europe – have seen a steady growth in the past two decades, except for the crisis years of 2009 and 2020. She also mentioned the challenges for Swiss exports that include uncertain market developments, geopolitical tensions, protectionism and travel restrictions, while the most important business opportunities for Swiss SMEs in East Central Europe lie in infrastructure developments.

PROGRESS IS A MUST

IS ON SUSTAINABILITY AT NESTLÉ HUNGÁRIA

In 2021, Nestlé Hungária is celebrating its 30th anniversary. The Hungarian subsidiary of the Swiss food group is the largest Swiss investor, employer and food company in Hungary. Nestlé Hungária remains highly active and plans its future on sustainability and automatization.

NESTLÉ IN HUNGARY

• Nestlé has three factories in Hungary: Nescafé and Nesquik cocoa and coffee products are produced in Szerencs, hollow chocolate figures come from in Bük.

• Nestlé Hungary delivers products to over 40 countries all around the world with 80-90 % of the products made exclusively for export.

• In the last three decades, the Swiss company has invested over HUF 150 billion in Hungary, the majority occurred in the past ten years at the Bük factory.

• The company employs a total of 2,400 people.

The company is not only proud of its history, but also looks to the future. Last year, Nestlé announced its global action plan addressing climate change with a pledge to reach net zero emissions by 2050. The ambition is to minimize their carbon emissions across the entire value chain from raw material production to the path to consumers.

They promote sustainable agricultural practices to contribute to a renewable, regenerative food production and supply

system, and offset its remaining GHG emissions with state-of-the-art nature oriented and climate friendly solutions. Nestlé Hungária has achieved tangible progress in this area. All three Hungarian factories have been using 100% green electricity since 2017 eliminating carbon footprint from electricity. The company also continuously explores opportunities for using other renewable sources (e.g. geothermal energy) in the production processes and ensures that no waste from the factories ends in landfills: they are recycled or utilised for heat generation.

Innovative, environmentally friendly packaging

As the world’s largest food company, Nestlé is committed to use its size, scale, and power to tackle the issue of packaging waste and pursue a vision that none of their packaging ends up in a landfill or in the environment but achieve a circular solution.

Nestlé accelerates its global efforts to make 100% of its packaging recyclable or reusable and reduce the use of virgin plastics by onethird by 2025. 87% of Nestlé packaging globally is already recyclable or reusable. The Nestlé Institute of Packaging Sciences in Switzerland, the first such undertaking of this kind, plays a key role in developing and testing new, environmentally friendly packaging materials. Promising research results from the Institute include the latest refillable or reusable packaging solutions, high-performance barrier papers, simplified, biodegradable or compostable packaging materials, and the increased use of recyclable content in Nestlé’s packaging. Thanks to these efforts, all packaging is now designed for recycling – meaning all the packaging materials are recyclable if the appropriate collection, selection and recycling infrastructure is available.

NESTLÉ. UNLOCKING THE POWER OF FOOD TO ENHANCE QUALITY OF LIFE FOR EVERYONE, TODAY AND FOR GENERATIONS TO COME

swiss focus

Expensive or not?

In a web chat forum, someone asked the question ‘Why is the Swiss watch expensive – or not expensive?’ As the expert explains, a few years ago the requirements for the 'Swiss made' standard were tightened. “This means that a watch can only get this certification if it is more than 60% Swiss made. Obviously, the raw materials are made in Switzerland, where the standard of living is high, prices are high and average wages are high, so the production costs are high. Of course, the quality is very good. It is very strange that while the market is shrinking, prices are rising, but it is because the regulations make manufacturing more expensive and also that most of these watches are produced mainly by hand. For watchmaking, it is very important to employ precision craftsmen who should then be paid accordingly.”

Helpful partners

A PRESTIGE WATCH IS ALWAYS PRESTIGIOUS

SHOULD THERE BE NO MORE CLOSURES, THE SWISS WATCH TRADE IS TO THRIVE IN HUNGARY

In an earlier interview with Diplomacy&Trade László Bakonyi, the owner and General Manager of Btech Hungary Ltd., the market leader in the wholesale of watches (and in the retail under the name BL Óraszalon) in Hungary in terms of turnover, number of employees, product portfolio and the number of shops, noted that demand for top brand Swiss watches had plummeted during the COVID-19 pandemic. Now, he is more optimistic.

“Primarily because of China, demand for more expensive watches has returned this year. As far as the situation here is concerned, demand is also higher now because of the summer. As Europe opened up, we reopened in March-April due to the improvement in the COVID-19 situation and we see that sales numbers are better than in the corresponding period in 2020. So, things are a bit better, people are more optimistic. The rate of decline in turnover, for example, was 40% here in Hungary for 2019-2020, but this figure for 2019-2021 is only 20%,” the General Manager says.

Good summer sales

In March this year, it was reported that the decline in sales in the Swiss watchmaking sector slowed significantly in February, the 13th consecutive month a drop in sales was recorded. “I can confirm that this is the reality, there is growth. As far as watches are concerned, if it's summer, people are happy to wear a watch because the wrists are visible and thus, others can see the watch –so, sales are better. Countries have opened, the malls have opened, the shops have opened, it was summer, the weather was good, so business is booming, I'm not complaining,” he adds.

The prestige watch

According to the Swiss watch industry association (FHS), the biggest drop in the number of watches sold was in the under CHF 200 range, while the number of watches sold increased in the over CHF 3,000 category, but revenue fell slightly, with the biggest increase in the lower mid-range range of CHF 200 to 500 at the beginning of the year. László Bakonyi puts this down to the fact that a prestige watch is always a prestige watch.

“In the meantime, smartwatches have appeared on the market and people are trying them out, but I also see that people buy the smartwatch, then they realize that they have to charge it often, it's a hassle to use, so they buy it and then they simply stop using them. The reason why there is a drop in the sales of Swiss watches in the lower category is because people try the smartwatch but then they go back to buying watches of higher prestige. The COVID-19 situation and the smartwatches put together – those two things first made me a little bit scared about what the future will bring. All in all, we are not despairing, people will buy watches. What is important to know is that, overall, about 1.2 billion watches are purchased every year in the world. Of that, Swiss watches are only 21 million, the Apple watch 20+ million. So, I see room for improvement.”

The watch wholesaling business, BL Watch Salon, has been dealing in quality watches since 1993, so László Bakonyi has nearly 30 years of experience and contacts in the watch distribution world, which helped him through the pandemic. He has observed that the Swiss partners are very loyal to their clients and “that shows in problem situations like the one we are in now. They have changed their attitude to the world which is positive. So, I am completely satisfied with this situation in the sense that they have been fair and the thirty-year relationship has worked. In Hungary, we have been in a similar position to be able to help our partners wherever we could.”

Reacting to the circumstances

Last year, the General Manager told Diplomacy&Trade that "what I can promise is that we adapt to the situation in no time – whatever that situation may be." Now, he recalls that in

terms of the sequence of events, “2020 saw at least two ‘reboots’ of the business, as was the case in February this year. I can say that the crisis management worked well and with my colleagues, we were able to adapt very quickly and really hats off to those of us who are here because we had to react quickly to the circumstances – and we did. We had crisis management last summer, and in the fall, we got back to business as usual, back to normal day-to-day operations. This January, I sat down to restart the business with full power and then came the ‘hard reset’ again around FebruaryMarch. Now, we are back to the same optimism we had in January that hopefully there will be no shutdown and then, we can get back to normal.”

Cleaning the portfolio

Making a comparison with 2008, László Bakonyi says that the world economic crisis 13 years ago basically went unnoticed in the watch industry. “However, the current crisis caused by the new coronavirus infection is affecting everyone – we have also felt it, but we are coming out of it. The pandemic has cleaned up the market a bit, even on the manufacturing side. Many have closed down, the smaller brands will disappear and the big ones will be even stronger. As for the future, if there are no closures, we will grow. Our strategy right now in Hungary for this company is to eliminate all the small brands and sell only products that we ourselves import directly, products of factories – currently 26 of them –we represent in the stores we operate. What is more, the COVID-19 situation has led to a lot of factories approaching us to work together, so we have even improved in that area. So, there is no end to optimism, we are improving in all areas, we have reopened all our stores and we might even open new stores in the future if we can get good conditions,” he concludes.

witty leaks

It’s a beautiful summer morning –warm, but between a patchwork of clouds and the elevation of , pleasant. As I wind my way through birch and pine trees and among white and pink foxglove flowers, I relax into the stillness of the forest. Standing there, it is hard to believe only a few hours earlier, I was in the hustle and bustle of Budapest. This is the Hungary that many visitors to the country will never see.

More to see than Budapest

Understandably, most Americans who travel to this land will spend the majority of their time in the nation’s capital, and for good reason. Budapest is one of the great cities of the world. The breathtaking architecture of Parliament and Andrássy út, the world class museums, the hundreds of years of history – Budapest has enough to keep a tourist satisfied. Still, Budapest is jus t one part of Hungary. And I am not a tourist in this country. I have been here for two years as an American diplomat, and I want to get a full view; not just Budapest, but Pécs, Debrecen, Szeged, Tokaj, Eger, and other places. There is so much beauty in this country, and I am doing my best to see it, one stretch of the Blue Trail at a time. The National Blue Trail, or Országos Kéktúra in Hungarian, snakes itself from the lookout little village Hollóháza in northeast Hungary on the Slovakian border. All told, the Blue Trail stretches 1,168 kilometers from start to end. I would love to explore as many sections of the trail as possible while I'm here in Hungary.

An experienced hiker

I’m not new to hiking. Much like Europe, America has a rich hiking and camping tradition. The National Park System in the United States is famous throughout the world. As President Franklin D. Roosevelt once said, “There is nothing so American as our national parks.” The U.S. counterparts to the Blue Trail of Hungary – the Appalachian Trail, Pacific Crest Trail, and several other iconic hikes in America – attract millions of visitors every year, and I have been privileged to hike in many of our most beautiful parks: Yellowstone, Sequoia, Yosemite, Grand Teton, Glacier, Zion, the Grand Canyon. Just as Hungary is not only Budapest, the United States is not a single place, like New York City or Chicago. I encourage every Hungarian I meet who wants to travel to the United States to broaden their visit as much as time and money will allow, because there is so much to the American experience. See the great American cities, but also get out to the smaller towns of the Midwest. Visit the rural heartlands. Explore the natural beauty of our great country. There is nothing like doing that with a pair of sturdy hiking shoes, a hat for shade, a sense of adventure, and an openness to talking to the people you meet.

Hiking the Blue Trail

In my time hiking the Blue Trail, I’ve been fortunate both to experience the natural beauty of Hungary and to meet interesting Hungarians along the way. My position as Chargé d’Affaires at the

WITTY LEAKS

HIKING INHUNGARY

AMERICAN DIPLOMAT DISCOVERS THE NATURAL BEAUTIES OF THE COUNTRY ON THE BLUE TRAIL

BY THE

embassy provides me with the opportunity to get to know many Hungarians, not only those working in the government, but people from companies, NGOs, the arts, and, of course, the talented group of Hungarians who work within the embassy. Still, there is something different about coming across a fellow hiker on the trail. These encounters can be brief, or they can linger as people take a break for some water and a snack. From the very beginning, though, you have a shared connection. You have the love of outdoors, the joy of the hike, the understanding that the natural world is something that connects us all.

A natural encounter

On one of my recent hikes, my daughter and I found ourselves in a conversation three of us looked for one of the stations with the stamps to mark progress on the trail. She told us about her love of teaching, the energy of her young students, and the challenges she and her community faced during the pandemic. Would the two of us have ever crossed paths if we hadn’t both been hiking the Blue Trail that day? Maybe. Perhaps I would have met her at an embassy function or had the opportunity to visit her school. Would the exchange have been the , ,

of a long day of hiking? I don’t think so.

Diplomacy in nature

It is for these brief encounters just as much as the natural beauty of the trail that I do these hikes. I can select a stretch of the Blue Trail, be there after only an hour or two’s worth of travel, breathe in deep the clean air, and let the accumulated stress of the city go. I can hike, walking at whatever pace I choose, and pausing to take photos or simply enjoy my surroundings. And, if I’m lucky, I’ll come across other hikers out on the trail. Maybe they’ll be Hungarian. Maybe they’ll be tourists from another country out to enjoy Hungary’s natural treasure. We’ll share a few words, and I will learn more about them and their world, and, in return, I will provide a small glimpse into the country I have come to Hungary to represent.

CHARGÉ D’AFFAIRES OF THE UNITED STATES, MARC DILLARD

IN THIS SERIES, DIPLOMATS SHARE PERSONAL ACCOUNTS OF THEIR EXPERIENCES ON “EXCURSIONS” into Hungarian culture, art, gastronomy & scenery.

DESIGN WITHOUT BORDERS

OCTOBER 10 – NOVEMBER 28

KISCELLI MUSEUM, BUDAPEST

Incepted 15 years ago, this is one of the region’s most significant dynamicallyevolving independent exhibition and all-arts event series. This year featuring the works of more than 140 designers, jewelry designers and visual artists from Austria, the Czech Republic, Denmark, Estonia, Germany, Hungary, Italy, the Netherlands, Poland, Portugal, Romania, Spain and Switzerland in the Kiscelli Museum for a month.

The name refers both to the ever-growing number of international exhibitors and the interoperability of the various art disciplines. The works, projects, objects and related events showcased in the exhibition emphasize the importance of productive interaction between the various disciplines of art – the visual arts, design, as well as the visual and performing arts. The selection highlights not only the artists, but also the role of social responsibility, civil society and creators in society, as well as the importance of networking. design-without-borders.eu

BRIDGING EUROPE

SEPTEMBER 17–30 BUDAPEST–BERLIN

The joint festival of Müpa (‘Palace of Arts’) Budapest and the Budapest Festival Orchestra always lends an exciting flavor to the start of the new season: besides classical concerts, it also features jazz, popular music and film screenings. At the center of each instalment over the years of this event series, launched in 2013, has been a country or group of countries with a rich and diverse culture and significant musical traditions – as a country's music says a great deal about its inhabitants. From 2021, the concept behind the festival is changing: although the focus will remain on Europe, within this context we will be partnering with another major cultural center and jointly organizing events in both locations, thus promoting the creation of co-productions between the two countries. This September, our partner will be Konzerthaus Berlin, meaning the building of a bridge between Budapest and Berlin. One of the high points of the Bridging Europe festival will be the concert by the Konzerthausorchester Berlin conducted by Iván Fischer, but also receiving an important role in the future will be the permeability between genres, including further developing bridges between classical music and jazz, early music and contemporary music. At the literary program to be held in the Festival Theater, Hungarian writers will recount their adventures in Berlin, and there will also be film screenings. mupa.hu

EXHIBITION OF JOSEPH SZABÓ

VIRÁG JUDIT GALLERY

SEPTEMBER 10 – OCTOBER 02

The independent creative career of Joseph Szabó, an outstanding sculptor and painter part of the 1956 Hungarian exile to Paris, is completely connected to France. Joseph Szabó's rich oeuvre is a great arc ranging from Expressionism, and Surrealism to Neo- Figurative art. He has exhibited regularly in Spain, America, Switzerland, Italy and France. From the 1960s onwards, critics mentioned his name among the best contemporary artists, and from the mid-1970s, he was named among the greatest Surrealist painters. A multitude of dreamy, apocalyptic visions followed by geometric, brightly colored figures, faces, grids, and stripes appear on his canvases. His monumental sculptures are on view in many French cities’ public squares. viragjuditgaleria.hu

FIRST LISZT FEST INTERNATIONAL CULTURAL FESTIVAL

OCTOBER 8–24 BUDAPEST AND ESZTERGOM

Musical rarities, world and local premieres, legendary ensembles, young talents, great figures of Hungarian and international cultural life: the first Liszt Fest International Cultural Festival is held between October 8 and 24. In addition to the classical music concerts, there will be opera and dance performances, a professional conference, organ concerts, evenings of contemporary music, treats in jazz, world and pop music, literary and visual art events, and unconventional open-air happenings throughout these seventeen days, on the stages of Budapest's most important institutions, as well as in numerous special venues, from the Esztergom Basilica through the Svábhegy Observatory to the Paris Department Store.

While the Liszt Fest International Cultural Festival salutes Liszt’s genius, and offers a taste of his matchless oeuvre every year, it is not the sole focus of the event series, which encompasses all the arts and attracts international audiences by representing the artist’s spirit in countless genres, stimulating thereby contemporary creativity as well. It is no secret that the Liszt Fest is meant to act as a catalyst for the creation of new productions, and gradually connect Budapest with the other cities of the country, to make Hungary an increasingly attractive destination for cultural travelers, thus participating in the promotion of cultural tourism. lisztunnep.hu

EXPERIMENTING THE BONDS OF FRIENDSHIP

GRADUATION FILM ATTEMPTS TO POSITIVELY AFFECT REAL LIFE SITUATIONS

‘Triangle’, an English-Hungarian co-production graduation film at the Arts University Bournemouth by Hungarian director Péter Engelmann has attracted international interest. Now, he tells Diplomacy&Trade about this movie described as “a sci-fi pseudo-docu drama exploring the dark realms of the human mind.”

The story follows three strangers who are about to become friends for life, separated only by 36 questions. It is based on a 1997 psychological experiment on the bonds of friendship.

“I had been interested in this topic for a long time and every time this issue came up in the news, I always felt a strong need to do something, but didn’t know what. Then, in 2018, when I was studying BA Psychology, I started to dive into this topic and since I had already studied film and already had the goal to be a filmmaker, I started to think about how I can make a short film about it and try to make a positive impact on the issue. I started to build up the psychological foundations of this idea, I decided on the aspects that I would like to focus on, but at that point I couldn’t find the story and form for it,” the director recalls. It was only last year, during his MA at the Arts University Bournemouth when due to the things they learned, the encouragement that came from the tutors to experiment and his transformation as a filmmaker in the course, he finally found the story and the form for this idea –

and that was also the point when he brought in the psychological experiment by Arthur Aron – and then, Triangle came to life, he adds.

Combining filmmaking with psychology

As to how much the theme of psychology appeared in his professional career before, Péter Engelmann notes that when he went on to study BA Psychology in 2014, he already had a diploma in TV Studies and he was also about to finish Directing, Screenwriting and Editing courses at the Budapest Film Academy. “I knew that I would like to be a filmmaker. However, I always had a strong interest in psychology and I wanted to study it at the highest level, while in the meantime I also thought that by learning psychology

I could also be a better filmmaker since I can use it in screenwriting, working with people and so on. In the first week of the course, I came across the theme of ‘pseudo reality’, which then became the main theme of my first short film ‘#HELP’ that I started to write just a few days later, so – having also Triangle in my pocket – I can say the plan has worked well so far.”

Change of plans

Péter Engelmann studied in Britain but shot this film in Hungary. He explains that “in the middle of our second semester the pandemic came and although for the summer when our grad shoots would have occurred the situation became a bit better, it turned out that we couldn’t shoot in the UK. We had two options: waiting for the summer of 2021 or try to shoot it in a different country.

WHAT THE ACTORS HAD TO SAY

For me there was no way to wait a year so – after a short and desperate search for countries where they speak English, since I wrote the script in English – I went back to my home country, Hungary, translated the script into Hungarian and there we could shoot it with no-to-minimal restrictions as the situation was very favorable. People tend to say ‘at the end it was better this way’, but this is truly the situation now,

I was glad to work with a topic like this, I think this issue is still very relevant these days, unfortunately and it is very important to talk about it. However, in this film, I liked that the topic wasn’t pushed into our faces from the beginning, it slowly unfolds and we don’t really know what is going on, we aren’t prepared for what is coming. I think this is one of the main strengths of Triangle. (Lili

Vetlényi)

From the very beginning, I knew that working with this issue won’t be easy. It’s a tough topic and an even tougher job to elaborate on it in a 20-minute short film. However, Péter was very prepared both during the writing process and working with us, actors. The crew was also great, we could open up to each other and that is very important while we are dealing with such a heavy topic, you just couldn’t do it if you aren’t surrounded by trustworthy people. (József

S. Kovács)

This topic is really close to me. Due to my weak eyesight, I was bullied during basketball training when I was a kid – which, of course, was also done to everyone else. They called me blind...well I didn’t get the joke. However, later on, ‘being blind’ was the key for me to learn choreographies more easily as back in time during the basketball training, I was identifying my teammates through their moves, how they handled the ball, how they threw it and so on. Triangle has a very important message for me that I happily pass on through my acting. (Dániel

Gaál)

I can only say I’m so glad that I had to shoot this film in Hungary with this wonderful cast & crew. For that matter, although it is a UK graduation film, it was shot in the Hungarian language with only one person being British in the crew, our composer Sam Dinley.”

Favorable feedback

“Fortunately, we got very good feedback so far and the reason it is even better is because it is not just ‘oh I liked your film’, it is not just a classic good reception of the movie – which, don’t get me wrong, it is an awesome thing to hear – but several comments are related to specifically to the topic and how people looked back to their own actions, how it affected them in their own lives and hopefully, it will also give them something for the future. One of my main goals with the film, that I set out way back in 2018, is to try to positively affect real life situations and its participants related to the issue of the film. If it only happens to one person, it is already worth it. I’m excited to look forward to the upcoming screenings and feedback. I will try to be at as many screenings as I can in order to be able to interact with the audience,” the director points out.

A versatile artist

Péter Engelmann is listed on the international movie database IMBb primarily as editor, and then in eleven other categories. Explaining this versatility, he says with a smile that “it is a bit annoying that I can’t make it show writer, director first, and then editor, but the truth is the truth, I’m also a working editor and since people are looking for editors more frequently than I can shoot a film as a director, I have more film credits as editor than anything else. I’m also working on a film at the moment as an editor and colorist, so yeah…. I urgently need to direct a new film!”

He adds that although his main fields are writing and directing, and then comes editing, he also likes cinematography, color grading and visual effects “while due to several reasons where budget is one of the main ones...I happened to do sound mixing, production design and of course producing in recent years. With Triangle, I decided that I will only do writing, directing, producing and editing and that’s it, but at the end, I had to do the color grading and the visual effects too, but I learned a lot while doing these, so, I don’t mind.”

As regards his plans for the near future, Péter Engelmann highlights that since he finished ‘Triangle’, he started to focus on finding a job, “which, of course, is not an easy thing, but I’m on it. This is really time consuming, but in the meantime, I also try to focus on my future projects: finding the right idea for my first feature and developing a short story (or more) from the Holocaust.”

The tradition of viticulture and winemaking in this region in NE Hungary was founded by the labor and spiritual inheritance of Count Imre Degenfeld, landowner, and it dates back to the 1800s. The passionate love of this region and its wines has stayed with the family ever since then.

MODERN WINERY BUILT ON TRADITIONS

GRÓF DEGENFELD WINE ESTATE AND CASTLE HOTEL CELEBRATES ITS QUARTER-CENTURY ANNIVERSARY

It was 25 years ago, or a little bit more, that the Count Degenfeld family decided about the foundation of a new wine estate and thereby evoking an old family tradition in the Tokaj Region.

Rebuilding the estate

Although after the World War II, the family was deprived of all their estates and possessions, Count Sándor Degenfeld returned in 1994 and bought a new estate in the Tokaj region, after he had established a new existence in Germany. He could see the potential and the beauty in the neglected park

and in the ruinous buildings, and he started renovating the center of the wine estate in Tarcal with resolution. In his quest, he was supported by his daughter, Countess Marie Degenfeld and his son-in-law, Dr. Thomas Lindner. In the following years, their task was to buy and exchange more estates and to build a winery, in which the first harvest took place in 1996. At the foundation of the new winery, the owners had a grand vision in mind; to make elite wines in the highest quality standard in a modern factory, but also with respect to the traditional ways of winemaking.

In 1996, a grand extension and renovation of the factory was started by the plans of the architect Ferenc Salamin, a student of Imre Makovecz.

Winemaking in harmony

Today's castle hotel was built in 1873 on the King’s order for a traditional winemaker's trade school to support the winemaking industry after the phylloxera epidemic. In this institute, owned by the King and then by the state, future cellar masters were

trained, and we can still visit the spacious wine cellars which are used by the winery today. Traditional winemaking was always practiced in these spacious wine cellars. After the renovation of the buildings and the replantation of the park, the castle hotel started to operate in 2003 and thus the first four-star

hotel

opened. The elegant restaurant with the intimate terrace, which is open from spring to autumn, and the delicious harmony of the wines and the courses can offer a great experience to the visitors of the region. The center of the estate with the châteaustyle castle, the winery and the surrounding vineyards are all united as a whole in complete harmony.

By modern standards

The 35-hectare vineyards are located from Tarcal towards Mád, and there are some historical ones among them, like the Terézia, the Zomborka or the Borkút vineyards. Ever since the foundation of the estate, the vine-growing is the responsibility of István Varkoly. The replantation of the vineyards took place according to modern standards, fractionally, between 1999 and 2010, keeping a 1.8 -2 m row space and a 0.8 m space among the vines. As a result of the owners’ enlightened, environmentally friendly way of planning, in 2009, the estate could start controlled organic farming. By 2012, all the vineyards were able to start organic farming. The winery produced the first organic wines in 2017, these were the estate Furmint and the Muscat Blanc. 2015 was a new milestone in the history of the estate, the most iconic and beautiful part of the estate, the Terézia chapel was renovated. Since then, it has been the charming scene of thousands of photos and the location of weddings, christenings, engagements and anniversaries.

of the Tokaj region