N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International
Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 36/1995                                                     17
February 199
5

ECU 85 Million Phare Support for Hungary


        Budapest, February 16 (MTI) - As part of the Phare
programme, Hungary
may receive ECU 85 million from the European Union this year,
Karoly Attila
Soos, State Secretary of Industry and Trade, and Istvan
Szent-Ivanyi, State
Secretary of Foreign Affairs, told reporters today.

        Of this sum, ECU 16.5 million will be used to develop the
private secto
r,
ECU 29 million to develop the infrastructure, ECU 15.5 million will
be devoted
to environmental protection and energy saving, and ECU 24 million
allocated
to education, primarily the Tempus programme.

OSCE High Commissioner in Hungary


        Budapest, February 16 (MTI) - The High Commissioner on
National
Minorities of the Organization for Security and Cooperation in
Europe is
holding talks in Hungary.

        Max van der Stoel is here to prepare a visit by the
international
commission of experts examining the situation of the Hungarian
minority in
Slovakia, and that of the Slovak minority in Hungary.

        Today, the high commissioner met Matyas Eorsi, chairman of
the
Hungarian Parliament's Foreign Affairs Committee.

        The politicians discussed the minorities problems in the
region,
especially with regard to Slovakia and Romania, and also exchanged
views on
the two basic treaties Hungary plans to sign separately with these
two
countries, Eorsi told the press after the meeting. He said there
was accord
between the high commissioner and him on every major issue.
        The western European countries are aware that minorities
problems
exist in Eastern Europe, but there is a lack of united action to
solve them,
Eorsi said. Actually, the West is rather insensitive to concrete
cases, which
makes it harder for the countries directly involved to find
solutions.

        In Eorsi's view, the Council of Europe's framework
convention for
protecting the rights of national minorities does not provide a
real solution
either - the countries that do not want to deal with minorities
problems can
point to this convention saying that these are the European norms.

        Eorsi said the basic treaties, although important
documents, are no
substitute for the goodwill of governments.

        The two politicians agreed that a deadline for the signing
of the treat
ies
would only be grist to the mill of the country that is less
interested in
signing a
basic treaty, because due to a lack of sufficient time for
negotiating, the
other
party would be forced to accept less favourable terms.

        Max van der Stoel and Eorsi agreed that the international
community
should strive to include monitoring in conventions on minorities.

        Hungary is ready to allow the international community to
monitor the
observance of the rights of its minorities, Eorsi said.

OSCE Minorities Commissioner Holds Talks in Budapest


        Budapest, February 16 (MTI) - Max van der Stoel, high
commissioner of
the Organization for Security and Cooperation in Europe (OSCE) in
charge of
minority affairs, held talks with Csaba Tabajdi, parliamentary
state secretary
at
the Prime Minister's Office, and Laszlo Labody, president of the
Office for
Hungarians Beyond the Border, in Budapest on Thursday.

        Labody later told reporters that on his two-day visit to
Budapest, Max
van der Stoel was leading an international group of experts
examining the
situation of minorities living in Romania, Slovakia and Hungary.
The OSCE
official visited Slovakia last week, and is expected in Romania
next week.

        Labody said at the talks Tabajdi noted that what Slovak
Prime Minister
Vladimir Meciar said in Budapest was not in complete conformity
with the
Bratislava government programme. Tabajdi also voiced his concern
over the
principles guiding transformation of the Slovak administrative
system and the
introduction of the so-called alternative education system, which
the state
minister presumed covered the switch of Hungarian schools in
Slovakia to
study in the Slovak language.

        According to Labody, Tabajdi criticized the documentable
political
campaign which has been conducted in Romania for several months
aimed at
having the Hungarian Democratic Union of Romania (HDUR) banned.

        Tabajdi also questioned the reception of European norms in
Romania
and Slovakia. As a concrete example, he compared the Charter of
Local Self-
Government of the Council of Europe, providing for free contacts
and
organizing of local governments, with the Romanian response to the
formation
of the HDUR self-government council.

Tunisian Foreign Minister on Talks in Hungary


        Budapest, February 16 (MTI) - Tunisian Foreign Minister
Habib Ben
Yahia expressed his satisfaction with the results of his three-day
official
visit
to Hungary, in an interview given to MTI on Thursday.

        Ben Yahia paid a visit to Hungary at the invitation of
Hungarian Foreig
n
Minister Laszlo Kovacs. On Wednesday, he was also received by
President
Arpad Goncz.

        According to the Tunisian foreign minister, the ministerial
talks cover
ed
possible forms of cooperation between the two countries, including
how to
stimulate the interest of the private sectors, the development of
bilateral
trade,
and the establishment of trilateral trade links with other
partners. They also
held discussions on how to extend the scale of Hungarian business
activity in
Tunisia.

        Ben Yahia said that in his opinion, within a few months
economic
cooperation could improve significantly between the two countries.

        The Hungarian-Tunisian joint committee will hold a session
this year,
the Tunisian minister continued.

        The ministers agreed to organize regular visits between
their countries
'
governments, parliamentary leaders, and in the fields of culture
and sciences.

        Next year will mark forty years of diplomatic links between
Hungary and

Tunisia, and the two countries plan to celebrate this anniversary
with cultural
events.

        Tourism is developing quickly between the two countries and
this is
expected to have a positive effect on the other fields of
cooperation, the
Tunisian minister said.

        According to Ben Yahia, the two ministers' views on
international
developments were in total accord, such as on the challenges to
world
security and stability, especially as regards the Mediterranean.

        Hungary, as current chair-holder of the OSCE, is greatly
responsible fo
r
the closer aligning of the efforts of European and Mediterranean
countries, the
Tunisian minister said.

        The ministers agreed that their countries' interests do not
contradict
but
complement one another. In a great Euro-Mediterranean free-trade
zone,
Hungary and Tunisia will be immediate partners, the Tunisian
minister said.

        The current task of Hungary and Tunisia is to prepare for
the era
beginning at the turn of the century, Ben Yahia said.


Government Spokesman's Briefing


        Budapest, February 16 (MTI) - At a news conference after
Thursday's
cabinet meeting in Budapest, newly appointed government spokesman
Elemer
Csak said he and his colleagues would do all they could to provide
the press
with reliable, quick and professionally correct information.

        At today's meeting, which lasted more than two and a half
hours, had
the attendance of all ministers and was led by Prime Minister Gyula
Horn, over
20 topics were discussed, Csak said.

        The government passed a decision on changes to the system
of top
military leadership. Accordingly, the highest leading body is the
Army
Command, to which the Chiefs of Staff, the Main Division of the
Land, Air and
Defence Forces and the Main Division of Provisions and Technology
are
directly subordinated. The previously scattered organizations
engaged in
human activities will now belong to the Human Main Division. At the
Army
Command, inspector's posts will be created to monitor the military-
professional work of the army. With the transformation of the
upper, and later
mid-level, leadership structure, staff numbers at these levels will
fall by 20
per
cent, or 470 people. At the same time, the Army Command personnel
will
increase by 75 men.

        The government discussed a report on the public hearing
related to
Slovakia's Mochovce nuclear power station, but did not adopt a
separate
position on the issue, in the knowledge that the competent
Hungarian experts
closely follow the technical operations of the facility.

        Regarding the satellite television project MAGYARSAT, the
government
decided to look further into the question of whether government
participation
in the private venture is profitable, or not.

        In connection with the Hungarian heats of Formula One
races, the
government confirmed it would continue to support the organizing of
competitions, with a guarantee of HUF 150 million (1 USD equals 112
HUF).
Thus indicating that from now on the success of talks will not
depend on the
Hungarian side, the spokesman added.


        The government on Thursday adopted the Foreign Ministry's
proposal
for closure of seven embassies - in Uruguay, Peru, Venezuela,
Zimbabwe, the
United Arab Emirates, Cambodia and the Philippines - and transfer
of their
functions to Hungarian embassies in neighbouring states, Csak said,
adding
that the step was dictated by financial constraints. The
approximately HUF 125
million to be saved by this may finance the opening of new
Hungarian
embassies, for instance in Slovenia.

        At the briefing, Minister of Justice Pal Vastagh informed
journalists o
f
the government"s decision on Thursday to table the bill on public
purchases
in Parliament for urgent discussion. The new legislation is
intended to create
a
clear-cut situation for organizations using public funds. Above
certain value
limits, purchases will be subject to participation in compulsory,
open tenders.
The bill also allows the government to order centralized purchases
binding for
certain objects and certain groups of organizations under its
control. The aim
is to ensure an effective and economical use of public funds, rule
out
corruption and block phenomena opposed to market competition. The
law
would affect some 5,000 economic units and HUF 110-120 billion
worth of
goods annually. Vastagh stressed the bill was also a major step on
the road to
European law harmonization.


Parliamentary Foreign Affairs Committee Meets


        Budapest, February 16 (MTI) - The Foreign Affairs Committee
of
Hungarian Parliament discussed today proposed amendments to the
parliamentary resolution on tasks necessitated by the unilateral
diversion of
the Danube by Slovakia.

        Last year the government examined the state of temporary
water supply
for the Szigetkoz region, and found that the pumping method
previously
agreed upon had failed to meet expectations, and therefore a new
solution was
needed.

        Under a decision reached at a meeting between the Slovak
and
Hungarian prime ministers, an underwater weir would be built to
ensure
temporary water supply.

        On the basis of the prime ministerial talks, the government
drew up a
draft proposal, to which MPs submitted nine proposed amendments.

        Of these, the Foreign Affairs Committee supported the
motion of the
Committee on Environmental Protection, according to which
Parliament
should ask the government to make a decision in its own right, and
set aside
funds from the general reserves of the 1995 central budget to
finance the costs
of temporary water supply.

        The environmental committee proposed that the government
initiate a
separate agreement between Hungary and Slovakia on the issue.

        The Foreign Affairs Committee unanimously adopted the
parliamentary
draft proposals on the deportation agreements to be signed with
Austria,
Slovenia, Croatia, Switzerland and Slovakia.

        It also approved a bill amending the supplementary protocol
to the
Geneva conventions on the protection of victims of international
armed
conflicts.

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OMRI DAILY DIGEST
No. 36, 20 February 1995

DEMOCRATIC CONVENTION OF ROMANIA ABOUT TO SPLIT? The main umbrella
organization uniting Romania's centrist opposition appears on the
verge
of splitting after decisions taken by the organization's council on
17
February, Radio Bucharest and Romanian Television reported the same
day.
The council rejected proposals submitted by the Party of Civic
Alliance,
the Romanian Social Democratic Party, and the Liberal Party '93
that the
DCR be restructured to distinguish it from its member parties and
civic
movements. The council also decided that member parties, with the
exception of the Hungarian Democratic Federation of Romania, must
run
joint lists in the 1996 local and general elections and back the
same
candidate in the presidential elections. Finally, the council
demanded
that the HDFR explicitly state its respect for the country's
constitution, including the provision defining Romania as a
"unitary and
national state." The HDFR, the PCA, the RSDP, and the LP '93
representatives refused to sign the modified protocol, prompting
DCR
President Emil Constantinescu to say the implication is that the
four
parties "are no longer active in the DCR." But he added that the
parties' leaders have 30 days in which to change their minds. --
Michael
Shafir, OMRI, Inc.

[As of 12:00 CET]

Compiled by Jan Cleave

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0date=2/20/95
type=correspondent report
number=2-174358
title=Hungary Econ (l only)
byline=Barry Wood
dateline=Budapest
content=
voiced at:

Intro:  Hungary is one of about six post-communist countries to
have emerged from the transformation recession and returned to
economic growth.  But V-o-A's Barry Wood reports from Budapest
that the growth momentum has slowed this year as the socialist
government of prime minister Gyula Horn may be reconsidering its
policy on privatization.

Text:  Hungary's success has been its three percent growth rate
in 1994 and its continuing ability to attract foreign investment.
Hungary has been a magnet for West European and American
companies wanting to set up operations in Eastern Europe.
Hungary has attracted over eight billion dollars of foreign
direct investment.  That is more than half of the total
investment inflows into all of post-comunist Europe.

But foreign experts say these impressive accomplishments must
not  obscure the significant problems confronting Hungary.  The
International Monetary Fund says that with its large and chronic
budget deficit Hungary lives beyonds its means.  Hungary has a
large foreign debt.  And in recent weeks some experts have
predicted that Hungary could face the same kind of monetary
problems that afflict Mexico, which also is heavily indebted.

But Germany's Deutsche Bank says Hungary's biggest problem is
privatization.  Prime Minister Horn recently cancelled a
previously approved deal to sell Hungary's largest chain of
hotels to an American company.  The blocked privatization led to
the resignation of the finance minister and the privatization
commissioner.  But bankers say the recent naming of known
reformers as replacements is reassuring to the business
community.

There are now cautious predictions that the privatization will
soon  be resumed and that monetary policy will be tightened.  The
Hungarian  currency was recently devalued.  Negotiations for a
International Monetary Fund loan are being resumed.

Deutsche Bank says the Hungarian economy will  not  encounter a
Mexican-style financial crisis.  The foreign debt, it says, is
manageable.  The Big German Commercial Bank says Hungary's
economy will continue to grow, although the rate of growth could
slow to one and a half  percent this year.  Inflation remains a
problem, with price increases expected to exceed 17 percent this
year. By contrast, inflation in neighboring Slovakia is expected
to be under ten percent.  (Signed)
neb/bdw/skh/mmk

20-Feb-95 8:13 am est (1313 utc)
nnnn

source: Voice of America

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NATO Worries About East European Armies Meeting Standards

  JOHN POMFRET (WASHINGTON POST FOREIGN SERVICE)
  
  (C) 1995 THE WASHINGTON POST (LEGI-SLATE ARTICLE NO. 223008)


   KRAKOW, Poland -- With its trademark red berets and reputation
for
toughness, the 6th Air Assault Brigade is one of the elite units of
Poland's
new army, an important cog in Warsaw's designs to join NATO. The
only problem
is that the 6th Brigade, which wants to use helicopters to
accomplish its
tasks, has no choppers. And exactly what part of the army should
command the
brigade is in dispute.

        The troubles of this rapid reaction unit, with traditions
harking
back to Polish participation in World War II's Battle of Arnhem,
illustrate
two critical problems facing armies of the former Warsaw Pact as
they dream
about inclusion in a military alliance that from 1949 to 1989 was
their
Public Enemy Number One.
       The first is lack of money. Total defense spending in the
region this
year will be less than half of what it was in 1989.
        The second is that command structures and training that
made sense
under the Soviet-led Warsaw Pact appear incongruous today. And the
culture of
treating the military like an exclusive club only delays Eastern
Europe's
union with the West.
              Lately, Russia's adventure in Chechnya has rekindled
calls in
Eastern Europe and some Western capitals for a faster expansion of
the North
Atlantic Treaty Organization to guarantee security to the countries
of the
East. But while political pressure mounts for expansion, Western
military
officials involved in Eastern Europe's transition wonder whether
its nations
are capable of meeting NATO's standards.
     As important, the officials say, are growing concerns that
NATO, too,
could suffer from a hasty decision to augment the 16-member
alliance. Even
among the region's most likely new members -- Poland, the Czech
Republic,
Hungary and maybe Slovakia -- creating a NATO-compatible force
could take
many years, if not decades, these experts say.
      To prepare former Warsaw Pact nations for possible NATO
membership, the
Clinton administration has decided to permit sales to them of
fighter jets,
tanks and other sophisticated offensive weapons, U.S. officials
said Friday.
Most of the countries would be unable to afford the most expensive
weapons,
such as F-16 jet fighters, but U.S. military assistance might
offset the
cost. Arms sales to the countries could improve their ability to
contribute
to the alliance. All the former Warsaw Pact countries have
expressed interest
in acquiring secure communications equipment that would allow them
to
communicate with their potential NATO partners.

           Military reforms, launched in all the countries of the
East and
generally intended to bring Eastern Europe closer to the West,
appear to have
run aground because of poor cash flow and strong resistance among
senior
officers accustomed to the perquisites of power. Efforts to assert
civilian
control over the military are also generally failing.
             However, some reforms have gone through. Political
commissars,
Communist Party members tasked with ensuring the loyalty of the
armed forces,
have been abolished. So too has the lopsided deployment of East
European
troops.
              In 1989, for example, there were 200,000 Czechoslovak
soldiers
deployed on their country's border with East Germany. Today there
are barely
20,000 Czech soldiers there. In 1992, more than 60 percent of
Poland's army
was arrayed along its frontier with Germany and only 10 percent
along its
eastern front. By the end of this year, three times as many
soldiers, tanks
and artillery batteries will face the former Soviet Union, while
the Western
border deployment will have dropped to 40 percent.
              But the main result of the reforms, according to one
senior
Western military official who studies Eastern Europe, has been to
gut the
Warsaw Pact, not to create new national armies capable of mounting
a credible
defense. Indeed, the departure of the Soviet war machine from
Eastern Europe
left the region without an air defense system, with little early
warning
radar and with none of the glue of command structure that had held
the region
together militarily for 45 years.
              "Breaking up the Warsaw Pact was like chopping the
limbs off a
body," the official said. "But since then, nothing much else has
been done.
Now these armies couldn't fight themselves out of a wet paper bag."
The
exception, the official noted, was Romania, ironically one of the
poorest
countries of the Eastern Bloc.

           Although NATO has only begun to codify standards for new
members,
broadly they involve two main categories, enunciated by U.S. Deputy
Assistant
Secretary of Defense Joseph Kruzel during a visit to Warsaw late
last year:
"First, an unshakeable commitment to the democratic process,
including a
commitment for civilian control of the military; and secondly, an
ability to
contribute to collective defense and security."
             So far, Eastern Europe does not qualify. Consider the
following:
   None of the armies in Eastern Europe, except that of the Czech
Republic,
is deemed by Western officials to be truly controlled by civilian
authorities.
     Poland's President Lech Walesa fired his defense minister
after he
proposed placing control of the army directly under the
civilian-dominated
Defense Ministry. Walesa wanted to bypass the ministry and have the
army
controlled by the chief of general staff, who is appointed by the
president.
              "Instinctively, our generals see the need for
changes, but they
can't accept the limitations on their power and civilian control,"
said Piotr
Kolodziejczyk, the ousted defense minister, in an interview in the
northern
Polish city of Gdynia. "This is a significant problem, and it is an
indispensable part of the reforms."
  The Czech Republic, though its army is firmly controlled by its
civilian
government, faces other, severe problems, Western officials said.
     By the end of 1995, the army plans to shrink to 65,000
soldiers and cut
its tanks, artillery and armored personnel carriers well below the
ceiling
set by the Treaty on Conventional Forces in Europe, according to
Jiri Sila,
an official with the Czech Defense Ministry.
             "With a tiny, powerless force like this," said a
Western
officer, "we have to ask exactly what will they be able to
contribute --
cooks?"
  Many military programs are designed not to contribute to defense
but to
keep workers employed. Poland, for example, is developing its own
tank, the
Gorilla, and has recently re-funded an 18-year-old project to
develop a jet
trainer, despite the widespread belief by Western military experts
that it
should abandon both projects and concentrate on producing its
well-built
military helicopter, the Hussar.
             "These are decisions that were made with society in
mind, to
save jobs," Kolodziejczyk said. "Militarily, they are debatable."
   Schooling in Eastern Europe's military academies still sticks
closely to
the Soviet model, which fails to develop one of the key ideas
necessary for
effective participation in NATO -- the concept of national defense.
   The Warsaw Pact sacrificed national defense to develop a virile
attacking
machine. One of the founding principles of NATO, however, has been
a
commitment to national defense along with collective security.
   The command structures of the armies in Eastern Europe are so
skewed that
experts say they would hamper collective security and take more
than 10 years
to fix.
     In Poland, because money was always short, officers were
rewarded with
higher ranks, not higher pay. As a result, there are almost three
times as
many colonels and lieutenant colonels as there are lieutenants. The
situation
inverts effective command structure.
      Hungary, in pursuing reforms, sacked numerous junior officers
but kept
the men who should have been replaced, scores of "old political
colonels," a
Western defense analyst said. "As a result, the army has become
less open
than ever before," he said. "It is a situation that is getting
worse."
   Programs such as one launched by Hungary's previous government
to slice 10
percent of the soldiers from every unit, which brought turmoil to
the armed
forces, have turned the militaries of Eastern Europe into
"hedgehogs," the
senior military official said. "Civil-military relations are
terrible across
the board," he said.
              In an interview, Hungarian Defense Minister Gyorgy
Keleti
acknowledged that the cuts brought havoc to his army. "We're
starting to
change it," he said. "But it is very slow."
             On the surface, East European military officials
appear to
understand that a major problem involves the psychological changes
necessary
to create a new army. Keleti spoke eloquently that "the problem is
not with
tanks and artillery, it is with our minds and the minds of our
soldiers." But
when asked what needs to be learned, he sidestepped possible
solutions of
embracing a new culture or abandoning the old Soviet style.
Instead, he
concentrated on practical skills -- such as English language
courses.
             "When the Berlin Wall fell we were surprised, and NATO
was
surprised," said Gen. Roman Hermoza, a former MiG-29 fighter pilot
and now a
top defense official steering Poland's military reforms. "But no
one had a
recipe for the right reforms."

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