Thursday, 2 May 1996
Volume 1, Issue 340



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REGIONAL NEWS
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Hungary in Oil Exploration Talks
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  Hungarian oil company MOL is engaged in talks with partners in
  Russia and North Africa about oil exploration,  MOL Chairman
  Laszlo Pal said Tuesday.  He declined to name the partners in
  the talks, but said that some negotiations could be concluded
  in a few weeks.

  Two weeks ago MOL won the right to explore for oil off the
  coast of Qatar jointly with U.S. petroleum producer Chevron.
  Pal also said he wants the government to continue MOL's
  privatization, which began last year with a 4O percent sale of
  shares to Hungarian, British and American investors. The
  Hungarian government still holds 58 percent of MOL, but
  according to the privatization law the state can retain only a
  25 percent stake. MOL has a monopoly position in most areas of
  oil and gas production, export-import and wholesale
  distribution in Hungary.


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Hungary's Auditer Resigns
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  The President of Hungary's State Audit Office, Istvan
  Hagelmayer, is stepping down July 1st due to poor health, it
  was announced this week. Hagelmayer was elected by Parliament
  in 1989 to a 12 year term.

  Likely candidates to replace Hagelmayer include former Justice
  Minister Kalman Kulcsar, the former president of the
  Federation of Trade Unions Sandor Nagy and Laszlo Nyikos, the
  current audit office vice-president.


> --------------------------------------------
Ex-Finance Ministers Criticize Hungarian Tax
> --------------------------------------------
  Former Finance Ministers Laszlo Bekesi and Lajos Bokros both
  disagree with a current finance ministry proposal to tax
  interest earned on savings.  Bekesi says the 1O percent
  interest tax would cause inflation, thereby destroying the
  government's inflationary target of 23 percent for the
  forthcoming year.

  Bokros thinks the tax will take away public incentive to save
  money, possibly causing a loss in government income. A third
  former minister of finance, however, supports the tax. Ivan
  Szabo, who held the position under the previous governmeent,
  says capital income should be taxed like job income.


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