OMRI DAILY DIGEST
No. 49, 10 March 1996

ECONOMIC IMPROVEMENT IN HUNGARY. Peter Medgyessy, Hungary's new finance
minister, on 7 March expressed satisfaction with budgetary developments
this year, Hungarian and international media reported. Hungary ended the
first two months of 1996 with a budget surplus of 23 billion forints
($157.5 million). The country's monthly inflation rate dropped from 4.4%
in January to 2-2.2% in February, and the cabinet aims to limit annual
inflation to 20% in 1996, down from 22.5% last year. Although GDP growth
dropped slightly in February, dynamic export growth and satisfactory
imports create a good basis for the 2% GDP growth projected for this
year, Medgyessy said. He warned that overspending by local authorities
could generate inflation, and he instructed the cabinet to work out
anti-inflation measures. -- Sharon Fisher

[As of 12:00 CET]

Compiled by Ustina Markus


Friday, 08 March 1996 Volume 1, Issue 304


REGIONAL NEWS
-------------

> --------------------------------------------------
CHRISTOPHER TO ATTEND E.EUROPE CONFERENCE MARCH 20
> --------------------------------------------------
The Czech Foreign Ministry confirmed on Monday that a security
meeting between U.S. Secretary of State Warren Christopher and
eastern European foreign ministers will be held in Prague on
March 20.  Czech Foreign Minister Josef Zieleniec announced the
one-day conference on Wednesday, which is expected to be
domimated by ex-communist countries' wish to join NATO.  But he
said only that it would be held when Christopher visited Prague
from March 19 to 21.  The U.S. embassy said it had no details
yet of Christopher's trip, but said Christopher would attend the
conference between visits to Ukraine and Russia.  Russia has
fiercely opposed plans by the western alliance to recruit some
of its former East Bloc allies. Some NATO diplomats have
suggested the eastward expansion issue would be put "on the back
burner" until after presidential elections in Russia and the
United States later this year.  So far NATO has said it will
definitely invite former East Bloc countries to join but it has
never said which or when. Russia on Thursday called the idea a
dangerous provocation and a return to the Cold War.  Prague
officials are hopeful that a NATO meeting at the end of this
year will reveal more, and Poland and the Czech Republic are
tipped as frontrunners for eventual membership.  Hungary also
wants to join NATO as soon as possible but has unresolved
disputes with its neighbours Slovakia and Romania. Slovakia's
international image has also been tarnished by a long-running
dispute between its prime minister and president.  Most of the
countries want to join NATO to end what they feel is a regional
security vacuum created by the demise of the Soviet-led Warsaw
Pact after the 1989 fall of communism.


> ----------------------------------------------------
HUNGARY HANDS OVER FRAUD SUSPECT TO BUCHAREST POLICE
> ----------------------------------------------------
Hungarian police on Thursday completed the extradition to Romania
of a Romanian citizen wanted by Bucharest police on charges of
swindling his fellow-citizens out of some 24 million dollars.  A
Hungarian police commando escorted Sergiu Bahaian, 33, from
Budapest to a deserted border crossing at Artand in Eastern
Hungary where Romanian police were waiting to collect him.
Bahaian's company, Sabina Product SRL, allegedly collected
around $24 million from over 20,000 investors in what Romanian
police called an illegal pyramid investment scheme.  The scheme
promised investors 20 percent monthly interest on their hard
currency deposits.  Romanian police began investigating the case
after they received more than 800 complaints and alerted the
Hungarian police through Interpol after Bahaian went missing
with two associates in December.  Get-rich quick schemes
mushroomed in Romania after the December 1989 fall of communism,
luring thousands of depositors with promises of high returns on
short-term deposits.  Last year, the owner of a pyramid scheme
in the Transylvanian city of Cluj, Ion Stoica, was sentenced to
two years in jail for fraudulent bankruptcy and for defrauding
citizens after his scheme, known as Caritas, collapsed in 1993.
Stoica's dodge sucked in savings worth one billion dollars from
around four million Romanians.


BUSINESS NEWS
-------------

> ------------------------------------------
HUNGARY PREPARES ANTI-INFLATIONARY PACKAGE
> ------------------------------------------
Hungary proposes a package of measures to keep average annual
inflation below 20 percent this year, Finance Minister Peter
Medgyessy told a news conference on Thursday.  The government
plans to decide on the measures at the end of this month, he
added.  Medgyessy called inflation "Public Enemy Number One"
soon after he was appointed Finance Minister last week to
succeed Lajos Bokros.  The minister said he hoped that
year-on-year inflation would slow to 23 to 25 percent by the
middle of this year from 28.9 percent in January and would drop
below 20 percent by December. The government will make efforts
to keep energy and drug price rises as low as increasing costs
allow, he said.  Before the privatisation of the Hungarian
energy sector late last year, Hungary undertook to introduce
market prices for energy by the end of this year.  Medgyessy
also said that the Fair Competition Office would examine whether
companies in monopoly positions, primarily in the field of food
processing and services, were not raising prices beyond
reasonable limits.


> --------------------------------------------
EAST EXPANSION COULD ADD TO EU SUGAR SURPLUS
> --------------------------------------------
The European Union's (EU) planned expansion eastwards could
initially add to the 15-nation bloc's sugar surplus but more
outlets might emerge for the commodity in the longer term, a
leading industry analyst said on Thursday.  In its latest
report, German statistician F.O. Licht said none of the 10
Central and Eastern European Countries (CEECs) was likely to win
full EU membership before the year 2000 but the region's
depressed sugar output would probably increase.  According to
the report, the three countries most likely to join the EU first
-- the Czech Republic, Poland and Hungary -- would probably be
regular sugar exporters by the time they were EU members.  Sugar
production in the Czech Republic had tended to exceed
consumption in most years so that imports were negligible, Licht
said, adding that the country's area sown to beet could easily
be expanded especially after the privatisation of state farms.
The Czech Republic was likely to become a regular sugar exporter
provided financing problems for the industry could be got right,
Licht said.  Hungary was normally a net exporter of sugar, it
said, but in some years it had been forced to import when the
crop had been set back by bad weather.  With the establishment
of sugar regime in Poland, the country had become a regular
exporter and would probably raise its world market profile as
largest CEEC sugar producer.  Licht said it had to be assumed
that western capital and know-how would flow into Europe's
post-communist nations, raising standards and hence sugar
production.  The report added that while this might include an
increase in sugar consumption in one or two cases, in most it
would mean that consumption would fall due to inroads made into
the market by alternative sweeteners.


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date=3/8/96
type=correspondent report
number=2-193994
title=East Euro Stocks (s only)
byline=Barry Wood
dateline=Prague
content=
voiced at:

Intro:  Eastern Europe's stock markets were mostly higher again
this week, with Prague and Warsaw hitting new 12-month highs.
V-o-A's Barry Wood reports.

Text:  The biggest move this week was in Warsaw where the WIG
index gained seven percent to close at 11-thousand-942.  The
Warsaw market is up over 20 percent in the past three months.
Trading volume is also higher.  On Friday the Warsaw market
closed higher for the tenth consecutive session.

In Prague, the market also went steadily higher, posting gains
all week. The P-X 50 index gained eight points to 482, a nearly
two percent gain.  The most heavily traded shares were S-P-T
Telecom, CEZ (the electic utility) and Komercni Banka.

In Budapest, the market was down Thursday and Friday, but still
closed higher on the week.  Profit taking held the high flying
Hungarian  exchange to a four percent gain on the week with the
B-U-X index closing at 23-hundred-12.

The smaller exchanges were lower, with Bratislava down two
percent and Bulgaria off one-and-one-half percent. (Signed)

neb/bdw/jwh/gpt

08-Mar-96 12:55 pm est (1755 utc)
nnnn

source: Voice of America