OMRI DAILY DIGEST
No. 200, 13 October 1995

HUNGARIAN POLITICAL UPDATE. All six political parties in Hungary are
debating the future of the socialist-liberal cabinet, Hungarian
newspapers reported on 13 October. While the coalition parties are
recovering from the abruptly terminated coalition crisis, the four
opposition parties are preparing themselves for a possible takeover. The
Hungarian Democratic Forum says that, in a coalition with the Young
Democrats and the Christian Democrats, it would be able to offer an
economic policy that would end the current economic crisis. The
Smallholder's Party, which has been labeled populist and unconstructive
by coalition politicians, says it is prepared to lead on its own. --
Zsofia Szilagyi

HUNGARY TO CURB TAX FRAUD. The Hungarian government has announced draft
regulations designed to give tax authorities more power to clamp down on
tax evasion, Reuters reported on 13 October. Tibor Draskovits, state
secretary at the Finance Ministry, told a news conference that
procedures need to be tightened and obvious loopholes closed. The new
rules include allowing national tax authorities to conduct searches of a
suspect's workplace or car and obliging job centers to inform the tax
authorities if they discover that a person claiming unemployment benefit
has undeclared sources of income. The measures are aimed at reducing
Hungary's large gray economy, which is estimated to be equivalent to 30%
of GDP. -- Zsofia Szilagyi

[As of 12:00 CET]

Compiled by Jan Cleave


Friday, 13 October 1995
Volume 2, Issue 201


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

**NATO SQUARING HUNGARY AWAY**
  Hungarian officials were briefed yesterday on a new NATO report
  on enlargement.  It outlines the hows and whys of expansion.
  Budapest said it'll meet all of the requirements for
  membership, including the possible stationing of nuclear
  weapons on Hungarian soil.  The 28 page report says NATO
  reserves the right to station nuclear weapons in new member
  countries.  But, according to NATO assistant secretary general
  for political affairs Gephardt von Moltke.  Russian and
  Ukrainian concerns about the deployment of nuclear weapons in
  central and eastern Europe are groundless.

  "We have said in our study there is no apriori requirement for
  the stationing of nuclear forces.  Our present policy is
  sufficient to take care of all relevant considerations."
  Hungarian officials say it'll become clear later what specific
  contributions Budapest must make to join the alliance.  Ferenc
  Somogyi is a state secretary in the Foreign Ministry.

  "We will be able and confident to offer what is going to be
  requested of Hungary when the time will come when the
  conditions of our admission will be precisely defined.  New
  members should not just be consumers of security but should be
  contributors."

  Somogyi said Hungary is already helping NATO by letting AWACS
  planes use Hungarian airspace to monitor the no-flight zone
  over Bosnia. --David Fink



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

**HUNGARY'S PRIVATE FUNCTIONS**
  Hungary's privatization agency said it'll start the private
  placement of a 25 percent stake in state-owned oil company MOL
  with foreign institutional investors at the end of November.
  The foreign private placement is due to close in early
  December.  It'll be followed by a domestic public offer for
  another 3 percent of the shares.  That's expected to be
  started between December 10 and 15.  The privatization agency
  said It'll close by December 22.  An offer to MOL employees
  and management will follow the domestic public offer.
  Employees will be offered a 5.5 percent stake.  Point five
  percent will be offered to management.


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