american chamber of commerce in

VOICEVol I. issue 07, march 2012 Data protection

MORE INSIDE: Life after Malév Battling for data protection reform 8% Great Britain Hungary 7% 30% Netherlands 5% Switzerland 2%

Austria, Belgium, Canada, Cyprus, , , Israel, , , Finland, Korea, Lithuania, Norway, Sweden USA 9% 39%

Fig.1. AmCham members by country.

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VOICE 3 Contents

4 introduction 15 ANALYSIS 27 Amcham News Dear Members and Friends… Life after Malév Filling in the education gaps

5 PEOPLE IN THE NEWS 28 AmCham news An old new-face on board 16-17 COVER STORY Good news, bad news The strategic-tactical switch 6 PEOPLE IN THE NEWS 29 AmCham news On an upward spiral COVER STORY 18-19 Making NAIH: More or less 7 people IN THE NEWS a key investment Giving back for the indepemdent common good 30 AmCham news 20-21 LIFESTYLE Information is king 8 people IN THE NEWS Time Out Improving the three ‘Es’ 31 AmCham news lifestyle Teaching by example 9 Inside Out 22-23 András Török’s Budapest Get involved 32 Chamber corner Constructive persistence works 10 -11 ANALYSIS 24 AmCham News Business news roundup Right-hand people 35-37 AmCham news 12 analisys New members on board 25 Amcham news Forint to weaken as funding talks drag on Hungary’s economy remains 38-41 AmCham news vulnerable, IMF warns Photo coverage 14 ANALYSIS OTP to surge on bailout 26 AMCHAM News 42 AmCham news agreement Stand by your message CEO’s note

Voice is published on behalf of the American Chamber of Commerce by Absolut Media Zrt., Madách Trade Center, 1075 Budapest, Madách Imre út 13-14., Building A, 8th floor Editor-in-chief: ROBIN MARSHALL ([email protected]) • Contributors: GABRIELLA LOVAS, ROBIN MARSHALL, ANDRÁS TÖRÖK, Time Out Budapest Photography: Péter Kőhalmi • Design: ABSOLUT DESIGN STÚDIÓ ([email protected]) • Art director: Tamás Tárczy • CEO: TAMÁS BOTKA Advertising: ABSOLUT MEDIA KFT ([email protected]) Sales and Marketing: Viola Farkas ([email protected]) Product Director: Vanda Taletovics-Vedres • Subscriptions: [email protected] • Printing: Absolut Print Kft • Websites: www.amedia.hu, www.bbj.hu For AmCham Content: ZSÓFIA JUHÁSZ ([email protected] + 36 1 266-9880/360) Advertising: CSILLA PÁL ([email protected] +36 1 266-9880/319) HU ISSN 2062-1817 VOICE american chamber of commerce in hungary Introduction Resolutions

ose weight, find a hobby, and start taking yoga classes. These are your average New Year’s L resolutions. We came up with our own set of self-made promises or goals rather, as the AmCham Board defined five key areas as part of our strategy for 2012. representation. We want to be an authentic accelerate economic renewal, by business After a half-day brainstorming we agreed that channel of your views and needs, therefore we promotion efforts through its diplomatic these areas are the promotion of the positive need to know how you see the current situation network, building economic information role of multinationals, raising the profile of and what your plans are for the future. Early and analysis competence in the diplomatic SMEs, drive R&D&I, advocate for predictability February we sent out a 21-question survey to our network and by addressing three top priorities: and work with the government on industry members on the business climate and investment (1) the National Export Initiative to promote strategies for selected sectors. plans in Hungary and we are still collecting your exports and to combat non-tariff barriers, (2) answers as this issue goes to print. increase inward investments to the USA and You must have come across our recent projects (3) create a level playing field for US companies that were already focusing on the above- We have been actively working on our Trans- competing against business owned, supported, mentioned areas, such as the study prepared by Atlantic relationships this February both in or championed by foreign governments. Századvég Gazdaságkutató Zrt. on the present Hungary and in the US. and future of FDI, our educational SME series, At the end of February we also hosted the the Innovation Position Brief (read more on this I have attended the first Global Business US Congressional Delegation (see group on page 26) or other advocacy efforts. However, Conference in Washington DC, organized by photo of delegates and AmCham Board and as you need personal resolutions to help you keep the US State Department, where Secretary of Patron members above) who visited us on focused and dedicated, we, as an organization State Hillary Clinton announced that the State their European trip, looking for answers and need the same to stay on the right track. Department will introduce „Jobs Diplomacy”. collecting information on how the region is We are also working on better membership In short, the USA will use diplomacy to handling the crisis.

AmCham Member’s Board

President First Vice President Second Vice President Secretary Treasurer István David Dr. Andrea Péter Havas G. Young Jádi Fáth Németh GDF SUEZ bpv Jádi Energia Ernst & Young Amrop Németh Holding 1136 Kohlmann Ügyvédi Iroda Hungary Zrt. Budapest 1023 Budapest, 1051 Budapest, 2440 Rómer Flóris Váci út 20. Vörösmarty Százhalombatta, u. 57. tér 4. Csenterics u. 8. [email protected] [email protected] [email protected] [email protected] Phone: +36 1 451-8701 Phone: +36 1 391-0970 Phone: +36 1 429-4000 Phone: +36 23 502-400 Fax: +36 1 391-0951 Fax: +36 1 429-4001

Board Members at large William Norbert László Márk Benkő Fogarasi Drajkó Hetényi Morgan Stanley Graphisoft SE Rózsakert Hungary 1031 Flextronics Medical Center Analytics Ltd. Budapest, International 1026, Budapest, 1095 Budapest, Záhony u. 7. 1183 - Gábor Áron u. Lechner Ödön (Graphisoft pest, Hangár 74-78. fasor 8. Park) utca 5-37 [email protected] [email protected] [email protected] [email protected] Phone: +36 1 225 7350 Phone: +36 1 881-4113 Phone: +36 1 437 3000 Phone: +36 30 677 5029 Fax: +36 1 881-3700

Board Members at large chief executive officer László Frank Eszter Péter György Klausz III. Szabó Dávid Cisco Systems Hungary Telenor Ma- GE AmCham 1123 Budapest, gyarország Zrt. 1138 Bp., 1051 Csörsz utca 45. 2045 Török- Duna Tower, Budapest, bálint, Pannon Népfürdő utca Szent István út 1. 22. B-C. épület tér 11. [email protected] [email protected] [email protected] [email protected] Phone: +36 1 225-4658 Phone: +36 20 930-4000 Phone: +36 1 237-6811 Phone: +36 1 266-9880 Fax: +36 1 225-4611 Fax: +36 20 930-4159 Fax: +36 1 266-9888

Ex officio members Robert Peaslee, Gusztáv Bienerth, Les Nemethy, Péter A. Hegedűs, András Sugár , Charles A. Huebner, Péter Kraft, László Czirják, Robert C. Knuepfer Jr., Edward J. Bush Jr., Theodore S. Boone, Steve Bina, Michael J. Shade People in the news 5

PEOPLE An old-new face on board

You might think that having already given 18 years of your professional life (and quite a bit of your private existence too) to an organization such as AmCham would be enough. But December’s annual assembly saw former CEO Péter Fáth return to the board. AmCham’s advocacy role, he says, is probably as important now as it ever has been.

ow director of stakeholder either. “Our advocacy must be correct, GDF Suez was not, prior to Fáth joining relations at GDF Suez, Péter peaceful and cooperative. We have to use it, a member of AmCham, but he says the Fáth explains that, “There the opportunities we have created, such as company did not take much persuading, N are two reasons I came the strategic agreement with the Ministry of and in any case, the decision falls within back. One, I thought I could Public Administration and Justice, in more his job remit. “The company has been in help AmCham develop further in another effective ways. But at the same time we have Hungary since 1995, when it was part of capacity, and two, I also hope it will be to make sure that AmCham will continue the privatization process, and it is one of helpful for my company.” to work for common goals and not serve the biggest investors in the country, and individual interest.” certainly among the top five in AmCham: So what, in his return to the AmCham it has invested more than €1 bln so far. board, does he want to achieve as secretary Having decided to stand for election, he felt Big companies need a big voice: AmCham treasurer? He makes absolutely no criticism the job that most suited his background was is the perfect match.” of what has gone before, but rather says its that of secretary treasurer. Fáth did not run successes should be built upon. “AmCham for any alternate positions. “I very much Away from stakeholder relations, Fáth has an increased role in representing its hoped I would be elected,” he says with a relaxes, as he always has, through members’ interests. I would like to achieve laugh. “I had no plan B; I thought that if the photography (the photo shows him with that AmCham is more active in advocacy, members trusted me, they would vote for me.” the fastest lens ever made, a Carl Zeiss expressing its view in a well-based manner, 0.33/40mm Super-Q-Gigantar, which as it always has done in the past.” So how was the process of submitting sold for €70,000). He is a collector of old himself to a public vote for the first time? “It cameras, but somewhat ruefully admits that Faced with a government that, for the was quite an interesting experience to see an his knowledge and tastes have developed, first time in Hungary’s post-communist election from the other side. Of course, many along with his collection, over the years, history does not need to win allies to pass of the rules were laid down during my time and although he now knows exactly what whatever laws it likes, such is the size of its as CEO, so I knew very well how it worked. pieces he wants at an auction, “others parliamentary majority, the business world I did not campaign extensively before usually have a bigger wallet”. More time, must make sure its opinions are known, hand, because I felt that might somehow be therefore, is spent using his long lenses and its voice heard. “We need to be a little unfair; I just concentrated on what I hoped and modern equipment, especially in bit louder,” Fáth says. “When everyone is would be a good speech on the night. I am nature photography, and particularly in expressing an opinion on Hungary from grateful that the largest AmCham members photographing birds in the wild. So much the European Parliament to the New York supported my candidacy before the election, so, in fact, that he has been elected to the Times, business associations cannot be and to everybody who voted for me at the board of naturArt, the Association of silent.” But antagonism isn’t the way forward general assembly.” Hungarian Nature Photographers. VOICE american chamber of commerce in hungary

PEOPLE On an upward spiral

involved in community service, but in Hun- An American with gary that’s not really that evolved, so I saw this Hungarian roots, as a chance to get involved in business and society and start working for its betterment. Frank J Klausz III Now, I’m able to leverage a full team of Tele- starts his second term nor employees to get involved in the work that AmCham is doing to make Hungary more as an AmCham board transparent and competitive.” member convinced U.S. Had anything surprised him about being business practices and a board member? “If I’m honest, it was Hungarian ingenuity how much AmCham is run like a busi- ness. This is not some rinky-dink associa- are a relationship that tion, but a corporation that just happens can make a difference, to be a not-for-profit.” It is greater than its membership alone, which is why it has and a marriage worth survived for more than 20 years, he says, fighting for. but remains very much “about people and its members. That impressed me, because it is a really professional and powerful group,” Klausz recalls.  I want to help make Hungary a more competitive place; I want to help He stood for a second term on the board AmCham keep Hungary an attractive because he says that, like AmCham itself, he is here for the long run. “While we did get destination for investors through a number of things accomplished during transparency and working to keep a my first term, I believe there is a lot further level playing field.” to go. I want to help make Hungary a more competitive place; I want to help AmCham keep Hungary an attractive destination for he man who is now Chief he spends time here doing that, the more investors through transparency and working Corporate Development he wants to do it. “I was going to say I am to keep a level playing field.” Officer of Telenor Hungary becoming progressively more Hungarian, T likes to joke that he has been but I think it is just that I am realizing how Improving transparency remains a big living in Hungary for all of Hungarian I always have been. There are challenge, but so is increasing predictability. this millennium. What brought him here so many great things about Hungary, and “I am fully infused into the fact that a new on 3 January 2000 was a telecoms proj- discovering more of them and feeling they government needs to make changes, but I am ect, but it was also a convenient excuse are part of who I am has been quite an ad- looking forward to a time when we are done for trying on Hungary for size. venture. I believe in American ethics, in the with the changes and can work with the way business should be done, but there is no government on implementing them.” “My parents had escaped from Hungary, question I consider myself Hungarian. That and though I had come back on a number of duality stays with me and I am proud to be Does he share the traditional Hungarian visits and really enjoyed it, I was curious to part of seeing what AmCham can achieve trait of pessimism when it comes to the know if I had enjoyed it simply because I was because, if applied to Hungary, I think great future? “I’m the perennial optimist, the on vacation, or because there was something things can be achieved.” glass is more than half full; that is just the special about Hungary; obviously it was sort of person I am. But I am not naïve, of Hungary itself,” says the 41-year-old. Klausz has been involved with AmCham course there are a lot of challenges, a lot of Hungary for five or six years, having pro- things Hungary – and Europe in general Now married to a Hungarian, and with a gressed from an individual to being a busi- – have to deal with. are a very 10-month-old daughter, he says living here ness, patron, and now a board member. “I resourceful people, nation and market, and has put him on “an upward spiral”. He saw AmCham as a chance to, firstly, build have always found a way to make do, to came to connect with his roots and hope- relationships and really get to know a number work with what they are given, so I believe fully to make a difference, and the more of companies. Secondly, in the U.S. I had been the future will be successful.” People in the news 7

PEOPLE Giving back for the common good László György, GM of Cisco Systems Hungary, says working on the AmCham board is a way of giving something back to his country by serving the common good. And with a background that takes in private and public sectors, governmental relations, multinationals and SMEs, he has much to draw on.

 Agenda items and to help Hungary identify best practices look at what would to aid the integration of women, minorities be most beneficial and the disabled. “I had a disabled brother,” for improving the he says, “so this last thing is perhaps closer to me. It is something of a passion.” Indeed, country’s he has a regional role for Cisco dealing with competitiveness inclusion and integration. [a key part of AmCham’s mission Having been involved so long with AmCham, statement], not and having pursued his dream of joining its selfish interests. officials despite previous election defeat, has anything surprised him now that he gets to sit at the board table. “The organization is much more efficient than I thought it would be, which I am happy about, and the board embassy in Japan for four years], so I guess is quite structured, which is very good,” he my negotiating skills are OK. Having worked says. “Agenda items look at what would be ászló György has been involved with four multinationals in the IT sector, I most beneficial for improving the country’s with AmCham for 15 or so years, guess my representation skills are OK. I am competitiveness [a key part of AmCham’s working on various committees an engineer and an economist by training, mission statement], not selfish interests.” L since 2000, but first ran for the so I understand the importance of making board in December 2010. “It was the economy work. In short, I think I bring The 55-year-old (“I look like a 54-year-old,” he not a success, but it was good experience to see different perspectives, and thereby I can help jokes) is also impressed by the degree of work how hard you have to work for the appreciation others as well, raising new aspects to reach that goes in to preparing AmCham responses of the members,” he recalls with a laugh. good solutions for everyone.” to draft legislation, but feels the government doesn’t yet give the proper weight to those For the past couple of decades, György has One key element of “making the economy responses. “But we should never give up worked for a succession of multinationals work” is to make SMEs fit for purpose, finding ways to have meaningful conversations (including IBM, Oracle and Ericsson), joining not just to survive, but to thrive. “The with government. The versatility of the Cisco six years ago, and becoming general entrepreneurial level is not very high here. [AmCham] board gives us a vehicle to find manager for Hungary in 2008. “I think I know Cisco runs an entrepreneur institute to train multiple communication channels to show that the issues. I know government relations; I SMEs how to become more competitive, we can come together for the common good.” worked in the public sector for 10 years. I also and Intel and Microsoft and others often know the subcontractors and their problems cooperate on courses.” You could call it a Away from company and chamber business, well, as all the multinationals I have worked form of Corporate Social Responsibility, but his interests are his family (he has two sons with have used lots of local firms; I know the it isn’t pure altruism. Skilled, competitive studying for their masters at the Central problems they face to be competitive, and to SMEs help multinationals as much as a well- European University) and sports and, wherever make the country competitive.” trained and flexible workforce does. possible, combing the two simultaneously. He was an early adopter of windsurfing, and is He comes across as being far from boastful, In particular, György wants to help all levels vice president of the national association, and but that’s not the end of what seems like an of Hungarian society better understand is also a keen motorcyclist. “We are already impressively long checklist. “I also worked in the true value of multinationals in the planning our next road trip to Transylvania in diplomacy [he was first secretary in Hungary’s development of the country and its economy, the spring,” he says. VOICE american chamber of commerce in hungary

people Improving the three ‘Es’

for 800 employees. Although Morgan New board member Stanley quickly joined the chamber, and Norbert Fogarasi, Fogarasi attended a few events, he says a master level chess he only became more deeply involved in the summer of 2011. The company, along player, hopes to bring his with AmCham, founded the Women of analytical and strategic Excellence Award in 2010, and last year game playing skills to he joined the jury that oversees it. his work with AmCham, “What had always impressed me was the while learning from his organization of AmCham, the clarity of communications was very impressive peers and raising the and the events, without exception, were profile of his company.  What had always impressed me was orbert Fogarasi was born and the organization of AmCham, the clarity brought up in Budapest, but of communications was very impressive at age 17, his family moved and the events, without exception, were N to Canada. Now the general manager of Morgan Stanley in useful and time well spent. Hungary, he has played chess competitively for 25 years. He is good, but says learning to play at around 12 or 13 meant he started too them through a very rigorous program. useful and time well spent. I didn’t late to become a “really strong player”. To They are tested every couple of weeks, and always get that feeling from attending prove his point, he tells an anecdote, which the Hungarians are typically near the top. the events of some other business also reveals much about the talent levels to be We have talents here that can hold their own organizations,” the GM says. found in this country. against the best in the world.” Now that he already has a couple of “Just before we left Hungary, I played in a The 38-year-old Fogarasi was elected to the board meetings behind him, what chess tournament for the Budapest area board for the first time at December’s annual has surprised him? The metaphor of and came sixth in my age group. A year general assembly, his four-minute speech the swan serenely crossing a lake, but later in Canada I won the national under 18 featuring, not surprisingly, a chess theme. paddling madly beneath the water, championships. I was good enough to beat He also talked about E3, improving the comes instantly to mind. “It looks very everyone in Canada, but was only the sixth three ‘Es’ of education, encouragement, and different from the inside,” he laughs. best player in Budapest, let alone the rest of entrepreneurship. The latter, in particular he “From the outside, it all looks effortless. the country. It was just at a different level.” says, is learnt rather than innate. A cultural Working inside, you get to see just how shift needs to happen in Hungary, in part by much effort that requires, the day to day And that, he says, is a typically Hungarian improving the situation of the first two ‘Es’. decisions that need to be made to run experience. All the talent that is needed to such an organization, knowing when succeed is present, “that’s a major reason Having spent time working in America, to speak out and when not, even how to Morgan Stanley is here in the first place”, Japan and the UK, the chance to return reconcile the diverse views of the board Fogarasi says, but it doesn’t always have to Hungary came in 2007, when Morgan members, let along the 400 members.” the direction it needs. That is something he Stanley opened its Hungarian office. He hopes to improve. had joined the company in 1999, and was As mentioned at the outset, Fogarasi asked to build up and head a group of 30 or had multi-faceted reasons for standing. “Morgan Stanley doesn’t have a presence in so technologists in Budapest working on “I am finding it a very interesting the local market really. Everything we do front office projects. From 2009 he ran the experience just meeting other leaders in Budapest serves London, New York or whole IT department, putting him initially like myself and spending time with Asia. That’s one reason I want to raise our in charge of 200 people, although that them. It is very rewarding, and I know I profile here. But every year we take some of grew under his leadership to 350, and in have a lot to learn, in terms of improving the best students from the best universities mid-2011 he took over as general manager my own skills and developing my in Hungary, the UK and the U.S., and put for Hungary, making him responsible personal networks.” Inside Out 9

Q&A Improving the three ‘Es’ Get involved

In the third installment of Inside Out, our series on long-term expats, we feature Steve Corwell, CEO of AES Hungary, a local affiliate of the U.S.-based global power company.

How long have you lived and worked in Hungary? I came to Hungary three years ago with my wife. It is our first experience of living outside the U.S. Was there anything you wish you had known at What most surprised you about life in general, and the outset to make life easier? in particular about doing business in Hungary? My wife and I often say, “If someone would have just told Our time in Hungary has been extremely fulfilling. We laugh us about…” but in the end, we agree that much of the fun is about the randomness of city life, the unusual things we see and stumbling into things on your own. experience. There have been many surprises, and most of them have either been pleasant or, at least, humorous. One such came What would you recommend a new expat shortly after I arrived. I was out running and somehow misjudged do in order to make the most of their time in the terrain and landed on the side of my foot, breaking it badly the country? enough to require surgery. I had already heard stories about Get involved quickly and fully. Joining AmCham is a great start for Hungarian health care but little did I know I would so soon your business or professional life and I have met many great people experience it first hand. Despite my pleas to return home after there who have taught me about Hungary. I also found a few books surgery, the doctor required me to stay overnight. That was a good that helped me to learn about Hungary’s history. If eligible, join and thing since, if I had left, I would have missed the lady who popped network with expat groups for women like NAWA and IWC. And into my “VIP” room trying to sell me shoes. All in all, I was embrace the public transportation system – it is really good. impressed with the care I received. Doing business in Hungary has also been an interesting Would you recommend Hungary as a good experience. As AES has been in Hungary since 1996, I am place to be based? fortunate to have inherited an extremely professional and Definitely. There are plentiful opportunities for business, dedicated group of people who understand how to navigate entertainment, arts and recreation here in Hungary, and Budapest the expectations of a U.S. corporation against the business and is a scenic and central location from which to explore. On the cultural nuances of Hungary. It is also nice to have access to spur of the moment, we jumped on an overnight charter to the first class interpreters who have bailed me out of more than Arctic Circle in Finland and within a few hours were sleighing one tricky situation. behind reindeer at -25oC.

What are the biggest challenges facing a foreign What one thing would you change about businessperson? the country? I believe a big challenge is to establish key professional I would seek to find ways to cut through the stamps and blue ink. and personal relationships that allow you to break through Hungary knows more about my mother’s maiden name than I do. If stereotypes, engender trust and make your stay most productive. she knew I was giving that out to strangers she would be mortified! In the case of Hungary, this can be particularly challenging given the language barrier; however, a big part of the fun is When the time comes to move on, what do you overcoming that. think you will miss most about the country? In my first two years here I ran for, and was elected to, the Each day provides a pleasant surprise or unique snapshot: the AmCham Board of Directors. I believed that joining forces impressive fireworks on the . A pizza box with instructions with Hungary’s business leaders, learning about the important in 13 languages, none of which are English, a homeless guy who issues facing business, and seeking solutions, I could make a carves out a living by directing cars into coveted parking spaces on difference. AmCham’s membership represents a talent pool Nagymező, the formality of greetings, even on emails, long since lost in armed with some of the world’s best practices and an eagerness the U.S., drivers who recognize the need to stay in the right lane when to make Hungary a better place to do business. I see huge they are going slow, “non-stop” dentists and the beauty and vibrancy untapped opportunities for business and government to work of the city. I know my wife and I will long reflect with fondness on how more closely together in this regard. fortunate we were to have lived here. VOICE american chamber of commerce in hungary Business news It isn’t necessarily all doom roundup and gloom out there… Compiled from Hungary AM’s news service

1, receives parts from Dana production facilities in Belgium, Hungary, Italy, and Spain. “We are focused on building our distribution capabilities to best service our customers globally,” said Dana President & CEO Roger Wood. Dana has installed a new ERP system that will connect the new facilities with its existing distribution center in Crossville, Tennessee.

A HUF 10.6 billion development at the Debrecen Health Center in Hungary’s second- biggest city, was inaugurated in February by National Resources Minister Miklós Hungarian bus maker NABI said at the end of January that it would restart Réthelyi, Hajdú-Bihari County government production at its plant in Kaposvár (southwest Hungary) to fill an order from commissioner Róbert Rácz and Debrecen the city of Los Angeles. NABI will restart production in March to fill the order for 150 45-foot composite buses. The order is part of a general agreement signed Mayor Lajos Kósa. The development involved with the local council in 2008. NABI suspended production in the middle of last year the construction of a laboratory diagnostic after the city stopped taking delivery of the buses. Earlier, NABI CEO Ferenc Lévai center, as well as a central emergency, intensive told daily newspaper Magyar Nemzet that the company would hire 100 workers to care and internal medicine block. Several complete the order, which will keep the plant operating until the end of 2012. clinics were renovated and the conditions for live donor transplantation were also created. Engineering giant ABB has invested more than of production at the new capacity from 2013 HUF 200 bln in energy and automatization will draw foreign suppliers to Hungary too, Exal Corporation, the Youngstown, projects in Hungary in the past 20 years, the he said. Audi is in talks with the Hungarian Ohio-based extruded aluminum can managing director of the company’s local government and the local council of Győr on maker, has reached an agreement to acquire unit Tanja Vainio said at a press conference establishing a suppliers’ park, but a decision on troubled Hungarian peer Szenna Pack in mid-January. All five of ABB’s divisions a location has still not been taken, he added. for €14 mln and pay off some of its debts, are represented in Hungary. The company consultancy KPMG Hungária said in early counts among its Hungarian business partners Auburn Hills, Michigan-based automotive December. Family-owned Szenna Pack filed the Paks nuclear power plant, drugmaker industry supplier BorgWarner Inc plans for bankruptcy protection in July because of Richter Gedeon, oil and gas company a 50% capacity expansion at its 13,400sqm a poorly timed investment. Since then, Exal MOL and electricity distributor Elmű, Vainio turbocharger plant in Oroszlány (north- Corporation has agreed to buy Szenna Pack, added. ABB opened the capital’s first charging western Hungary), Attila Bogár, the managing take care of unpaid wages and bills, and repay station for electric vehicles, with equipment director of the company’s Hungarian unit 50-75% of loans backed by collateral and 10% manufactured in Hungary, in January. BorgWarner Turbo Systems Kft of loans without collateral. The American said in January. BorgWarner also wants to company wants to continue production at German carmaker Audi’s Hungarian unit raise headcount by 140 over the 700 at present, Szenna Pack and keep its 120 workers. had by December signed more than HUF by 2015. BorgWarner’s plant in Oroszlány has 50 bln of orders with Hungarian building turned out 2 million turbochargers since it was Danish pump maker Grundfos will build companies on the construction of a big inaugurated ten years ago. a HUF 9 bln plant in Szekesfehervar, its fourth addition at its plant in Győr (northwest in Hungary, Grundfos Magyarország Hungary), managing director for financial Ohio-based Dana Holding Corp, a managing director László Török announced. affairs in Hungary Johannes Roschek told supplier of driveline products (axles and Grundfos will spend about HUF 4 bln to journalists. The unit has so far signed contracts driveshafts), power technologies (sealing and build the 15,000sqm plant in 2012 and 2013 worth €200 mln for the €900 mln capacity thermal-management products), and service and a further HUF 4-5 bln on equipment in expansion, and the majority were with parts, has added a distribution center in Győr, the following years, Török said. About 400 Hungarian companies, Roschek said. About western Hungary, as part of its aftermarket people will work at the plant by 2015, he added. 70 Hungarian companies supply the unit in expansion in Europe. The 6,039sqm facility, Grundfos will make giant industrial pumps the area of engines and parts, but the start which became fully operational on February at the plant, a new activity for the company. News & Analysis 11

It expects most orders to come from Russia, St. Petersburg, Florida-based contract The plant will make pre-cast concrete Eastern Europe and South Korea. Grundfos electronics manufacturer Jabil Circuit elements, mainly for civil engineering Magyarország employs 1,900 people on a started operating an electronics products construction. Leier Hungária has eight combined total production area of 65,000sqm. servicing center in Pécs (southwest Hungary) production bases employing 750 people. from the end of January, making about 400 In addition to the Hungarian market, About €65 mln of venture capital and private new hires from an Elcoteq plant in the city the unit also exports to , where equity was invested in Hungary in 2010, the that went bust in the fall of 2011. Jabil building construction was not hit as hard Hungarian Venture Capital and Circuit Magyarország managing by the crisis as in Hungary. Private Equity Association (HVCA) director Attila Pajor said the decision to said early in February. The money was invested bring product servicing to Pécs was made Texas-based product packaging maker in 19 transactions. Earlier in December, on because of the large pool of trained labor with Motivating Graphics is spending the 20th anniversary of its establishment, the previous experience in servicing electronics more than $8 mln to outfit a plant at a HVCA had said that about $3.7 bln had been products. The center will repair smart phones, property it is renting in Komárom (northwest Hungary), managing director of the company’s Hungarian unit Ray Christopher Clark said in December. The plant is family-owned Motivating Graphics’ first base in Europe: it will supply markets in Denmark, Germany, , and Sweden, Clark said.

Samsonite Hungária, the Hungarian unit of Mansfield, Massachusetts-based suitcase maker Samsonite, has completed a HUF 765 mln expansion of its plant in Szekszárd (southern Hungary), the daily Népszabadság said. The investment is part of a HUF 1.5 bln expansion of the base in Szekszárd announced last fall to meet growing global demand for Samsonite German carmaker Opel on 9 February marked the 20th anniversary of the start of products. The investment will include production at its plant in the Hungarian city of Szentgotthárd (western Hungary). construction of a 1,800sqm production The event at the Transportation Museum in Budapest was the first in a series hall and 4,000sqm warehouse as well celebrating the first serially produced vehicle at the plant, an Opel Astra that as modernization of nearly 8,000sqm rolled off the line on March 13, 1992. The car, now part of the Museum’s collection, will return to Szentgotthárd “under its own power” for the 20th anniversary of existing production and office space. celebration, said Opel Magyarország managing director Tamás Kovács. Between Samsonite Hungária said last autumn 1991 and 2011, more than 370,000 Opel models were registered in Hungary, including that it expected to manufacture 572,000 240,000 Astras. Last year, 5,327 Opel cars were sold in the country, 13% more than suitcases annually, up from 420,000 in 2010. in the previous year. Opel invested €735 million at its plant in Szentgotthárd between 1991 and 2010. It is currently undertaking a €500 million expansion at the base that will go online in December. The car-marker will manufacture 100,000 Hungary’s TriGranit sold a 74% stake in more engines at Szentgotthárd this year than it did in 2011, factory spokeswoman four properties at its Millennium City Center Edit Legardi said. Opel will hire 210 more workers at its new assembly plant this development in Budapest at the end of 2011 to year, factory director Tamás Solt announced mid-January. The plant is eventually expected to employ 800 workers. the American investment group Heitman European Property Partners IV for almost HUF 45 bln, chairman Sándor Demján invested in Hungary between 1989 and 2010. computer parts, memory equipment and other said. The developer retains the remaining That money was invested in 420 transactions. telecommunications devices. Jabil Circuit stake and will manage the offices, Demján Investors have already exited from transactions Magyarország employs more than 6,000 said. TriGranit said the sale of the stake in the worth about $900 mln, HVCA added. people at an assembly plant in Tiszaújváros combined 70,000sqm of office space was the (eastern Hungary) and a further 1,100 at a biggest property deal of the year. IBM Data Storage Systems Kft, the servicing and logistics center in Szombathely Hungarian unit of Armonk, New York-based (western Hungary). The parent company has so Unisys Global Services Hungary IT company IBM, has completed a HUF 2 far invested $300 mln in Hungary. will open a call center in Pécs (southwest billion expansion of its service center in the Hungary) this spring, local news portal Pécsi city of Székesfehérvár (). The Hungarian unit of Austrian building Újság said in mid-January. Deputy mayor Speaking at the closing ceremony for the materials maker Leier expects to Peter Csizi told the portal that the local project, CEO Zoltán Takács said the unit complete a more than HUF 2 bln plant council had now wound up negotiations would hire 250 more employees as a result of in Győr (northwest Hungary) this year, with representatives from the Blue Bell, the expansion, which will service customers Leier Hungária managing director Andor Pennsylvania-based company. The call center throughout Europe and North America. Komlós told business daily Napi Gazdaság. will employ about 100 people, he added. VOICE american chamber of commerce in hungary

Macroeconomics Forint to weaken as funding talks drag on by gabriella lovas

In 2012, Hungary’s economy will be closer to forint could stabilize at a level below EUR/ stagnation or even a slight recession, than to HUF 290, he thinks. economic growth. State debt: up or down?

“The government and the market clashed ungary’s economy expanded Bank of Hungary (MNB). In line with the over the amount of state debt, whether it by 1.7% in 2011, according to government’s increasing commitment to decreased or not during 2011,” says Buda- preliminary figures released reach an agreement with the IMF and EU, Cash’s Tóth. He points out that the gross H by the Central Statistical perceptions about the economy started to central budget debt, which accounts for the Office (KSH). GDP rose by improve. Prime Minister Viktor Orbán majority of state debt, was up by HUF 900 a higher-than expected 1.4% in Q4 2011 said in his ‘State of the nation’ speech on 7 billion to HUF 20,955 bln at the end of last compared to the corresponding period in the February that he is ready to cooperate with year from HUF 20,041 bln a year before, previous year. GDP growth was mainly due anyone who is willing to help – or at least not according to figures published by the Debt to agriculture and industrial exports. obstruct – the government in the achievement Management Agency (ÁKK). of its goal: that of a strong Hungary. In the first quarter of 2012, however, GDP However, the weakening forint rate was growth is expected to fall back to around The market’s main problem is that financing behind the majority of the increase, Tóth zero due to a slowdown in industrial has been troublesome lately, Buda-Cash stresses. The HUF/EUR rate, at which exports, Concorde analyst János Samu says. analyst Gergely Tóth says. Although the foreign currency part of the debt was In addition, the positive contribution of bond yields started to decline in line with calculated, was HUF 270-275 at the end of agriculture to growth, which was simply softening government communication, from 2010 compared to around HUF 315 at the the result of a slightly better than average 10.5% at the beginning of January to around end of last year. This led to a significant harvest in 2011 and a poor one a year earlier, 9%, they are still far from the sustainable appreciation in the forint value of the foreign will be missing this year. Recent stories, level of approximately 7%. This is why an currency debt, which accounts for about 50% such as the liquidation of troubled national agreement with the EU and the IMF is of the total. The state debt is estimated to be carrier Malév and the massive layoffs by inevitable, he adds. around 81% of GDP, Tóth adds. Finnish handset maker Nokia will also have a negative impact on GDP growth, he adds. Analysts agree that Hungary is likely to Inflation soars reach agreement, but think the talks will on VAT hike The main drivers of the Hungarian drag on. “Hungary first has to implement economy, exports and domestic the required legal and institutional “We are getting further away from the consumption, will continue to be weak changes, as a precondition to the start of central bank’s 3% inflation target,” says Tóth. this year. Hungary’s main export market is negotiations,” Samu warns. He attributes the increase in inflation partly Germany, whose economy is slowing down, to one-off effects, such as the increase in the while domestic demand has refused to In January, the EU initiated three standard VAT rate from 25% to 27%. On the revive, despite efforts aimed at prompting infringement proceedings against Hungary upside, demand side inflationary pressure just that, such as the introduction of the regarding the central bank act, the planned will remain moderate. Samu believes that flat-rate 16% personal income tax. lowering of the retirement age of judges there is a good chance of reaching the as well as data protection (see cover story inflation target in 2013. IMF: lengthy talks pages 16-19). The IMF and the European Commission received a request from the Consumer prices in Hungary rose 5.5% Recent developments surrounding a loan Hungarian authorities for possible financial year-on-year in January, accelerating from agreement between the government and assistance on 21 November, 2011. a 4.1% increase in December, according the International Monetary Fund and to KSH figures. Food, beverages and the European Union have been the most The prolongation of the IMF-EU talks will fuel prices boosted January’s 12-month important factor shaping perceptions about probably weaken the forint rate, Samu says. inflation figure. Only consumer durable the economy, according to the National However, once agreement is reached, the prices tempered the increase. Promotion 13 VOICE american chamber of commerce in hungary

Stock markets OTP to surge on bailout agreement, analyst says by Gabriella Lovas The surge in Hungary’s addition, the refining environment faces significant challenges. Packaging state- capital market at the owned MOL shares into convertible bonds beginning of 2012 was only would stir up the market, Equilor suggests. temporary and maybe This would ensure new funds for the governments, while allowing it to retain its a little too euphoric. shareholders’ rights. Only when the domestic macroeconomic issues are The elimination of the sectoral tax for 2013 is certainly positive for Magyar Telekom. sorted out will the market The company would also welcome a decrease see a more lasting upturn, in government security yields. Currently, market analysts say. a major risk is the launch of a new mobile provider, although this is expected only in the second half of the year. e have focused on On the downside, the shares of OTP the five blue chips, as and mortgage bank FHB are adversely A consortium of state-owned Magyar Posta, 2012 is not yet the year affected by the early repayment scheme the Hungarian Electricity Works (MVM) “W when smaller shares on and other FX loan rescue packages, as well and a unit of the Hungarian Development the BSE will tend to move towards their as by deteriorating retail and municipality Bank (MFB) successfully bid for a 5MHz fundamental, true values,” said Buda- loan portfolios. The current economic frequency block in the 900MHz band at Cash analyst Péter Fazakas. Buda-Cash environment will ensure lending is auction, making it the fourth player on recommends OTP Bank for investors with depressed in Hungary for years to come. Hungary’s mobile telecommunications a shorter investment horizon due to the market. The three mobile positive impacts of the expected agreement Egis share prices are expected to move closer telecommunications service providers, with the EU and the IMF, while the shares to their historical price level with a one-year Magyar Telekom, Telenor Magyarorszag and of pharmaceutical producer Egis could be target price of HUF 21,800, Buda-Cash Vodafone Magyarorszag, also won frequency suitable for longer-term investors. believes. The current price is significantly blocks in the auction. below both the sectoral average and its OTP could be one of the biggest winners historical level. Fazakas points out that Still no interest in of the upcoming IMF agreement due to Egis operates in a crisis-resistant, defensive smaller stocks the overall improving investor confidence, sector and the company’s export markets are decreasing political risks and expected stable with Carl Zeiss 0.33/40mm Super-Q- Analysts agree that small shares on BSE, yields, says Fazakas. If agreement with the Gigantar relatively good performance, while even those with strong fundamentals like IMF-EU is reached, the forint could further the market has already priced in the risks Graphisoft Park, E-Star or Zwack, are not strengthen somewhat, which could reduce related to the domestic market. expected to attract much interest in 2012. lending costs, too, he points out. In addition, the extra burdens on the Hungarian Egis foresees stagnating revenues in the Among the smaller stocks, Fotex is one banking sector will be eliminated in 2013 business year started 1 October, based on last of Equilor’s favorites. The stock price of or 2014. Buda-Cash sees significant growth year’s exchange rates. Revenue is expected the Luxembourg-based Hungarian asset potential in the long-term due to expansion to rise by 0-2% only in the 2011/12 business management company fell to levels unseen in the regional markets, especially in year. Egis sees domestic sales falling 8-10%, since the beginning of 2009. Equilor believes Russia and Ukraine, as well as to potential but stands by its projection of a 10-12% sales that the current market price, at around acquisition opportunities. growth in the CIS. Turnover in Eastern Europe HUF 300, does not reflect the real value of will fall 5%, but Egis puts sales growth of both the company. The market value of the real The current OTP price level is attractive both finished products and active ingredients in the estate portfolio held by Fotex comes at HUF in an historical and a regional comparison, rest of its export markets at 0-5%. 1,200 per share, while its book value is at Fazakas says. Buda-Cash foresees a potential HUF 450. This will surely attract market increase of 45-75% in the stock price from the Investors see the 25% state holding in oil players sooner or later, Kuti notes. On levels seen at the end of 2011, which translates and gas company MOL as a slight setback, the downside, the free float is low and the into a HUF 4,500-5,500 target price. according to Equilor analyst Ákos Kuti. In company is highly indebted. News & Analysis 15 Life after Malév by robin marshall

expensive and is not, and never was, a viable Distressing as it was for passengers who lost their ‘public’ transit system for the masses.” by Gabriella Lovas flights, disturbing as it has been for those who are seeing their jobs axed, and disrupting as it has been Ambassador Péter Kraft, head of AmCham’s tourism working group, for the operators of Budapest airport, the biggest agreed that an uncompetitive state-owned losers from the collapse of Malév Hungarian Airlines operation is not the answer. “National carriers have disappeared over the last seems likely to be the government, and therefore, 10-20 years; that has been the trend. A ultimately, the Hungarian taxpayers. replacement national carrier would be welcome, but the key issue is that it is competitive. It is unfortunate for the n the short-term, the easiest The stated aim was to develop Budapest as people who work for Malév, but if anything problem to solve is coverage for the a gateway between Eastern and Western it is a regret that this didn’t happen 15 short-haul flights. Within days, if Europe, but within a few years the EU years ago. It has cost the Hungarian I not hours, low cost carriers such as had forced the Italian carrier to give up its taxpayer a tremendous amount, hundreds Ryanair and Wizz Air were making a grab shares as a trade off for getting acceptance of millions of dollars.” for a slice of the suddenly vacant market. of a state funding deal. Should the government try to create a Budapest Airport Zrt., the operator of Liszt With the market unwilling or unable to replacement for Malév, or leave it to the Ferenc International Airport Budapest, is invest, all that was left was the Hungarian markets? Kraft is in no doubt. “Absolutely, potentially in line for millions of forints in state. Repeated governments have found let the market find its own answers. compensation from the government over lost themselves forced to bail out Budapest I would look forward to seeing some business. The airport handled 8.9 million Transport Company (BKV) and Hungarian Hungarian market players form a carrier passengers last year, 3.2 million of them Railways (MÁV). But much as Hungarian that is competitive and aggressive, but Malév customers, BA Zrt. said. “Passenger public opinion would seem to back such a not one that would cost the Hungarian recovery can be supported by the Hungarian move with Malév, the EU again intervened, taxpayer any money.” authorities immensely by removing obstacles effectively blocking any help. The European preventing airlines from picking up lost Commission ruled in January that the Gergely Horvath, CEO of Hungarian Malév capacity,” the operator stated in a airline must return the equivalent of $390 Tourism Plc., believes there is a long- press release. “For example, there are four million in government aid dating from 2007 term need for a national airline, “because regulated agreements which allow only one to 2010. Malév collapsed with debts of HUF a national carrier could operate as a Hungarian airline to fly routes to , 60 bln ($270 million), halting flights on 3 regional hub, providing better long-haul Israel, Russia and Ukraine. On flights to and February 2012 after 66 years in operation. flight connections to Hungary. Low cost from these destinations, only Malév had the airlines can fill the hole on the market right to fly, therefore hundreds of thousands Ultimately, the government has been only partly, as they are willing to operate of passengers will not get this chance until forced to abandon an outmoded only profitable flights. Therefore a national there is increased capacity from either the business model says Thomas A. Tass, carrier would have a significant role in other country’s designated airline, or from executive director of Borderpol, a providing reliable flight connections to a new designated Hungarian airline. It is worldwide organization supported by Hungary from those European markets important that the Hungarian authorities various governments and private sector that are important to the country from a move quickly to close these gaps; otherwise institutions that researches and advises tourism point of view.” the road to recovery will be much slower.” border services on cross border issues; he was for several years based in Hungary. He added that Hungarian Tourism Plc. was But the near universal reaction of tourism working with trade organizations, Budapest experts to whom Voice spoke was not “Over the past 20 years very few airlines Airport and other partners to analyze “how surprise that Malév had collapsed so much anywhere in the world have been able the undoing of Malév may impact incoming as intrigue that it had survived as long as it to make a profit,” says Tass. “Since tourism in Hungary. The company does did. It is telling that, over the years, pretty governments the world over began meddling not intend to make statements about this much every major airline has looked at in commercial aviation in order to boost before proper data and related analyses buying into Malév before walking away revenues through various subsidies, fees, are available. It can be seen already that from any deal. The one exception was Italy’s regulations, etc. the business model for though the situation causes some troubles, Alitalia, which entered into a partnership airlines no longer makes sense. Malév is a it does not seem to be disastrous concerning with Malév in December 1992 that gave it casualty of this and some of its own self- tourism flows to Hungary in the long run.” 30% of the shares in the Hungarian airline. inflicted wounds. The fact is travel by air is As BA Zrt. said, “There is life after Malév.” VOICE american chamber of commerce in hungary Good news, bad news by robin marshall

The good news is that AmCham feels it is now talking to the right people about changes to the new law on data protection. The bad news is that those changes might yet be a year away from implementation.

mCham’s regulatory committee has been using the data protection issue as a pilot A project for its negotiations with the government through the strategic partnership agreement it signed a year ago with the Ministry of Public Administration and Justice (KIM). Finding a navigable passage that works for both parties has inevitably led into some choppy waters says advocate Balázs Fazekas, who has acted as the operational lead for the committee on this subject, but the way ahead now appears somewhat smoother.

“At the end of January we finally had a meeting with two officials in the ministry who are really professional, well educated, knowledgeable people who were involved with drafting the law,” explains Fazekas. data protection reform “That meant we could go step-by-step through our points with them, explaining On 25 January 2012 the European Commission proposed a comprehensive reform why we thought the way we did, as could of the EU’s 1995 data protection rules to strengthen online privacy rights and boost they. The good news is that finally KIM had Europe’s digital economy. Technological progress and globalization have profoundly changed the way data is collected, accessed and used. In addition, the 27 EU Member delegated the right people to talk to us at States have implemented the 1995 rules differently, resulting in divergences in a professional, rather than political, level. enforcement. A single law will do away with the current fragmentation and costly The bad news is that whatever is in the law administrative burdens, leading to savings for businesses of around €2.3 billion a year, is there intentionally, not by mistake, or the Commission estimates. because our comments didn’t get to the Its proposals update and modernize the principles enshrined in the 1995 Data Protection Directive to guarantee privacy rights in the future. They include a policy right people. In fact, they said they read our communication setting out the Commission’s objectives and two legislative proposals: comments back in June, considered our a regulation setting out a general EU framework for data protection and a directive proposals, understood what we were saying on protecting personal data processed for the purposes of prevention, detection, but took a different view,” Fazekas says. investigation or prosecution of criminal offences and related judicial activities.

The officials indicated that the ministry wants to give the new data protection year before such a review is conducted. In news is good news, after a fashion. “I think it authority some time to bed in, and for them other words, now the regulatory committee is very positive that KIM remains open to us. to collect data and impressions on how has found the right people to talk to, it must If we have issues we can talk to these people. it, and the new act, are functioning. The convince them over time with the strength It is very positive that we have met these advocate suspects that it will be at least a of its arguments. In that sense, even the bad officials.” Cover story 17

From the beginning, Fazekas says the important step forward from the old law. he points out, plenty of European experience committee wanted to avoid any areas with We would like to see some minor changes, that could be drawn on to put a workable law a political dimension, such as the thorny but we can live with what we have for the in place now. question of the independence of the data present.” The other two areas are somewhat protection authority (see separate article more problematic, however. The question of sub contractors similarly on pages 18 and 19), and concentrate on puzzles Fazekas, not least because it makes professional interpretation of the law. It also If you want to transfer data to a country commonly used practices by “cloud” based sought to support its arguments not only outside the EEA, such as Israel or Australia, service providers or BPO operators offering by referring to the relevant directive, but you can only do so if that country appears services as a group illegal under Hungarian also with examples from other EU states, on an EU approved list, published on the law. AmCham’s data protection advocate Commission decisions and publications of Commission website, if you follow an EU says the KIM officials insist that the current the Article 29 working party, which is an approved so-called “model contract” to the European directive prohibits contractors advisory body to the European Commission letter, or if you, as a multinational, draw up engaged with data processing activities from featuring data protection experts from all the Binding Corporate Rules (BCR), essentially using sub contractors. members of the EU. an internal policy document that operates The committee focused on three across all your businesses and is approved by “My feeling is that even if Hungary areas in particular. the data protection authority in the relevant interprets it that way, it is indicative that no 1) How data is controlled. EU state in which you primarily operate. one else does, not one EU country or the 2) Transfer of data to third countries outside European Commission itself, since it has a the European Economic Area (EEA). “This BCR was theoretically available whole chapter in its decision dedicated to 3) The prohibition against data controlling under the old law, but not the new. We how to deal with sub contractors, how the contractors hiring sub contractors. think that is strange. The officials said the relationship should be formulated between “The new law actually makes life easier old system was not actually legal and that processors and sub-processors. KIM is open in terms of the titles under which data they wanted to develop a better functioning on this, however; the officials have asked us is controlled,” says Fazekas. “It is a very solution, but hadn’t had time to do so – it to supply further arguments and examples is a complicated matter because in their from other countries.” According to Fazekas, view its implementation requires not only Hungary’s data protection laws being overly Hungarian legislation but also international strict may even give rise to an infringement agreements – so for the time being it is procedure against Hungary, as recent action intentionally missing from the law. against Spain suggests.

“That is sad because if you read the EU Fazekas says AmCham raised other Commission draft legislative proposal on the points, including a request to relax the new reform of data protection, you will find the registration requirement imposed on telcos, Commission wants to rely on BCRs more utilities and financials, which was not a and more, that it believes it will be an ideal requirement earlier and which is viewed as solution in a dynamic world because it is an overly bureaucratic burden by a number very flexible and cost effective. So, just as the of the chamber’s members. EU decides to use it more, Hungary drops it. I understand KIM’s arguments as a lawyer, AmCham’s next step in convincing KIM but this is going against the EU trend, and of the need for change will be debated at an that makes us look a little silly.” There is also, upcoming regulatory committee meeting.

trend setter Balázs Fazekas is a counsel and Hungary’s original data protection act dated back to 1992, and was a pioneering member of the Telecommunications, piece of legislation, as attorney Balázs Fazekas points out. “It appeared well Media and Technology (TMT) before the EU directive, which followed in 1995 [at a time when less than 1% practice group of Réczicza Law Firm of Europeans used the internet], and before many western European countries White & Case LLP, the Budapest had any legislation in place. It was acknowledged as really well developed and office of White & Case. He also has thought out and brought huge respect for the country and those involved with considerable experience in M&A, the act. But that was 20 years ago, and it was time to step forward with new intellectual property and data legislation. It was given a major overhaul when Hungary joined the EU, but in protection matters. He joined White essence it didn’t change that much, and it was never 100% compliant with the & Case in 1995. directive, being generally more strict.” VOICE american chamber of commerce in hungary NAIH: More or less independent by robin marshall

The ’s new National Authority for Data Protection and Freedom of Information (NAIH) is confident the authority is more independent than the ombudsman’s office it replaced.

he rights of investigation of new constitution. Following several the NAIH and the former exchanges with the Hungarian authorities ombudsman are very similar, on the drafts of the new legislation… the T says Dr. Attila Péterfalvi, Commission has now concluded a detailed who actually held the latter legal assessment of the new legislation office from 2001-2007, but he believes the adopted at the beginning of January. fact that the authority makes compulsory For the Commission, the Hungarian decisions in data protection (though not legislation conflicts with EU law by freedom of information) cases gives it putting into question the independence more power. It also, for the first time, has of the country’s central bank and data its own section in the state budget, and protection authorities and by the measures the act under which it operates is closer to affecting its judiciary.” existing EU regulations and the draft Data Protection directive, he adds. In the specific case of the data protection, the EC said it was unhappy at the way The Parliamentary Commissioner, as the the then current ombudsman’s role (he ombudsman’ role is more properly known was appointed in 2008 with a six year in Hungary, was appointed by a two- term) had been cut short. “The new rules thirds vote of Parliament. The head of the also create the possibility that the prime authority, however, is appointed – and under minister and president could dismiss the certain circumstances can be removed – new supervisor on arbitrary grounds,” Vice president Dr. Endre Győző Szabó by the President of Hungary alone, at the the EC said. “The independence of data suggestion of the Prime Minister. protection supervisors is guaranteed newspaper Magyar Nemzet, itself citing under Article 16 of the Treaty on the “unidentified people with knowledge of “I think both solutions fit European Functioning of the EU and Article 8 of the issue”, as reporting that “The Cabinet legislation,” Péterfalvi told members of the the Charter of Fundamental Rights. In of Prime Minister Viktor Orbán will Hungarian International Press Association addition, EU rules on data protection… redraft the law on the data protection on Tuesday, 7 February. His deputy, Dr. require Member States to establish agency stripping the premier of the right Endre Győző Szabó, pointed out that the a supervisory body to monitor the to dismiss the head of the agency.” EU seemed to share that view, both now application of the Directive acting in and in its draft data protection laws. “The complete independence…. The [European] Szabó told HIPA that he saw no need for new legislative proposal by the European Court [of Justice] underlined that data such a change, arguing that the power of Commission also mentions that the head protection supervisory authorities recall was limited to specific areas, such of the authority may be appointed by have to remain free from any external as in a sudden and unexplained rise in the parliament or government,” he says. influence, including the direct or indirect income of the president of the authority influence of the state. The mere risk of (published, along with that of the vice The fact remains, however, that the EU is political influence through state scrutiny president, on the NAIH website). “In my not entirely happy with Hungary’s new is sufficient to hinder the independent view, since it is clear in the Hungarian data protection regime. So much so, in performance of the supervisory legislation that this is not specifically about fact, that on 17 January the European authority’s tasks, the Court ruled.” dismissal of the president, but about a Commission announced it had “started practice present in Hungary for many years, legal action against Hungary over new Hungary seems willing to move. On I don’t see the need to change it. But if this legislation that came into force at the 6 February, the Bloomberg news wire [EU-requested change] element is passed by beginning of the year under Hungary’s quoted the Fidesz-friendly conservative Parliament, that I will of course accept.” Cover story 19 NAIH: More or less independent

President Dr. Attila Péterfalvi

Earlier, Péterfalvi had insisted that the investigate that the former ombudsmen that interregnum period, Szabó said. “If new authority was both independent and did but now our decisions are obligatory, you look back, you may feel it is quite a strong. “Our values are European values if it is a formalized investigation. That is practical decision. Parliament was not able and we are in agreement that we should why I say the authority is stronger than to smoothly elect a new commissioner.” be independent from political influence; the ombudsman’s office was before, but One area where the ombudsmen did have it is absolutely necessary, and I have to the rules on data processing rights are an advantage was in speaking directly declare that our authority is a totally very similar.” to lawmakers. As an officer elected by independent authority.” MPs, he had a seat in parliament and the Another advantage highlighted by Szabó right to speak in committees and even An important pillar of that freedom from was that, with the PM recommending the parliamentary debates. While the later influence lay in its financial structure, the head of the authority to the President of will remain out of reach, Szabó hopes president said. “The budget of the new Hungary, and the President making the his boss will at least be able to talk to authority is an independent chapter of the appointment, rather than having to get the committees soon. “Modifications to state budget,” he pointed out. Previously, the support of two-thirds of parliament, the recent legislation will give the head the budget for all four ombudsmen had the mechanism for finding a replacement of the authority the right to speak in been lumped together. should mean a smoother handover. The Parliamentary committees,” he explained. old system, for example, did not allow Given that the authority clearly has an He described NAIH as “a real authority”, for the outgoing ombudsman to remain interest in any legislation touching on data and one that in certain cases was more in post in an acting capacity until a protection and freedom of information powerful than the old parliamentary replacement was appointed, leaving areas, it makes sense to allow it to air commissioners, in that its decisions have periods of several months with no one those as soon as possible in the legislation more teeth. “We have the same rights to in office at all. The new system avoids drafting process, he said. VOICE american chamber of commerce in hungary

Local food and wine get to shine

Hungarian wine is the focus at this six-month wallpaper and black-and-white tiled floors yet old restaurant, where they serve more than is more relaxing than you might expect from two-dozen local vintages by the glass and that colour scheme. The information on these pages is produced by Time loads more by the bottle. But it’s impossible to But back to the point of the whole meal, Out Budapest, available on ignore the excellent food. the wine. The personable sommelier will newstands every where. For a subscription, write to Like the wine list, the à la carte menu recommend the right vintage for every course [email protected] changes regularly, using seasonal ingredients of your meal. Wines are reasonably priced, in attractively prepared dishes that are as at anywhere from Ft550 for a glass of 2009 pretty as they are tasty. Watch for their Szent György-hegyi Olaszrizling to Ft850 winter cabbage soup, tangy and spicy and for a 2007 Villányi Cabernet franc (Ft5,500 enhanced by subtle hints of root ginger. by the bottle). Featured wine regions include Main courses can include a deliciously Villányi, Mátrai, Balaton (north and south), tender duck breast with a side of pear and Etyek, Somló, Sopron, Mór and Tokaj. squash marmalade and layered potatoes If you’re more into drinking than eating, baked with Gruyere cheese, or occasional try the Ft1,790 wine menu, which includes Asian dishes, like Tandoori chicken with three glasses of wine and an assortment of red lentils and zucchini. The excellent house tapas served with house-made bread. If you coffee – a blend of Semiramis beans roasted happen to find a wine you like, they also fresh daily – complements deserts like sell bottles to take away for a mark-up of saffron crème brulée. 10 per cent above the wine cellar’s asking Dinner or lunch feature the same choice of at price. And watch for Curia’s frequent wine- least three starters, three mains and as many tasting events, which are usually served desserts, priced at Ft2,900 for two courses with a buffet or à la carte dinner. on up to Ft5,500 for five. A simple lunch menu of mostly traditional Hungarian fare V. Ferenciek tere 2 (782 5060/ is available every weekday at Ft1,290 for two www.curiavendeglo.hu) courses and Ft1,590 for three. M3 Ferenciek tere/bus 7, 173. It’s served with pride and professionalism Tue-Fri noon-midnight; Sat inside a tall airy space that has striking gold 7pm-midnight. Credit MC, V.

Time Off num’, as the title immodestly photographic series Consumer exhibition space of the Ernst. suggests, is a retrospective Art, show the artist fellating a The series of photos ‘Artificial Natalia LL Opus of Natalia LL’s most impor- banana, in a work that is usu- Photography’ show the art- Magnum tant work from the early 1970s ally explained in terms of a cri- ist’s parallel interest in formal There has been something of until today, consisting mostly tique of the lack of consumer experimentation, with dou- a drought recently of interna- of photographs and video doc- goods in communist , ble exposure used to engineer tional art stars exhibiting in umentation of performances. with the tropical fruit repre- ambiguous sexual situations in Budapest, so this show of well- Billed by the museum as “one senting the unattainable object an armchair. known Polish neo-avant-garde of the world’s most important of capitalist desire. Through March 18. artist, Natalia LL, is most wel- feminist artists”, the hot topic Natalia LL has continued along Ernst Museum come. It also feels like a long of conversation among post- this fruitful path of artistic VI. Nagymező utca 8 time since there’s been any- feminist critics at the opening enquiry, carving out a niche (341 4355/www.mucsarnok.hu). thing substantial to see in the was whether her most famous within the genre of body art M1 Opera. Tue-Sun 11am-7pm. Ernst Museum: the preced- images were originally meant for her personal branch of sex- ing show by Ilona Németh fea- to be erotic and whether they obsessed conceptualism. The Spr ing Festival tured a film screened in the still have the power to shock oddly pre-dated ‘Velvet Terror’ The capital’s annual smor- ground floor hallway explain- audiences. A favorite eye- (1970) shows the artist as a mid- gasbord of classical music, ing why she decided not to catching cover picture for dle-aged dominatrix in a three- the Budapest Spring Festi- exhibit in the main exhibition books on Polish conceptual by-three-meter photographic val, is less sumptuous during space after all. ‘Opus Mag- art of the 1970s, the film and block that overlooks the main these tight economic times, Lifestyle 21

but the diet seems to have done some show. It stars the State Opera’s Eszter Sümegi Theater, Sara Gómez and Maika Gómez good. While last year’s program was a bit as Arabella. The other Hungarian premiere (the Ttukunak duo) play the txalaparta – scrappy and eccentric, the slimmed-down is a semi-staged version of Handel’s ‘Hercu- a large Basque percussion instrument. The budget apparently forced organizers to les’, with talented Hungarian György Vashe- highlight of the day may be the 4pm show keep more focused when planning this gyi conducting the Orfeo Orchestra and the in the Palace of Art’s main concert hall, year’s 32nd annual festival, which runs Purcell Choir; the singers are with the Hun- where Zoltán Kocsis conducts his National March 16-26. The decreased financing garian State Opera. The festival is rounded Philharmonic and gives a rare demonstra- also seems to have encouraged a relative off with a revival of the State Opera’s pro- tion of the piano virtuosity that launched increase in Hungarian performers, but duction of ‘La Traviata’, which has been in his career. Kocsis conducts and performs that’s not a bad thing, and there will still the company’s repertoire for a few years. during a concert that features Bartók’s be plenty of top-level foreign acts. Sadly, ‘Arabella’ 6pm Mar 17; ‘Sonata for Two Pianos and Percussion’ the one local act missing will be the Buda- ‘La Traviata’ 7pm Mar 25 with Ingrid Fliter on the second piano and pest Festival Orchestra: Hungary’s most Opera VI. Andrássy út 22 Amadinda and others on percussion. The highly regarded orchestra will be in Paris (814 7100/www.opera.hu). second piece, Stravinsky’s ‘Les Noces’, also and will not make the Spring Festival for ‘Hercules’ 7pm Mar 21. features multiple piano and percussion. the first time in memory. Palace of Arts X. Komor Marcell utca 1 The day winds up with jazz greats Chick The shows are taking place in 11 different (555 3300/www.mupa.hu). Corea on piano and Gary Burton on vibes venues around the city, and tickets sell out for an 8.30pm concert. fast, so book early. The finale is already sold Day of drums Sunday March 18 Palace of Arts X. Komor out. Some interesting highlights… March 18 is ‘Percussion Day’ at the Palace Marcell utca 1 (555 3300/www.mupa.hu). of Arts, with shows on the complex’s var- Opera ious stages. It begins upstairs in the Festi- Opera offerings include two new produc- val Theater at 11am with a ‘family concert’ tions. Richard Strauss’ ‘Arabella’ is by turns from Amadinda, the Ferenc Liszt Acad- thought-provoking and delightful, and the emy graduates who use percussion on odd Hungarian State Opera’s recent Strauss instruments to make classical music more offerings have been impressive, so we are accessible. At 12.30pm on the outdoor stage looking forward to their premiere of this of Zászló tér, and at 6.30pm in the Festival VOICE american chamber of commerce in hungary

András Török’s Budapest Secrets of a great public library

Some History: The building This former neo-Baroque palace was commissioned for Count Frigyes Wenckheim and his wife Krisztina, who were landowners and philanthropists. Designed by Artúr Meinig, it was completed in 1889 and displays Dresden Baroque styling on the outside, with Louis XV inside. With a 500-person ballroom, it was considered “court worthy” and Franz Joseph I attended events here. During the short-lived Communist dictatorship after WWI, the building was confiscated and became the base of the Carpenters’ Union. A “museum of the proletariat” was planned for the space, but never happened. In 2002 a thorough reconstruction of the palace was completed, including the addition of two annexes, which has proved to be a real success. City developers have listened to the pulse of Budapest, and combined the old and the new. Along the way, this library has become the centre of the Ervin Szabó Budapest Public Library system, which has 52 branches throughout the capital.

Where to leave your belongings You can leave your belongings in the human- Entering operated cloakroom or in the lockers. The Entering from the left side of the palazzo, from lockers are handier, but patrons almost always Reviczky utca, and you’ll arrive in a pretty outnumber them. And some readers, immersed A model that tells all atrium, which is a covered courtyard. You can sit in their books, find they have forgotten the num- To really understand the library complex, look at here and have a coffee in the café in the former ber of their locker, which leads to lengthy and the model that is in the new staircase to the left stables, or you can register to use the library for a loud scenes. If you use the cloakroom, you are of the elevators. The two annexes are a late-19th- day (you cannot get past the courtyard without confronted with the fee conundrum. How free century former residential building (to the bot- registering). When the library first reopened, is a free service? (Give HUF 100 anyway.) Real tom left) and a newly built eight-storey building registration wasn’t necessary, but the homeless insiders outwit the system by visiting the lockers (to the bottom right). In the periodicals section in and kids hungry for Internet porn overcrowded in a back room. To find it you have to cross the the latter annex, the old spiral staircases from the the ground floor waiting section. The library is covered courtyard of the palazzo, and enter a storage space were ingenuously incorporated. The open from 10 a.m. to 8 p.m. on weekdays, from 10 spiral staircase in a cylinder-shaped part of the whole complex is a lively labyrinth, worth spend- a.m. to 4 p.m. on Saturday. There are 15 reading building, jut to the right to the cafeteria/former ing half a day exploring. Don’t miss the glitzy rooms, and some 160 computers. stables, and go down into a basement room. art-reading room or the gold and silver parlors Lifestyle 23 rvin Szabó, an eminent librarian, social scientist and reformer, originally founded the Budapest Public Library in 1904 in the City Hall building. (It was one small room; a large photo of the very first library is exhibited on the second floor in the current building.) Plans for the erection of a grandiose modern building were swept away by WWI. In 1927 the city bought the palazzo of the Wenckheim Barons and in 1931 the library re-opened here. E The 5-6,000 people who come here annually are likely to sit down and stay awhile. Most of the patrons are students, who tend to speak English. The terracotta palace facing the library’s main entrance is the music library, which has a special collection and sophisticated music listening facilities.

The palazzo part The glitziest part of the library is the former ballroom and the smaller foyer, the “silver saloon” and the “golden saloon”, where there are comfortable armchairs that are instantly reserved by students who stay all day, most of them with a laptop of their own; modern devices that don’t really fit the environment. In some of the reading rooms there is highly ornamented oak panel- ing and some of the prettiest young ladies and middle-aged women. The latter are translators of literary works. They use the library as cafés, as the mid 20th century writer and wit, Jenő Heltai (cousin of Theodor Herzl, the Pest-born founder of Zionism) once explained in an oft-cited defini- tion: “You are not at home, but you don’t have to be outdoors in the open air”.

How to check out a book Either pick up a book and go to the check out section, or you can do it through the website of the library (www.fszek.hu) Then you have to sit down and wait. In 30-45 minutes you should see the last four digits of your library card displayed on the notice board (also in the reading rooms). If not, the book you wanted is lost, or you did something wrong! Since 2011 there have been mysterious checkout machines. Don’t ask how it operates. Every time I am there I have to learn it anew. Luckily there are always helpful ladies around.

The ordinary old part The ordinary old part, overlooking Reviczky utca, a former residential block from the 1880s, was added during the facelift of 1998-2002. There are a series of reading rooms, one on top of the other, with a handy reference library in each. On the floor there are sockets for your laptop. The nicest specialized reading room (also the closest to the heart of the au- The new part thor of this column) is on the top floor – it is called The latest part, completed in 1998, is a contrasting modern building in the style of the 1990s. It the Budapest Collection. Apart from the books and contains the free shelves, where you can browse and take any of the books to check them out. The photographs, there is always a changing exhibition connection between the palazzo and the new part is on the second floor. on its walls. If you enter this (or, indeed, any of the The wooden floor with its bombastic patterns is a bit over the top, and bears the signs of mild reading rooms), you are supposed to leave your “moral obsolescence”. All over the library there are card operated copying machines. You can buy library card with the reference librarian. cards at the cahier on the ground floor. VOICE american chamber of commerce in hungary Right-hand people

In addition to the new G. Young, of executive search company and re-elected board Amrop Kohlmann & Young. members (see People “I feel strongly that AmCham’s voice be heard,” he told Voice. “At a time when the in the News, pages five business environment for many companies to eight), December’s has deteriorated, it is more important than annual general ever for AmCham to stand up for our members and our American business values. assembly also voted in Due process, transparency and predictability the two deputies who are not just media sound bites, but important David G. Young Dr. Andrea Jádi Németh foundations for a modern open economy.” serve, in the words of she said she sees her responsibilities as “my one of the successful The second vice president is now Dr. Andrea opportunities to give a loud voice to the Jádi Németh, of the bpv Jádi Németh law firm. values and business interests our members candidates, “as the stand for. I deeply appreciate and recognize president’s two right- “It is a great privilege for me to have been that I became part of AmCham’s driving hand persons”. voted the second vice president of AmCham force with a noble mission: to help raise at such a competitive election,” she told Hungary’s competitiveness and to advocate us. “I feel truly honored by the support I for a healthier, friendlier and more growth- The first vice president is no stranger to received from the membership.” As one of oriented business climate that directly the role, having won reelection; David the president’s “two right-hand persons”, benefits our members.” AmCham news 25 Right-hand people forum Hungary’s economy remains vulnerable, IMF warns by Robin Marshall

The principle problem facing Hungary’s economy, and the key answer to fixing it, are one and the same, according to the International Monetary Fund’s resident representative in the country, Iryna V. Ivaschenko.

or Hungary, challenge number and the short-term runs into the long-term”. money, she points out. “Some €35-40 billion one is growth…. [It] is a Such intertwining made solving the problem annually gross needs to be rolled over in the challenge in the short-term, all the harder. “One of the biggest challenges entire economy. It has the highest public debt “F the mid-term and the long- in the eurozone crisis is that difficulties for in the region, and one of the highest in the term,” Iryna Ivaschenko told delegates at an sovereigns affects the banks, and difficulties entire emerging economies universe.” AmCham business forum held at the Hotel for the banks affect the sovereigns. It is a Marriott on 9 February. vicious circle that is very difficult to break, She acknowledged that the government and it needs to be broken.” had been taking difficult steps, especially in “Hungary is a small economy reliant exten- relation to labor participation, but warned sively on funding from abroad. Exports are the One comment seemed to indicate the IMF that the economy “remains vulnerable, risks only source of growth. Domestic consumption was aware of criticisms about the conditions are still there because it takes time to work and investment are weak.” The latest IMF pro- it attaches to the aid it gives. She pointed through”. There were also, she said, limited jection for economic growth here put the figure out that the money is absolutely necessary policy options. “You must tailor the tax mix for 2012 at just 0.3%, but Ivaschenko cautioned for nations seeking a bail out. “There are and the expenditure mix to make adjustments that those numbers were already outdated. never ‘easy measures’ when a crisis hits, it sustainable and reduce impediments to “This 0.3% is our last official estimate, which is not because we want it, but because you growth…. Hungary needs to improve the was made with a slightly better eurozone out- gotta do what you gotta do in a war, or a investment climate and enhance economic look, so it can be revised down,” she warned. crisis.” The measures the IMF asks for, and governance with independent institutions and the money it gives, are always better than strong fiscal governance.” She gave an overview of the original the alternative, she said. downturn of 2008, which she dubbed ‘Crisis Was Hungary heading in the right direction? 1.0’ as well as the present ‘Crisis 2.0’. “One big Ivaschenko was not entirely downbeat. “The Magyar Hírlap wanted to know. “It is too com- difference is that this is more of a sovereign worst can be avoided,” she insisted at one plex to answer here. I think I have been explicit crisis, with its epicenter the eurozone, whereas point. “It is not a very deep recession as was about our concerns to make it [Hungary] more previously it was the individual world 2008-9.” She identified a number of what growth-friendly.” The Hungarian government banking sector and insurance spill-over.” This she called “headwinds” that might hinder in knows exactly what is required of it if it wants time, in other words, the financial problems Hungary’s progress. “Hungary is a country to access IMF financing, she added. “The gov- are much closer to home. that has one of the highest ratios of export ernment has been informed. It is not that we to GDP. It is a very open economy and very are not talking; we talk all the time. We have Part of the complexity for Hungary, indeed heavily integrated. When Germany sneezes, also been very public about our concerns, in- for many emerging countries, is that Hungary is going to catch a cold for sure. It is cluding the independence of the central bank. “eventually, everything is inter-connected, also a country that needs to generate a lot of Right now a lot depends on the government.” VOICE american chamber of commerce in hungary

position brief Stand by your message

47 recommendations AmCham has taken what is, for it, the unprecedented step of including a preamble to its Innovation position The AmCham Innovation Working group started on its first Position brief. We look at the preamble, and the reasons for it. Brief in 2011 with the objective of shedding light on the role of R&D&I enterprises have lost an effective means to raised innovation to a level where meaningful on the competitiveness of the improve the supply of special expertise.” discussion is occurring and AmCham is a country, and to stimulate changes in Another recent government decision means part of that dialogue, helping to change future areas of key significance. Companies with international experience in R&D, including manufacturing and service companies, law and advisory firms, delegate its members. The group made 47 recommendations in the brief, in the area of competitive R&D tax policy, an efficient tender application system, special solutions for SMEs, and education supporting R&D. For more on the Innovation Position Brief, read our interview with Lajos Reich in the September 2011 issue of Voice.

he preamble starts by welcoming firms are not entitled to write off costs from policy,” he explained. Innovation policy is news that as of February 2012, the their innovation contributions, although something the country must nurture each Hungarian Intellectual Property those maintaining real R&D capacities can year, Hetényi added. “I am very hopeful that as T Office has been authorized to make up for the lost savings through tenders. time goes along, and we as AmCham stand by evaluate R&D projects upon request, with the “Although we acknowledge and support the our message, the government will integrate as National Tax and Customs Administration government’s intention to clarify the system of much of it each cycle as possible.” having to accept its ruling. This was actually an writing off innovation contributions and to put AmCham proposal, and the chamber points an end to loophole abuse, we believe that this Lajos Reich, Chief Technology Officer at out that the IP office will need appropriate decision does not improve the competitiveness GE Healthcare and the chair of AmCham’s staffing to take on the new task. of enterprises in the long run,” it says, arguing Innovation Working Group said, “it was only that the net position of the winning enterprises a little while since the position brief draft had It also welcomes the “huge success” of a will only be neutral at best. “In addition, been finalized, since when the government “significant increase” in numbers of state these schemes may become unfeasible, if the implemented several policy changes, on subsidized students majoring in IT, natural budget provided by the state is too low, or which we wanted to reflect”. But he is sure sciences and engineering. “The fact that from the state requires headcount maintenance the government will listen to AmCham’s this year on 31,000 students, as opposed to commitments in exchange for R&D subsidies proposals. “Our recommendations are based the previous 21,000, have the opportunity similar to the GOP schemes, which is an on the extensive international experience of to study these majors is a great achievement uncompetitive condition in the current world our member companies over many years. to ensure the long-term provision of talent.” economic situation.” Stimulation of R&D investments and creation But the preamble points out that it will be of a great number of new R&D jobs is only two to five years before the extra students It was AmCham board member Márk Hetényi, possible considering these best practices that graduate, “which is why we urge that R&D of Flextronics International, who suggested have already made many countries successful centers have the possibility of fully leveraging the inclusion of a preamble. It demonstrated in this area,” Reich said. “Nowadays the vocational training contribution for the that AmCham had worked out a robust plan technological innovation has undoubtedly university education of their choice. According for innovation that it was willing to stand become the engine of development in to the most recent decision of the Hungarian by, he said. “The important thing is that all advanced economies. I believe that Hungary’s government, enterprises are obliged to fully parties realize that all forms of innovation expenditure on industrial research, pay this amount to the government budget. – home grown and imported – are key to development and innovation can be doubled This is a great loss for the R&D sector, as the the nation’s future success. Government has by implementing our recommendations.” AmCham news 27

in the chair Filling in the education gaps Stand by your message by Robin Marshall

The single major issue already practiced by many dentists. “We program is also excellent, and I’d like to have a lot of frustrated and very badly paid expand that to the universities as well as high facing Hungarians doctors in Hungary. At the same time, school students. Even though you cannot now today is simply finding healthcare costs are very high in much get a degree without good working knowledge of Western Europe, and we have all these of at least one foreign language, companies a job warns Andrea spas; why not concentrate on rheumatic say this is still an issue.” Juhos, the new chair of diseases, for example?” AmCham’s Labor and As, indeed, is that disconnect mentioned Juhos has been involved with AmCham earlier between the needs of employers Education Committee. for 15 years or more. Since 2000 she has and the students the system produces, and been country head and managing partner that is something else Juhos would love to here are, of course, other of DBM Hungary, an HR consultancy tackle. “I would like to have a roundtable problems that need to be overcome; many businesses T still complain of a disconnect between their needs and the undergraduate workforce turned out by Hungarian universities, for example. But Juhos says the economic downturn has trumped that.

“The number one challenge is finding a job, definitely,” she says immediately the question is asked. “We as a country cannot afford that. This is one reason why I’m so keen to work with higher education. It is very important we start creating new jobs.”

That, famously, is a goal the Hungarian government shares, having pledged to create one million new jobs in 10 years. Except, of course, that with finances unable to support a massive public building program, it is not firm that specializes in working with discussion between the universities and the government who will create most of organizations undergoing corporate major employers to discuss what universities those jobs, but the private sector. The state, change. But as well as HR, her background need from the private sector, and what the therefore, has to develop an environment also takes in education and a five-year stint private sector is looking for from university that promotes job creation, and Juhos says working at the American Embassy in the graduates. I think such a “gap analysis” she sees little sign of the necessary vision for U.S. Information Service. would be very important.” how that might happen. Having moderated AmCham’s Career There are also practical steps that can be “They say we need 100 lawyers next School series, she became chair of the taken now, such as skills seminars aimed year, and it will support only that many Labor and Education Committee in at addressing common failings among university places, but what I don’t know is January, following on from John Cantwell. post-university job seekers. Employers why it is 100. Why not 50, or 150?” Rather “I’m very grateful for the work John and complain that, alongside poor second than targeting figures, she believes the the committee coordinator, László Metzing language skills, undergraduates are government should create focal sectors. have done, and am really very happy to often lacking in presentation skills, self- “Let’s say we want to attract more service take over. I see it as a great opportunity.” awareness and confidence. centers to Hungary. From there you can go back to the universities and say we want At the time of writing, her plans have yet to She’d also like to work with foundations you to teach unique or unusual languages, gain board approval, but she already has clear supporting Roma university students, because that is what the service centers ideas of what she would like to do. “The career and help at the four (possibly soon to will need.” Similarly, she thinks the school is excellent, and we will continue that be six) Roma dormitories that offer country could become a wellness center, and are looking for exciting and inspiring undergraduates a place to stay and wider bringing in health tourism in a manner leaders to present. The language ambassador support through onsite skills workshops. VOICE american chamber of commerce in hungary

In the chair The strategic-tactical switch by Robin Marshall

Among the key challenges foundation on which trust will be built.” Strauss took over the chairmanship of the facing human resource HR committee on a temporary basis last managers across the world spring, when the work commitments of his is developing the necessary predecessor made it impossible for her to continue. In November he was confirmed core competencies to become in the role fulltime. The committee is now strategic partners in the working on an action plan that will take business decision making it into 2015. Central to that is a vision to “improve the competiveness of Hungary and process, and being accepted contribute to a better society by supporting by their management peers members to achieve world-class levels of HR as being there by right. effectiveness and impact”.

Matthew Strauss says one The chairman accepts the goal is of the goals of the AmCham ambitious, but says the committee has HR Committee he chairs is to steps in mind to get there. “We want Career path to maintain ‘best practice’ sharing, help make that come about. but also develop beyond that, getting HR was not the career Matthew Strauss more involved with other AmCham expected to follow when he was studying politics and diplomacy in the University of committees, such as Labor and Georgia. He even served for a while as an Education, or the SME. We also want s a first step, HR professionals intern in the U.S. Department of State. “But to develop relationships with higher I decided I wanted something different, and need to broaden their ended up traveling the world, teaching English education and other HR organizations knowledge, he says. “We in to pay my way.” in Hungary, such as the Hungarian the HR world don’t always Association for Human Resources A A friend’s wedding brought him to Szeged speak the same language as the execs,” on a one-way ticket in 1997. He moved up Management (OHE).” explains Strauss, who is an owner and the to Budapest, where there was a “world class managing partner at ARGO Performance teaching program” and was soon offered a Mentoring may also be on the books, job. Given his background, he quickly found & Development Budapest office. himself working with politicians, diplomats especially if the committee can get even and business leaders, who frequently wanted more top leaders onboard to help. “We “Part of what attracts many people to HR is insight into content, not just help with currently have a good group of very language. From there it seemed a natural the service side, the people, not the hard- move into coaching, training and eventually active people, but there are more than nosed business side,” he acknowledges. But the full HR spectrum. He became owner and 400 AmCham member companies, some to become a strategic partner, to be involved managing partner of ARGO Budapest in of them with highly developed HR. We March 2010. in business development decisions, that is need to get more of these HR professionals exactly what HR experts need to embrace. Strauss had already joined AmCham involved. We want to become the place “Those who want to be involved really have by that time. “My wife is Hungarian, I where people know to go in order to share have two small children who are ‘mostly’ to know the business pretty much as well as Hungarian. With so much of my life or learn best practices.” everyone else at the top; they have to be able here, I wanted to get more involved in to speak the same language as those on the business life and Hungarian life, and Activity wise, the chairman plans to run AmCham seemed the logical first step.” As executive board and contribute to the overall soon as he had joined, he threw himself workshops for members in strategic HR management decisions by suggesting HR into the Corporate Governance and HR and consultancy skills, and to participate tools and means.” committees; “I wanted to get involved in in a conference in May being organized affecting change in my society.” by the OHE. “There will also probably be But Strauss also warns that, in order to He has no plans at present to return to the a mini breakfast conference in Q2, which win acceptance, the HR fundamentals States. “Going back just doesn’t interest me will be by invitation only for AmCham HR now,” he says. The patchwork quilt of countries must be flawlessly in place. “To be accepted that makes up Europe holds far more interest. leaders. And together with professional strategically, the tactical things – the “If I’m doing a regional workshop, I may have partners, we are planning to invite world- administration of salaries, hiring staff people from eight countries, speaking eight class leadership experts to Hungary, the languages and with eight cultures. That is an etc. – must be perfect, because that is the experience you don’t get in the U.S.” first event of which is due in May.” AmCham news 29

In the chair Making tourism a key investment by Robin Marshall

For a country like Hungary, Achieving that would require more than doubling the current actual tourism income. you would think tourism So how does he plan going about changing would be an obvious all this? To establish the agenda of the investment priority area, revitalized Tourism Working Group, he has in the past few weeks held half a dozen given the urgent need to meetings with AmCham members who are promote growth and create senior leaders in the tourism industry. Based jobs. But Péter Kraft believes on these conversations, a common approach is materializing within the working group. the sector is not receiving the The main objective will be to contribute to full attention it deserves. It is the competitiveness of Hungarian tourism. an area where he thinks the To that end, six priority areas have been “There are roughly 1,000 to 1,500 people identified: in Hungary who make up the political, renewed Tourism Working economic and social elite, the people Group he now heads for 1) Raise awareness of the opportunities and who move the country forward. Maybe AmCham can make a real potential of the Hungarian tourism sector; one key is to talk to that elite about the 2) Help Budapest attract quality tourism; opportunities and its impact.” contribution. 3) Expand quality tourism beyond Budapest and into the countryside; And he is certain opportunities are there. ne observation you can make 4) Contribute to the building of a large His own company has been working on a is that it seems that it doesn’t conference center; project to bring the first Sheraton hotel to matter that tourism is a 5) Work to attract FDI in the tourism sector; Hungary, not to Budapest but to Kecskemet. “O significant contributor to GDP 6) Within 18 months put together a Papers were signed in October 2011, and – it is about 9-10% of the total. It Tourism Position Brief aimed at key the hotel will be inaugurated in 2013. “The is not currently perceived as an area of strategic Hungarian decision makers. Sultan of Oman recently bought the Four importance,” Péter Kraft believes. Seasons hotel in Budapest. If the Sultan of Point four is interesting because, as I point Oman has bought, you can be sure there are He says there are four main areas of concern. out to Kraft, people have been talking many more opportunities, both in Budapest Insufficient EU funding is channeled to about it since I first arrived in Hungary and the countryside.” tourism; tourism seems something of an in 1998. “Yes, but how many times has it afterthought in government communications; been in the newspapers in the last couple Kraft would seem well qualified for his there is no evidence that the impact on of years? Not once. A plan is announced new role. In 1990 he brought American tourism is considered when major decisions to build a new national football stadium. Express to Hungary, leading it until 1997, are taken; finally, “There is no national If you have the money for that, maybe it during which time he also served a term consensus that shows where Hungary wants makes sense to think about building the as AmCham President. In 1999 – 2000 he tourism to be in 5-10 years time.” conference center first, and then, with the was Deputy State Secretary for Tourism, at proceeds generated you can build three that time the highest government position Not that Kraft wants to get bogged down in football stadiums. The question is what is responsible for the sector. He spent three overly beaurocratic five-year plans. Strategy, the best order?” years in the Ministry of Foreign Affairs, and he says, is important, implementation even was appointed Hungarian Ambassador to more so. In his own professional practice, the Tourism seems to have slipped so far from Peru. He is a member of the prestigious U.S.- single most important criterion is to be at the public attention that Kraft suggests one step based International Society of Hospitality inauguration of the hotel he is working on, toward drafting a national tourism strategy Consultants, an elite group of professionals not to produce papers. “Just a year and a target is simply by talking about it again. He dedicated to developing hotels around the figure would do,” he explains. Kraft says it is imagines a number of lunches and dinners world. His company, KRAFT & Associates, not unreasonable to suggest that Hungarian where AmCham members, key players established in 2004, specializes in putting tourism should be able to generate €14 from the sector, exchange their views with together investors, hotel operators and bln a year, a figure two-thirds of Austria’s. the decision makers. financing for tourism projects. VOICE american chamber of commerce in hungary

sme service Information is king Good information, as  “SMEs’ needs every businessperson have changed, worth his or her salt especially during the past two to knows, is vital to four years. More running a successful and more companies company. Now an are interested AmCham member in their market is offering SMEs a position. comparative analysis of how they perform “We do an analysis of the publically available vis-à-vis their data, look at the structure of income and competitors in terms of expenses, the company’s liquidity, its portfolio competitiveness. of assets and state of indebtedness. What if the accounting is in euros? Who are the investors, the sources of finance, the partners and shareholders? What is the value of the assets, he business intelligence report and what is their possible use?” that TMF Hungary provides was born two years ago, and Analysis of such data can also shed possible T came out of a request from light on differences in margin levels. “One a company that was not then a client, says of our analyses showed a company with MD Julia Varga. just two employees and a turnover of HUF 300 million. That’s just not possible so you “It was prior to an acquisition, a compliance begin to look at how that might happen, are review in relation to an investment,” recalls subcontractors involved?” Trust & transparency Varga, who joined TMF Hungary in 2003, and became MD one year later. “The company TMF Hungary began working on the Such reporting also looks at EBITDA, a figure wanted to know whether to go for acquisition local market in 1995. Originally a that foreign businesspeople, in particular, pay of the company as an on-going concern or Dutch-based company established a lot of attention to, Varga says. “It is a very an asset deal. At the beginning it was not 25 years ago, the group has grown ‘neutral’ indicator for the health and finances clear what would be the best path, but the into a global BPO player, with 110 of a company. For foreign investors it is much compliance review showed the route to an asset member entities in 75 countries. more important that a company is complying deal, and that is what the company went for.” “What we are proud of, and what with all the local statutory rules and that we find important, is that we are they receive management reports based on The company that made that original request independent administrators,” says international financial reporting standards. was so impressed it became a client. Much Julia Varga. “We can work without These figures ‘speak’ more to them.” of what TMF does as a BPO is on-going any conflict of interest alongside administrative tasks: accounts, HR, payroll, any other service provider of any But has TMF used the product itself? “Yes,” corporate secretarial services, etc. But Varga of our clients. Trust, compliance Varga laughs, “every year! When we are says it is also finding increasing take up for one- and transparency; this is at the very preparing the budget, this is part of the off services such as IFRS reports. And, initially heart of our activities.” process, and it always proves very interesting. starting with the company’s own network of It confirms our feelings, of why we run the friends and partners, there has been growing business in the TMF way, if you like. This helps interest in business intelligence reports. More and more companies are interested in me to be confident in the analyses we make. Varga says there are a number of reasons their market position. That can be simply It makes me think, ‘What if we do business why a company ought to conduct such a from a desire to know ‘Where am I?’ But it this way, what if we, for example, use sub review, all of which have been brought into could equally be because a company would contractors and fewer employees?’ These are sharper focus by the current economic like to invest in or acquire another firm, very useful thoughts to have, and the process climate. “SMEs’ needs have changed, and wants to know what the picture is of a helps me to be very confident in the budget especially during the past two to four years. potential target,” she explains. when I present it to the group board.” AmCham news 31

Information is king Teaching by example

A moderated boardroom simulation has been developed from AmCham’s Sixth Corporate Governance Workshop that vividly illustrates the kind of ethical questions well-run businesses can and must address.

rganized by AmCham’s have attended the workshops. The idea University of Pécs, Jacques de Jager, country Governance, Integrity and is that we give them a practical business manager of SpenglerFox, Péter Garancsi, Entrepreneurship Committee, insight that they can later use in their Senior Associate, bpv Jádi Németh Attorneys O the workshops are designed to classes. This year they received a package of at Law and Judit Budai, partner at Szecskay promote good governance and the board-meeting synopsis, a PowerPoint Attorneys at Law. Corporate Governance ethics in the private, non-profit, and public presentation and will also get the transcript and Business Integrity Committee chairman sectors. Part of the committee’s outreach from the event itself. Of course, they also László Czirják, a partner at iEurope Capital, program, the workshops are tailored for had a chance to listen to the simulation, moderated the simulation. professors teaching the subject. which can be really beneficial when they are teaching a related subject,” Dávid says. Renowned corporate governance and legal “Using a ‘teach the teacher’ concept, the expert Holly Gregory, a partner at Weil, target audience is professors and students, The seniority of the ‘mock’ board members Gotshal & Manges LLP was a keynote but AmCham members are also welcome to demonstrates how important the AmCham presenter at the workshop. In addition, join,” explains AmCham Hungary’s CEO committee feels business ethics to be. It Marianne Drain, commercial attaché Péter Dávid. “We had professors from the included András Hanák, a senior advisor at the U.S. Embassy, and John Griffin, Central European University (CEU), the for Euro-Phoenix Ltd., Matthew Strauss, the Australian Ambassador, provided University of Pécs (PTE), the Corvinus managing partner at ARGO Performance welcoming remarks. University of Budapest (BCE), Budapest & Development, Péter Kazár of CFG Paralel University of Technology and Economics Consulting, László Drajkó (then general For more information on the project contact (BME), Budapest Business School (BGF), manager of Microsoft Hungary, now vice Zsófia Juhász, coordinator of the Governance, and the International Business School president sales, Americas at Graphisoft), Integrity and Entrepreneurship Committee at Budapest (IBS); traditionally these schools András Kecskés, a professor of law at the [email protected]. VOICE american chamber of commerce in hungary chamber corner Constructive persistence works

AmCham Serbia promotes American best their implementation is significantly lagging. business practices, values and responsible partnerships between the U.S. and Serbia, Historically speaking, what leading to economic development through particular problems have trade and investments. Its portfolio of faced businesses in your activities includes advocacy, networking, country? promotion of Serbia as an investment Red tape across the board: lengthy customs destination, promotion of business ethics, procedures, significant number of different CSR and engaging university graduates. licenses, burdensome administrative Amalija Pavić, Government Affairs and procedures in cross border payments, Policy Advisor, takes Voice through some of registering workers etc. AmCham Serbia’s ten-year history. capital markets (adoption of the new Law Number one challenge facing Notable successes since on Capital Markets). business today: foundation: • Advocating for VAT Law implementation. Regulations in the domain of real estate, We at AmCham Serbia believe that, over ranging from the still lengthy process our ten years of activity in Serbia, our What have you found to be an for obtaining construction permits, to greatest achievement has been establishing effective approach? cumbersome procedures for registering AmCham as a constructive partner and Constructive persistence: AmCham ownership on urban construction land. an unbiased evaluator of Serbia’s economic Serbia produces more than 200 concrete reforms. Over the last ten years, AmCham suggestions for improving economic Current Advocacy and has given constructive suggestions and regulations annually which has resulted in lobbying campaigns: comments on improving around 80 positive changes to more than 30 regulations • Decreasing administrative burden economic laws and regulations, organized 30 just in the last two and a half years, while imposed by labor regulations (collective roundtables and conferences, and invested in the formal adoption of a significant number agreements and the Labor Law). capacity building of public administration, of regulations is still pending. Some of • Increasing transparency in public all with the aim of facilitating the business AmCham Serbia’s greatest advocacy procurement regulations. operations of foreign and local investors. successes materialized due to persistent • Eradicating red tape in real estate advocacy at different levels for as long as regulations in the area of obtaining Areas with the largest three years (from our initiative to adoption construction permits and registering advocacy success: of the law by Parliament). ownership rights. • Protection of IP rights legislation and A sense of realism in AmCham’s demands, • Stopping proliferation of earmarked enforcement (enactment of the Law on suggesting smaller steps in the areas where charges (different compensations and Special Powers enabling various different larger reform process have just started, has levies) in non-fiscal regulations at central parts of the state administration, including also proved beneficial to the final score. and local levels. tax administration, to check compliance • Enhancing enforcement of intellectual with IP laws and the Law on Optical Discs What has not worked? property (IP) rights . which allows for better control of optical Some of our initiatives, especially those that • Increasing transparency in procurement discs manufacture and trade). might be associated with social issues, such procedures of the public health care fund • Relaxing administrative burden related to as labor related policy, proved to significantly and fostering synergies in the private and foreign exchange transactions by amending depend on the political cycle. Thus, while public health care system . the Foreign Exchange Law in two iterations. our suggestions may have been adopted by • Fine-tuning implementation issues in tax • Significant improvement regulations on the Government of the Republic of Serbia, regulations especially transfer pricing.

Vital statistics Contact details Name of Chamber: American Chamber of Commerce in Serbia Executive Director: Bojana Ristić When founded: October 2001 E-mail: [email protected] Number of members (at foundation and currently): Postal address: Smiljanićeva 24/I. 11000 Belgrade, Serbia 11 founding members, 160 members in 2011 Telephone: +381 11 308 81 32 Website: www.amcham.rs AmCham news 33 patron profile SAP Hungary Kft.

Field of business: software/IT When established (parent company and Hungarian company): parent company, SAP AG, in 1972; Hungarian company, SAP Hungary Kft, in 1997 Workforce: nearly 500 Interviewee: Balázs Ablonczy, managing director, joined SAP in 2009

gained market share, and is What one thing would you the leader in the enterprise like to see changed above application software sector, with all others to improve the 35% of the market in 2011. business environment? Through our channel system, There is an immediate need and consultancy capacity, we for greater predictability and give work and provide a living increased transparency and that supports nearly 1,000 operational efficiency. Improve Hungarian families. In the light the business environment of previous years, it can clearly and, with some delay, you will be seen that the perception of also improve social, cultural, the improvements business life environmental, financial, and can effect in societal, economic, other fundamentals, creating a and environmental dimensions more functional, more livable become ever more important. Hungary. This is something Innovative domestic companies we have tried to contribute have grown up to become to through our expertise, regional players, many of them and we will continue to do from the IT field. so in the future. There is another trend that can clearly be seen: the government Why is it important to has pledged to provide more belong to an organization How would you describe important significance in our efficient operations, a long-term such as AmCham? the current business country, since it is responsible feature of companies like SAP. AmCham believes in and environment in Hungary? for nearly 10% of GDP, and thus promotes the same values that are If we look at our sector, the is one of the positive “pulling What are the greatest the foundation stones of SAP. Of enterprise application market is factors” for Hungary. challenges in doing these, the most significant is that really prosperous. Companies business in Hungary AmCham, like SAP, tries to raise are doing business in a fast- How has doing business right now? the country’s competitiveness on paced world, which is marked in Hungary changed I think in the long-term many levels, and through many from the IT point of view by since the company was that a predictable policy, approaches: from CSR actions to the need for mobile devices, the set up here? economic and social common conversations, thinking ability to handle large amounts For us in a very positive matter, environment is a prerequisite together with governmental of data, trusted company since SAP Hungary has gained for national development and officials. This organization governance and control, and operations that are remarkable competitiveness. Predictability has a variety that helps one to agility. Software solutions that even on an international level. does not come at the expense of understand the wider world as a make companies run better are The Global Support Center, competitiveness. We also need whole, and to work as a chamber becoming especially important which is mainly responsible for to add innovation to traditional to develop a more favorable in the difficult economic state in supporting German-speaking Hungarian creativity, introduce environment, which is exactly which we find ourselves. countries, and SAP Labs more proactive input in everyday what it has done for years. Today, many companies Hungary, which develops new business strategy, and the have decided that a critical applications, are both operating internal policies of multinational element to building their from here. These two areas companies (e.g., integrity, fair future is raising their own ensure continuous staff growth. trade practices) should be used competitiveness, and for that IT Since its foundation in 1997, SAP as an example for the Hungarian is the enabler. This sector has an Hungary Ltd. has continuously business community. www.sap.hu VOICE american chamber of commerce in hungary

patron profile Guardian Hungary Ltd.

Field of business: Flat glass and coated glass production. When established (parent company and Hungarian company): The American parent company was founded in 1932 (Detroit, Michigan state). Began operations in Hungary in 1988. Workforce: 350 employees work for Guardian in Orosháza. The plant works in four shifts. Biographical details of interviewee: Ferenc Finta, 54, plant manager, has been working for Guardian since 2008. Length of time an AmCham member: Guardian has been a member of AmCham since 1989. In fact, it was one of the charter members of AmCham. Length of time an AmCham Patron: Guardian has been an AmCham Patron since 2004.

became a real open economy, the taxation rules are changing where the competitors are year-by-year and even during coming not only from Hungary a business year. These changes but also from Turkey, Algeria make it difficult for investors and China. The companies and management to build up or Guardian is working in close fine-tune a strategy and to find partnership with have grown the right actions to keep being from small “garage companies” proactive – in short to make the into really big, sometimes even right decisions. international corporations, using the most developed technology. What one thing would There were firms that could you like to see changed not stand the competition and above all others to have disappeared. The strong improve the business and hard competition forces environment? each member of the business to I would like to see some more free find new ways, to develop new competition and accountability, products and new methods to be but if I had the chance to pick up faster and better in product and just a single point, this would be service. To summarize: doing the predictability of the business How would you describe countries (Germany, Hungary, business in Hungary has became environment. the current business Luxembourg, Poland, Spain, and harder, as it has all around the environment in the UK), but the price of gas in world, but it keeps the business Why is it important Hungary? Hungary is the most expensive in awake and fit, and since it is the to belong to an Hungary is going through a kind the industry. This is the result of customers who enjoy the results organization such as of economic reconsideration nothing else but an administrative of this improvement, it is good AmCham? phase for the time being. The decision and it is putting almost for everybody. AmCham as an organization situation is pretty complicated. every company working in ‘collects’ companies whose results On one hand, the world economic the building industry in an What are the greatest inspire, and contact with their crisis has shown that there is uncompetitive situation. challenges in doing staff provides information that a need for a global political- business in Hungary can be used to improve our job economical intervention to How has doing business right now? and results as well. It is also good put the economy back on the in Hungary changed There have been steps taken to to belong to an organization right track, on the other hand since the company was decrease company administration. that can represent our business any artificial influencing of the set up here? I would encourage the responsible interests where needed. costs, like bank interest rates, When Guardian started its institutes to continue on that path. labor or energy costs, definitely activities in Hungary in 1988, The rules on administration and influence companies in their Hungary was a socialist country. taxes could be further simplified. competitiveness compared to I do not think I have to explain Beside these, the greatest their peers working in a purely the change made there. The challenges are that there is no, or free market driven environment. change since 1990 is significant. almost no, long-term fixed rules Just one example: Guardian is The Hungarian economy, among the business conditions. running float plants in six EU parallel to the world economy, The Labor Code is changing; New members 35 New members on board patron

BorsodChem Zrt. Google Information Technology Services Ltd. (Hungary)

CEO: Mr. Jason Ding Address: 3700 Kazincbarcika, Bolyai tér 1. Country Manager: Ms. Edina Heal Phone: +36 48 511-211 Address: 1077 Budapest, Wesselényi u. 16/A. Fax: +36 48 511-511 Phone: +36 1 888-0501 E-mail: [email protected] Web: www.google.com Web: www.borsodchem-group.com BorsodChem as part of the Wanhua Group is an important European Google is a global technology leader focused on improving the chemicals producer with two main product groups: polyurethane ways people connect with information. Google’s innovation in web raw materials (MDI, TDI) and vinyls (PVC resins and caustic soda). search and advertising have made its website a top internet property It sells more than half of its output on Western European markets. A and its brand one of the most recognized in the world. For more significant amount of its production is sold to customers in Central and information, visit www.google.com/about.html. Eastern Europe. BorsodChem is establishing an increasingly relevant position outside Europe. More information: http://www.borsodchem-group.com/

MDI (methylene-diphenyl-diisocyanate) is mainly used in polyurethane foams. Rigid foams are mostly used in construction, refrigeration, packaging and insulation. MDI is also used to make binders, elastomers, adhesives, sealants and coatings. TDI (toluol-diphenyl-diisocyanate) is used in the manufacture of polyurethane flexible foams for upholstery, mattresses and automotive seats. Smaller uses for TDI include polyurethane elastomers and coatings.

corporate

Antenna Hungária Zrt. Concorde Alapkezelő Zrt.

CEO: Mr. Jean-Francois Fenech Address: 1119 Budapest, Petzvál J. u. 31-33. CEO: Mr. Botond Bilibók Phone: +36 1 464-2464 Address: 1123 Budapest, Alkotás u. 50. Fax: +36 1 464-2525 Phone: +36 1 489-2299 E-mail: [email protected] Fax: +36 1 489-2290 Web: www.ahrt.hu E-mail: [email protected] Web: www.concordealapkezelo.hu Antenna Hungária is an innovative, customer-oriented telecommunication company, a market leader in nationwide terrestrial television and radio transmission and microwave-based network services in Hungary. The company plays a pivotal role in the transition The wealth management practice we established in Hungary is based on to digital TV and radio transmission, and in the convergence of the principles of the Swiss Private wealth management. Concorde Asset broadcasting and telecommunication. Its digital terrestrial television Management was established in 1994 as the first independent asset service, MinDig TV contains 7 free-to-air television and 4 radio manager in Hungary. We provide a wide range of wealth management programs, while the pay-tv component, MinDig TV Extra offers services to individuals and companies. As of today, we manage over additional 24 blue-chip TV channels all across country. HUF 250 billion (USD 1,1 billion) worth of assets. VOICE american chamber of commerce in hungary corporate non-profit

Johnson Controls Csodalámpa Alapítvány

Country HR Manager: Mr. Imre Grünwald Address: 8514 Mezőlak, Petőfi Sándor u. 92/A. Phone: +36 88 558-854 Fax: +36 88 558-860 Managing Director: Ms. Éva Patzauer E-mail: [email protected] Address: 1052 Budapest, Váci u. 16 C. Web: www.johnsoncontrols.co.hu Phone: +36 20 448-1557 Fax: +36 1 327-0916 Johnson Controls is a global diversified technology and industrial leader E-mail: [email protected] serving customers in more than 150 countries. Our 162,000 employees Web: www.csodalampa.hu create quality products, services and solutions to optimize energy and operational efficiencies of buildings; lead-acid automotive batteries and Csodalámpa Wish-Granting Foundation established in 2003 grants advanced batteries for hybrid and electric vehicles; and interior systems one wish of 3-18 years old children suffering from life threatening for automobiles. Through our growth strategies and by increasing illness thus giving them hope and strenght to overcome the illness. market share we are committed to delivering value to shareholders and Our Public Benefit Report audited by PWC and information about making our customers successful. each fulfilment can be found on their website www.csodalampa.hu business

Dr. Rose Egészségügyi Image Factory Szolgáltató Kft.

Your Media, PR and Event Manager

Managing Directors: Dr. Elemér Illanitz & Mr. Tibor Bleier Address: 1051 Budapest, Széchenyi tér 7-8. Executive Manager: Mr. Bence Kálmán Phone: +36 1 377-6737 Address: 1026 Budapest, Garas u. 1. Fax: +36 1 348-0486 Phone: +36 1 315-3201 E-mail: [email protected] Fax: +36 1 315-3201 Web: www.drrose.hu E-mail: [email protected] Web: www.imagefactory.hu Dr. Rose Private Hospital provides a unique and complex medical service in the heart of Budapest: IMAGE FACTORY is a communications agency offering the broadest range of - 3 departments: In- and Out-patient services and Obstetrics professional services, from classic PR and media management through event - 28 different specialties in the Out-patient department organizing to graphic design, website development, digital PR and social media - Exclusive hospital rooms management. Our goal is to provide innovative, custom-made solutions for our clients. Image Factory was awarded with the most prestigious professional prize - 7/24-hotline service of our field, the PRizma prize twice: 2010, 2011. - Home visit

Helios Partners Infogroup Menedzsment Kft.

Vice President: Mr. Timothy Moss CEO: Mr. Ádám Székely Address: 1117 Budapest, Alle Corner, Október Address: 1115 Budapest Bartók Béla út 105-113. huszonharmadika u. 8-10. Phone: +36 1 481-4530 Phone: +36 1 882-3629 Fax: +36 1 481-4531 Fax: +36 1 882-3501 E-mail: [email protected] E-mail: [email protected] Web: www.infogroup.hu Web: www.heliospartners.com Infogroup Menedzsment Kft. is the member of the privately held InfoGroup Helios Partners is an international sports marketing and sponsorship Real Estate Development Group, which is looking back at 22 years of consulting firm based in the United States. The company has led history in the Hungarian real estate market. After 15 years of residential several successful hosting bids for the Olympic Games and World focus, the company changed profile and now the portfolio mainly consists Cup and has extensive experience in sports marketing and sport of commercial projects. Recent success stories include the Bartók Court (Bartók Udvar, Budapest) and Polgar Industrial Park (in Northeastern property sponsorship. Hungary) which won the Best Industrial Park Award in 2011. New members 37 business

MyCorporation Kft.

Strategic Development Partner: Mr. Gábor Dehelán Address: 1013 Budapest, Krisztina krt. 32. Phone: +36 1 213-4280 Fax: +36 1 213-4289 E-mail: [email protected] Web: www.mycorporation.hu

MyCorporation | The Smart Office, the coworking office on the Buda side, beside its coworking and office spaces offer business incubation & networking services for individuals, entrepreneurs and companies in a multinational environment, with soul and industrial design. We connect business ideas, create innovation.

Solti & Partners Consulting Kft.

Managing Partner: Mr. Előd Solti Address: 1147 Budapest, Kerékgyártó utca 47-49. Mobile: +36 20 945-3363 E-mail: [email protected] Web: www.soltiandpartners.com Solti&Partners Consulting is a management-consulting firm. We support our clients to identify and manage changes through their organization. Our mission is to find ways to improve the efficiency of your company. Our continuously updated know-how, solid experience with market leading companies, and fresh creativity guarantee trustworthy and predictable results.

Tomlin Kft.

Managing Director: Mr. Tamás Fonda Address: 1023 Budapest, Bécsi út 28. Phone: +36 1 336-3380 Fax: +36 1 336-3389 E-mail: [email protected] Web: www.tomlin.hu With over 20 years experience in the local property and construction market, with great blend of professional skills and experiences TOMLIN fulfill the role of leading project and construction manager in large scale projects and developments. TOMLIN’s company philosophy: Efficiency, Transparency, Result oriented. The focus of our services is the cost and time efficiency to deliver the target quality result of any development. VOICE american chamber of commerce in hungary AmCham events – photo coverage

A nemzetközi helyzet fokozódik - Mit csináljak a pénzemmel? - AmCham-Concorde Podium Debate February 14, 2012 Kempinski Hotel Corvinus Budapest

Moderator Zoltán Simon, Bloomberg with the speakers, Tamás Móró, Viktor Zsiday and László Szabó from Concorde AmChamxxxxx news 39 AmCham events – photo coverage

Global Leaders on the AmCham Podium: Paula Dowdy, Vice President, Cisco Services, EMEA and Russia February 22, 2012 Budapest Marriott Hotel

Paula Dowdy

First Vice President David Young, host of the event

Business Forum with Iryna V. Ivaschenko, Resident Representative in Hungary, IMF February 9, 2012 Budapest Marriott Hotel, 1052 Budapest, Apáczai Csere János u. 4.

Iryna Ivaschenko with U.S. Ambassador Kounalakis and AmCham President István Havas VOICE american chamber of commerce in hungary

AmCham Morning Mini Seminar: Cafeteria 2012 February 9, 2012 American Chamber of Commerce

Seminar and Cocktail: Tax Law Changes for 2012 December 14, 2011 Kempinski Hotel Corvinus

Tibor pálszabó and róbert heinczinger, Partners, Tax Services, Ernst & Young Advisory Ltd.

Annual General Assembly and Board Elections 2011 December 1, 2011 Budapest Marriott Hotel AmChamxxxxx news 41

Sixth Corporate Governance Workshop November 29, 2011 Budapest Marriott Hotel

Keynote speaker Holly Gregory, Partner, Weil, Gotshal & Manges LLP

László Czirják, Committee Chair; iEurope Capital

AmCham Thanksgiving Dinner 2011 November 22, 2011 Budapest Marriott Hotel

Ferenc Snétberger and his students played before the dinner AmCham Staff

Chief Executive Officer VOICE american chamber of commerce in hungary Péter Dávid

CEO’S note [email protected] Phone: +36 1 266-9880 Chief Operating Officer, Committee Coordinator László A little absurdity Metzing with potentially [email protected] Phone: +36 1 266-9880/316 Membership Manager

Csilla big consequences Pál

[email protected] Phone: +36 1 266-9880/319 Events Manager Anita Árvai

[email protected] Phone: +36 1 266-9880/325 Financial Issues, Charity Erika Bosnyák

[email protected] Phone: +36 1 266-9880/312 Marketing and Communications Manager Zsófia Juhász People make mistakes. We all do. Some- a huge dilemma. Your activity may be in the times they are easy to correct, sometimes ‘grey zone’, i.e. you do something that may or they remain hidden and have no significant may not necessitate a special certificate issued [email protected] impact at all. There are instances where a by the Hungarian authorities. Since you oper- Phone: +36 1 266-9880/360 mistake becomes, metaphorically speaking, a ate in Hungary, which is a member state of Project Manager Ildikó killer. Just imagine the sensitive area of gene the European Union, you are compliant with Bryják technology and genetically modified micro- EU regulation, so no worries. organisms, or GMMs for short. However, strictly speaking, if the Hungarian [email protected] It so happens that the Hungarian act regulat- authorities ever decide to raise hell with you Phone: +36 1 266-9880/310 ing GMMs, when it was aligned with the reg- because of the lack of your local (Hungarian) Events & Project Manager ulatory requirements of the European Union, certificate, you may be in trouble. As a result, Ildikó was more or less a direct transposition of the you may not be able to carry on with regu- Takács- relevant EU rules. Unfortunately, the trans- lar laboratory operations, and sure enough, Berka lator who was given the task of transposing soon your scientists and researchers – the the original into Hungarian made a small employees of your laboratories – will resign [email protected] mistake: they omitted a few pages (probably and leave. Potentially, they may even leave the Phone: +36 1 266-9880/329 when turning a page, it just so happened that country and continue their scientific career Project Manager instead of turning to the next, they turned in a happier EU member state where the rele- Judit SZILÁGYI two). It is even more regrettable that, for quite vant regulation was appropriately transposed some time, nobody realized this mistake. As from the acquis communautaire. Would it be a result, the Hungarian regulation is, mildly a loss to Hungary? No doubt. Can AmCham speaking, ambivalent. It does not regulate do something about it? Yes, we can and we [email protected] Phone: +36 1 266-9880/332 certain details that are important in this field. should. Because, at the end of the day, it is a competitiveness issue. A prime competitive- AmCham office contact info So, if you work with GMMs, for example pro- ness issue, in my opinion. H-1051 Budapest, Szent István tér 11. Phone: +36 1 266 9880 Fax: +36 1 266 9888 ducing substances in your biotechnological Email: [email protected] laboratories in Hungary, you are faced with Péter Dávid website: www.amcham.hu