Hungarian Watch Autumn 2013
Hungarian Watch editions
Utility service providers willing to sell some operations to the Hungarian state
Sharp cuts in utility prices
The Hungarian retail energy sector has recently experienced a tough time. After the imposition of sector taxes in the energy market, a 10% price cut was imposed in respect of regulated prices for households in the field of electricity, gas and district heating sector. Utility service providers complained that the sharp cut jeopardizes their long-term operations. However, despite these warnings the Hungarian government appears to be resolved to introduce even further cuts to the regulated utility prices. Some energy firms have already expressed a willingness to sell some of their operations to the state. Read more...
Banking sector may face consolidation
OTP is planning to acquire two banks
The chairman-CEO of OTP Bank, Sándor Csányi argued that the sector’s lack of profit could drive the sector to consolidation. “Currently we have eight large banks. However, it is certain that in the next couple years there will be less than eight. There will be four maybe five” Csányi told Reuters. Csányi’s statement caused wild speculations in the professional circles. Will consolidation really turn into reality? Which players will remain in the market? Which players will sell their Hungarian businesses? Read more...
Turbulent times in Hungary’s media business
Government announces new tax on the media industry
The news about the potential introduction of an advertisement tax generated a wide debate in professional circles. The tax would particularly hit the largest television companies RTL Klub and TV2. In general the new advertisement tax would be hardly sustainable for several large media players. The recent events – including the merger plan of Axel Springer and Ringier and speculation regarding other potential deals – evidence the inevitable restructuring of the Hungarian media industry. There is no question that the expected advertisement tax will reinforce these trends. This proposal may be put before Parliament in the autumn session. Read more...
A new chance for the Hungarian upstream gas and geothermal sector
Call for tenders for hydrocarbon and geothermal energy concessions in Hungary
In order to give a boost to upstream gas and geothermal sector the Hungarian Minister of National Development has recently published the calls for tenders for the exclusive right of exploration, development and production of hydrocarbons and geothermal energy under concession contracts. Bids may be submitted by 15 November 2013. Will this long awaited opportunity attract the major players in the Hungarian upstream gas and geothermal sector? Read more...
The deal of the century
Call for tender for the EUR 10 billion worth project of the Paks Nuclear Power Plant expansion
Considering primarily the potential future increase of energy consumption (according to the prognosis 1% increase/per year) and the need for renewal of old power plants the Government launched the project of Paks Nuclear Power Plant expansion few years ago. The latest evidences of this news is that the project is close to implementation, the invitation for the tender is expected by the end of 2013. There are 5 potential applicants: the French Areva, Atmea (joint venture of Areva and the Japanese Mitsubishi), the South-Korean Kepco, the Russian Rosatom and the American Westinghouse owned by the Japanese. According to the presentation of Rosatom the project would cost approximately EUR 10 billion. Read more...
EU closed the excessive deficit procedure against Hungary
A new chance for the Hungarian economy
After nine years Hungary has finally managed to exit from the excessive deficit procedure (EDP). Hungary has become one of the few countries who are free from the EDP. The release from the EDP will have a clearly significant impact on the Hungarian economy as it is expected that it will generate lower lending rates, decreasing risk premiums and a more easily reducible government debt. The Minister for National Economy states that technically speaking the economic recession is over in Hungary. Read more...
Hungary cuts interest rates to record low
The new economic boom may cause further interest rates cuts
After several cuts, the Hungarian interest rates have been reduced to the historic low level of 3.8% by the Central Bank of Hungary’s decision of 27 August 2013. According to the Central Bank of Hungary as long as the real economy justifies further cuts are expected. Interest rates may sink to 3.5% or 3%. According to the opinion of financial experts, the cuts are based on the strong macroeconomic conditions in Hungary. Read more...
Strategic partnership agreements with major business actors in Hungary
Mutual trust and profit
The Hungarian Government has already concluded strategic partnership agreements with 34 key, mainly foreign-owned companies and plans to extend the number of such cooperation. Read more...
Better times ahead for the Hungarian construction industry
The new bill may give a boost to the development of the Hungarian construction industry
To lift the construction industry from recession intervention was needed. Thus the Parliament adopted a new bill providing for a swifter court procedure and other efficient measures in order to resolve debt chains and return the market confidence in the construction industry. Hopefully the new measures will facilitate the recovery and rise of the Hungarian construction sector. Read more...