A step toward regional defense cooperation

The Central European Cooperation in Peace Support Operations (Cencoop), a seven-nation defense coalition, took a major step toward its first international peacekeeping operation when in late October it pledged to send up to 700 troops to Bosnia-Herzegovina in 2004.
Cencoop was established in 1998 by Central European states in order to help promote peace and stability in the region. Until now, the group only performed joint training exercises. It members include Hungary, Austria, Slovenia, Croatia, Romania, Slovakia and Switzerland, while the Czech Republic and the Ukraine have observer status.

“This is a turning point in the history of Cencoop,” said Colonel Tibor Kovács, one of Hungary’s representatives at the meeting.

“I hope the cooperation will be successful, because the future, especially now, is with the regional cooperation among small countries.”

At the fifth Cencoop ministerial meeting in Graz late October, defense ministers said they would help build and strengthen democratic structures in Bosnia by performing law enforcement duties and help train the Bosnian police force. Hungary currently has 150 troops in Bosnia stationed under NATO command. Since Austria and Switzerland are not NATO members, Kovács said that Cencoop would only be able to send a common unit when control shifts to the EU sometime next year.

He also said that Hungary was the only country to pledge an exact number of troops for the unit, which would probably be a trimmed down version of what is already deployed.

Forging new relationships

Canada is preparing to enter into closer economic relations with future European Union members, including Hungary, in advance of the historic enlargement next year. A delegation of senior Canadian officials, led by Paul Dubois, assistant deputy minister for Europe in Canada’s Department of Foreign Affairs, visited Hungary on a tour of accession countries in mid-November.

Dubois said the purpose of the trip was to introduce the newest EU members to Canada’s second most important “economic, cultural, security and political connection.”

“Hungary’s imminent EU membership makes it important to understand modern Canada, how it relates to Europe and North America and why there will be more opportunities as a result of its future status in this special Canada-EU relationship,” said Dubois.

While 85 percent of Canada’s trade is with the United States, Canada is looking to strengthen bilateral trade with an enlarged EU. Canada and the EU agreed last year to establish a new trade and investment agreement.

The EU is Canada’s second-largest trading partner, with annual bilateral trade totaling more than USD 78 billion, according to Canadian Government statistics.
When Hungary joins the EU, they will also meet a new Canadian prime minister. Jean Chrétien, Canada’s prime minister for 10 years, recently announced he will step down Dec. 12, making room for Paul Martin, his long-time rival and successor.

Hungarian developer warns of lagging economy

A “very dark future” may be in store for the Hungarian economy if it does not make serious economic reforms, warned real estate developer Sándor Demján at a meeting of Hungary’s most influential foreign and domestic investors.
Demján, chairman of TriGránit Development Corporation and the National Association of Entrepreneurs and Employers (VOSZ), said Hungary has lost its competitive edge and is in a state of emergency. He offered a critical and blunt analysis as he spoke at a business luncheon organized by the Canadian, American, British and Dutch chambers of commerce in late October.

“No country in the world can be competitive where state infrastructure is expensive,” said Demján, as he lashed out at what he claimed to be the government’s inefficient and bloated bureaucracy.

Demján, one of Hungary’s most influential real estate developers, said that Hungary would have to reduce personal income taxes, raise wages and not rush to adopt the euro if it wants to regain its competitive edge. He often compared Hungary to Slovakia, citing Hungary’s neighbor as Central Europe’s new economic tiger, and a place where economic incentives were attracting foreign investors.

The Hungarian Government announced in its 2004 budget proposal a cut of 8,000 public sector jobs and changes to tax laws that would reduce personal income tax, but raise taxes in other fields. Both the government and the National Bank of Hungary (NBH) have said they want Hungary to adopt the euro in 2008.

A quiet endorsement for Christianity clause

The telephone lines between the offices of the prime minister and the president appear to have been crossed. While the Hungarian Government was not actively advocating for an explicit reference to Christianity in the European Constitution, Hungarian President Ferenc Mádl has been pressing the issue with visiting heads of state. Mádl, who strongly supports the adoption of a ‘Christianity clause,’ approached the subject with Dutch Prime Minister Jan Peter Balkenende and Slovak President Rudolf Schuster during their October visits.

After some initial confusion whether the Socialist-coalition supported the proposal, Prime Minister Péter Medgyessy and Foreign Minister László Kovács finally told Mádl that while they would support having Christian values added to the constitution, they would not make it a priority. Instead, they have been lobbying for a minority rights proposal. Currently only seven of Europe’s 25 countries support including Christian values into the Constitution, while French President Jacques Chirac is staunchly opposed.

Mentioning Christianity in the European Constitution could alienate Europe’s growing Muslim population. There are over 10 million Muslims in Western Europe and European Union accession hopeful Turkey has one of the world’s largest Muslim populations.

“This is possibly an obstacle for Turkey’s EU ambitions,” says Aydan Karahan, Turkey’s ambassador to Hungary. “If religion is injected into the Constitution’s clauses, then it would be a problem for Turkey, and it would also be an affront to people of Albania and Bosnia.”

Hungary-Peru look to rejuvenate ties

Early last month, the Hungarian export-import bank, Eximbank, and the Peruvian Economic Development Institute (COFIDE) signed a USD 30 million open credit deal to promote bilateral trade. The president of Eximbank and Peruvian Ambassador to Hungary Guillermo Russo Checa signed the deal. Similar to arrangements made with other Latin American countries, the deal is aimed at kick-starting projects between Hungary and Peru, primarily in the agricultural or transport sectors.

With this most recent deal bilateral trade between the countries shows signs of increasing, after a slowdown following the systemic changes. In the 1970s and 1980s Hungarian-Peruvian trade was strong in the agricultural, health, energy and transportation sectors.

”In terms of bilateral cooperation, I would put an emphasis on the agricultural sector,” said ambassador Russo Checa.”Hungarian agriculture is well known throughout the world, and is well known in South America.”

The ambassador also pointed to wine and tourism as other sectors for future cooperation.

”Let’s not forget that Hungary will be a member of the European Union very shortly, and we will look to Hungary to facilitate entry into European markets,” he added. ”And let’s not forget that the Andes region also represents markets of some 120 million people.”

The last high level Hungarian diplomatic visit to Peru took place in 1999 with a visit by then-Hungarian President, Árpád Göncz.