Jockeying for power within Hungary's coalition government may have staved off a threat to privatization of the country's petroleum industry.
At the same time, however, fresh concerns have risen over prospects for privatization.
Efforts to sell part interests in Hungary's two state owned petroleum companies appeared to be getting off high center last month after a year of political wrangling over whether their privatization should proceed (OGJ, July 4, 1994, p. 21).
Socialist rebuffed
Hungary's Socialist party last month dropped efforts to name traditional Socialist Sandor Nagy to the new post of economics minister and deputy prime minister. The Socialists' minority partner in the Hungarian coalition government, the profree market Free Democrats, vetoed Nagy's appointment.
The proposed appointment had worried reform elements in Hungary that support privatization (OGJ, Sept. 11, p. 26)
Nagy rose through the Communist Youth movement and now has a strong power base as head of the trade union movement. He described his role in the privatization process as protecting the "human factor." He seems certain to return to the center of economic policy in Hungary before long, strengthened rather than weakened by the Free Democrat veto.
Meantime, a recent proposal to name ex-Minister of Trade and Industry Laszlo Pal head of state integrated petroleum giant Magyar Olaj es Gaz (MOL) suggests Nagy's sidelining was only a temporary reversal for opponents of privatization.
Pal lost his job last June amid accusations that he tried to slow the privatization process. He was clearly identified with the group of ministers who believe Hungary can only gain by making prospective buyers wait and pay a higher price for utilities.
It is not clear how much power he would have as president of MOL, but the proposed appointment sends another negative signal to privatization proponents. Pal has been an advocate of keeping strategic sectors such as energy state owned.
Pal last month was named president of the board of directors at MOL. The board also named former Strategic Director Zoltan Mandoki general director. Significantly, it did not set a timetable for a privatization tender for MOL or the smaller oil company, Mineralimpex.
Slow going
Even with the appointment in late August of Merrill Lynch as privatization adviser there is still no date for a tender.
Finance Minister Lajos Bokros had hoped proceeds from privatization would help whittle the government's budget deficit by $1.5-2 billion this year, but this looks increasingly unlikely.
Also complicating the issue of petroleum privatization is the negative publicity attached to an earlier Hungarian privatization effort involving state telecommunications agency Matav.
Two companies that spent $875 million for 30% of Matav, are increasingly public about their bitterness. Ameri-tech and Deutsche Telecom have proposed paying less than half that amount for additional stakes larger than 30% in a bid to recoup losses, take control of Matav, and show their revised opinion of Matav's worth.
What some observers see as stubborn negotiating for unrealistically high prices, with time no object, has concerned foreign investors and the International Monetary Fund team visiting Hungary. As the Hungarian fiscal year overtakes the leisurely effort to privatize the petroleum sector, a change of approach looks no more likely.
Grassroots opposition
On Sept. 18, a petition of 70,000 signatures opposing privatization of the energy sector was presented to Hungary's parliament.
That cleared a 50,000 signature legal limit that forces a parliamentary special debate.
However, it does not reach another constitutional threshold-100,000 signatures, which forces the holding of a nationwide referendum. A second petition going for a referendum, however, may be easier to organize with the publicity the first petition has given the issue.
Organizer of the petition is Istvan Csurka, a nationalist/populist eased out of the last center-right government before 1994 by late Prime Minister Jozsef Antall. Viewed as a fringe figure today, Csurka has been in cooperative talks with other far-right figures Imre Pozsgay and Jozsef Torgyan. Only Torgyan has a party in parliament.
Anecdotal evidence of popular opinion in Hungary suggests Csurka may have found the issue he needs to focus antiforeigner feeling. There is intense sentiment among many Hungarians that cheap winter fuel prices are a national entitlement.
The prequalifying round for bidding on Hungary's five natural gas local distribution companies (LDCs) closed Sept. 19. Thirty bidders bought data packages.
George Weber, in charge of the LDC sales at Hungary's State Privatization & Holding Co., saw potential for further delays and believed Csurka's protest petition was unfairly last-minute in timing.
Often described by critics as xenophobic, Csurka, like Pozsgay and Torgyan, is careful to steer short of statements that could be considered fascist in tone. Torgyan's party has been steadily strengthening in the polls and has a much broader rural appeal than Budapest commentators tend to believe.
While all three are often stigmatized as neofascist, they have strong moderate support as well. Separately, there is significant resentment within Hungary of any business that is not Hungarian.
