OMRI DAILY DIGEST
No. 204, 19 October 1995

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JOURNALISTS: A directory of OMRI analysts covering Eastern Europe and
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HUNGARY'S SOCIALISTS SERIOUSLY DIVIDED. Hungary's ruling Socialist Party
is deeply divided one month before a crucial party congress in late
November, Reuters and Hungarian newspapers reported on 18 October. A
slump in the party's popularity, divisions over economic policy, and
mounting dissatisfaction with Prime Minister Gyula Horn's governing
style are expected to make that meeting particularly explosive. Party
sources say Horn's position as party chairman is unlikely to come under
threat at the congress, but they suggest the controversial government
austerity package may have to be softened. -- Zsofia Szilagyi

HEAD OF LARGEST HUNGARIAN TRADE UNION FEDERATION QUITS. Sandor Nagy,
head of MSZOSZ, the country's largest trade union federation, officially
resigned from his post on 18 October, Hungarian newspapers and AFP
reported the next day. He told a news conference that MSZOSZ is
generally disappointed with the socialist-led government because it does
not stand up for leftist values. However, observers say that Nagy's
resignation was prompted by growing criticism among union activists that
Nagy, who is also an MSZP deputy, does not represent union interests
well enough. -- Zsofia Szilagyi

HUNGARIAN PREMIER IN CROATIA. Gyula Horn, during an official visit to
Zagreb on 18 October, met with President Franjo Tudjman and Prime
Minister Nikica Valentic, Croatian and Hungarian newspapers reported the
next day. The two premiers said after their meeting that discussion
focused on the current situation in the region, with special attention
given to bilateral economic relations. Horn said Hungary is willing to
participate in the reconstruction of the Croatian and Bosnian economies
by offering assistance worth $1 billion. -- Zsofia Szilagyi

[As of 12:00 CET]

Compiled by Jan Cleave


Thursday, 19 October 1995
Volume 2, Issue 205


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

**HUNGARY CLOSE TO IMF LOAN CLOSE**
        The International Monetary Fund said yesterday Hungary's
        government is close to winning a standby credit.  Hungary is
        seeking about 300 million dollars.   IMF resident
        representative George Kopits says  this is the closest  the
        IMF has come to reaching a standby agreement with the current
        government.  He was speaking after the publication of a copy
        of a letter from the IMF to Hungarian Finance Minister Lajos
        Bokros in the Nepsava newspaper.  The letter outlines the
        areas in which further economic reforms are necessary.  The
        letter says five areas of Hungary's economy need particular
        attention.  It says next year Hungary should try to
        significantly reducte its net external indebtedness by reining
        in the current account deficit to under two  billion dollars
        from the expected  three billion for this year and boosting
        foreign investment and privatization income.  The letter also
        says Hungary's public sector deficit should be cut to below
        four percent of gross domestic product from eight percent last
        year and an expected 6.2 percent this year.  But that means
        the government would have to drastically cut spending on
        social security.  The IMF is also warning that wage restraint
        is vital.

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