Okno Group - Environmental policy briefs

Hungary: Selected environmental policy briefs

Reprinted from Environment & Health Online

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The policy briefs reprinted in these pages are drawn from past issues of Okno Group's E&H Online Environment Report. The briefs have been selected for broader interest and appear here with a delay after original publication.

August 1998

New Hungarian government wants to kill Danube dam plan

The new Hungarian coalition government led by Viktor Orban of Fidesz (Young Democrats) finally made public in mid-August its opposition to a new dam on the Danube River. According to a 1977 treaty between then-Czechoslovakia and Hungary, the two governments agreed to construct a series of dams and reservoirs to generate electricity and use for flood control. While the Slovak side constructed a power station and a canal to divert water from the Danube, recent Hungarian governments have tried to abandon the Communist-era agreement.

Slovak leaders have made completion of the hydroelectric projects an issue of national development and pride, while Hungarian politicians have been sensitive to popular opposition provoked by the plans (sparked by environmental and other concerns) that had helped crystallize protest even before 1989. In the face of Hungarian opposition, Slovakia took the matter to the International Court of Justice in The Hague, which ruled that the 1977 treaty was still valid and that the two countries must come to an agreement on the projects. The Court also ruled, however, that Hungary was entitled to have at least 50% of the Danube water flow through the old river bed which passes through its territory; Slovakia had diverted much of the water to its hydroelectric plant at Gabcikovo.

Slovakia wants a dam built at Nagymaros in Hungary, and the Slovak water utility says they have even offered to pay for it. The Hungarian cabinet does not want to build a dam at Nagymaros or at an alternate site, and its cost estimates are much higher than Slovakia's. The Hungarian government has named a new commissioner to re-start negotiations with Slovakia -- Laszlo Szekely, a Fidesz lawyer and environmental expert. Slovak government officials, however, accuse Hungary of wanting to delay a settlement until after Slovak parliamentary elections in September which might return an opposition government more inclined to compromise. Copyright ©1998 by Okno Group.

Hungary calculates costs of improving environment for EU

A team of researchers from the Hungarian Academy of Sciences issued a report in early August describing the costs involved in bringing the country's environment up to EU standards by 2010. The estimates range from 1.5 trillion forints ($6.7 billion), for a minimal program, to over Ft 4.6 trillion ($20.5 billion) if all requirements are met in full. The report indicated that an "optimal" level of upgrading would require spending around Ft 3.1 trillion on the construction and operation of pollution control and prevention efforts, as well as monitoring and information systems.

The largest single spending item was water quality, which might absorb anywhere from Ft 660 billion to Ft 2.16 trillion. Costs of improving waste disposal could range from Ft 60-460 billion, while air pollution efforts are expected to cost Ft 200 billion in all the scenarios. Environmental spending represented 1.1% of Hungary's GDP in 1997; the report estimated that if GDP remains constant and 1% is allocated to environmental projects, Ft 1.4 trillion would be available over the period to 2010. If GDP grows at 3% annually, and 2.5% of GDP is spent on the environment, as much as Ft 3.05 trillion might be available. (Hungary's real GDP grew at an annual rate of over 4% in the first quarter of 1998.) The report estimated that Hungary may receive as much as Ecu 1 billion ($1.1 billion) in aid >from the EU over the period to 2010. Copyright ©1998 by Okno Group.

July 1998

New Hungarian environment minister; program described

The new center-right coalition that came to power after May elections in Hungary formally approved on 22 June the agreement that will allow the three-party group to govern. As part of the agreement, the senior partner Young Democrats (Fidesz) led by PM Viktor Orban will dominate the cabinet, but the Democratic Forum will hold only one portfolio and the more conservative Independent Smallholders' party names four ministers [see E&H Online, June 98]. The Smallholders, which represents agricultural interests, named Pal Pepo as environment minister; Mr. Pepo is a professor of agriculture with a degree in agricultural engineering. Mr. Pepo spent considerable time abroad in the West during the 1990s, including a Fulbright fellowship in the U.S. and agricultural, environmental and biotechnology projects in Britain and Germany.

In the government program the coalition presented to parliament, the three parties committed themselves to a socially- and environmentally-friendly economic policy; the new government also pledged to encourage the use of less-polluting fuels as part of its restructuring of the energy sector. Copyright ©1998 by Okno Group.

The EBRD intends to shift the focus of its financing programs in Hungary to emphasize small and medium-sized businesses and local investment projects -- including solid waste disposal, recycling efforts and public transit. EBRD officials said in late June that major international banks have a large enough presence in Hungary that the agency can afford to cut back on large government projects. Copyright ©1998 by Okno Group.

Hungarian Environment Minister Pal Pepo said that the new government hopes to double the share of renewable energy sources in total energy consumption. Mr. Pepo spoke while attending a meeting of European environment officials on 18 July; he said that energy from solar, wind, hydro and biomass sources currently supplies three percent of Hungary's energy needs and the government hopes to increase that to six percent by 2010. Copyright ©1998 by Okno Group.

June 1998

Hungary gets new environment minister

The new center-right governing coalition led by Fidesz-Hungarian Civic Party that emerged from May elections has finalized its list of cabinet ministers. Candidate premier Viktor Orban of Fidesz (Young Democrats) agreed to name Pal Pepo of the junior coalition partner Independent Smallholders' Party as environment minister, replacing Ferenc Baja of the outgoing Socialist Party. Mr. Pepo, 43, is a professor at the University of Agricultural Studies in Debrecen in eastern Hungary. His nomination for the post came as part of a deal in which the Smallholders receive four cabinet seats in return for their support for the coalition. Fidesz and the Hungarian Democratic Forum were 29 seats short of a parliamentary majority, and the election partners turned to the more conservative Smallholders to give them a 20-seat majority. Zoltan Illes of Fidesz was initially expected to get the post [as reported in E&H Online, May 98].

Mr. Pepo echoed earlier statements by Mr. Illes of Fidesz opposing further diversion of the Danube, though he was more cautious about the controversial Slovak-Hungarian hydroelectric dam project on the river, which Fidesz had strongly opposed [see EHO March, May 98]. Mr. Pepo also said he opposed operation of the Mochovce nuclear power plant in Slovakia. Nevertheless, 100 environmentalists picketed outside Fidesz's Budapest headquarters on 18 June, protesting the party's decision to give the environmental portfolio to the Smallholders. The activists' worry was that the ministry under Mr. Pepo might try to dilute Hungarian efforts to come up to EU environmental norms. Copyright ©1998 by Okno Group.

May 1998

Leaders of the Hungarian Young Democrat/Civic Party (Fidesz), who are expected to form the country's new government after May elections, announced late in the month that they opposed construction of a dam on the Danube river called for in an agreement with Slovakia [see E&H Online, March 1998]. The outgoing Socialist government had initially agreed to construct the dam after losing an appeal to the International Court of Justice, but sought a delay for further study in March. Zoltan Illes, Fidesz's likely candidate for environment minister, said the estimated 600 billion forint ($2.8 billion) cost of the dam would be better spent on social benefits. Copyright ©1998 by Okno Group.

April 1998

Hungarians weigh cost of meeting EU enviro standards

A report released 8 April by the Hungarian government indicates that the country will need to spend between Ecu 6-6.8 billion ($6.6-7.5 billion) in order to meet European Union environmental standards and rules. The Hungarian Academy of Sciences report, made public by the environment ministry, indicated that measures to improve water quality would be the most costly, taking up nearly half the total. Of the Ecu 3.2 billion allocated to water quality, the largest share would go toward investments in sewers and waste water treatment facilities; further amounts would be targeted to protecting groundwater, lakes and rivers. The report also described a further Ecu 1 billion that would need to be spent on pollution and conservation measures in the energy sector and Ecu 2 billion to be spent on solid waste management.

Ministry officials said that the total costs would depend on the outcome of membership negotiations with the EU. They declined to argue with estimates offered a week before by a member of the European Commission that environmental harmonization would cost as much as Ecu 13.7 billion. The Hungarian officials said that the National Environmental Protection Program was predicated on annual GDP growth of 4-5% by 2002, of which two percent would be spent on environmental protection (up from one percent currently). The government plans to introduce an "environment burden" fee, intended to raise between 15 and 30 billion forints ($70-140 million) over the five years beginning in 1999; officials are also considering an environmental tax to be levied in future years. Copyright ©1998 by Okno Group.

Hungary's National Environmental Protection Program will spend Ft 116 billion ($550 million) on environmental projects in 1998. The largest share of this total will go towards new sewer and water treatment facilities for local governments; other projects include upgrading the nation's air quality monitoring network, regional recycling and waste separation facilities, and environmental aspects of several transportation projects. Copyright ©1998 by Okno Group.

March 1998

Hungarians try delay on Gabcikovo dam agreement

The Hungarian government called for further delay in the construction of a controversial dam and hydroelectric complex on the Danube river bordering Hungary and Slovakia. Plans for the dam, set forward in a 1977 treaty between the communist governments of Hungary and Czechoslovakia, were upturned when environmental protests in Hungary led the then-communist government to suspend participation in 1989. Hungary withdrew from the treaty entirely in 1992. Environmentalists oppose the dam because it involves diverting a large proportion of the Danube's waters to an alternate channel with locks and hydroelectric plants, threatening sensitive wetlands and wildlife habitat; Hungarian farmers upriver of one of the proposed dams worry their fields will be inundated. Opposition to the dam has wider political repercussions in Hungary, however, since it served as a rallying point for opposition to the communist regime in the early days.

After Hungary's withdrawal from the pact, the now-independent Slovak government went ahead with construction of their half of the project, including significant diversion of river waters, which was completed in 1994. The Hungarian government took the matter to the International Court of Justice in the Hague, hoping to force the Slovaks to halt or reduce water diversions. Last fall, the ICJ ruled that Hungary had illegally withdrawn from the 1977 treaty, that Slovakia should not have continued unilaterally, and gave the two countries until late March to reach an agreement on the matter. Negotiators reached agreement in principal in early March to resume operation of related small dams and reservoirs which had been suspended; these measures would result in more water flowing into the original Danube riverbed. More controversial were reports that Hungary might be willing to build new dams either or both above and below the main Slovak one, with locks to help shipping and to control the irregular water releases from the Slovak hydro plant. Reportedly, Hungarian officials offered to resume construction on one of the dams if the Slovaks would reduce the volume of water they divert, which they refused to do.

Hungary is eager to press its membership application to the European Union, and the government wants to be seen as a reasonable and reliable partner. The fact that Germany invested $2.2 billion building a Rhine-Main-Danube canal assuming the Hungarians would build a dam with locks making their section of the river navigable year-round is not lost on the Hungarian government. The center-left government of premier Gyula Horn has been under pressure to compromise with the Slovak government since losing the ICJ judgment; moreover, Mr. Horn was foreign minister in the communist government that suspended the treaty and had been a strong advocate of the dam. But political opposition to the dam could be very damaging to Mr. Horn's Socialist-led coalition as they prepare for parliamentary elections this May, since it would serve as a strong rallying point for more conservative parties and environmentalists. In mid-March, the Hungarian government said a final agreement on the dam would have to wait until the end of 1998, when additional studies of the dam project could be completed. Slovakia has threatened to take the case back to the ICJ, arguing that the Hungarians are stalling and do not have a valid reason to delay signing an agreement. Despite the current political ferment in Slovakia, the dispute seems unlikely to end soon, since the main Slovak opposition parties also support the dam. Copyright ©1998 by Okno Group.

The Hungarian Environment Ministry and the Budapest city government have agreed to share the cost of installing smokestack scrubbers at the city's Waste Recycling Works. Thirty percent of the Ft 9 billion ($43 million) project will be financed with grants from the Central Environmental Fund; another 20% will be a loan from the Fund to the city, while the remainder will be covered from the city budget. An international tender is to be published next month; the installation is expected to be finished by late 2000. Copyright ©1998 by Okno Group.

February 1998

Hungarian officials announced a new EU-supported energy efficiency initiative in mid-January. The EU's PHARE program is providing Ecu 7.5 million ($8.1 million) in financing, supplemented by loans from the EBRD and European Investment Bank. The program is targeted at local governments, public institutions and small businesses and will make it easier for these organizations to invest in energy efficiency; participants will have to supply 10-25% of the funding themselves. Copyright ©1998 by Okno Group.

The Hungarian Central Environmental Protection Fund granted Ft13.5 billion ($65 million) to support 292 environmental protection and remediation projects in the third quarter of last year. The projects include air pollution control, noise abatement and water quality; the funded projects will involve investments of Ft61 billion over the next three years. Copyright ©1998 by Okno Group.

January 1998

Swiss extend environmental aid to Hungary

The Swiss government extended its SFr30 million ($20.4 million) environmental and infrastructure aid package to Hungary for another two years, until November 1999; the agreement was originally signed in November 1993. The Swiss have allocated a SFr3 to 5 million reserve to fund joint implementation projects under the Rio Framework Convention on Climate Change aimed at controlling greenhouse gases. Environmental projects have received 90% of the total aid package, including equipment for the sewage treatment plant in Debrecen and waste incinerators for hospitals in Debrecen and Szeged. Copyright ©1998 by Okno Group.

Financing plans of the Hungarian Environmental Fund

At the end of November, the Hungarian Ministry of the Environment announced that the Central Environmental Fund projected revenues of Ft24.6 billion ($120 million) and expenditures of Ft23.4 billion for 1998, with a surplus of Ft400 million for 1997. The surplus will be added to the Ft16 billion accumulated by the Fund in recent years. Plans call for F16.2 billion to be available for environmental investments, of which Ft1 billion will be spent on the national environmental clean-up program and the remaining amount will be allocated through tenders. A further Ft4.5 billion will be used on public environmental projects including Ft2 billion for Lake Balaton and the region of Varpalota. The bulk of the Fund's revenue comes from pollution fees, with some funds deriving from privatization revenues and mining royalties. Copyright ©1998 by Okno Group.

The Budapest City Council announced that water and sewage rates would increase by 20% starting 1 January 1998. The Hungarian city councilors hope to improve the city's poor sewage system and bring it up to EU standards. Only about 20% of sewage is treated before it flows into the Danube. Copyright ©1998 by Okno Group.

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Baltic States	Bulgaria	Czech Rep.	Hungary	Poland	Romania
Slovakia	Fmr. Yugoslavia	Central/East European Region		Former Soviet region
Belarus	Caucasus	Central Asia	Moldova	Russia	Ukraine


August 1998	New Hungarian government wants to kill Danube dam plan The new Hungarian coalition government led by Viktor Orban of Fidesz (Young Democrats) finally made public in mid-August its opposition to a new dam on the Danube River. According to a 1977 treaty between then-Czechoslovakia and Hungary, the two governments agreed to construct a series of dams and reservoirs to generate electricity and use for flood control. While the Slovak side constructed a power station and a canal to divert water from the Danube, recent Hungarian governments have tried to abandon the Communist-era agreement. Slovak leaders have made completion of the hydroelectric projects an issue of national development and pride, while Hungarian politicians have been sensitive to popular opposition provoked by the plans (sparked by environmental and other concerns) that had helped crystallize protest even before 1989. In the face of Hungarian opposition, Slovakia took the matter to the International Court of Justice in The Hague, which ruled that the 1977 treaty was still valid and that the two countries must come to an agreement on the projects. The Court also ruled, however, that Hungary was entitled to have at least 50% of the Danube water flow through the old river bed which passes through its territory; Slovakia had diverted much of the water to its hydroelectric plant at Gabcikovo. Slovakia wants a dam built at Nagymaros in Hungary, and the Slovak water utility says they have even offered to pay for it. The Hungarian cabinet does not want to build a dam at Nagymaros or at an alternate site, and its cost estimates are much higher than Slovakia's. The Hungarian government has named a new commissioner to re-start negotiations with Slovakia -- Laszlo Szekely, a Fidesz lawyer and environmental expert. Slovak government officials, however, accuse Hungary of wanting to delay a settlement until after Slovak parliamentary elections in September which might return an opposition government more inclined to compromise. Copyright ©1998 by Okno Group. Hungary calculates costs of improving environment for EU A team of researchers from the Hungarian Academy of Sciences issued a report in early August describing the costs involved in bringing the country's environment up to EU standards by 2010. The estimates range from 1.5 trillion forints ($6.7 billion), for a minimal program, to over Ft 4.6 trillion ($20.5 billion) if all requirements are met in full. The report indicated that an "optimal" level of upgrading would require spending around Ft 3.1 trillion on the construction and operation of pollution control and prevention efforts, as well as monitoring and information systems. The largest single spending item was water quality, which might absorb anywhere from Ft 660 billion to Ft 2.16 trillion. Costs of improving waste disposal could range from Ft 60-460 billion, while air pollution efforts are expected to cost Ft 200 billion in all the scenarios. Environmental spending represented 1.1% of Hungary's GDP in 1997; the report estimated that if GDP remains constant and 1% is allocated to environmental projects, Ft 1.4 trillion would be available over the period to 2010. If GDP grows at 3% annually, and 2.5% of GDP is spent on the environment, as much as Ft 3.05 trillion might be available. (Hungary's real GDP grew at an annual rate of over 4% in the first quarter of 1998.) The report estimated that Hungary may receive as much as Ecu 1 billion ($1.1 billion) in aid >from the EU over the period to 2010. Copyright ©1998 by Okno Group.

July 1998	New Hungarian environment minister; program described The new center-right coalition that came to power after May elections in Hungary formally approved on 22 June the agreement that will allow the three-party group to govern. As part of the agreement, the senior partner Young Democrats (Fidesz) led by PM Viktor Orban will dominate the cabinet, but the Democratic Forum will hold only one portfolio and the more conservative Independent Smallholders' party names four ministers [see E&H Online, June 98]. The Smallholders, which represents agricultural interests, named Pal Pepo as environment minister; Mr. Pepo is a professor of agriculture with a degree in agricultural engineering. Mr. Pepo spent considerable time abroad in the West during the 1990s, including a Fulbright fellowship in the U.S. and agricultural, environmental and biotechnology projects in Britain and Germany. In the government program the coalition presented to parliament, the three parties committed themselves to a socially- and environmentally-friendly economic policy; the new government also pledged to encourage the use of less-polluting fuels as part of its restructuring of the energy sector. Copyright ©1998 by Okno Group. The EBRD intends to shift the focus of its financing programs in Hungary to emphasize small and medium-sized businesses and local investment projects -- including solid waste disposal, recycling efforts and public transit. EBRD officials said in late June that major international banks have a large enough presence in Hungary that the agency can afford to cut back on large government projects. Copyright ©1998 by Okno Group. Hungarian Environment Minister Pal Pepo said that the new government hopes to double the share of renewable energy sources in total energy consumption. Mr. Pepo spoke while attending a meeting of European environment officials on 18 July; he said that energy from solar, wind, hydro and biomass sources currently supplies three percent of Hungary's energy needs and the government hopes to increase that to six percent by 2010. Copyright ©1998 by Okno Group.

June 1998	Hungary gets new environment minister The new center-right governing coalition led by Fidesz-Hungarian Civic Party that emerged from May elections has finalized its list of cabinet ministers. Candidate premier Viktor Orban of Fidesz (Young Democrats) agreed to name Pal Pepo of the junior coalition partner Independent Smallholders' Party as environment minister, replacing Ferenc Baja of the outgoing Socialist Party. Mr. Pepo, 43, is a professor at the University of Agricultural Studies in Debrecen in eastern Hungary. His nomination for the post came as part of a deal in which the Smallholders receive four cabinet seats in return for their support for the coalition. Fidesz and the Hungarian Democratic Forum were 29 seats short of a parliamentary majority, and the election partners turned to the more conservative Smallholders to give them a 20-seat majority. Zoltan Illes of Fidesz was initially expected to get the post [as reported in E&H Online, May 98]. Mr. Pepo echoed earlier statements by Mr. Illes of Fidesz opposing further diversion of the Danube, though he was more cautious about the controversial Slovak-Hungarian hydroelectric dam project on the river, which Fidesz had strongly opposed [see EHO March, May 98]. Mr. Pepo also said he opposed operation of the Mochovce nuclear power plant in Slovakia. Nevertheless, 100 environmentalists picketed outside Fidesz's Budapest headquarters on 18 June, protesting the party's decision to give the environmental portfolio to the Smallholders. The activists' worry was that the ministry under Mr. Pepo might try to dilute Hungarian efforts to come up to EU environmental norms. Copyright ©1998 by Okno Group.

May 1998	Leaders of the Hungarian Young Democrat/Civic Party (Fidesz), who are expected to form the country's new government after May elections, announced late in the month that they opposed construction of a dam on the Danube river called for in an agreement with Slovakia [see E&H Online, March 1998]. The outgoing Socialist government had initially agreed to construct the dam after losing an appeal to the International Court of Justice, but sought a delay for further study in March. Zoltan Illes, Fidesz's likely candidate for environment minister, said the estimated 600 billion forint ($2.8 billion) cost of the dam would be better spent on social benefits. Copyright ©1998 by Okno Group.

April 1998	Hungarians weigh cost of meeting EU enviro standards A report released 8 April by the Hungarian government indicates that the country will need to spend between Ecu 6-6.8 billion ($6.6-7.5 billion) in order to meet European Union environmental standards and rules. The Hungarian Academy of Sciences report, made public by the environment ministry, indicated that measures to improve water quality would be the most costly, taking up nearly half the total. Of the Ecu 3.2 billion allocated to water quality, the largest share would go toward investments in sewers and waste water treatment facilities; further amounts would be targeted to protecting groundwater, lakes and rivers. The report also described a further Ecu 1 billion that would need to be spent on pollution and conservation measures in the energy sector and Ecu 2 billion to be spent on solid waste management. Ministry officials said that the total costs would depend on the outcome of membership negotiations with the EU. They declined to argue with estimates offered a week before by a member of the European Commission that environmental harmonization would cost as much as Ecu 13.7 billion. The Hungarian officials said that the National Environmental Protection Program was predicated on annual GDP growth of 4-5% by 2002, of which two percent would be spent on environmental protection (up from one percent currently). The government plans to introduce an "environment burden" fee, intended to raise between 15 and 30 billion forints ($70-140 million) over the five years beginning in 1999; officials are also considering an environmental tax to be levied in future years. Copyright ©1998 by Okno Group. Hungary's National Environmental Protection Program will spend Ft 116 billion ($550 million) on environmental projects in 1998. The largest share of this total will go towards new sewer and water treatment facilities for local governments; other projects include upgrading the nation's air quality monitoring network, regional recycling and waste separation facilities, and environmental aspects of several transportation projects. Copyright ©1998 by Okno Group.

March 1998	Hungarians try delay on Gabcikovo dam agreement The Hungarian government called for further delay in the construction of a controversial dam and hydroelectric complex on the Danube river bordering Hungary and Slovakia. Plans for the dam, set forward in a 1977 treaty between the communist governments of Hungary and Czechoslovakia, were upturned when environmental protests in Hungary led the then-communist government to suspend participation in 1989. Hungary withdrew from the treaty entirely in 1992. Environmentalists oppose the dam because it involves diverting a large proportion of the Danube's waters to an alternate channel with locks and hydroelectric plants, threatening sensitive wetlands and wildlife habitat; Hungarian farmers upriver of one of the proposed dams worry their fields will be inundated. Opposition to the dam has wider political repercussions in Hungary, however, since it served as a rallying point for opposition to the communist regime in the early days. After Hungary's withdrawal from the pact, the now-independent Slovak government went ahead with construction of their half of the project, including significant diversion of river waters, which was completed in 1994. The Hungarian government took the matter to the International Court of Justice in the Hague, hoping to force the Slovaks to halt or reduce water diversions. Last fall, the ICJ ruled that Hungary had illegally withdrawn from the 1977 treaty, that Slovakia should not have continued unilaterally, and gave the two countries until late March to reach an agreement on the matter. Negotiators reached agreement in principal in early March to resume operation of related small dams and reservoirs which had been suspended; these measures would result in more water flowing into the original Danube riverbed. More controversial were reports that Hungary might be willing to build new dams either or both above and below the main Slovak one, with locks to help shipping and to control the irregular water releases from the Slovak hydro plant. Reportedly, Hungarian officials offered to resume construction on one of the dams if the Slovaks would reduce the volume of water they divert, which they refused to do. Hungary is eager to press its membership application to the European Union, and the government wants to be seen as a reasonable and reliable partner. The fact that Germany invested $2.2 billion building a Rhine-Main-Danube canal assuming the Hungarians would build a dam with locks making their section of the river navigable year-round is not lost on the Hungarian government. The center-left government of premier Gyula Horn has been under pressure to compromise with the Slovak government since losing the ICJ judgment; moreover, Mr. Horn was foreign minister in the communist government that suspended the treaty and had been a strong advocate of the dam. But political opposition to the dam could be very damaging to Mr. Horn's Socialist-led coalition as they prepare for parliamentary elections this May, since it would serve as a strong rallying point for more conservative parties and environmentalists. In mid-March, the Hungarian government said a final agreement on the dam would have to wait until the end of 1998, when additional studies of the dam project could be completed. Slovakia has threatened to take the case back to the ICJ, arguing that the Hungarians are stalling and do not have a valid reason to delay signing an agreement. Despite the current political ferment in Slovakia, the dispute seems unlikely to end soon, since the main Slovak opposition parties also support the dam. Copyright ©1998 by Okno Group. The Hungarian Environment Ministry and the Budapest city government have agreed to share the cost of installing smokestack scrubbers at the city's Waste Recycling Works. Thirty percent of the Ft 9 billion ($43 million) project will be financed with grants from the Central Environmental Fund; another 20% will be a loan from the Fund to the city, while the remainder will be covered from the city budget. An international tender is to be published next month; the installation is expected to be finished by late 2000. Copyright ©1998 by Okno Group.

February 1998	Hungarian officials announced a new EU-supported energy efficiency initiative in mid-January. The EU's PHARE program is providing Ecu 7.5 million ($8.1 million) in financing, supplemented by loans from the EBRD and European Investment Bank. The program is targeted at local governments, public institutions and small businesses and will make it easier for these organizations to invest in energy efficiency; participants will have to supply 10-25% of the funding themselves. Copyright ©1998 by Okno Group. The Hungarian Central Environmental Protection Fund granted Ft13.5 billion ($65 million) to support 292 environmental protection and remediation projects in the third quarter of last year. The projects include air pollution control, noise abatement and water quality; the funded projects will involve investments of Ft61 billion over the next three years. Copyright ©1998 by Okno Group.

January 1998	Swiss extend environmental aid to Hungary The Swiss government extended its SFr30 million ($20.4 million) environmental and infrastructure aid package to Hungary for another two years, until November 1999; the agreement was originally signed in November 1993. The Swiss have allocated a SFr3 to 5 million reserve to fund joint implementation projects under the Rio Framework Convention on Climate Change aimed at controlling greenhouse gases. Environmental projects have received 90% of the total aid package, including equipment for the sewage treatment plant in Debrecen and waste incinerators for hospitals in Debrecen and Szeged. Copyright ©1998 by Okno Group. Financing plans of the Hungarian Environmental Fund At the end of November, the Hungarian Ministry of the Environment announced that the Central Environmental Fund projected revenues of Ft24.6 billion ($120 million) and expenditures of Ft23.4 billion for 1998, with a surplus of Ft400 million for 1997. The surplus will be added to the Ft16 billion accumulated by the Fund in recent years. Plans call for F16.2 billion to be available for environmental investments, of which Ft1 billion will be spent on the national environmental clean-up program and the remaining amount will be allocated through tenders. A further Ft4.5 billion will be used on public environmental projects including Ft2 billion for Lake Balaton and the region of Varpalota. The bulk of the Fund's revenue comes from pollution fees, with some funds deriving from privatization revenues and mining royalties. Copyright ©1998 by Okno Group. The Budapest City Council announced that water and sewage rates would increase by 20% starting 1 January 1998. The Hungarian city councilors hope to improve the city's poor sewage system and bring it up to EU standards. Only about 20% of sewage is treated before it flows into the Danube. Copyright ©1998 by Okno Group.