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Riots spark worries
By Kester Eddy
WORLDWIDE TV coverage of the rioting in Budapest last week prompted many worried businessmen to call trusted partners in Hungary for reliable advice, fearful that their contracts, if not their property, was going up in smoke.
But business folk on the ground here appeared confident that, provided the unrest was quickly brought under control, the effects on the economy and investment would be minimal.
"I spent half my day yesterday answering emails, voice mails and phone calls from people making sure that everybody understood that public safety is not in danger, and life here during the day is business as usual," István Papp, general manager of Cisco Systems in Hungary & SE Europe, said in the wake of the street violence.
"At night we have had these unfortunate incidents, but otherwise I think the political situation is stable.
"The most important thing is that the financial markets do not overreact, as that would put even more pressure on the local currency," Papp added.
The fall-off in violence by the weekend, plus the central bank's decision to up interest rates this week appears to have ensured the forint's stability, at least in the short-term. However, the sight of crowd violence appears to have had an immediate effect on tourism, with the Kempinszky Hotel reporting the cancellation of conferences leading to lost revenues of "several tens of millions of forint," according to the daily
Népszabadság.
"There has certainly been an effect, though I can't put any numbers on it," the receptionist of one Budapest mid-range hotel said, requesting anonymity.
Népszabadság also reported that airlines were feeling the pinch, as tourists begin to shun Hungary, if only temporarily. However, György Borsos, head of the budget airline SkyEurope in Hungary, said the troubles had had no impact on traffic.
"We have not felt any negative effect or seen any cancellations.
We have even increased our loadings," Borsos told The Budapest Sun.
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