Budget deficit grows
The European Commission expects Hungary’s budget deficit could be almost double the government’s target next year, a Web site reported on Friday, as Hungarian Prime Minister Viktor Orban continued to dismiss lenders’ conditions for a financing backstop. EU officials, in a letter about initial talks with Budapest last month on a financing agreement, said Budapest’s growth projections were overly optimistic and its deficit could exceed 4 percent of gross domestic product next year. The letter, dated Aug. 31, also called for Hungary to scrap a new transaction tax on its central bank as a condition of securing a backstop but did not mention proposals for pension cuts or a rise in income tax. Daily newspaper Magyar Nemzet said on Thursday that the IMF was demanding pension cuts and an income tax rise as a condition of a financing deal.
Casino invests in Spain
Casino giant Las Vegas Sands Corp has chosen Madrid over Barcelona for a multibillion-dollar gambling resort project dubbed “EuroVegas.” The Spanish capital, the country’s largest city, emerged as the company’s best choice for the development, Las Vegas Sands Chairman and CEO Sheldon Adelson said in a statement released on Friday in Las Vegas. Critics predict that gambling will attract criminals and say positions as hotel maids, waiters and blackjack dealers are not a recipe for success for young people badly in need of jobs. Adelson has said he wants to invest about US$22 billion in the project. The company statement made it clear Las Vegas Sands will allocate no more than 35 percent of that amount.
Government signs FDI law
Parliament on Friday adopted a much anticipated foreign direct investment (FDI) law that is crucial to the government’s ambitious plans for economic expansion in one of Asia’s poorest countries. The law drops several provisions in the original draft that had raised fears it could deter investors. The law was seen as one of parliament’s most urgent tasks and was passed on the last day of its current session. One proposal dropped from the law would have required a US$5 million minimum initial investment outlay. The final version also allows foreign parties to hold a 50 percent stake in joint ventures rather than limiting them to a proposed 49 percent. Another progressive aspect of the new law allows foreign investors to lease land for an initial period of 50 years with an option to renew, compared with 35 years under old rules.
Nokia unveils smartphone
Nokia will start selling its new smartphone, potentially its last chance to break into the most profitable part of the mobile phone market and secure its future, in November, sources at European telecoms operators said on Friday. The new phone, which with its rounded edges and colorful covers looks similar to its predecessors, was unveiled on Wednesday and drew a thumbs down from many analysts, who felt it lacked the “wow” factor to make big inroads against rivals. By going on sale in November, the Lumia 920 will hit stores in time for the key holiday sales season.