HOMOLYA KATALIN — ROBERT THIESSEN Topic by Topic Sz6beli vizsgafelkészité gyakorlékényv a kizgazdasdgi szaknyelvi vizsgéhoz AULA, 2009.Contents Overview of the 15 topics Topics sees 1. The European Union 2. Globalisation 3. The market 4, Thelabour market 5. Taxation 6 7. 8. Environment protection Companies .. . Banking ......... 9, Financial markets 10. International trade 11. Marketing ... 12, Telecommunications .. 13, The Hungarian economy 14, Major and emerging world economies 15. Societal issues and the economy Appendix . Key to vocabulary exercises Il, Key to comprehension questions Ill, Making comments, stating your opinions IV. Sample role-playing exercise Y. 30 role-playing exercises VL. List of transition signals in writing ............ 129 VIL Sample essay ...ssssees. ssussvitvesssieaitscssesvisee dQ) VILL Hungarian texts ...... cose seeneeeeeseveeeeee 131 IX. English texts .. 139 X. Further exercises to English texts 154 English - Hungarian glossary 155 Hungarian ~ English glossary 173Elész6 A sveraik 2 BUDAPESTI CORVINUS EGYETEM nagy gyakorlattal rendelkez6 vizsgeanyag-fejlesat6 és vinsgéataté oktatéi, akik az OECONOM kézgazdaségi szaknyelvi vizsgajat belilrdl ismerve célirdnyos titmu- tatést tudnak adni a sikeres felkésziléshez Ekényy ~ egy olyan sorozat részeként, amely a BCE nyelwvizsgara készit fel - £8 célul azt tate ki, hogy pet adjon a vizsga sabbeli résaérdl és hatékony segitséget nyiijtson azoknak, akik esoportban vagy egyéni- leg késziilnck erre a vizsgara. {A sasbeli viasga napjaink gazdasdigi kérdésci kéré fonddik. A kényv 15 fejezetének mindegyike egy adott témakdrralfoglalkozik és szorosan Koveti a vizsga szerkezetét L IL ™. Vv. Azéltalanos bevezeté célja az adott téma legaltaldnosabl vonatkozAsainak megismertetése és jellema6 szokincsének bemutatésa. A székinesfeladatok megolddkulcsét a Fiiggelék (Appendix) tartalmazza Az dsszefoglalésra szant adaptalt magyar szdveg valamivel hosszabb, mint a vizsgasziveg, mivel ily modon tébb magyar s26 és kifejezés adott kontextusban hasznélt angol megfelel6jével talllkozik az olvasd, Ez a fejezetrése elsé lépésben az adott téméra jellemzd szavakkal és kifejezésekkel ismertet meg, Ezek ismeretében a vizsgi6 feladata az, hogy megtelelé valogatés utén dsszefoglalja a szbveget. A Fliggelékben talélhaté gyakorliszdvegek hossza egyezik a kéizépfoktivizsgan eldirt mérette. Az Osszefoglalandé angol sziveg sadmagyarézatai sadkincsbévitésre szolgdlnak, mig a szOvegértést meré kérdések az Osszefoglaldshoz nyéjtanak timpontot. A Figgelékben 2 feladatok megoldékul- san kivil gyakorldszdvegek is talélhatdk, tovabbi feladatokkal. ‘Az elsd hdrom rész tartalmi szempontjai,illeve feldolgozott szdkincse verethet el a megyitatandé saakmai kérdésekhe2, amelyek egyrésat az angol sziveg szakmai téméjéhoz kapcsolédnak, masrészt a téma dltaldnosabb vetileteire vonatkoznak. A kényy elején talélhats éttekintés tovabbi szempon- tokat is tartalmaz, amelyek segitségevel jl kortljarhats az adott téma. A sabbeli vizsga utolsd feladata a vizsgdatatéval eljétszott szerepjaték. Az egyes fejezetekben kettd ~ nem az adott témshor kapcsol6ds ~ feladat gyakorlisara van Ichetdség. A Figgelék mintameg- oldasa és az egyes fejezetek dtletekkel kiegészitett szerepjitékai is segitséget nysijthatnak a felkésriilésher, AFUGGELEK tartalmaz tovabba: egy s2dbeli mondatkezd6 é mondatokat dsszek0t6 kifejezéseket tartalmaz6 gyéjteményt egy irdsban hasznélatos mondatkezdé és mondatokat (gondolatokat) dsszektd kifejezés- gyditeményt egy mintét az irdskéseség feladathoz, amely IehetOséget ad az frdsbelifogalmazds és a sz6beli Ossze- foglalds kézti kilonbségek megfigyelésére egy angol-magyar és magyar-angol sadszedetet a kényvben eldfordulé legfontosabb gazdaségi jel- leg svavakkal és kifejezésekkelTopic 1 — The European Union Subtopics: + General information (purpose for which it was established, waves of expansion) + Problems concerning the influx of labour + Systems that provide aid to member states (CAP, Structural Funds, Cohesion Funds) + Monetary Union (goals, Maastricht criteria, member states) + Advantages of EU membership, problems between member states, issues relating to further expansion, reasons why certain countries (Switzerland, Norway) opted out of the EU + Tssue of constitution for the EU, whether is it needed, obstacles, advantages Topic 2 — Globalisation Subtopics: «The development and spread of globalisation = Characteristics + Multinational companies + Advantages and disadvantages of globalisation, + Movements against globalisation + Impact of outsourcing on wages and jobs + Implications of new emerging economic giants like China and India + Migration of workers to urban centres Toy Subtopics: + The regulatory role of the market in the economy + Most important models of the market economy (eg. Japan, America, etc.) + Internal and external markets + Characteristics of the Hungarian market (companies, population), changes since the beginning of the 90s + Consumer patterns and habits + Defending and increasing market share, competition + Anti-trust issues, price fixing + Need for cultural awareness in successfully entering new markets 3—The Market Topic 4 The labour market Subtopics: + Characteristics of the Hungarian labour market (distribution according to age, region, sectors black and ”grey” work) + Determining factors that shape Hungarian employment policy (level and problems of employment) + Level and characteristics of unemployment in Hungary and in English-speaking countries (e.g. develop- ment in the rate of unemployment) + Process of job hunting (methods, channels, job interviews) + Non-discrimination in terms of age and ethnicity + Women in the labour force + Flexibility in the labour market + Creation of new jobs to stay economically viable + Executive pay + Hiring executives, leadership skills and qualities necessary + Job buy-outs and retirement schemes for reducing employee costseeu ERE RES A Topic 5 — Taxation Subtopics: + The role of taxation from the viewpoint ofthe state + Main types of tax (direct and indirect taxes) + The Hungarian tax system (characteristics, changes, problems) + Transparency and oversight of taxation (attempts to introduce flat rates) + Tax evasion (reasons, prevalence, consequences) + Political, economic and social forces influencing income taxation + Issue of tax havens (legalities, avoidance or evasion) 6 — Environment protection Subtopics: + Global threats (global warming, ozone layer, water, air, soil, noise pollution) + Alternative energy sources (water, wind, geothermal, biomass) + Measures taken to solve environmental problems (Kyoto Protocol, trading of carbon credits, comprehen- sive green-tax reforms) + Energy conservation + Problem of waste disposal (storage, recycling, toxic waste) + Risks and opportunities for biotrade business presented by the glabal market economy + Safeguarding biodiversity Topic 7 — Companies Subtopics: + Types of companies in Hungary and other countries, their role and influence + Role of small and medium-sized companies in the economy + Characteristics of multinational companies + Joint ventures + Profile of a company + Mergers and acquisitions + CSR (Corporate Social Responsibility) + Cultural awareness Topic 8 — Banking Subtopics: + The Central Bank - its functions and operation + Retail banks ~ their characteristics and services offered + Banking services from the perspective of the consumer and the institution + Expansion of online banking (advantages, associated problems) + Role of world institutions like the IMF, the World Bank, the ECBOverview of the 15 topics Topic § — Financial markets [the stock exchange, investment] Subtopics: + Role of the stock exchange in the economy (differences between countries, continents) + How the stock exchange operates + The Budapest Stock Exchange (leading stocks, trends, role in the region) + Investors and investments of the stock exchange (types of investment, returns and risks, domesticand for- eign investors, institutional and individual investors) + Various types of investment (investment funds, government securities, realestate, art treasures) Topic 10 ~ International trade Subtopics: + Hungarian trade relations (EU member state, foreign trade balance) + Hungarian trade relations with third countries + Role of the WTO in global trade (conflict of interests between developing and emerging countries) + Protectionism (reasons and means used) commerce (characteristics, advantages, future prospects) + Agricultural issues (genetically modified foods, government subsidies) Topic 11 — Marketing ‘Subtopics: + Marketing ~ its components, types and role + Advertising (channels of advertising, advertising techniques, banned ads) + Advertising and how consumers are influenced or not influenced + Sponsorship (purpose and types) + Successful advertising + Spread of Internet and mobile phone advertising Topic 12 — Telecommunications Subtopics: + Telecommunications in the 21st century (development of technology, role of telecommunications in the economy and in society) + Fixed line and mobile telephone market (changes, liberalisation) + The Internet (its spread, significance, societal problems) + Rapid rise and implications of social networking and online communities + Mobile phone and Internet penetration in Hungary, roe in the economy + Impact of telecommunications on work Topic 13 — The Hungarian Economy Subtopics: + Macroeconomic indicators (financing the budget deficit, balancing the budget) + Hungary as a member state of the EU + Euro ~ convergence criteria (Maastricht criteria), prospective date for joining + The state and the competitive market + The black/grey economyTopic 14 — Major and emerging world economies Subtopics: + Economic situation of these countries (stabi + EU member states, relationship to the EU + BRIC countries ~ growth of economic potential + Labour market features (regional, sectoral, migrant workers) + Economic problems and their proposed solutions + The impact of America’s current account deficit on global markets + Global power shifts ~ moving from unipolarity to multipolarity development characteristics) Topic 15 — Societal issues and the economy Subtopics: + Societal problems + Demographic issues and consequences for the economy + Societal inequality; racial, sexual, age-related discrimination + Social welfare system (health care, education, pension system) + Living standards and quality oflife + Life expectancy + World poverty + CorruptionTopicsce] 1. The European Union INTRODUCTION 1 TOPIC ‘The European Union (EU) is a supranational and intergovernmental union of 27 democratic member states, It was established under that name in 1992 by the Maastricht Treaty. Three countries, Switzerland, Iceland and Norway, have decided to stay out of the European Union. In May 2004 ten applicant countries joined. The next phase of enlargement took place in January 2007 with the accession of Bulgaria and Romania. The Four Freedoms ‘The free movement of goods, services, labour and capital forms part of the substantive law of the EU. ‘The Schengen Agreement abolished passport control and customs checks on many of the EU’s internal borders, creating a single space of mobility for EU citizens to live, travel, work and invest. While the free movement of goods, services and capital has more or less been implemented, after the enlargement of 2004, only 3 "old members” ~ Sweden , the UK and Ireland ~ allowed foreign workers to take on jobs without a work permit. Most ofthe old members temporarily prohibit the inflow of foreign workers, because they are afraid of the mass migration of cheap labour. The single currency The euro has been the official currency of the European Union in several member states since 1999, although coins and bank notes weren’t introduced until 1 January 2002. Some of the old member countries decided against joining the eurozone at that time. Most of the new members are preparing for the adoption ofthe euro. The single currency is managed by the European Central Bank. 1. Countries wishing to accede to the eurozone have to meet certain requirements: the Maastricht criteria: + Price stability: inflation must be under the average of the three countries with the lowest inflation, plus 1.5% + The long-term interest rates should be within 2% of the average of the three countries with the lowest inflation + The public deficit shouldn't exceed 3 % of GDP + The national debt shouldn't exceed 60 % of GDP 2, ERM Il (Exchange Rate Mechanism II) Joining ERM II ensures that the participating countries orient their policies towards stability and con- vergence, which will help them in their efforts to adopt the euro. A central rate is determined between the euro and each participating non-euro area currency, with a standard fluctuation band of 15% above and below that rate, and each participating country has to hold its currency in this band without the interven- tion of the National Bank for two consecutive years. Hungary has not joined the system yet. 3. Asa result of the introduction of the euro, transaction costs and exchange rate risks are eliminated (there is no need to exchange the national currency) and prices become more transparent. Apart from con- tributing to macroeconomic stability, it has further favourable economic impacts by attracting foreign direct investment (FDI). 12Common Agricultural Policy The Common Agricultural Policy (CAP) is @ protectionist policy guaranteeing a minimum price to p ducers and also giving direct aid to them. Some countries in the EU have larger agricultural sectors than others, notably Spain, Poland and Portugal, and consequently receive more money under the CAP. They are net recipients. Overall, certain countries make net contributions, notably Germany, the Netherlands and the UK. The enlargement of the EU in 2004 increased the number of farmers from 7 t0 11 million, and it also increased the agricultural land area by 30% and crop production by 10-20%. ‘The 2004 entrants into the EU gained immediate access to price support measures (export refunds, intervention buying). However, direct payments to Hungary are being phased in over 10 years (2004-2013), starting at 25% of the rate paid to old member countries in 2004. Further enlargement After the last enlargement (when Romania and Bulgaria joined the EU) the union remained open, but countries wishing to join have to comply with strict requirements. Croatia and Turkey are the official can- didate countries which have started accession negotiations with the EU. Vocabulary exercises based on the introductory text A. Match each word in the left-hand column with a word or phrase similar in meaning from the list opposite. L a repayments 2. b. support 3. abolished c. joining asa new member 4. customs 4. effects 5. _ internal e. place where import duties are charged 6. exceed f. candidate 7. transparent & surpass 8. impacts h. clear 9. aid i, eliminated 10. refunds j. not foreign B. For each word or phrase in the list below, find in the text a word or phrase given in bold that is similar in meaning. setup expansion necessary conditions something owed taking part take and use, accept asa result countries receiving more money than they pay in (two words) 9. introduced gradually (two words) 10, actin accordance with a demand (two words) PN AM eee1. The European Union HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equivalents of the underlined parts of the Hungarian text. Exercise 2, After checking your guesses against the equivalents listed on the right, give an oral sum- mary of the text in English. Pragdban nem sietnek az euré dtvételével’ A cseh kormdny* az év végén étdolgozta azt a konvergenciaprog- 1 adoption ofthe euro ramot’, amelyet két éve még Jiri Paroubek kormédnya hagyott j6- 2 Ceech government va. A dokumentum 2010-et jelilte meg" az euré esehorszdgi be- 3 reworked the convergence programme vezetésének idépontiéul, @ mostani terv azonban mér nem tar- 4 designated 2010 talmaz konkrét cdldétumot’ 5 target date ~ Sokal tb _kérunk, mint hasznunk* szérmazna a felesleges 6 mare cosis than benefits sietségbdl’. Terveink szerint legkésbb jévére' teljesitjtk_a 7 unnecessary haste maastrichti kritériumokat’, 4m a cél a kedvez6 folyamatok hosz- 8 next year at the latest ssai tévti fenntartdsa" — nyilatkozta Miroslay Kalousek pénziigy- 9 meet the Maastricht criteria miniszter". 10 long-term maintenance A pragai tércavezetd szerint az elkévetken6 években" szAmos 11. finance minister kockézattal seembesti!” az orszig, Beck kbatll az elsGhelyen em: 12 in the coming years litette a demogréfiai gondokat™ . ~ A nyugdijasok ardnya" dré- 13 faces risks maian megndvekszik” a gazdaségi szempontbol aktiv réteghez 14 mentioned demographic problems kepest”. A nyugdijkorhatart pedig csak fokozatosan emeljiik" fel 15. proportion of pensioners 65 évre ~ mutatott ré a pénzilgyminiszter. 16 will ise dramaticaly ‘A megfontolt Iépések hive” Zdenek Tuma, a cseh jegybank 17 compared to the active segment elnke* is, aki szerint az eur bevezetésének legalkalmasabbid6- 18 raise retirement age gradually pontja 2019 lehetne, - Akkor emilékeziink meg" az elsé csehszlo- 19 in favour of carefully thought out steps a korona megsriiletésének szai 20 governor of the Czech National Bank duléjars, amelytGl igy mélté médon biicstizhatndnk. Réadésul 21. commemorate akkorra® felteheten minden szemponthél* készek lesziimk az 22 currency euré bevezetésére, vagyis sokkal tobb lesz hasznunk a valtésbol, 13 100th anniversary mint a kockizatunk ~ szdgezte le a neves pénniigyi szakerté, 24 moreover Ovatoskod6 hangok hallatszanak Pozsonybél” is, ahol a legis- 25 by that time mertebb szlovak kézvélemény-kutatd intézet®, az MVK legutb- 26 in every respect bi reprezentativ felmérése szerint” a lakossdg 45.3 szdzaléka ~ 27 Bratislava jelentékeny meértékben” a csehorsrdgi stratégia hatdsdra” is 28. publi-opiniow research institute szeretné néhany évvel elhalasatani" az eurd bevezetését. Csupén 29 according toa representative survey a megkérdezettek 22.7 szizaléka tartand” a kittizétt idépontot, 30. toa large extent vagyis 2009. janudr 1-jét. - Szlovakidban satintelentl erdsidik.a 31 affecied by Korona az eurdhoz képest™. Ennek a hatisnak a megsdiintetése” 32 postpone leginkabb a szegény rétegeket stjtané* ~ érveltJilius Brocka, a 33. would keep 10 Magyar Koalicis Pértjénak egyik alelndke” 34 the crown is appreciating against Nepscabndsdg, Szihrdssy JOzsef 2008, jamudr 11 (1700 n) ieewe 35 elimination 36 would hit the poor layers 37 vice president argued 4(BBL ENGLISH TEXT Prodi says Romanian influx took EU by surprise Europe completely underestimated the scale of the exodus from Romania after the country’s accession to the European Union this year, Romano Prodi, Italy's prime minister, has said. Nobody could expect the scale of influx. Nobody was expecting the outflow from Romania across Europe,” he told the Financial Times in an interview. The Italian government is battling a wave of public anger over uncontrolled immigration follow- ing the brutal murder last week of a 47-year-old woman outside a Rome train station. A Romanian, man was subsequently arrested and charged with sexual assault, robbery and murder. In response to the public outcry, the government issued a decree authorising local authorities to expel EU nationals deemed a threat to public safety. Asked how many Romanians had entered Italy since Romania entered the EU on January 1, Mr Prodi replied: "Nobody knows.” However, he said the figure of 500,000 people given by Giuliano Amato, the interior minister, was an “exaggeration”. ‘The majority of Romanians are in Italy legally and are employed in construction, day care and night-shift wo Mr Prodi defended the principle of free movement of EU citizens and said Italy desperately needed imported labour. But he said the directive governing the free movement of EU citizens, drawn up when he was president of the Commission, was inadequate, Asa staunch defender of EU enlargement while Commission president from 1999 to 2004, Mr Prodi insisted that the expansion of the bloc had been more positive than expected. *T used to repeat that enlargement is the only way of exporting democracy,” he said. Italy has expelled only a few EU citizens but nearly all of them are Romanians. By Guy Dinmore in Rome Financial Times, 7 November 2007 (1420 n ) Wi Important terms scale of the exodus ~ the huge umber of people leaving (Romania) scale of influx - the huge number of people entering (Italy) outflow — the huge number of people leaving (Romania) (the opposite of influx) immigration — when people come into a country in order to live and work there (emigration is when you leave your native country to live in another country) principle of free movement ~ the idea that every citizen of the EU has the right to work and live in another member state without being discriminated against on grounds of nationality. imported labour ~ workers invited from other countries expansion (of the bloc) ~ same as enlargement. The bloc is the EU, 20 81. The European Union Wh Extended vocabulary — underestimated failed to realize how large something would be wave of public anger a sudden increase or surge in public anger public outcry a reaction of strong disapproval and anger shown by the public issued a decree published a ruling or law expel officially order to leave the country deemed considered (to be) night shift work working at night on a regular basis as part of a job directive a legislative act of the EU that requires ‘some action from member states staunch defender very loyal supporter inadequate not good enough, lacking in something Comprehension questions 1. How did the EU react to the outflow of Romanians across Europe? . What are people in Italy angry about? . What did the Italian government do in response to public anger? 4. According to Mr Prodi, how many Romanians have arrived in Italy since Romania entered the EU? And how many according to the interior minister? 5. What kinds of jobs do most Romanians in Italy work in? 6. Are most Romanians legally or illegally employed in Italy? 7. What does Mr Prodi believe about the principle of free movement? 8. What are Mr Prodi’s views about enlargement?BET) DISCUSSION QUESTIONS A. Discussion questions related to the article Many West European countries, like Austria or Italy, are afraid of migrant workers from Central Europe. Is this something they should be worried about or is it something they should be happy about? Justify your answer, 2. Doyyou think that migeant workers are good for an economy, and ifso, what conditions or rules should be applied to letting in foreign immigrants, in order to fight illegal immigration? 3, What is your opinion about imposing labour restrictions on a group of people (Bulgarians, Romanians) who are entitled to live in another member state for 3 months without a visa, but aren’t alowed to work there? Will this only encourage working illegally? B. Additional discussion questions 1. Which countries are involved in the further enlargement of the EU? Why have certain European coun- tries decided to be neutral? ROLE-PLAYING EXERCISES 1. Hope for the middle-aged unemployed Student You are an employment consultant who spe- ialises in helping middle-aged unemployed peo- ple to transition back into the workplace. A mid- dle-aged man / woman comes to you for advice on how to go about looking for a job. Small companies versus big companies Student Your best friend works as a middle manager at a small Hungarian company. He has been approached by a head-hunter who is offering a higher-paying management job at @ multination- al company. Now he asks for your advice. Try to convince your friend about the advantages of working in a big company. ‘What do you think are some of the advantages of EU membership? ‘What are the conditions for adopting the euro? What advantages do you see in the common currency? Examiner ‘You have been out of the workforce for many years, but would like to start working again, You don't know where to begin, and are unsure if people at your age are even hireable. Asktthe consultant for advice on getting a job. Examiner You are a middle manager at a small Hungarian company. You're successful and love your job. But a head-hunter is offering you a lot more pay at a multinational. You don’t know if you should take the job or not, and so you ask your bestfriend for advice- 2. Globalization INTRODUCTION TO THE TOPIC Globalization is a process characterised by the flow of goods, services, capital, labour, technology and information on an international scale. The development of telecommunications ~ mainly the rapid growth of the internet - contributes to the acceleration of the process of globalization with a huge amount of money flowing through the world’s capital markets. There is a large number of mergers and takeovers, as itis only the big companies that can survive on the global market. By combining their activities with their competitors they can increase their market share and cut costs. (eg. R&D) Through synergy they operate more efficiently. They can also take advan- tage of the economies of scale by offering more competitive prices anda wide selection of goods to con- sumers. As a result domestic SMEs are squeezed out of the market, causing a number of bankruptcies. ‘They can either become suppliers to their big rivals or try to specialise in areas which are not covered by multinational corporations (MNCs). Multisiationals with their subsidiaries contribute to the growth of social welfare by locating their pro- duction in countries where the wages are low or where they can capitalise on the favourable taxes. Besides creating jobs they improve the infrastructure and increase state revenues by paying taxes. On the other hand they are powerful enough to put pressure on the government and force them to offer favourable conditions in return for setling in their country. Anti-globalist movements protest against globalisation on the grounds that it widens the gap between the poor and the rich part ofthe world, and devastates national identity and sovereignty. Environmentalists raise their voices against the increased pollution occurring mainly in defenceless countries. 18Vocabulary exercises based on the introductory text A. Match each item in the left-hand column with a word or phrase of similar meaning from the list opposite. 1. acceleration a. express disapproval 2. mergers b. small and medium-sized companies 3. consumers © companies owned by a parent company 4. competitive (prices) 4. take advantage of 5, selection e. speeding up 6. SMEs f placing 7. subsidiaries g. _ actions of combining companies 8. locating h. low enough to attract buyers 9. capitalise on i. people buying and using goods 10. protest je choice B, For each word or phrase listed below, find in the text a word or phrase given in bold that is simi- lar in meaning. purchases of majority shares to gain control reduce higher efficiency as a result of cooperation reductions in costs due to increase in output local forced out firms providing sg manufacturing advantageous unprotected 192. Globalization HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Globalis remények Nem elsésorban kiltségcsikkentésre', inkabb tj piacok meg- sverzésére* hasindljak a nagyvallalatok a globalizdciét. Kinéban, Indidban, Brazflidban és Oroszorszdgban kinélkoznak’ ma a leg- nagyobb_piaci Iehetéségek* - mutatta ki a Pricewaterhouse Coopers felmérése’. A tandcsad6 cég* 1410 felsGvezetdt’ rde- zett meg a globalizécic jelenlegi irényairI’. A valaszadok’ szerint a terjeszkedés" legijabb szakaszaban'’ a vallalatok egyre inkabb* az tj fogyasztdk felkutatdsdra® koncentrdlnak a piaci terjeszke- és nyoman. Kordbban a brazil, az orosz, az indiai é a kinai gazdasdg els6- sorban" az olcs6 munkaerd* miatt sz4mitott vonzénak'*, ma- napség viszont exek az orségnk cere inkabb a kereslet”vérha- tan robbandsszerii mi " elképeszt6 névekedési Kilétésaik” révén keltik fel az lili, A vélaszadok 70 sza- zaléka jelezte, hogy a kovetkex6 hérom évben iizleti kapcsolatot szeretne létesiteni* ezen orszégok valamelyikében. A vezetdk szerint Kina rendelkezik a leginkabb kecsegtet6 lehetdségekkel, A mids piacokra leginkabb veszélyes ket orszdg Kina és India. Ki- na a kiltségcsokkentés és kapacitasbdvités", India a jdl képzet munkaeré és az azzal pérosulé alacsony munkaeré-kiltség”, actia é Oroszorszg pedig a koltségcsékkentés okén téinik vonz6nak. A megkérdezett vezetdk csaknem kétharmada szémit_arra*, hogy a globaliz4cié kedvenss hatdssal lesz* tarsaséganak teljesit- ményére® a kovetkea6 hérom év sordn. A vildgméreti” terjest- kedés legfébb kerékkitéi® — hasonléan mas felmérések tapasz- talatainoz ~ a lirokratikus szabélyozis", a Kereskedelmi korlé- tok®, a politikai ', a scocidlis problémak, valamint a ter= rorizmus fenyegetése*. wow feu 2006, februdr (1506 n) 1 costecuting 2 gaining new markets 3 present themselves 4 the best market opportunites 5 survey revealed 6 consultancy 7 top executives 8 current trends 9 respondent 10 expansion 1 stage 12 more and more 13 finding new consumers 14 primarily 15 cheap labour 16 considered attractive 17 demand 18 accompanied by a dramatic surge 19 growth prospects 20 establish business relations 21 capacity increase 22 well-qualified labour force 23 low labour costs 24 two-thirds expect 25 will have a favourable effect on 26 performance 2 global 28 obstacles 29 bureaucratic regulation 30 trade barriers 31 political instability 432 threat of terrorismPBLDE ENGLISH TEXT West urged to ‘tell truth on globalisation’ Long Yongtu, the diplomat who negotiated China’s entry into the World Trade Organisation, has urged western governments to stop politicising trade and start telling their voters the truth about glob- alisation. He said that some politicians in Europe and North America had been blaming China for problems in their own economies that they had failed to tackle themselves. "There are many miscon- ceptions about globalisation in Europe and North America,” he said. ”Governments should not delib- «xately politicise trade and economic matters.” He added: "China does not like to be @ scapegoat” The European Union and the US have criticised China for unfair trade practices since its entry into the WTO and have imposed temporary restrictions on Chinese fexties and steel exports. Some European and US politicians have also blamed job losses on rising competition from lower-cost Asian countries, such as China and India However, Mr Long, who now runs the Boao Forum, Asia’s equivalent to Davos, said Europe should not fear China’s economic expansion but exploit it, "There are a lot of misconceptions about China’s economy. People believe that it depends on exports and external investment. But China’s economic development is basically driven by domestic demand, both investment and consumption.” Christian de Boissieu, president of France’s Council of Economic Analysis, a governmental advi- sory body, said that Europe's capacity to bea credible and constructive partner for Asia depended on its ability to implement economic reforms. However, Gary Coull, chairman of CLSA, the Asian stockbrokers, criticised European economies for having too many stakeholders and too much government interference, leading to institution- alised unemployment. But he said that Asia's fantastic growth potential was being jeopardised by weak environmental standards, poor worker protection and widespread corruption. By John Thornhill in Deauville The Financial Times, 12 March 2007 (1574 n) © Important terms misconceptions (about globalisation) ~ wrong ideas politicise trade - give trade a political character impose restrictions ~ officially limit or control (the amount of exportslimports) economic expansion ~ economic growth driven by domestic demand ~ stimulated by investment and con- sumption within the country, not by the export of goods or external investment implement economic reforms ~ carry out measures to reform the economy stakeholders — individuals or organizations who stand to gain or lose from the success or failure ofa system institutionalised unemployment - unemployment that is established as part ofa social system 10 15 22. Globalization HE Extended vocabulary ged strongly advised tackle deal with in a determined way deliberately intentionally scapegoat someone blamed for something that may not be their fault iextiles products of the cloth manufacturing industry exploit take advantage of (in a positive sense here) jeopardised endangered or threatened (resulting in damage or loss) Comprehension questions 1. What do you think Long Yongtu means when he says that western governments should stop politicis- ing trade and tell voters the truth about globalisation? What specific problems do politicians in Europe and North America blame China for? 3. Mr Long refers to misconceptions about globalisation in Europe and in North America. What specific misconceptions does he mention? 4, What measures have the EU and the US taken against Chine’s unfair trade practices? 5. How does Mr Long advise the Europeans to view China's economic expansion? 6. According to Christian de Boissieu, what does Europe need to do in order to become a solid trading partner with Asia? 7. What does Gary Coull, chairman of CLSA, criticise Europe for? 8. What does he feel is threatening Asia’s incredible growth? 2GE DISCUSSION QUESTIONS A. Discussion questions related to the text Is China’s economic expansion something the world should be worried about, or something it should take advantage of? Explain. 2. There isa lot of "China bashing” going on. Is job-loss in western countries, such as in Europe, due to unfair trade practices by China, or due to Europe’s inability to implement economic reforms? Explain. B. Additional discussion questions Is globalization a positive force in the world that benefits poor countries as well, or is it a force for oppression, exploitation and injustice? Give reasons for your answer. In your opinion, why are there so many mergers and acquisitions all over the developed world? Outsourcing has its proponents and its opponents. What are some of the major criticisms of outsoure- ing that you're aware of ROLE-PLAYING E 3. Employee morale Student You are the HR Director at a company that is in the process of reducing its workforce by 20%, Your boss wants your ideas on how to make sure that employee morale stays as high as possible during the period of downsizing. 4. Competition in the market Student Examiner You are the boss of a company that is right now making a lot of people redundant. Still, you expect your employees to provide a high level of customer care. You know that it’s not going to be easy to maintain employee morale during this time. Ask your HR Director to come up with a few strategic actions for keeping morale high. Examiner You are a marketing expert. The owner of a fit- ness centre is facing some tough competition and has come to you seeking your advice because he has lost a lot of his customers to a new fitness franchise that has entered the market. How will you advise him/her? You are the owner of a local fitness centre. You provide high quality service at a fairly high price. Recently a new fitness franchise has entered the market and your market share is decreasing considerably, What should you do? You ask an expert for advice. 23Cs ) 3. The Market INTRODUCTION 10 THE TOPIC Market economy ‘The market economy is an economic system where the allocation of resources on the market is deter- mined primarily by supply and demand. Private ownership enables individuals 0 possess factors of production. Ina market economy the state has a limited share in regulating and intervening in the econ- omy (e.g, providing welfare benefits). Planned economy The planned economy is controlled and coordinated by the state, The production and the allocation of resources are prescribed centrally by the state (pricing, production and distribution). In state-owned com- panies there i full employment leading to unemployment on the job. There is no competition on the mar- ket, therefore efficiency is not increased by private entrepreneurs who are motivated by profits. The black economy is strong because of the shortage economy. + Staple commodities are subsidised. The social net is relatively strong + There is nota big gap between the layers of society. The 4 magic areas of economic policy + Price stability + Low level of unemployment + Balance of payments equilibrium + Economic growth The six different models of mixed economies Anglo-Saxon model - USA, United Kingdom + The state has only a small role in the economic processes; this is a relatively liberalised market structure, German model - Germany (Hungary) + Itis characterised by dynamic market competition and a wide social network provided by the government (social market economy). French model + The state has a dominating role in the economy as its not only a regulator buta proprietor/owner as well (state capitalism). Austrian model - Austria, Denmark, Finland, Norway + The employers negotiate directly with the representatives of the employees / trade union, The govern- ‘ment doesn’t take part in the negotiations, but it has to approve the decisions (social partnership). Swedish model + The state regulates/supervises the labour market/ labour relations, and cares about the social interests of workers. The government plays an especially important role in redistribution (the golden mean). Japanese model + There is an excessive supply of capital, a strictly organised education system and the utilisation of spe- cial methods in business management. 4Vocabulary exercises based on the introductory text A. Match each item in the left-hand column with a word or phrase similar in meaning from the list opposite. 1. possess a. social strata, classes 2. wellare benefits b. people working in return for pay 3. full employment c. people who start companies 4, unemployment oa the d. difference between the amounts of money coming into and going out of country | 5, entrepreneurs e. situation when everyone has a job social net £. system of social care provided by the state layers of society g. hidden unemployment balance of payments h. own employees i. intermediate position between two extremes golden mean j. financial and other assistance provided for lower income groups B. For each item in the list below, find in the text a word or phrase given in bold that is similar in meaning. act of setting apart for a purpose money, property, skill, labour availability (of goods and services) for sale restricted role (two words) determined, fixed Sosuniniiniunusiniununiusiasee earnings of a business when its income is higher than its costs basic controller talks aimed at coming to an agreement reducing inequalities of income through progressive taxation of income and wealth sstceoricenesnisctin3. The Market HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents on the right, give an oral summary of the text in English. Vonz6 K6ézép-Eurépa’ Magyarorszg és a tobi ij EU-tagéllam a kovetkez6 ot év- ben is legalabb olyan vonz6 beruhézési célpont’ marad, mint amilyen az elmult idészakban volt ~ jésolja‘ az Economist Intelligence Unit (EIU) A london intéet a vlég 82 orszdgdban vizsgélta meg" az Gzleti kbrnyezetet’ a 2003-2007-oards and management are struggling with,” said Peter Gleason, chief operating officer of the NACD. The issue is particularly sensitive because the gap between rich and poor in America has reached 15 s widest point in more than 60 years. Figures released last week showed the share of national acome claimed by the wealthiest 1 per cent of Americans had reached 21.2 per cent ~ a postwar ecord — partly because of booming company profits. Nearly 60 per cent of the directors polled by the NACD said the reason for excessive pay packages the absence of objective ways to measure an executive's performance. Nearly half criticised the 20 of options and equity awards that reward executives when the company’s share price goes up, er than when its operations improve. Investors have become more vocal in attacking what they often call "pay for failure” — large sever- ance packages awarded to ousted chief executives. By Francesco Guerrera in New York — Financial Tires, 15 Oct 2007 (1797 1) Bi important terms chief executive ~ also known as CEO (Chief Executive Officer). This per- son is the manager with the most authority in the everyday manage- ment of a company. compensation, executive pay - refers to the total amount of money and advantages a CEO receives (ie, the pay package) activist investors ~ these are specialized investors who buy stakes in companies they think are underperforming or undervalued in order to shake up management shareholder meeting — an official yearly meeting of the shareholders and company directors at which the company’s accounts are presented ‘pay package - the total amount of pay and other advantages (eg. Stock options) that are offered to a company’s top managers (same as pensation package). options and equity awards — stock options and equity awa shares in the company that are given to the CEO asa form severance package - the amount of money and other advai as advice on finding a new job) that are offered to CE pany tells them to leave, 34. The labour market HB Extended vocabulary — value for money worth the money paid relative to per formance embolden to encourage (the critics to take further action) underperforming not as profitable as it should be to poll sy ask questions of someone to find out their opinion to deem to think or consider vocal expressing opinions/feelings freely ousted fired or dismissed CEO Comprehension questions 1. How do most business leaders feel about the high pay chief executives receive? What impact is the report on executive pay by the National Association of Corporate Directors expect- ed to have? (list 2 effects) 3. When activist investors want to shake up the management of a company, where do they do this? 4, How many CEOs and company presidents were involved in the survey on executive pay? 5. What were the 3 major responses of the CEOs and presidents surveyed? 6. How did other CEOs who weren’t part of the survey see the situation? 7. Why is this question of executive pay such a sensitive issue in the US? 8. What percent of the wealthiest Americans get what share of the national income? 9. What does the abbreviation NACD stand for? 10, According to the directors polled by the NACD, why are executives paid so much? 11. What do these polled directors feel should be the basis for how much an executive gets paid? What do they fel should not be the bass fr their pay?A DISCUSSION QUESTIONS Discussion questions related to the text What is your opinion about high salaries and compensation packages for executives: are they justified orare they being overpaid? How should the salary package of top managers be determined? The article mentions that the gap between the rich and poor in America has never been so wide, What is the cause? Do you think there's a solution to this problem? Additional discussion questions How have the opportunities of Hungarian job-takers changed with out accession to the EU? How can the government relieve unemployment? Do you think there is discrimination against women in the workplace? Ifso, what are the indicators? ROLE-PLAYING EXERCISES Office relocation Student Examiner AAs the senior manager at a computer graphics company, you are responsible for coming up with anaction plan to relocate your fast-growing com- pany from your small city-centre location to a new suburban development area with bigger offices. The owner of your company meets with you to discuss this plan. Corporate Social Responsibility Student You are the owner of a computer graphics company. Your business is expanding and the number of your employees has doubled to 120. You urgently need to move away from the city center to bigger offices in the sub- urbs. You meet with your senior manager to discuss his action plan for this move and how to make sure it goes smoothly. Examiner Youarea board member of a manufacturing firm ‘which employs 500 people in a small town in which there are no other major employers. Your company is making a loss, however, and you ‘must cut costs. You're having a meeting with the ‘mayor of the town to discuss your options. You are the mayor of a small town in which there is only one major employer. You've heard that the company is making a loss and you're afraid that jobs may be cut, or worse, the company wil shut down. You meet with one of the board members to discuss this.i ) . Taxation NTRODUCTION TO THE TOPIC The main function of taxes Taxisa payment of money legally demanded by the government. Taxes are the most important revenue sources of the state. The main function of taxes isto cover the government’ expenditures. There isa wide range of goods and services which are provided by the government from taxes (e.g. national defence, secu- rity, education, welfare, basic economic services, housing). Types of taxes Taxation on individuals or companies, which is made directly by them or through their employer is called direct taxation. Direct taxes are progressive, which means that they fall most heavily on the well-to- do. Examples of direct taxes are: personal income tax, corporation tax, local business tax, capital gains tax, inheritance tax and wealth tax. Indirect taxes are levied on turnover and consumption. They are regressive, so they fall most heavi- ly on the lower paid. Examples of indirect taxes are VAT, excise duty, customs duty. Personal income tax Personal income tax is levied on an individual's gross income. This is the sum of his total earnings reduced by the amount of exemptions and deductions to which each taxpayer is legally entitled. In Britain taxpayers file their tax returns to the Inland Revenue. The actual tax liability is calculated from the appropriate tax schedules. In each schedule there is a zero bracket amount which means that income up to that amount is taxed at a zero tax rate. Currently, there are two tax rates in Hungary. Tax evasion ‘The higher the tax rates are, the more people are tempted to cheat. Lots of people have undeclared cash- in-hand jobs on which no one pays any tax or national insurance. Tax avoidance To reduce income tax liability some companies give employees perks instead of taxable money. Legal ways of avoiding tax are known as loopholes in the tax laws. Multinational companies ofien set up their head offices in tax havens such as the Bahamas. Life insur- ance policies and pension plans are known as tax shelters.vocabulary exercises based on the introductory text & Match the words and phrases in the left-hand column with their equivalents in the list opposite. ax a. tables used for calculating tax on tax b. tax paid at each point of exchange of goods ot services 1. personal i 2. corpora 3. local business ta © taxlevied on particular products 4. capital gains tax 4, taxlevied on the profits of companies e, tax paid by individuals on their earnings . f. range that incomes fall into 7. & _ tax paid by individuals on their property 8. fb, tax paid by companies to the local authority 9. i, taxlevied on imports 10. istoms duty j. tax you pay when you sell an asset 3. For each word or phrase listed below, find in the text a word or phrase given in bold that is simi- Jar in meaning, imposed 2 submit tax declarations (three words) responsibilty to pay tax (two words) actual tax to be paid, expressed as a percentage (two words) trying in an illegal way to pay less tax (two words) trying in a legal way to pay less tax (two words) benefits provided by a company (e.g. company cars) legal ways to avoid paying tax places with very low rates of tax (two words) investments which enable tax payment to be postponed (two words) 375. Taxation HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Radikalis amerikai adéreform? Csiitértdkdn tartia kévetkez6 iilését' az amerikai adéreform elikésxitésére’ életre hivott elndki tandcsadé testiler’. A jilius 31-ig eldteriesztendé javaslatéban‘ nagy valoszintiséggel szere- pelni fog a szivetségi forgalmi ad6° bevezetése. Valdsdgos adéparadicsomot* igérnek a térvényhozds’ mind- ket hézat uralé* republikanus tirvényhozsk’, akik forgalmi adé kivetésével® fedeznék a kézterheket". Egyes nyilatkozatokban" mar eldre tinneplik” az dtillds" sikerét, mert ~ mint érvelnek ~ a jévedelmek" helyett a fogyasztés megadértatdsa” elkeriilhetet- leniil fokozott takarékosssighoy'* és felhalmozshoz”, ennek szeként a beruhdzdsok” és a névekedés fellendiléséhe , ACNN olyan igéreteket idéz”, hogy a fiskalis” technikai kor- rekcié nyomn™ meg lehet sziintetni” a szévetségi jovedelem- adst®, a vallalati nyereségadét”, a tékenyereség addjdt™ és az ingatlan: Vérmesebb varakozdsok szerint” a bérarényos munkanélkilliségi" és térsadalombiztositési terhek” is kiiktat- hatévé valnénak, az AP szerint pedig akér az SrdkOsidési ado" is nélkiilézheté lesz. Az xj szerényen®, fizess kevesebb adét” elvher” fiizitt vér- mes remények” azonban valdszindleg koraiak. Egyes szakéridk ugyan azt dllitjdk", hogy a sz6vetségi kormény dltal évente” adok forméjaban beszedett kétezer milliérd” dollérnyi dsszeg behait- até" a forgalmi szféra megadéztatésdval, a szémitésok* azon- ban mést mutatnak. Az dtlet tmogatéi® szerint 23 szézalékos sadvetségi kulesot kellene al i", a birélék® szerint azon- ban 30 szzalék lene a tényleges” kulcs. A jelenlegi tervek csak »¢ladasi ad6rdl” (sales tax) szdlnak, igy azt még nem lehet tud- ni, hogy az Europaban szokésos tobbfézisit valtozat” (fa, pon- tosabban hozzéadott érték-ad6” ) lenne-e bevezetve. A tery ellen maris tiltakoznak a kiskereskeddk®, akik - tigy- mond ~ nem akarnak az orszag addszedéive" valni. Ellenzik az elképzelést® a demokratak is, akik sverint arinytalanul_nagy teher” hdrulna a kiskeresetiiekre*, akik a fizetésiik igen nagy ré- suét ~ ha nem az egés7ét ~ kénytelenek létfenntartési kiadé- sokra® kélteni. Vildggazdasdg 2007. februdr (1786 n) 38 1 hold a session 2 preparation 3 President's Advisory Panel 4 motion to be table 5 federal turnover tax 6 genuine tax haven 7 legislature 8 rain 9 legislators 10 levy 1 fut public expenditures 12 staiements 13 celebrate 14 transition 15 argue 16 incomes 17 taxing consumption 18 frugality 19 ‘accumulation of capital 20 investments 21 lead t0 a boom 2 cites 23 fiscal 244s a result of 25 it will be possible to eliminate 26 income tax 27 corporation tax 28 capital gains tax 29 property tax . 30 according to more sanguine expectations 4H wage-related 32. unemployment 33 social security burdens 3 Ierince ax 15. modest 35 principle 37 hopes attached 10 38 experts claim 39 annually 40 billion 41 collectable 42 calculations 8 supporters 44 federal rate should be applied 45 crties 46 actual 47 multiphase version 48 general turnover tax 49 value added tax 50 retailers protest 51 tax-collectors 52 oppose the idea 33 disproportionately large burden 34 cul fall onthe low-paid 55 casts ofliving(EDV ENGLISH TEXT Collateral damage eats, as chancellor of the exchequer, Gordon Brown dithered over what to do about rich foreign- ‘ng in Britain untaxed on their offshore wealth. Spurred by a Tory plan to clobber them, Alistair ‘who now runs the Treasury, introduced tax changes that will bring in £650m ($1.3 billion) a year. «there is a genuine worry about damage to the economy. This risk is the main reason that the ernment has dragged its feet for so long over reform, as it has wrestled with a trade-off between ‘sxx equity and economic harm. Unlike other taxpayers, rich foreigners living in Britain can shelter their offshore wealth from tax. do so by claiming "non-domiciled” status, asserting a longstanding connection with another satry. This allows non-doms to avoid being taxed on overseas earnings and capital gains on ts held offshore, unless they remit income and gains to Britain. Their favoured status offends st a cardinal principle of tax equity: that taxpayers who have the same income (from wherever derived) should pay the same tax. on the other hand, as the Treasury paper lays out, non-doms, who include shipping tycoons and igh-flies, pack an economic punch much weightier than their number, currently around 115,000. average earnings in Britain, on which they do pay tax, exceed £100,000. As a result, they con- ed taxable income of £12 billion to the economy in 2005-06 and paid income tax worth £4 billion. langer in imposing a draconian tax regime on non-doms is that many of them may pack their ind go elsewhere. That could harm the economy and lead to a loss in domestic tax revenues. e of the risk, Mr Darling is sweetening the tax pill. From next April, non-doms will face an annu- 2 levy of £30,000 to retain their status. This will apply only to those who have been in Britain for sore than seven out of the past ten years, however. government is not wrong to tighten taxation of non-doms, but it needs to temper their tax privileges siously. The economy needs to keep attracting footloose, smart, rich foreign workers in order to thrive. Taxing the foreign rich The Economist, 13 December 2007 (17691) Bi important terms collateral damage ~ the unintentional damage caused by a singular action (e.g. ifrich foreigners are taxed too heavily, the economy will suffer) offshore wealth ~ money/assets that foreigners keep in a different country from the one they live in tax equity — fairness in paying taxes non-domiciled taxpayers(non-doms) ~ foreign residents who main- tain a permanent address in a country other than the one in which they live capital gains ~ profit made from assets sold remit (income) ~ transfer, send levy - a tax that non-doms will have to pay on their offshore income/assets 10 15 205. Taxation Wi Extended vocabulary dither oversg be indecisive about sg clobber come down hard on dragged its fet (idiom) been deliberately slow or reluctant to act trade-off compromise cardinal principle most important or fundamental principle high-fliers people who are ambitious and successful in their careers pack a punch (idiom) have a powerful effector influence ‘footloose (foreigners) highly mobile, free to travel when they want and do as they please Comprehension questions 1 What group of people in Britain is the Treasury targeting with tax changes, and why? Who is encouraging the Treasury to tax rich foreigners? Why has the government been reluctant so far to tax the offshore assets of rich foreigners? What is the specific dilemma that the government is struggling with? In what way are rich foreigners living in Britain treated differently from British nationals? ‘What is the basis of this tax exemption for foreigners? What isthe basic principle of tax fairness that non-domiciled status violates? What reason has the Treasury given for treating these rich foreigners differently? What is the danger in forcing these non-doms to pay taxes on offshore income? 10. How is the government planning to make this new tax change more acceptable to rich foreigners?$A DISCUSSION QUESTIONS & Discussion questions related to the text exs might leave)? % Additional discussion questions ernments of tax revenues? Give reasons. BP ROLE-PLAYING EXERCISES © Male or female manager? Student ‘Your company's new policy is to increase the ‘umber of female managers. As a member of the Soard, you support this policy but you are afraid about the potential reaction from your biggest customers, who prefer working with male man- ‘agers. You are meeting with another board mem- ‘ber to discuss this issue. Financing start-ups Student ‘You are apprenticing as an investor. Your compa- sy provides finance for start-up companies which seed capital to develop their business. You are preparing for your first interview with an entre- preneur who needs about £2.5 million to launch his new magazine. What questions will you ask ‘Bis entrepreneur before you decide to invest in his project? You are talking with your trainer. Do you think it’s fair that rich foreigners without resident status should be required to pay the same tax on their offshore income as national residents do on their locally-earned income? Give reasons. 1 you were the government, how would you compromise between tax equity (making sure rich for- esgners pay fairly) and economic harm to your country (the risk of losing money because rich foreign- at are some of the ways in which tax can be avoided or evaded? = What sort of taxation policy should the government adopt that provides taxpayers (businesses and indi- \s) with the incentive to pay taxes, rather than to evade them? at is your opinion about tax havens: are they ultimately a healthy part of globalization or do they rob Examiner You are a board member of a company that is secking to bring more women into manage- ‘ment positions. You are against such a policy because you feel that men in general are more respected as managers than women are. You meet to discuss this issue with another board ‘member, who thinks differently. Examiner You are a senior investor responsible for the training of young graduates apprenticing as investors at your company. You want to know what questions your apprentice investor will ask his client at the interview. a— 6. Environment protection INTRODUCTION TO THE TOPIC Throughout history mankind has reaped the benefits of nature. But during the last century our earth changed more rapidly than at any other time in history, primarily because of our careless interaction with its resources. Today, in the wake of ever-increasing consumption and massive economic development, the ecological crisis has gone global. Global problems - Air pollution People all over the world breathe smog, sulphur dioxide, acid rain, carbon monoxide, and other toxic pollutants every day as a result of industrial activity and the excessive use of cars, which emit exhaust gases. The accumulation of gases in the atmosphere leads to the greenhouse effect and the depletion of the ozone layer. The build-up of gases may result in temperatures on earth increasing 2.2-5 degrees Celsius over the next century, causing global warming. Predictions include climatic changes leading to natural disasters, drought, floods, changes in agri- cultural patterns and skin cancer. One major threat to the ozone layer is chlorofluorocarbons (CFCs). Deforestation The gradual reduction of forests in size is resulting in erosion, flooding, desertification and global warming. Rain forests, which generate large amounts of oxygen, are being destroyed to harvest hardwood and to gain space for growing plants and breeding animals. Water pollution 10 percent of rivers worldwide are polluted and the oceans collect 6.5 million tonnes of litter per year. Less than 1 percent of all the water on earth is suitable for drinking, bathing, or growing plants. Soil pollution Agricultural activity contributes to the pollution of soil by using chemicals (fertilisers and pesti. cides) to boost yields. Overpopulation Ifthe current growth rate continues, world population will double over the next couple of decades. This process accelerates the exhaustion of natural resources. In 2000 there were 6.3 billion people on the earth, It is an important task to exploit renewable energy sources. Waste accumulation Huge amounts of hazardous waste are produced by the developed part of the world every year, part of which is exported to the Third World. Households and industries also create piles of non-recyclable waste which are not able to decompose in landfill sites. Oil shortage With the increase in worldwide demand for oil, the price of oil products (e.g. petrol) is rising, posing serious difficulties for ol-dependent economies. In fact, most ofthe feedstock (e.g. corn) for biofuels such as biodiesel and ethanol is grown using the high-tech, ol-powered industrial methods of agriculture, 42socabulary exercises based on the introductory text 4 Match each word or phrase in the left-hand column with one of similar meaning from the list opposite. accumulation global warming predictions deforestation flooding 6. soil 7. yields 8. overpopulation 9. hazardous 10. decompose a the state of having too many inhabitants break down, rot filling or covering with water increase in quantity a general increase in world temperatures the top covering of the earth the action of clearing an area of trees forecasts, advance warnings amounts produced dangerous meaning. che act of making dangerously impure oo much giveout reduction in amount along period of dry weather a large sandy area of land with little or no water using up completely use or develop / take advantage of not fit to be used again places where waste is buried & For each phrase listed below, find in the text a word or phrase given in bold that is similar in6. Environment protection HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Stlyos kévetkezményekkel' jarhat a globalis felmelegedés Az ENSZ’ égisze alatt létrejott korménykézi klimavéltozési Bigg tal kbar jens gmat are, hogy ha nem sikeril at déseket hozni' a globdlis feimelegedes megiltsira trae emberiségnek egyre nb vekv6 Kihatésti természeti Katasztrofakkal’, ez6d6 tarsadalmi ellentétekkel, valamint a kornyezet,illetve a bioszféra visszafor- dithatatlan pusztuldsaval kell szembenéznie*. Az IPCC tébb mint 100 orszdg Ital delegélt_szakéridinek’ mult heti_genfi aldlkoz6iét® KovetGen publikalt jelentés szerint a globalis felme- legedés kezdetben az éscaki- & a deli-sarki terleteket ¢rinti legérzékenyebben'", majd a klimatikus valtozésok a siirdbbenla- kott teriletekre is kiterjednek". Az drad4sok, téjfunok és egyéb anomdlidk gyakoribb el6fordulisa’, a sok helyen krOnikussé vé- 16 szarazsig és vihiény" fOként a kevésbé fejlett orsz4gok" hely- zetétfogja neheziteni, de a guzdagabb orszdgokban is silyosan Grinti a hatranyos hi A természeti katasztréfdk okozta kérok radikdlisan emelkedtek', amelyért donté mértékben a felelétlen - fiveg- hézhatast” oko7z6, rovid tavi érdekek™ mentén végre hajtott ter- mmészetatalakitést” végzd ~ emberi magatartés tehet6 feleldsse. A jelenlegi tendencia” folytatédésa esetén 100 éven beliil az atlagos h6meérséklet 5.8 C fokkal né és a_tengerszint fél_métert emelkedik®. AzIPCC egy korabbi jelentése egyértelmtien leszigezi*, hogy akorabban szamitottndl gyorsabb titeméi globdlis felmelegedést foként a fosszilis energia hordoz6k elégetése, az ipar és a kozle- kedés dltal termelt szennyezés*, valamint az erddk irtésa” és a lapok lecsapolésa okozza. A K6zel 3 exer szakérté kozremiikbdésével késziilt mostani jelentést a testilet j6v6 honapban Accraban rendezend6 tandcs- kozésan™ jévahagyand6, a kedvez6tlen folyamatok lassitasdnak médozataira” és a javasolt kezelésre fGkuszal6 jelentés Koveti ‘majd, amelynek eredményeként elkésziil az az dtfogé jelentés, amely a tudoményos szakért6k mellett a biztosié tarsasigok”és a kirnyezetkimélé iparigak” illetékeseit is bevonva™ megpré- balja majd a politikai déntéshozdkat is mielébbi hatékony cse- lekvésre dsztdkélni*. Vildggazdaség 2006. oktdber (1866 n) “ 1 serious consequences 2 UN(O) United Nations (Organisation) 3 climate change committee 4 report warns 5 take fast and efficient measures 6 global warming 7 natural disasters 8 face ireversible destruction 9 delegated experts 10 Geneva meeting 11 hits hardest 12 are spreading to more densely popu- lated areas as well 13 occurrence of floods 14 drought and water shortage 15 less developed countries 16 exacerbate the situation 17 deprived segments 18 damage has risen 19 greenhouse effect 20 short-term interests 21 transformation of nature 22 present tendency 23 sea levels will rise by halfa metre 24 report points out 25 burning of fosi fuels 26 pollution generated 27 deforestation 28 at the meeting ofthe body 29 ways ofstowing down unfavourable processes 30 insurance companies 31 environment friendly industries 32 involving the competent authorities 33 urge decision-makersUN food boss urges rethink on biofuels ¢ world risks deeper poverty and greater environmental damage unless it fundamentally its bioenergy strategy, the United Nations’ top food and agriculture official has warned. 'N Food and Agriculture Organisation is pushing for @ high-level meeting next June to fay es for the international bioenergy market. FAO is urging the European Union and the US to lower trade barriers against ethanol establish a system for bio-energy environmental standards; and provide more microcred- = farmers in developing countries to develop local biofuels. es Diouf, FAO director general, said: "Such measures would allow developing countries ~ rally have ecosystems and climates more suited to biomass production than industri- ations and often have ample reserves of land and labour — to use their comparative advantage.” + Diouf said the objective of the proposed meeting should be to ensure that bioenergy realised catial to fuel sustainable growth and reduce hunger. S, Europe and Brazil last year accounted for almost 95 per cent of the world’s biofuel pro- 1; Canada, China and India produced most ofthe rest. Siofuel production, mostly of corn-derived ethanol in the US and rapesced-derived biodiesel 2, doubled between 2000 and 2005, but is still just 1 per cent of global road-iransport fuel. = Diouf said the bioenergy sector had a "huge potential to reduce hunger and poverty” if pro- “on shifted from rich to poor countries, At the moment, rich countries’ tariffs make it uneco- poor countries to grow biofuel crops. roblem for developing countries is exacerbated by food prices being pushed up by the biofuel s rising consumption of crops. Corn prices this year reached an 11-year high of $4.30 a bushel By Javier Bias in London Financial Times, 18 August 2007 (1530 n) BW important terms bioenergy energy derived from the land ~ from agriculture (crops and livestock), forestry and waste management (i.e. from biomass) biomass - organic material such as wood, plants, or animal wastes that produces energy when burned biofuels ~ fuel derived from living matter biofuel crops - crops that can be grown to produce ethanol or biodiesel fuel corn-derived ethanol ~ an example of biofuel (ethanel made from cor) rapeseed-derived biodiesel - another example of biofuel (diesel made from rapeseed) microcredit ~ small loans given to poor people who don’t qualify for bank loans sustainable growth - growth that is possible to sustain (keep going) without causing economic or environmental problems ecosystems — communities of interacting organisms and the physical environment in which they live 10 18 206. Environment protection Wi Extended vocabulary poverty the state of being poor fundamentally basically, significantly pushing for sg urging other people to do sg lay down rules state or determine what must or must not be done ample reserves ‘more than enough spare supply accounted for made up (a specified amount ‘ot proportion) doubled grew to tice the usual quantity (cf. to triple (x 3} to quadruplelx 4] ) shifted moved exacerbated made worse consuiption the act of using up a resource (noun form of consume) Comprehension questions 1. According to the UN’s top official for agriculture and food, what potential dangers does the world face ifit doesn't change its bioenergy strategy? Why is the UN Food and Agriculture Organisation calling for a high-level meeting on bioenergy? 3. What measures are the EU and the USA being urged to take in order to help developing countries to develop their biofuel industry? 4, In what way would these measures help developing countries? What comparative advantage do developing countries have in terms of producing biofuels? 6. What would be the objective of the meeting proposed by the UN? 7. What percentage of the world’s biofuel production do Canada, China and India account for? 8. What percentage of global road-transport fuel consists of biofuel? 9. According to the Food and Agriculture Organisation (FAO), why is itimportant that the bioenergy sec- tor shift from rich to poor countries? 10. What makes it difficult for developing countries to grow biofuel crops? 11. The ttle ofthe article says that rich countries need to rethink on biofuels. What do they need to rethink and why? 48[EEA DISCUSSION QUESTIONS & Discussion questions related to the text “biofuels are known to be a good source of renewable energy and effective in reducing emissions, why hey more widespread? What factors hinder the production and use of biofuels? ne article mentions that one of the comparative advantages of developing countries is that they have | jenty of land and labour that could be used in the production of biomass. What might be some possi- Additional discussion question sides of using land and labour for the growing of biofuel crops? kind of global environmental problems do we face today? fhich are the most important alternative energy sources? How widespread are they? What are their advantages and disadvantages? Which are the most feasible ways of using alternative energy in Hungary? 1 kinds of measures have been /are being / taken by countries and authorities to tackle the problem ¢ environmental degradation? What can we, as individuals, do for the environment? L 1 The best candidate for the job Student You are the director of 6 cultural centres in Manhattan, New York. These centres try to ‘=ppeal to people of all ages and income groups, sccluding large ethnic groups. They also organise social activities for members. Your task is to hire ‘= General Manager who will increase the profits ‘ofthese centres. The owner asks you what kind of | serson would be the best candidate for the job. 1 Getting local Government approval Student ‘A production plant is going to be set up ina small sown near Budapest. As one of the managers of, ‘Se company, you are planning a meeting with a focal government representative because you seed their approval. What strategy will you use in der to get the local authority's approval for your project? Examiner You are the owner of 6 cultural centres in New York and are looking to hire a General Manager for these centres. You meet with your director to ask what kind of person he thinks would be best to meet the various aims of the centres and still make a profit. Examiner You are a local government representative. A company has contacted you about setting up their production plant in your small town. You are not convinced about the bencfit of such a plant and are meeting to discuss this with one of the managers of the company. a7a 7. Companies INTRODUCTION TO THE TOPIC I. There are three main types of business ownership in the private sector of the economy: 1, Sole proprietorship This type of firm is run by the sole trader who is responsible for the total control and management of the business. The owner has unlimited liability for the debts. 2. Partnership + General partnership ‘This is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested. At least one partner must accept unlimited liability. + Limited partnership In this type of business the internal member has unlimited liabilit take part in the activity of the partnership. He/she has limited liabil The external/silent partner doesn’t 3. Corporation + Limited liability company-Private limited company (Itd) ‘The members have limited liability. The capital of the firm is divided into shares, but the shares are not sold on the stock exchange and they cannot be offered to the general public. + Company limited by shares ~ Public limited company (plc) This business has to be founded with a certain amount of issued capital. When an investor buys shares he/she becomes a part owner. Shareholders have limited liability to the extent of the face value of their shares. Special forms of private business enterprises and relationships + Holding/parent company This is a company that owns enough voting stock in another firm to control management and opera- tions by influencing or electing its board of directors. + Co-operative Thisis a business society which is jointly owned and run by its members, who work together and share the profits, + Joint venture ~ Joint enterprise This is a partnership in which two or more people or organisations work together. It is usually restrict- ed to short-term deals. * Union This is a legal entity with a minimum of two founding partners without the obligation of contributing a certain minimum amount of capital. It is a non-profit organisation. + Subsidiary/affiliate In business this is an entity controlled by another entity. The controlling entity is called its parent. A par- ent and all its subsidiaries together are called a group. When ownership is not shared and the subsidiary is wholly owned by the parent, itis called a branch, + Franchise This is a business selling named goods on the basis of a licence given by a company to use its estab- lished brand name and sell its goods. + Building society Operating on a non-profit basis, it pays interest on deposits made by the general public, and provides mortgages. 8+ Offshore company F) This isa firm based and registered ina tax haven to avoid higher taxation. 1 There are two main types of public enterprises: 1. Municipal undertakings These are businesses or services operated by local authorities. They are financed by local council tax sod charges made for the use of the service (e.g. theatres, sports centres). They may also be subsidised by ents provided by the government. 2 State undertakings These are businesses operated by the government on behalf of the public. The general policy is decid- =>y the government in consultation with the corporation board, which is appointed by the government. _ Vocabulary exercises & Match each word or phrase in the left-hand column with one similar in meaning from the list opposite, proprietorship a. ownership j unlimited liability b. choosing for an official position by voting losses c. managed, operated 4. limited liability 4. sums of money lost as a result of operating a business 3. electing e. obligation to cover all debts with personal assets | 6. oard of directors f. _ forsy, asa representative of sy 7 run & group af people elected to manage a company 3. deals h. liability for debts only to the extent the person concerned has invested 9. entity i. business agreements ). on behalf of sy j. something that exists independently & For each item in the list below, find in the text a word or phrase given in bold that is similar in meaning. established > capital in the form of shares (two words) collectively allowed by law giving, along with others S permit > located «ax paid to the local authority (twvo words) + sums of money given by the state meeting held to exchange opinions or seek advice a7, Companies HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary o the text in English. Oriasfiizidktol' hangos a vildgsajté* A Procter & Gamble bekebelezi’ a Gillette-et, s e példatlan méretti tranzakciéval' a fogyasztdsi cikk-gyértési* szegmensben [étrejin a vildg masodik legnagyobb vallalata’. De az utébbi idé- ben bejelentett” megafizidk kézil feltétlentl emlitést érdeme!* az Oracle-Peoplesoft felvasérlés’, a HPCompaq egyesillés, a leg- jab hir” pedig az, hogy az SBC telefontarsasdg az AT&T-re tett ajdnlatot". ‘Mia magyarézata” a szinte minden ipardgban'* diilé egyesii- lési Léznak? A vallalatok dltaléban a tankonyvekben is lefrt eld= ket emlitik': a kizds fejlesztési és értékesitési csatornsk™ jobb_kihaszndlisira’, a méretgazdasigossigb_fakadé meg: takaritésokra", a beszallitdkkal® torténd kizis térgyalasbol” szérmaz6 erdsebb alkupoziciéra®. Ezen érvektél a Procter- Gillette néssvalfelelegessé val6* 6 exer alkalmazot bizonyéra net hak meg". A valsgban sokszor az vet felvés- lot", hogy egy gazdasdgi lassulds® idején csak ily médon™ tudja névelni forgalmét”, vagy egyszertien meg akarja szerezni a kon- ‘Kurens piacit”, Az optimista kalkuléciék mindazondltal nem mindig valnak be". A t6zsde" jobbara mér a bejelentés" pillanatéban pontosan jelez": a vev6 cég résevényeinek drfolyama altalaban esik”, a megvasérolté pedig emelkedik*, a vételart6l fiiggden. A fizidk nagy részénél a fellelkesiilt vdlegények® til sokat adnak a ‘menyasszonyért™, a hézassdghan azonban a tervezett elénydket nem tudjék val6ra valtani”. El6fordul, hogy maga a koncepcié is hibés", mint példdul az AOlI-Time Warner parti esetében. Sok- stor viszont ,csak” a figyelmetlenség”, a szervezeti kultirak, ve- zetdi stilusok dsszeférhetetlensége" okolhaté a kudarcért®. Réaddsul* - mint azt a Business Week felmérése kimutatta® - az figyfelek* a fizidk feléndl tigy éraékelik, hogy valamilyen scem- pontbél rasszabb kiszolgdlist® kapnak, mint kordbban. Amerikaban kevésbé gondolnak r4, az Eurépai Uniéban azon- ban az is szempont" az egyesiilések megitélésénél” hogy meny- nyire veszélyes a szabad versenyre*, ha egy iparégban mar csak két-hérom éridsi jatekos” marad. Vildggazdasdg 2007. mércius (1756 n) 1 megamergers 2 word prs 3 is acquiring 4 transaction 5 consumer product manufacturing 6 company is established 7 announced 8 deserve mentioning 9 acquisition 10 the latest news is 11 has made a bid for 12 explanation for 1B branch of industry 14 mention the advantages 15 shared development and sales channels 16 better exploitation 17 savings arising from economies of scale 18 suppliers 19 joint negotiation, 20 bargaining position 21 arguments 22 being made redundant 23 are not affected 24 what motivates the acquirer 25 economic slowdown 26 only by this means 27 increase their turnover 28 rival’s market 29 come true 30 stock exchange 31 announcement 32 gives precise signals 3 ‘Share pric fall 34 rises 35 bridegrooms 36 jor the bride Y wale 39 farses 40 incompatibility of corporate cultures 41 canbeblamed oof lure 42 moreover 43 survey has revealed 44 clients 4 vars serie 46 argument, point word considering 47 judging 48 fee competition 49 giant playersHungry tiger, dancing elephant Last June TBM_held its annual investors’ day in the grounds of the Bangalore Palace, a fake windsor Castle in India’s equivalent of Silicon Valley. Ten thousand employees gathered to hear sceches by the president of India and IBM’s own boss, Sam Palmisano. The domestic Indian market has become one of the fastest-growing in the world for IBM, with :nues rising by 40-50% a year. The firm now has more employees in India than in any other coun- xcept America. Emerging economies increasingly count as a threat to established global firms, as well as an eportunity, Indian services firms such as Infosys and Wipro are starting to give [BM-and its old vals, Accenture, EDS and Hewlett-Packard-a run for Heir money, As globalisation accelerates, this s forginga new vision of what itis to bea successfull multinational company. Ina speech last year Mr Palmisano set IBM's Indian move in the context of the modern multina- al company. This, he said, had passed through three phases. First was the 19th-century "interna jonal model”, whereby firms were based in their home country, but sold goods through overseas cies offices. Then came the classic multinational firm, in which the parent company created smaller -sions of itself in countries around the world, This was how Mr Palmisano found IBM when he od it in 1973. The third model, argues Mr Palmisano, the IBM he is now building, is the "globally integrated esterprise”. Rather than have a parent with lots of Mini-Mes around the world, such a firm shapes strategy, management and operations as a single global entity. It puts people and jobs anywhere = the world "based on the right cost, the right skills and the right business environment. And it inte- gates those operations horizontally and globally.” In this approach, "work flows to the places Sete it will be done best”, that is, most efficiently and to the highest quality. The forces behind this, ivesistible”, he says. "The genie’s out ofthe bottle and there's no stopping it.” Rethinking the multinational The Economist, 4 April 2007 (1690 n) Bi important terms domestic market — the country in which a company producing -goods/services has its base, or in which they are sold multinational company (MNC) - a company that operates tionally, usually with subsidiaries, offices, or production fa ‘more than one country maa: parent company - a company that owns other companies globally integrated enterprise ~ a company that fashions its strategy, its management, and its operations in pursuit of a new goal: the integration of production and value delivery worldwide. integrates ... horizontally - manages production establishments located in different countries to produce the same or similar prod- ucts (eg. McDonalds) 10 20Companies Wi Extended vocabulary eld (an investors’ day) count asa threat to give sy arun for their money (idiom) forging (a new vision) irresistible the genie’s out ofthe bottle (idiom) Comprehension questions 1. What was organised at the Bangalore Palace last June? organized (an event for IBM investors) are considered to be a threat tobeas good, or nearly as good, as sys at sg forming or creating very appealing and therefore unstoppable nothing can stop it from succeeding (refers to the story of the magic genie ‘who was released from a bottle and granted wishes to the person who let it out) 2. What indication is there that India is a strategic market for IBM? 3. How do established global firms typically view emerging economies? 4, How well do Indian IT companies like Infosys and Wipro compete with giants like IBM or Hewlett- Packard? 5. What general impact is the rapid rise of globalisation having on global firms? 6. According to IBM’s boss, what are the first two phases that multinational companies have passed through and what characterised each of these models? 7. Which of the multinational phases was IBM in when Mr Palmisano joined the company? 8. Whatis the third multinational model and what characterises it? 9. How does the integrated enterprise model work?DISCUSSION QUESTIONS 4. Discussion questions related to the text What are some of the threats and opportunities that emerging economies present to global firms? How can multinational companies stay competitive in an increasingly globalised economy? How are the forces of globalisation changing the way multinational companies view themselves? 3. Additional discussion questions Which are the most popular business forms in Hungary? What are the advantages and disadvantages ofa franchising business? Whats the role of small and medium-sized enterprises in an economy? What kinds of problems do they struggle with? J) ROLE-PLAYING EXERCISES 13. Increasing market share Student Examiner Youare the director of one ofthe local budget aiz- lines. Your company sales are high, but you find out that another budget airline intends to enter the domestic market. The owner of your airline meets with you to discuss your strategy for not losing sales to the competition. 14, Environment-friendly Student You are the head of the R & D department in a company that produces 30,000 tons of waste products from its offices and café areas every year. Currently, there is no policy on recycling and you think there should be one. You meet with the CEO to discuss with him the advantages of recycling, and mention some of its possible dis- advantages. You are the owner of a local budget airline, which is operating successfully. However, another budget airline will soon enter your ‘market and you want to get ready to face the competition. You meet with your director to discuss a strategy. Examiner ‘You are the CEO ofa large company that pro- duces many tons of waste products from its offices and café areas. You meet with your R & D manager to discuss the advantages of recycling and whether there could be some disadvantages.8. Banking INTRODUCTION 10 THE TOPIC ‘The Hungarian two-tier banking system is made up of the National Bank of Hungary and the com- mercial banks. ‘The National Bank of Hungary acts as banker to other banks. Itis the lender of last resort when there is no other source to borrow from. Itis an independent financial institution responsible for the country’s, monetary policy. Its primary target is achieving and maintaining price stability. The central bank of the UK is the Bank of England. The Federal Reserve System is a decentralised insti- tution performing central banking functions in the United States. Some of the functions of a central bank are to: + issue banknotes + set the long-term interest rate + make open market transactions (eg. issues treasury bills) + regulate the exchange rate of the national currency + regulate the amount of money in circulation + guard the gold reserves and foreign currency reserves of the country + maintain contact with international institutions + maintain the capital adequacy ratio Commercial banks either separate the commercial function from the investment function (Anglo- Saxon model) or handle both (universal banking). The most important requirements for banks are liquid- ity and solvency. They provide a wide range of services for private individuals and corporate clients for which they charge a handling fee. Their major source of profit is the interest margin. Commercial banks perform the following services: + extend loans in the national and foreign currencies + manage current accounts: meet standing orders, issue credit cards and debit cards, make transfers, ‘operate cash dispensers, send monthly statements of credits and debits + manage deposit/savings accounts + offer insurance services, + provide factoring and leasing services + deal with project financing + exchange foreign currency + trade in securities + provide safe boxes and night safe + provide private banking services + offer Internet banking, SMS banking and telebanking services The IMF - the International Monetary Fund ‘The IMF was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements. It fosters economic growth and high levels of employment. It also pro- vides short-term financial assistance to countries to help ease balance of payments adjustment. Since the IMF was established, its purposes have remained unchanged but its operations ~ which involve surveillance, financial assistance, and technical assistance — have developed to meet the changing needs of its member countries. The IBRD (International Bank for Reconstruction and Development) The objective of the IBRD, also known as the World Bank, is to help borrowers reduce poverty and improve the standard of living in the developing countries. It provides cheap loans for developing coun- tries for major industrial development projects (like dam building, power plants) and other long-term investment projects.Vocabulary exercises based on the introductory text A. Match each word or phrase in the left-hand column with one similar in meaning from the list opposite. 1. two-tier a. difference between the interest on loans and deposits 2 b. ask in payment for something 3. solvency c._ records of money spent or owed 4. charge 4. taking over the administration of ‘a. company’s money due to be received 5. _ interest margin €. accounts used for saving money 6. current acc £. having enough to pay all money owed 7. credits g having two levels 8. debits h. accounts that can be used for bill payments 9. deposit accounts i. ability ofa bank to pay back to clients what they have put in 10. factoring j. records of money added to a bank account B. For each item listed below, find in the text a word or phrase given in bold that is similar in meaning. 1, produce by printing interest rate set by the Central Bank (two words) price at which a currency can be bought with another one sums of money borrowed currencies of other countries (two words) arrangements to regularly pay a fixed amount of money (two words) ATMS (two words) giving the right to use something in return for payment personalised financial service (two words) banking over the phone 4 5. 68. Banking HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. A bankfidkok' 6téde veszteséges* ‘Az eurépai banki iigyfelek’ szdmédra valtozatlanul a fidkok je- 1 bank branches lentik a legfébb értékesitési csatornét’. Ezzel egyiitt gy tinik, 2 loss-making hogy a versenyre nekik is reagalniuk* kell, hiszen egybtédik vesz- 3 clients teseusen midis. 3 Ss channel A legtabb nyereséges’ bankfidk Kelet-Kézép-Eurdpaban’ ta- — pracrto lathaté ~ hangzott el a European Financial Management Marke- 7 operate at aloss ting (EFMA) barcelonai kongresszusin". 8 profitable A fidk sikerének elsddleges kuulesét" az értékesitékben” létjak 9 East-Central Europe a hitelintézetek”, am a mésodik helyet illetéen' mar megoszla- y fee rimary key nak a vélemények"’: a kézép-eurdpai térségben az tigyfélkapeso- au terseg = 12 salespeople lat-menedzsmentet* (CRM) soroljak ide, mig a kontinens tbbi 13 cect institutions részében magat a fidkvezetét". A fidkok szerepe névekszik* az- 14 conceming zal, hogy a fidkvezet6nek kell edontenie, hany kollégst foglalkoz- 15 opinions differ tat”, melyik digyfélszegmenst milyen termékekkel célozza meg’, 16 customer relations management s milyen drazdst alkalmaz”, hiszen e2t helyben jobban litja. A fi-. 17 branch manager 18 role increases kok szerepe némilegvaltozk is, hisven az j technolégidkat be 19 Cntnys kell vetni az dj szolgéltatdsok kifejlesztésének” érdekében is. 20 targets A valtoz6 koralmé: val6 alkalmazkodésra” j6 példa a 21 what kind of pricing he applies spanyol Solbank, amelyet a Banco Sabadell hozott létre” és kife- 22 development jezetten’ az orszdgban tobb hénapot tartézkod6 killféldieket® cé- 23 adaptation to the changing Tozta meg. A négy évalatt 20-rél 90 tagaira b6vil6fidkhldzatot” = environment a Foldkizi-tenger_partvidékén” hozték létre, a megeélzott 2 specfcally félkbr® pedig komoly fizetdképes keresletet® takar. 26 foreigners A bankfigkok szerepének jov6jét egyes bankszakemberek” némi- 27 branch network leg masképp latjdk*. A Danske Bank tigyvezetije”, Per Damborg 28 on the coast of the Mediterraneant ‘Skovhus a fidkok szémanak tovabbi csikkkenését vetitielére*, ame- 29 clientele sestasDecsieacal® age meee cee ee Kécrméng. _30-solvent demand Iyekekisebbktszdmmal” mikodnének, minimalzalidna sypénze 3 phen! do foxglom a iokokbancsupin korplx tandcsad6 tevékenység” 3) ep diferent zajlana. Hasonlé trend jésol" a finn Nordea menedesmentpartnere, 33 managing director Pentti Tirkkonen is: szerinte egyre kevesebben™ haszndljék tranz- 34 anticipates a further fall akciGikhoz a figkokat, a netbankkal ugyanis minden tigyletet_ 35 smaller staff cluggezhet* az igyfdl,kivéve a késopénzfelvételt*. 36 cash turnover 37 consulting activity VG, Farkas Barbara 2005. november 3. (1668) 38 predicts 39 fewer and fewer people 40 can perform every transaction 41 cash withdrawalNGLISH TEXT Central banks expected to hold key rates steady The European Central Bank and the Bank of England are widely expected to keep their main sterest rates steady tomorrow, as the central banks evaluate a mixed bag of reports showing slowing, economic growth and continuing fallout from the summer's subprime-lending crisis. The central banks are meeting to set interest rates at a time of deep uncertainty in the global ancial system. Recent data have indicated that euro-zone inflation is.om the rise, while Europe's iously strong economic growth appears to be slowing, Banks are continuing fo tally the damage from the summer's lending crisis. The Bank of England’s governor, Mervyn King, said yesterday that it could be "several more months” before all the losses red this summer are exposed and accounted for. [ think most people expect we have several more months to get through before the banks have -evealed all the losses that have occurred and have taken measures to finance their obligations that ult from that, but we're going in the right direction,” Mr. King said in an interview with BBC Radio. In the euro zone, consumer prices in October were up 2.6% from the same month last year ~ the st rate since September 2005 and putting the ECB on course to miss its inflation goal of just iow 2% for the eighth year running, ECB watchers say they don’t expect the central bank to increase s target for the refinance rate from the current 4% tomorrow, but they do expect it to signal a sre increase in interest rates. "We would expect the ECB council to_retaiw-a tightening bias at the ess conference,” said Morgen Stanley economist Elga Barisch. ECB President Jean-Claude Trichet is expected to reiterate that the ECB closely monitors price cisks in the euro zone and stands ready to act "in a firm and timely manner.” Financial market par- securities b. upward movement 3. -\ fall financial investments, such as shares 4.0 tise 4 give the right to (sy) 5.h_ fluctuations €relating toa company 6.2 stake £ part of the ownership of a company 7. entitle (sy) & _ function 8 h 9. iv 0. ik 3. For each item listed below, find in the text a word or phrase given in bold that is similar in meaning. react 2 worth 3. agent who acts as a middleman, buying and selling securities on behalf of others corresponding to (three words) amount paid for the use of borrowed money time when a financial investment is due for payment "get, acquire profits yielded 9. expecting amounts 619. Financial markets (the stock exchange, investment) HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the list of equivalents on the right, give an oral summary of the text in English. DANUBIUS -Atértékelik’? Hossaai évek 6ta visszatéré téma* a magyar részvénypiacon’ a Danubius Hotels, saz érfolyamaban nem értékes ingat- Janallomény’. A brékercégek* kordbbi elemzései’ nem igértek* na- gyobb emelkedési potencialt, ugyanakkor az ij informacigk azt ve- lthetik eldre’, hogy a felillvizsgélt” modellekben mér nagyobb sly kap" majd az eszkOzalapii értékelés®, Minder jelentésebb", akér 30 szdzalékos arfolyam-emelkedéssel kecsegtet". Az dtértékelédést elsGdlegesen" a lengyel szektortérs", az Orbis szérnyalésa” vetiti ere. A vezet6* lengyel szallodatarsa- sig résavényeinck félelmetes emelkedését” (janudr eleje 6ta 50 szévalékos ugrés) az inditotta el”, hogy értékesitették az egyik megfelel6 kihaszndltséga" svdllodat, amely a kOnyv szerin- ti ingatlanértéknek” k6zel héromszorosdn kelt el. A Danubius ~ az Orbishoz hasonléan”, eltéréen” viszont a nyugat-eurdpai_szektortarsaktél - nem csupén szilloda- vemeltet6, de egységeinek tabb mint 90 szazaléka sajat tua} oni ingatlanban m@kodik. Az ingatlanok piaci ériéke” a nem- régiben napvildgot létott”, hangstilyozottan konzervativ becs- 1gs® szerint részvényenként™ tobb mint 12 ezer forint lehet, ah- hoz azonban, hogy e piaci érték érvényesiiljin®, néhdny tényle- ges és sikeres" értékesitésre lenne szikkség. Az ti informédci6t egy stratégiai dintés* adja, amely szerint a Danubius ~ konkrét hatéridé* nélkil — értékesiti négy alacso- ayabb kategérijd* szallodéjat. Ezek becsiilt értéke elérheti® a mas{él millidrd forintot*. A lengyel példabol kiindulva” pedig egy ilyen tranzakcié elegendé lehet arra, hogy a befektetGk" figyelmét az eddig rejtve marad6” ingatlanérték felé terele, és meginduljon édési folyamat®. A hatalmas ingatlanvagyon bedrazédésa ellen hat", hogy a térsasdg fétulajdonosa és me- nedzsmentje nem igazdn elkitelevett® a professziondlis ingat- lanhasznosités mellett. El figgetlenil” a befektetéknek érdemes" a kézeljovében fokozott figyelemmel® kévetnitk a Danubius-részvényekre vonatkoz6 elemzéi kommentdrokat*. Vildggazdasdg 2007. dprilis (1752 n) 62 1 revalue 2 recurring topic 3 stock market 4 not reflected 5 valuable rea! estate portfolio 6 brokerage firms 7 earlier analyses 8 did not promise 9 anticipate 10 revel 11 is attributed greater importance 12 aset-bsed sation 13 significant 14 holds out hopes of. 15 primarily 16 peer in the sector 17 soaring 18 leading 19 dramatic rise lsed 22 book value of property 23 similarly 24 differently from 5 hotel operator 26 market value 27 recently published 28 estimate 29 per share 30 prove effectual 31 actual and successfil 32 strategic decision 33 deadline 34 lower-category 35 amount t0 36 one-and-a-half billion forimts 37 om the basis of 38 investors 39 so far hidden 40 partial pricing process 41 works against 42 committed to 4 apart from this 44 worth 45 with increased attention 46 commentaries onENGLISH TEXT ofthe article on the cd for this unit is on page 147) Bear market: Is Putin waiting to take advantage of the Russian oligarchs’ huge losses? ‘ew countries have been as hard-hit by the global financial crisis as Russia. The Russian stock exchange has lost 70 per cent of its value since May. But the effect on Russia’s main companies has seen dramatically magnified by the huge borrowings of the oligarchs, the men who bought control- shares in Russia’s industries during the post-communist privatisations of the 1990s. Many of ‘Sese moguls borrowed heavily against the rising value of their shares, and have lost billions in paper ‘Asa result they are facing huge margin calls, and have to repay $120 billion before the end xt year. There is only one source rich enough to save them - the State. ‘The Russian Government has offered up to $50 billion to tide them over, but some oligarchs have large debts that a firesale looks inevitable. Oleg Deripaska, Russia’s richest man may have to y for state refinancing: he has to repay to Western banks some $2 billion ofa $4.5 billion loan by Sovember. The owner of a majority holding in the Rusal aliminium company, he also has large seakes in Western car and construction companies. What is unclear is whether the Kremlin will exploit the oligarchs’ problems to take back control strategic industries and energy companies. It is certainly in a position to do so: Russia now has 5:0 billion in reserves, having salted away the profits from its oil exports for the past decade. Vladimir Putin is probably not looking at renationalisation. He has never shown the slightest rest in a return to communism. He is determined, however, to keep Russian industry in Russian is- and therefore will not allow foreign investors to buy up the shares at bargain prices. Whose will be these hands? For a while, the State may become a majority shareholder. But tem- xry nationalisation gives Mr Putin an extraordinary opportunity. When the economy and the market recover, the assets can again be privatised, at a large profit to the Kremlin. ‘The Times October 21, 2008 (1642n) Bi important terms bear market - a financial market in which prices are falling (as opposed to a bull market) controlling shareholder — (same as majority shareholder, majori- ty holding) someone who owns more than half the shares in a company margin call - A notification to a customer from brokerage firm informing them that they need to bring the equity level up in their account to meet the minimum maintenance margin requirements margin buying - is buying securities with cash borrowed from a bro- Ker, using other securities as collateral. The net value, i. the differ- ence between the value of the securities and the loan, is initially equal to the amount of one's own cash used. This difference has to stay above a minimum margin requirement. This is to protect the broker against a fall in the value of the securities to the point that they no longer cover the loan. firesale - occasion when someone sells something very cheaply because they need to raise money quickly stake — another word for share 10 159. Financial markets (the stock exchange, investment] WY Important terms strategic industry - an industry that a country considers very impor- tant for its economic development renationalisation — to nationalise again (an originally nationalised and more recently privatised industry, etc) nationalisation - bringing a company or industry under the control of, ‘a government Wh Extended vocabulary — magnify to increase oligarchy a small group of people having control of a country or organisation. ligarchs are members of an oligarchy mogul an important or influential person (a refe- erence to the oligarchs) paper fortune increase (or decrease) in the market value of an asset which will be converted into actual profit (or loss) only when the asset is sold tide over to temporarily provide (a person) with what is needed during a difficult period (in this case a loan) salt away to save money forthe future Comprehension questions 1. What is one way in which the financial crisis has affected Russia? 2. Who is mainly to blame for the negative impact of the financial crisis on companies? 3. How did the Russian Oligarchs get themselves into so much debt? 4. What is the only possible solution to help with their debt? 5, How much government money has been offered so far? Will this be enough, and if not, what will the Oligarchs be forced to do? 6. [fit wanted to, how could the Russian government take advantage of the huge losses of Russian oli- garchs? 7. What is the source of the Russian government's huge cash reserves? 8. What will Putin do to make sure that Russian industry stays in Russian hands? 9. In what way would the Russian government benefit by temporarily nationalising the private companies that are in trouble? 84DISCUSSION QUESTIONS 4. Discussion questions related to the text in the hands of an elite few, like the Oligarchs? Additional discussion questions ROLE-PLAYING EXERCISES 17. Homeworking, Student You are the HR manager in a company that is planning to introduce homeworking. You have been asked by a senior manager to outline the potential advantages and disadvantages of home- ‘working for both the firm and its employees. 18. Offer of early retirement Student You are a financial advisor. An employee has been offered a job-buyout package (carly retire- ment) by his/her employer, but is undecided whether to accept the offer, and if he/she does, whether to accept regular payments or a lump sum, This employee comes to you for advice. ‘What are the pros and cons of the government bailing out financially troubled companies? What kind of regulation should be introduced by the government to prevent the concentration of power Should strategic industries stay in government hands or in the hands of the private sector? What role does the stock exchange play in the economy? In what way is it important? How would you compare the merits of bonds and shares for investing in? Apart from securities, what forms of investment do you think would give reasonable returns? Examiner You are a senior manager in a company that would like to introduce homeworking. You mect with the HR manager to discuss the advantages and disadvantages for both the firm and its employees. Examiner You are an employee that has been offered an early retirement severance package from your employer, but you're undecided if you should accept this offer, and if you do, should you accept regular payments or a lump sum. You ask your financial advisor for some insight,— ternational trade UCTION TO THE International trade - the export and import of goods, services and intellectual property - enables the countries involved to offer a wider range of goods. A country’s trade policy involves measures to regulate foreign trade. ‘The balance of trade (BOT) shows a country’s trade flow. Ifit is in deficit, governments often take protectionist measures to make their own producers competitive on the world market. They can limit free trade by imposing eg tariffs or quotas on imports. Another barrier to free trade is the granting of subsidies to domestic producers to boost exports. Non-tariff measures like national standards, slow administration and sanitary regulations are also considered protectionist tools. Arguments for protectionism + The main argument against free trade is definitely the defence of the country’s economy ~ for example new, infant industries must be protected from foreign competition + The other major argument is the need to save jobs ~ workers in certain industries are in danger of losing their jobs owing to foreign imports +A state may introduce anti-dumping measures to protect domestic producers Disadvantages of protectionism + It results in higher consumer prices, and so stimulates inflation + It may subsidise industries and companies that are operating inefficiently + It reduces the competitiveness of third world countries, preventing them from entering the world market Liberalisation - free trade ‘This is an economic policy which aims at the abolition or reduction of trade restrictions. It provides free movement of goods and services ~ so creating the conditions of free trade between the countries involved. Free international trade allows a country to specialise in goods in which it has comparative advantage, because of either resources or expertise, therefore increasing its sales on foreign markets and making a greater variety of goods available for consumers. It results in higher revenues and in the long run higher living standards for citizens. The WTO - the World Trade Organisation The WTO, established in 1995, is an organisation operating a system of trade rules. Its predecessor was GATT (the General Agreement on Tariffs and Trade). ts major function isto dismantle the existing barri- ers (eg agricultural subsidies). Italso serves as a forum for governments (o negotiate trade agreements and settle disputes. These negotiations are called rounds.-ocabulary exercises based on the introductory text & Match the words in the left-hand column with words or phrases similar in meaning from the list opposite. flow a. selling ina foreign market below home market price 2. subsidies b. exchange of products for money 3. boost c. skill or knowledge in a particular field 4. protectionism d. related to farming 5. dumping e. concentrate activity in a particular field 6. specialise £. fostering domestic industry by means of import duties 7. expertise & _aseries of recurring events 8. sales h. sums of money paid by the government 9. agricultural i, increase 10. rounds j. movement & For each item in the list below, find in the text a word or phrase given in bold that is similar in meaning, strategy for regulating trade (two words) 2. difference in value of exports and imports (three words) 3. taxes on imports limitations on quantity obstacle related to health rivalry .uneconamically elimination remove, take down 6710. International trade HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Sales, soldes, reduziert A szokésosnal is nagyobb volt a tmeg Périzsban az idei ,sol- des”, azaz a nagy kidrusitésok’ induldsakor’. Tob mint szdze ren rohanték' Je mér az els6 percekben a két legnagyobb éruhé- zat, hogy igazdn alkalmi_vétellel’ lepjék meg magukat. Egyes internetes értékesit6k’ is ,lerohandsrél” sz4moltak be’ mar az el- 86 napokban. A sportfelszereléstél’ a bizsukon, rahdkon, ci kén at szmos markas cikket’ kindlé” Brandalley miikédtetéie”” a szokasos 15 ezer létogatéval” szemben egyetlen napon 350 ezer ErdeKl6d6t” regisztrélt, kézillik négyezren rendeltek® étlago- san'*75 eurdért. ‘Mindenképpen érdemes azonban azzal is szamolni”, hogy a hazhozszéllités" tdbbnyire” nem ingyenes®, 5-20 euré kozatti plusztethet" is jelenthet. Igaz, vannak olyan vallalkozésok”, amelyek nem szdmitanak dijat”, mig mdsok csak bizonyos Ssszegii koltés felett™ juttatjak el a portékat ingyen a vasérlénak. A francia hatésagok” most a helyi kereskedelmi és iparka- mara”, valamint a turisztikai hivatal” tmogatdsét kihasendlva™ kiilénbéz6 rendezvényekkel” is csdbitjék a kézdnséget®, jatékokat, létvanyosségokat™ szervezve a kidrusitési centrumok kéré. A kidrusitisok kapcsdn ismét fellingolta vita” annak szabé- lyozésérél”. A kormény szerint™ a fogyasztést élénkiten? lehetne azzal, ha az akciGzas” lehetségét nem korlétozndk” évi két periédusra, hanem a keresked@knek* korlétlanul” bizto: tandk_ezt a lehetdséget". Az ellenzik', kéztiik a fontosabb kereskedelmi_szervezetek* és nagyobb druhdzak irdnyit szerint ez a fogyasztdk megzavardsdhoz®, dltaldnos minésé- gromldshoz" és az olesé import térnyeréséhez® vezetne*, NOL 2008. janudr 12.(1360n) 1 sales 2 on being launched 3 rushed 4 store 5 bargains sconces 7 reported on 8 sports gear 9 branded goods 10 offering 11 operator 12 visitors 13 inguirers 14 recorded 15 ordered 16 onaverage 17 worth allowing for the fact 18 home delivery 19 mostly 20 free 21 extra burden 22 enterprises 23 charge a fee 24 overa certain amount of spending 25 authorities 26 Chamber of commerce and industry 27 tourist office 28 taking advantage of 29 programmes 30 attract the audience 31 sideshows 32 debate flared up about 33 regulation 34 according to 35 consumption could be boosted 36 discounting 37 no limitson 38 traders 39 without restrictions 40 provide this opportunity 41 opponents 42 trade organisations 43 confusion of consumers 4 quality deterioration 45 gaining ground 45 would lead toENGLISH TEXT Protests at EU deadline for third-world trade pacts Anti-poverty campaigners demonstrated in more than 40 countries yesterday to protest at the European Union's insistence on sealing new free trade pacts with the world’s poorest countries this year. Peter Mandelson, the EU trade commissioner, warned yesterday that 77 of the world’s poorest countries in Africa, the Caribbean and the Pacific would face “less generous tariff rates” in trade with EU unless they completed negotiations on new “economic partnership agreements” (EPAs) with Brussels by the year’s end, ‘The World Trade Organisation (WTO) has set the deadline for the talks, which opened five cars ago to Tiberalise trade between the EU and the world’s poorest regions and phase in the abo- lition of tariffs, Many developing countries fear the agreements will expose their economies to a -inous invasion by European goods, services and business. Brussels argues that the pacts will create 2 more benign climate for badly needed European investment. According to campaigners protesting yesterday, senior EU officials have been threatening to cut to Africa if there is no breakthrough. Luis Morago, head of Oxfam International in Brussels, said: Threats to withhold aid and increase tariffs on exports have not helped but simply piled om the pres- ore in an entirely unjust way. IfEPAs are signed because of a WTO deadline, rather than because ~hey are good for development, they will fail.” Bibiane Mbaye, of ActionAid, said Brussels was using "strong-arm politics” to bully African -ountries into signing up. Campaigners say the pacts would see "the dumping of cheap agricultural oducts” at the cost of local producers. In an attempt to rebut the critics, Mr Mandelson and the EU aid commissioner, Louis Michel, cased an open letter yesterday, arguing that the new pacts were long overdue: "The negotiations ~ forcing us to face up to difficult issues... No one believes the status quo is working.” Jan Traynor in Brussels The Guardian, 28 September 2007 (1633n) B important terms seal a pact ~ establish a formal agreement between two countries Economic Partnership Agreements (EPAs) ~ pacts to be signed in order to create a free trade area (FIA) between the BU and the ACP (Africa, Caribbean, Pacific) countries. They are a response to con- tinuing criticism that the non-reciprocal and discriminatory prefer- ential trade agreements offered by the EU are incompatible with WTO rules the WTO - an organisation formed in 1995 to control trade agreements between countries and to set the rules on international trade (it replaced GATT) liberalise trade - break down trade barriers like tariff protection to allow free global competition for the provision of goods and services abolition of tariffs - removal of taxes on goods coming into /going out off acountry strong-arm politics ~ governments’ use of threats or force in order to persuade other people to accept their requirements 10 15 2010. International trade Wi Extended vocabulary ruinous invasion (of goods) benign breakthrough withhold sg piled on bully sy to rebut (a criticism) the status quo Comprehension questions 1, What were anti-poverty campaigners demonstrating over? 2. What are these new trade agreements called? a huge inflow of goods, liable ‘destroy/ local markets favourable, beneficial, advanta, success (in reaching an agre in these trade talks) hold back / not give / sg increased use superior strength to force sy to obey to prove (the criticism) untrue/unfair the existing, unchanged situation or condition 3. What were the EU’s original goals in trying to negotiate these agreements? 4. When did the WTO first begin these trade talks with the world’s poorest countries? 5. If these countries refuse to sign the new EPAs, what two things has the EU threatened to do? 6. Why are many of these developing countries against this new trade pact? 7. How does Brussels fel about the new trade pact? 8. How have other organisations, such as Oxfam and ActionAid, reacted to the EU trade deal? 9. What is one specific criticism that the anti-poverty campaigners have levelled against these pacts? 10, What arguments have Mr Mandelson and M, Michel used to try to show the crties that they're wrong? 710DISCUSSION QUESTIONS A. Discussion questions related to the text 8. Additional discussion questions advantages and disadvantages). ROLE-PLAYING EXERCISES 19. E-commerce Student Youare a student studying business communica- tion systems and are convinced that e-commerce is the future. The owner of asmall handheld com- puter store approaches you for advice about ‘whether he should open a website and set up an e-commerce department. What advice will you sive him on the potential advantages ? 20. Motivating staff Student You are a motivational expert who specializes in giving advice to companies with high staff ‘tumover. A newly appointed CEO of a company with high staff tumover asks for your advice on how to motivate his staff. Iftrade were liberalised between the EU and the world’s poorest regions and tariffs abolished, which do you think would come out as the bigger winner — the rich EU or the poor countries? Do you think its right for countries that believe in free trade to use protectionist measures against cheap- er imports? What are some means governments use to protect themselves from international trade? Outline some of the arguments in favour of free trade and some of the arguments against it (ie. its What is the main objective of the World Trade Organisation? How does it work? What are the advantages and disadvantages of e-commerce? Examiner You are the owner of a small store in the city centre that sells handheld computers and PDAs (personal digital assistants). You're thinking about opening a website and setting up an e-commerce department, but need the advice of people who know more about e- commerce than you. So you approach a stu- dent who is studying business communica- tion systems, Examiner You have recently been appointed CEO of a company that faces a serious problem of high staff turnover. Your job is to turn the compa- ny around and make ita place where staff will be motivated to work. You consult a motiva- tional expert for his advice. n11. Marketing Ce ) INTRODUCTION TO THE TOPIC Marketing is the creative process of satisfying customer needs profitably. It deals with the following areas: advertising, aftersales service, design, delivery and distribution, packaging and presentation, pric- ing, promotion, research, quality control and assurance and testing. The marketing concept requires an organisation to be consumer-orientated and to have an integrated marketing strategy. The marketing ‘mix depends on a number of decisions with regard to four major variebles (the four P-s): + product (the product should be appropriate for the market segment it is sold in) + place (the product should be available through the most cost-effective channels of distribution) + promotion (the product is presented to customers through advertising, packaging, publicity, public relations and personal selling) + price (the product must be priced so that it competes effectively with rival products in the same market) Advertising Advertising is an important element of marketing which is directed at a target audience. It reaches potential customers through several media ~ print media, outdoor displays (billboards, neon signs), radio, TV, cinema, the Internet, direct mail. There are three types of advertising: consumer advertising, trade advertising and industrial advertising. Arguments for advertising informs the public about products and services + influences the decision to purchase a good by allowing the consumer to make a more informed choice + it plays an important role in creating new needs Arguments against advertising increases costs and as a result, price it forces customers to buy products ~ children are especially sensitive to advertising messages + itcan be deceptive Banned advertisements There are certain products the advertising of which is restricted or banned. These products, like ciga- rettes and alcohol, have an unhealthy and harmful impact on people, especially on children. Advertising techniques Some of the most popular techniques of persuasive advertising are: repetition of a slogan, endorse- ‘ment, comparison of rival products, presenting scientific authority, making special offers and using emo- tional appeal. 2Vocabulary exercises based on the introductory text | A. Match each item in the left-hand column with one similar in meaning from the list opposite. | OL costefiective attracting public attention to a product | do 2 publicity yielding satisfactory profit 3. public relations competing Cc 4 rival activity aimed at giving ‘a company an attractive image © 5, direct mail 6 easily influenced 4. 6 consumer advertising A. _ marketing activity targeting producers 4 7. trade advertising (product advertising featuring 7 a famous person 4 8 industrial advertising marketing activity targeting customers 49. sensitive iZ advertisements sent through the post | 10. endorsement if marketing activity targeting wholesalers X and retailers B. For each item listed below, find in the text a word or phrase given in bold that is similar in meaning. 1, designing of wrappers/containers in which products are sold collecting of information (about potential demand) checking of Standards tiwo words) suitable part of the market, a specific category of customers (two words) potential customers aimed at (two words) information channels . misleading having the power to influence others | presenting a product in relation to another one 1S 3Viarketing HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. ‘After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Kiengedik a szellemet a palackbél? ‘Szerepelhet-e' markés péléban’ a miisorvezeté? a televizi képerny6jén? Mutathatja-e a kamera, hogy milyen aut6val érkez- nek a sztérok egy-egy televizids felvételre'? Ma még killénbézs valaszokat adnak az Eurépai Unié tagéllamaiban a fenti kérdé- sekre, Az Eurdpai Biztség olyan uj javeslatot kat el, amely egységesitené* a televizids hirdetésekre’ vonatkoz6 szabdlyokat’ Az sorobiiolgatiN’ az link’ #2 egyik legfontosabb ker- désnek, hogy miként szabélyozhate® a reklémidén kivil tele- vieids reklim. A médidban_,termékelhelvezésnek”* nevezett hirdetési forma” ugyanis a cégek valasza arra ajelenségre', hogy csdkken a reklémok nézettsége" és hatékonységa". Az internet térnyerése" ugyanis ijabb feliletetjelent a hirdetdknek," a digi- tlis televizidzds pedig lehetdvé teszi, hogy a néz6 maga déntsin, néz-e reklimot, vagy sem. A Késziil6 unis javaslat nem ndvelné az érankénti reklém- idét, az tovabbra is egységesen” tizenkét perc maradna, de eny- ten mblokkokon” kivili ,termékelhelyezésre” vonat- A javaslat Kovetné az Egyesilt Allamokban be- * miszerint a hir- és gyermekmiisorok” kivéte- m kézwctlen gazdaségi cla" ~ bemutathat6k* a mér- level kak. Mikézben a hirdeték és a médiacégek a szabalyozés libera- lizdldsa mellett érvelnek*, a brit kézszolgélati médium,” a BBC Képviseldje" aggélyait fogalmazta meg.” mondvan, ha kiengedik a szellemet a palackbol, vagyis ha mindent ,elonthetnek” a hir- detések, a miisorok tartalmat nem az djsdgirok®, hanem a hirde- 16k fogjak alakitani". Magyarorszégon egyeldre minden védjegy* bemutatésa bur- kolt reklémnak® mindsill. A jelmi_csatornék_nézéi" agyakran talélkozhatnak azzal a jelenséggel, hogy a él felismerhe- 16 markakat” kitakarjak* a térsaségok. Sarkadi Mdiké jogdsz” szerint azért van sziikség erre, mert a médiahatdsdg” szigorian binteti” a direkt reklémnak mindsitett _,termékelhelyezést”. Kolosi Péter, az RTL Klub programigazgatdja” arra hivja fel a figyelmet, hogy a rekldm finanszirozza" a televicidedst. Ha esdkken a hirdetések hatékonysaga, akkor vagy tj reklimozdsi formakat kell keresniak a cégeknek, vagy a nézékkel kell meg- fizettetni a tévézést. Vildggazdasdg 2006. szeptember (1878 n) 4 | appear 2 branded T-shint 3 presenter 4 reconding session 5 unify 6 television commercials 7 regulations 8 eurobureauerats 9 consider 10 capable of being regulated LI non-commercial airtime 12 product positioning 13 form of advertising 14 phenomenon/trend 15 viewership 16 efficiency 17 increased use ofthe Internet 18 advertisers 19 uniformly 20 relax 21 commercial spots 22 generally accepted practice 23 news and children’s programmes 24 with a direct economic purpose 25 can be presented 26 argue for 27 public service medium 28 representative 29 expressed concern 30 journalists 31 formishape 32 trademark 3 hidden advertising 34 viewers of commercial channels 235 easily recognisable brands 36 cover 37 lawyer 38 media authority 39 strictly penalises 40 programme manager 41 financesENGLISH TEXT The next big thing ADVERTISING on mobile phones is a tiny business. Last year spending on mobile ads was $871m worldwide according to Informa Telecoms & Media, a research firm, compared with $24 bil- lion spent on Internet advertising and $450 billion spent on all advertising. But marketing wizards are euphoric about it. It is destined, some say, to supplant not only Internet advertising, the latest fad, but also television, radio, print and billboards, the four traditional pillars of the business. At the moment, most mobile advertising takes the form of text messages. But telecoms firms are also beginning to deliver ads to handsets alongside video clips, web pages, and music and game downloads, through mobiles that are nifty enough to permit such things. Informa forecasts that annual expenditure will reach $11.4 billion by 2011. ‘The 2.5 billion mobile phones around the world can potentially reach a much bigger audience than the planet’s billion or so personal computers. The number of mobile phones in use is also growing much faster than the number of computers, especially in poorer countries. Better yet, most people carry their mobile with them everywhere-something that cannot be said of television or computers. Yet the biggest selling point of mobile ads is what marketing types call ”relevance”. Advertisers believe that about half of all traditional advertising does not reach the right audience. Less effort and money is wasted with online advertising: half of it is sold on a ”pay-per-click” basis, which means advertisers pay only when consumers click on an ad. But mobile advertising through text messages is the most focused: if marketers use mobile firms’ profiles of their customers cleverly enough, they can tailor their advertisements to match each subscriber's habits. But there are some problems. While consumers are used to ads on television and radio, they con- sider their mobiles a more personal device. A flood of advertising might offend its audience, and thus undermine its own value. ‘The Economist, 4 October 2007 (169in) © important terms mobile ads ~ advertising sent to mobile phones text messages — text as opposed to conversation used for communi- cating between 2 mobile phones (also referred to as SMS ~ short ‘message service) telecoms firms ~ companies that deal with telecommunications (tele- phone, Internet, TV, etc.) handset - mobile phone relevance - appropriateness to the target audience customer profile ~ information about the wants and needs of cus- tomers 10 1s 20 B11. Marketing Hi Extended vocabulary euphoric very excited, enthusiastic supplant replace one thing with another the latest fad the most recent fashion / craze, unlikely to last long nifiy clever tailor (their ads) create or adapt (for a particular person/audience), adjust undermine (here) reduce Comprehension questions 1. Interms of money spent, how does mobile advertising compare with Internet advertising? 2. How much money is spent in total on all advertising? 3. What sort of future do marketing enthusiasts predict in mobile advertising? 4. What are the four pillars of advertising referred to? 5. Currently, what is the main form that mobile advertising takes? 6. What other forms of mobile advertising are marketers starting to use? 7. How much do analysts predict will be spent on mobile advertising by 20112 8, Whatare the main advantages that mobile phones have over computers? 9. What is meant by advertising "relevance"? |. What might be a possible downside to mobile advertising?DISCUSSION QUESTIONS A. Discussion questions related to the text B. Additional discussion questions MUROLE-PLAYING EXERCISES 21. Promotional strategies Student ‘You are an advertising agency with a good repu- tation for promoting brands and increasing con- sumer awareness. A sports shoe manufacturer has contacted you and asked for suggestions for a campaign to promote their brand, You are aware that they have a budget of HUF 700,000. What is your opinion about mobile phone advertising — do you think it will replace internet advertising and all the other forms of advertising (T'V, radio, print, billboards), or will it be just a passing fad? What do you think are the greatest benefits mobile advertising brings to the customer? > Do you think mobile phone advertising is an invasion of personal privacy that users will be offended by? Give reasons for your answer. How can users’ private space be protected from marketers? Do you think itis ethical for marketers to use the information (profiles) that mobile companies have compiled about their customers to create ads that match each subscriber's habits? What is your opinion about advertising in general - does it perform a useful function in society or does it only encourage people to buy things they don’t need? 2 Do you think certain advertisements should be banned? If'so, on what basis should they be banned? 3. Whatare the advantages of online advertising over conventional methods like direct mail and promotions? Examiner You work in the marketing department of a sports shoe manufacturer. You have contact- ed an advertising agency and asked for sug- gestions for a campaign to promote your brand. You want to run a campaign within a budget of HUF 700,000. 22. Hiring a new CEO: from inside the company or outside? Student You are the chairman of the board of a company that needs to hire a new CEO, Will you select the number-two man (president) to succeed the num- ber-one executive (CEO), ot will you go outside the ‘company? Your shareholders want to hear what your views are about the advantages and disad- vantages of hiring from inside the company. Examiner You area shareholder ofa company that needs to hire a new CEO. At the shareholder’s meet- ing, you want to hear what the chairman of the board thinks are the advantages and disad- vantages of hiring from inside the company.12. Telecommunications INTRODUCTION TO THE TOPIC Telecommunications, supported by the electronic media, enable people to exchange information with each other. This form of communication can take place through several media: mobile and fixed-line telephones, television, radio, the Internet and telefax. A good telecommunications infrastructure is widely acknowledged as an important tool of economic success in the modern world, At the same time there is increasing concern about the digital gap,as access to telecommunications systems is not equally shared among the world’s population. The wireless telephone market There are three mobile operators in Hungary (T-mobile, Pannon and Vodafone) fiercely competing with each other for gaining new subscribers and keeping their present customers with favourable pack- ages. As a result, the public benefits from both the improvement in the quality of the services and the fall in rates. Advantages of mobile communication + itis applicable everywhere if there is the required signal level - it can save lives as well + not only voice, but images, music and videos can be transmitted + each subscriber has his/her own individual phone number which may be kept independently of the sery- ice provider Disadvantages of mobile communication + there isn’tan adequate signal level everywhere + the battery can go flat + the rates can be higher than those for wired telephones + it can sometimes be disturbing (e.g. in the theatre) The wired telephone market With the liberalisation of the wired market, T-com has lost its monopoly with new service providers entering this market. However, for the newcomers the process of gaining market share seems to be slow. They also face strong competition from the wireless market, therefore they are makingconstant effortsto offer more and more favourable conditions, such as broadband Internet access. The information society ‘The information society is being created by the revolution in the information and communications technologies accelerated by globalisation. In a knowledge-based economy, information is of key eco- nomic and cultural importance. The Internet has become indispensable for people and businesses, being the main source and channel of information. Iti also a tool of e-commerce, either between a firm and the consumer: business-to-consumer trade (B2C), or between manufacturers, wholesalers and retailers: business-to-business trade (B2B). Employment-related issues The IT revolution has had both positive and negative effects on employment. On the one hand it may bring aboutjob cuts ata company owing to increased efficiencyin business operations as a result of an IT investment. On the other hand it can lead to the creation of new jobs along with the growth of IT-related businesses. There are excellent employment opportunities in the form of telework, as employers can hire the best experts without having to worry about distance.. ocabulary exercises based on the introductory text Match each item in the left-hand column with one of the phrases listed opposite that is similar in meaning. exchange a. companies selling goods in large quantities eg, to shopkeepers acknowledged . availabilty, ability to reach and use tool speeded up 4. digital gap 4. people who pay regularly fora service 3. access e. _ givesgand receive sg in return 6. subscribers £. people who sell goods in shops broadband g inequality resulting from different levels of Internet penetration 8. accelerated h. accepted or admitted, recognised wholesalers i. system enabling the user to send ‘messages at very high speed 10, retailers j. means, instrument & For each item listed below, find in the text a word or phrase given in bold that is similar in meaning. wired worry composite offers gains, advantage fees making something free for use by others control of the whole market for a product or service complete change 9, buying and selling goods using a computer ). producers12. Telecommunications TT HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- ents of the underlined parts of the Hungarian text. Exercise 2. ‘After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Tudatosabb internethasznalat A viléghalét minimum ot éve haszndldk tobbsége' mér prébalta 1 majority of Internet users az e-kereskedelmet’. A férfiak leginkab’ hardvercket, sofivereket, 2 e-commerce a n6k kozmetikumokat’ vésdrolnak az internet segitségével. A ha- 3 mostly gyomdnyos vasdrlis hivei informaciészerzésre® haszndljék a netet. 4 cosmetics Az clektronikus levelezés mellett* még mindig az internetes hir- 5 for gathering information ‘portilok’, magazinok olvasisa az egyik legicllemzdbb tevékenység’ 6 besides e-mailing avvikighdlén, Az NRC és a TG kozis felmérése szerint a rendszere- 7 news portals sen internetez6 felnéttek’ tobb minthéromnegyede olvas rendsve- 8 the most pital activity resen internetes magazinokat. Fokozatosan zérkéznak fel" azon- 9 adults regularly using the Internet ban olyan viléghdl6n végzett tevékenységek, amelyek nagyobb ak- 10 are gradually catching up tivitdst és tudatosségot igényelnek'. A rendszeres internetezék 11 require awareness tbb mint 70 szdzaléka tilt le kilonbdz6 ingyenes vagy fizetds tar- 12 download free or pay content talmakat' ~ szoftvereket, jétékokat, filmeket, zenéket - a halérdl, 19 online games are typical & az online jaték is az intemnetezdk lényegesen nagyobb hényadé- 14 has risen 10 35% ra volt jellemzs" tavaly, mint egy évvel korébban, 2 menijetiores A rendszeres internetezdkén bell $3 szdzalékra nétt"* azok ‘16 se¥ice providers arénya, akik a vildghél6t visérlds elétti informécidgydjtésre 17/70" the home page of distributors 18 comparative analyses haszndljak. A gydrt6k”, szolgdltaték’*, forgalmazék hon- Di thout lapjardl”, interneten taldlhat6 terméktesztekbél, dsszehasonlité aa ee 20 according to data 21 ordered via the Internet 22 the ratio of business decision-makers 23 relatively high 24 well above average income 25 director of research elemzésekb6]" vagy netes forumokbél tdiékozédnak” egyes ter- meékek, szolgiltatisok feldl. Az NRC adatai szerint” tavaly a gya- kori internetezdk kézel fele késtolt bele az e-kereskedelembe, vagyis rendelt vagy vasérolt valamilyen terméket, szolgéltatést az interneten keresztll”. Aziialeti déntéshozdk arénya” a rendszeresen internetez6 fel- 35 turernet access néttek korében relative magas”, 15 szdzalék - wbbségik azon- 37 varget group ban férfi, jvedelmiik pedig az dtlagosndl lenyegesen magasabb" 2g halfof those questioned ~ mondta lapunknak Kurucz Imre az NRC kutatdsi igazgatoja*. A dintéshoz6k tobb mint hatvan szazalékénak van otthoni inter- net-hozziférése*, tobbségiik otthontél is haszndlja a netet. Ebben a célesoportban” kiemelkedéen magas az online vésérlék ardnya, a megkérdevettek fele” rendelt mar valamilyen terméket az interneten. A dintéshoz6k esetében az online fizetés is elterjedtebb”. Vildgeazdasdg 2007. janudr (1786 n) 29 more widespreadENGLISH TEXT Better together The Internet, supposedly a new realm, is most useful when coupled to the real world In the early days of the Internet, the idea that it represented an entirely new and separate realm, inct from the real world, was seized upon by both advocates and critics of the new technology. cates liked the idea that the virtual world was a placeless datasphere, liberated from the con- ints and restrictions of the real world, and an opportunity fora fresh start. Where some cyber enthusiasts found the separation between the real and virtual worlds excit- z, however, critics regarded it as a cause for concern, They worried that people were spending too such time online, communing with people they had never even met in person in chat rooms, virtu- al game worlds and, more recently, on social-networking sites such as MySpace and Facebook. A dy carried out by the Stanford Institute for the Quantitative Study of Society in 2000, for example, ind that heavy Internet users spent less time talking to friends and family, and warned that the rernet could be "the ultimate isolating technology”. Both groups were wrong, of course. The Internet has not turned out to be a thing apart. Unpleasant aspects of the real world, such as taxes, censorship, crime and fraud are now features of virtual world, too. Ganers who make real money selling swords, gold and other items in virtual me worlds may now find that che fax man wants to know about it. tthe same time, however, some of the most exciting uses ofthe Internet rely on coupling it with real world, Social networking allows people to stay in touch with their friends online, and plan activities inthe real world. The distinction between online and offline chatter ceases to matter. consider Google Earth, which puts satellite images of the whole world on your desktop and allows asers to link online data with specific physical locations. Rather than seeing the real and virtual realms as distinct and conflicting, in short, it makes sense to ee them as complementary and connected. The Economist, 6 December 2007 (1647 n) i important terms the Internet ~ a massive networking infrastructure that connects mil- lions of computers together globally, forming a network in which any computer can communicate with any other computer advocates — people who are supportive of the Internet (as opposed to critics) cyber enthusiasts ~ people who are highly interested in the Internet datasphere — combination of television, radio, newspapers, maga- ines, cell phones, the Internet, voice mail, e-mail, and all the newly exploding forms of communication, which can instantly transmit information anywhere around the world in seconds virtual game worlds - worlds not physically existing but made by soft- ‘ware to appear to exist (computer-generated simulations) social networking - connecting and sharing information with other like-minded people via the web 10 1812. Telecommunications Hi Extended vocabulary — realm a world ofits own to seize upon (an idea) to take advantage of (sg) for one’s own purposes «cause for concern 4 reason to worry about something commuting with communicating with people online (ie. chatting) heavy Internet user a person who spends alot of time online gamers people who participate in online com puter games the tax man the tax authority (informal) coupling connecting Comprehension questions 1. What idea did the Internet in its early stages represent to both proponents and opponents alike? 2. Why did supporters of the Internet like this idea of a separate world? 3. What were the critics of the Internet worried about? 4. What sort of social behaviour did the Stanford Institute study discover among heavy Internet users, and what warning did the Institute give? 5. Inwhat way have cyber enthusiasts been proven wrong about their ideas of the Internet as distinct from the real world? 6. What connection is made in the article between gamers and the tax man? 7. In what way have cyber critics been proven wrong about their fears of the isolating effects of the Internet? 8. How does Google Earth couple the virtual world with the real world? 9. What conclusion does the article draw about the relationship between the real and virtual worlds?DISCUSSION QUESTIONS . Discussion questions related to the text tivate real relationships in the real world? ;. Additional discussion questions (uses and abuses) do you foresee? ROLE-PLAYING EXERCISES Changing corporate culture Student ‘What is your opinion of social networking online - what impact does it have on people’s ability to cul- What do you think are some of the biggest dangers for people who spend too much time online com- municating with people they've never even met in person? ‘What do you see as the biggest benefits, to both companies and individuals, of creating online communities? How have the Hungarian wired and wireless markets changed in recent years? What is the connection between the IT revolution and economic development? What is your opinion about the growing availability of broadband Internet? What risks and benefits Examiner ‘You have just been appointed CEO of a newly merged company. Unfortunately, it is losing a lot of money. You feel thata major transformation of the culture of the company is needed. You are meeting with your assistant manager to brain- storm some possible policies. 24. Mergers and acquisitions Student You are a mergers and acquisitions expert. ‘The owner of a company asks for your opinion on the benefits and drawbacks of acquiring another company. What advice will you give him? ‘You are the assistant manager that has been appointed to help the CEO lead a newly merged company. You both feel that major changes are needed in the company’s culture and you meet with your CEO to brainstorm some possible policies. Examiner You are the owner of a company that is con- sidering acquiring another company in order to grow faster. You're not sure, however, that the benefits will outweigh the costs. You con- sult with an M & A expert to get his advice. 83Ls] 13. The Hungarian Economy INTRODUCTION 10 THE TOPIC Macroeconomic indicators Like most of the member countries of the EU, Hungary is also preparing for accession to the enrozone. ‘Before it can enter the European Economic and Monetary Union (EMU) and adopt the euro, macro data have to be analysed in accordance with the Maastricht criteria. The most criticised area is the twin deficit, the parallel deficit ofthe current account and the government budget. Measures to be taken to meet the convergence criteria Lasting budgetary equilibrium can only be achieved through structural reform of the expenditure side, making the introduction of austerity measures necessary. In parallel, there is a need for an increase in budgetary revenues mainly through the widening of the tax and contribution base and limitations in the scope of tax avoidance. Nonetheless, the changes affect all major components of the tax system. In order to achieve a durable reduction in the budget deficit and to maintain a level to underpin sus- tainable growth, the government has initiated substantive structural changes in health care, and in the pen- sion and education systems. These reforms are aimed at attaining the deficit targets through the modifica- tion of operational parameters. In addition, there is also a need for an economic and social policy turnround by promoting amore eff- cient performance of public tasks through appropriate state control, and strengthening responsibility for payment of public dues. Black and grey employment Many people hide their real income from the authorities, and pay less tax and social security contri- bution than they are supposed to pay. This results in a deficit in the social security system and lower tax revenues, Jllegal employment is rather common in Hungary, especially in the fields of construction, indus- try and agriculture. Ageing population ‘The problem of fewer and fewer active people providing for more and more pensioners is hitting the whole of Europe, Hungary's labour force participation rate is one of the lowest in the region. In order to ease the social security burdens, there is a general tendency to raise the retirement age. At the same time the desertion of young graduates to Western Europe for better employment opportunities is on the increase. The position of Hungary in the EU ‘The unfavourable macroeconomic data seriously affect Hungarian competitiveness. The neighbour- ing countries such as Slovakia, Poland and the Czech Republic are better at attracting foreign direct invest- ‘ments (EDI) by offering better conditions than Hungary.Vocabulary exercises based on the introductory text A. Match each word in the left-hand column with a word or phrase similar in meaning from the list opposite. 1. convergence a. started 2. achieved b. implementation 3. austerity ¢. situation in which there is little money for spending on comfort and enjoyment 4. initiated d. reinforcing 5. turnround e. attained 6. promoting £ abandonment 7. performan g assisting, encouraging 8. strengthening h. complete reversal of direction 9. desertion i. coming together towards the same point 10, unfavourable j. disadvantageous B. For each item listed below, find in the text a word or phrase given in bold that is similar in meaning. in conformity with (three words) actions taken to bring about a certain result state of balance restrictions influence long-lasting considerable, significant directed general movement or development in a certain direction ability to compete 4. 63. The Hungarian Economy HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- Jents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Briisszel' tovabbi reformokat siirget* Hazank eldrelépése’ egyelre ,korlétozott” a versenvképes- ségben‘; az Eur6pai Bizottsdg’ a kozigazgatéshan’, az egészség- ‘agyben’, a nyugdij-. & az oktatési rendszerben’ is tovabbi lépé- seket sirget. ‘Tobb kritikus megéllapitast’ is tartalmaz az Eurdpai Bizott- sigkedden nyilvanossdgra hozott ,lisszaboni” jelentésének"*ha- zénkrél sz6l6 fejerete, amely makro-, és mikrogardasigi, tovab- bb foglalkoztatéspolitikai szempontokkal" is foglalkozik. ‘A 2005-07-es magyar nemzeti reformprogrammal kapesolat- ban a bizottsdg megallapitja: ,ugyan gytimolesivzni'* Kezdenek” a kaltségvetési_hiény csokkentése”, az dllamhéztartés_fenn- tarthatdsdga érdekeben tett lépések”, de tovabbi elérehaladas- ra van sziikség. Ugyanakkor az eldregedés" fényében ez a fenn- tarthatdsdg tovabbra is ,magas kockézats”,illetve ,torékeny”” A villalt mikrogazdasigi célokkal kapcsolatban a bizotiség ligy véli: nincsenek konkrét lépések az dllami témogatdsok" csk- kentésére, illetve arra, hogy elégséges-e ezek leépitése”. Briisszel idvizli visvont a kutatés-fejlesztési” és innovacids stratégidt, de tovabbi eldrelépést var. Nem ldtnak magyar hatéridét” a vél- Jalkozdsok” adminisztrativ terheinek™ cskkentésére. Nincs lathat6 haladas* az dllanddsult regiondlis egyenlétlen- ségek” cskkentésére a foglalkoztatéspolitikéban, sem koherens politika” a munkaeré alacsony mobilitésénak* kezclésére Brisszel it is tovabbi reformokat srget, kilondsen az oktatés- ban és a képzéshen”. A Bizottsag iidvozli a korkedvezményes nyugdfjazds vissza- svoritisét® és a rokkantnyugdijazés" rendszerének reformjat Elismeri®, hogy a magyar kormédny nekifogott a feketemunka el- leni harcnak”. Tob koordindcist és odafigyelést kovetel” vi- svont az glethossvig valé tanulds”, az alacsony képzetts emberek™ beemelése a munkaerdpiacra”, valamint tobb munka- ichetdség birtositésa” a nk szdméra. ‘Népscabadsdg 2007. december 11. (1607 n) 1 Brussels 2 urges 3 advancement 4 restricted in competitiveness 5 European Commission 6 public administration 7 health care 8 pension and education system 9 critical statement 10 Lisbon report 11 aspects of employment policy 12 bear good results 13 cutting the budget deficit 14 sustainability of pubic finance 15 steps taken 16 ageing 17 fragile 18 state subsidies 19 reduction 20 welcomes 21 research and development (RED) 22 deadline 2 enterprises 24 burdens 25 visible progress 26 regional inequalities 27 coherent polic 28 low mobility 29 training 30 forcing back early retirement 31 disability pensioning 32 admits 33 has gat down to fighting 44 requires coordination and attention 35 life-long earning 36 people with low qualifications 37 labour market £38 providing ob opportunitiesENGLISH TEXT Hungary plans budget controls Hungary, afer years of soaring budget deficits, plans to revise its constitution to impose legally- binding limits on government spending plans, says Ferenc Gyuresény, the prime minister. The dra- conian legislation, which would be the toughest of its kind in Europe, would be enacted next spring in anattempt to break a tradition of pre-election spending sprees that have earned Hungary the biggest budget deficits in the European Union, including 9.2 per cent of gross domestic product last year. Mr Gyuresény told the Financial Times on Monday that legislation published at the weekend was required to ensure that the country, now in the throes ofa painful economic restructuring, did not stray again from the rules of budgetary discipline. Asked why politicians could not be trusted to run sound budgets without legal controls, the prime minister replied: ”Sometimes we have to protect ourselves from ourselves.” Mr Gyuresény is presiding over Hungary’s biggest budget cuts in a decade, withthe deficit on schedule to ‘all from last year’s 9.2 per cent to 6.4 per cent in 2007, with a further cut planned for next year to 4.1 per cent. Under the proposed legislation, parliament would amend the constitution to require govern- ‘ments to run sustainable budgets with a primary surplus — that is a surplus of revenues over expen- ditures, excluding debt service costs. Budgets would also have to allow for regular annual reduc- tions in the public debt, which currently stands at 67-68 per cent of GDP. Under the Maastricht Treaty, eurozone members must abide by legally-binding limits, including on budget deficits (3 per cent of GDP) and total public debt (60 per cent of GDP). But the EU made the regime flexible after breaches by several countries, including France and Germany, its largest members. Outside the currency zone, Scandinavian states and the UK have applied government-set limits on borrowing across the business cycle, but these are not legally binding, Poland’s constitution has a 60 per cent ceiling on public debt. By Stefan Wagstyl in London Financial Times, 14 November 2007 (1700 n) i Important terms legally-binding limits legislation passed by the government to make it illegal for it to overspend budget amounts prior to the election spending sprees ~ bouts of extravagant expenditure gross domestic product (GDP) - total value of goods and services pro- duced in a country's economy, not including income from abroad primary surplus — a surplus of revenues over expenditures debt service costs ~ expenditure involved in paying interest on debt and repaying the debt itself public debt - money owed by the national government and local authorities Maastricht Treaty ~ officially known as the Treaty of the European Union, it brought the EU into existence 10 15 8713. The Hungarian Economy Wi Extended vocabulary soaring increasingly high draconian extremely harsh or drastic inthe throes of deeply involved in something stray from wander away from a path presiding over in charge of, responsible for abide by accept and respect breaches repeated breaking (ofa rule or agreement ) ceiling (on debt) upper limit of permitted debt Comprehension questions 1. Howis the Hungarian government planning to deal with its budget deficit? 2. When is this new legislation to be enacted, and why? 3. How does Hungary's budget deficit compare in size with those of other EU countries? 4. What does Mr Gyurcsény hope this legislation will achieve and why does he believe itis necessary? . By how much does Mr Gyurcsday plan to cut the budget in relation to the 2006 deficit? . In order to pass this legislation, what step must Parliament take first? 7. What budget constraints would this new legislation place on governments? 8. How big is Hungary's total public debt in terms of GDP? 9. What are the Maastricht criteria for eurozone members? 10. Why was the EU forced to make the Maastricht criteria more flexible? 11. What other countries have set government-spending limits and how do these limits differ from the pro- posed Hungarian limits?_A DISCUSSION QUESTIONS A. Discussion questions related to the text Do you think that a plan to impose legally-binding limits on government spending will work? Justify your answer. 2 What factors have contributed to the fact that currently Hungary has the biggest budget deficit in the European Union? 8. Additional discussion questions How would you describe the present situation in Hungary in terms of the macroeconomic indicators and also its progress towards the adoption of the euro? What problems do black and grey employment present? What economic reforms do you think are most urgently needed in Hungary to enable it to put its finances in order? What budget areas need to be cut? ROLE-PLAYING EXERCISES 25. Flexitime Student Examiner You are the office manager for a company. The CEO has asked you to prepare a report on the fea- sibility of introducing flexitime. He wants to know what would be the benefits to the company and staff, the financial costs and the disadvan- tages, ifany. 26. Raising capital Student ‘The board of your company has recently con- sidered introducing the flexitime system, but needs more information about the advan- tages and disadvantages, and the costs. You've asked your office manager to prepare a report and are now meeting to hear hisfher conclusions. Examiner ‘You are the financial advisor at a family-owned company that needs to raise some extra capital in order to invest in a new plant. The representative from this family firm meets with you to discuss the potential sources from which money mightbe raised and the possible drawbacks. You represent your family’s firm, which needs capital to invest in a new plant to meet expansion needs. You arrange with your company's financial advisor to discuss what plans he might have for raising the extra finance.Maniss Foie he meyrud , 14. Major and emerging world economies B/N intRODUCTION TO THE TOPIC Multipolar world aus sens os Stren da ot ek Wea . A global power shift is taking place ~ from a unipolar world to a multipolar one ~ as other emerging _ countries like Russia, China and even India are stepping forward to take a bigger leadership role on the world stage thatthe United States has sofardominated. “S ebetee=s The BRIC markets There is a group of four countries within the emerging markets called the BRIC markets (Brazil, Russia, India, Ching), which are the largest of the emerging markets, The BRIC countries are characterised by ; tunes opulation (43% of the world’s population lives in these fgur countries), plentiful natu “s Ei eas hone to over 20% of the world’sSStiituated cfitde oil reserves), and a cheap, well- Cai labour force (India produces 5 million university graduates per year). “> \2s1eAet Sau plows the fist time another country has done so since at least the 1930s. China has also become the world’s largest ‘consumer, eclipsing the US in four of the five basic food, energy and industrial commodities-€hina has also surpassed the US to become the world’s largest emitter of CO). OS SdossU wey? se The 21st-century heanyweights one mage RED ‘The world egonomy jg increasingly powered by countries such as China and India whose growth is far more energy “and commodity-intensive than that of rich countries. Since 2001, China has accounted for about half of the increase in the world’s demand for metals and almost two-fifths of the increase in oil demand. The prices of many Fai materials have surged in the past 12 months. The Economist's dollar based commodity-price index is up by 26% from a year ago. The food index is up by almost 50%. The price of oil has risen almost 80%. These jumps are the main cause of higher inflation across the globe. They are also ~P Felated? at least Partially, fo structural changes in the global economy. GLE. Noonan Sox This shift means that the usual relationship between the USA’s buisiness cycle and commodity prices may change. Past American recessions have gent the prices of oil and other resources down. That may 10 longer be so as emerging econo1 me jent to an American recession than formerly. S ROD fiest Vocabulary exercises based on the introductory text A. Match each word or phrase in the left-hand column with one similar in meaning from the list opposite. 1. ovtaking place a. happening — 2. unipolar b. was the cause of 3. multipolar c.— outdoing 4. e. stepping forward 4. having one centre of power 5.c eclipsing e. advancing 6. surpassed f connected 7.6 accounted for & able to recover quickly from a setback 8.4, surged h. exceeded 9.2 related i. having more than one centre of power 0.0 resilient j. tigen sharply B. For each phrase in the list below, find in the text a word or phrase given in bold that is similar in ee pevada a change'in positon had controf over ~ roughly calculated ©“? people who have obtained a university degree . more and more all the time substances used to make a product (two words) . Stidden rises. for tompletely . periods of reduced business activity . develdping Beenaveywne 3114. Major and emerging world economies HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text. Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Elhasal a zéldhasti'? Jelenleg egy varatlan és ,,féktelen” dollérgyengiilés* a legna- gyobb veszély'a vilégeardasdg szamara ~ Allitja a Nemzetkizi Va- lutaalap (IMF) legfrissebb elemzése’. A nemzetk6zi szerveret sze- rint a befektetdk’ abban a reményben veszik az amerikai dllampa- pirokat’, hogy a zéldhasttdrfolyama a fob devizakkal szemben nem esik Létvényosan’ a kézelj6vében, am a duzzadé amerikai Kiilkereskedelmi hiény” ezt egyre inkébb megkérddjelezi. wAlacsony a valdszintisége" ugyan, de roppant kockazatok- kal jarna a vilég pénziigyi rendszereire az a forgatdkonyv, amely szerint a dollar esetleges gyengilése Gnmagit erdsité folyamat- 14° valtozik” ~ idézi* a Bloomberg az IMF viliggazdasdgi sta- bilitasrél” sz616 elemzését. Rodrigo De Rato, az IMF igyvereté igazgat6ja egy mult heti nyilatkozataban’* ugyancsak a labilis kereskedelmi_mérlegeket", a ‘onista_gazdasdgpolitike iérnyerését”, valamint a magas energiadrakat sorolta a viléggaz- dasaigra leselked6 legnagyobb veszélyek kizé". “—~Kedden kéuzétett statisztikik szerint” jiliusban az amerikai kiilkereskedelem hidnya rekord szintet, 68 millidrd dollart ért eF s ezzel valdszintileg minden id6k | itje” jm Ossze azidei harmadik negyedévben”. A hidny jelentds részét ~ a driga olaj mellett — a Kindval szembeni deficit okazza". Nem véletlen, hogy az amerikai gazdaségpolitika minden rendelkenésre alld eszkizzel" probilja elémi, hogy Kina adjon lehetéséget —Washington szerint tlértékelt — fizetdeszkiize™, a tan erdsédé- sére. Ha ez bekovetkezne, az amerikai kills6 egyenstily is kevésbé lene riaszt6. A helyzet ugyanakkor nem Kifejezetten ebbe az irdnyba mutat™. Pekingben kézzétett statisatikak szerint augusz- tusban immar negyedik hénapja egyfolytaban rekord magassig- ba szdkik a kinai kereskedelmi tébblet”. Ax IME szerint a devizadrfolyamokra a kizeljgvében™ még a jelenleg tapasztaltndl” is nagyobb volatilitas” lehetjellemz6. Ez elsdsorban a dréga olajnak, s az ebbél ered6 infliciés nyomés- nak", valamint az amerikai gazdasdg lassuldsdnak tudhaté be™. Figyelé 2006. oktéber (1988 n) 1 greenback 2 unexpected and unbridled weakening ofthe dollar 3 the biggest threat 4 Intemational Monetary Fund 5 latest analysis 6 investors 7 government securiites 8 exchange rate won't fall dramatically 9 foreign trade deficit 10 itis not very likely 11 self-reinforcing process 1 cites 13 stability ofthe world economy 14 managing director 15 statement 16 unstable trade balance 17 increasing prevalence of protectionist economic policy 18 listed among 19 according to statistics published 20 hit a new high 21 highest deficit ever 22 quarter 23 a significant proportion of the deficit is caused by 24 by every means available 25 overvalued currency 26 doesn't point inthis direction 27 trade surplus 28 in the near future 29 currently experienced 30 volatility 31 inflationary pressure arising from this 432 can be put down tothe slowdownENGLISH TEXT A more competitive dollar is good for America The dollar's dent dectide is just a prelude to the more subStasdal fll needed to shrink the US current account deficit, running ata nearly $800bn (€563bn) annual rate, about 6 per cent of gross domestic product. Ifthe dollar remained at its current level, the US trade deficit would continue to expand because Americans respond to rising incomes by increasing imports mote rapidly than foveign buyers raise their imports from the US, Although 2 faster growth rate in the rest of the warld would raise US exports and reduce the US trade deficit, experience shows that even substantially fester foreign wth would have only-a very small impact. ower dollar has to do most of the work of reducing slob trade imbalances America’s trade deficit must be financed by a capital inflow from the rest of the world. Since for- ign investors are no longer buying significant amounts of US stocks or direct investinents in US businesses, the yast bulk of that capital inflow must take the form of purchases of US bonds. ‘The largest purchasers of this debt are foreign governments and their related investment funds. A big uncertainty hanging over the dollar is how long those governments will be willing to keep adding to their dollar holdings, knowing that they will eventually incur losses as the dollar falls The falling dollar should not be seen as a problem forthe US economy. A more competitive dollar villraisenetexpots, reducing the probability thatthe current weakmess wll turn into an outright reces- sion. Looking further ahead, as the US household saving rate rises from its current low of nearly zero to amore norma level, consumer spending wil slow, driving down aggregate demand, A declining dol- lar vl then help to maintain growth and employment by raising exports and causing American con- sumers to shift their spending from imports to domestically produced goods and services. Martin Feldstein Financial Times, 15 October 2007 (1594 n) (0) important terms current account (CA) deficit - this exists when a country’s total imports of goods, services and transfers is greater than the country’s total export of goods, services and transfers. trade deficit - a negative balance of trade in which a country’s imports exceeds its exports (the CA deficit includes the trade deficit plus net income payments and unilateral transfers) global trade imbalance — a situation in which some countries have a high trade surplus while others have a high trade deficit capital inflow ~ money coming into the country dollar holdings ~ the amount of dollars countries keep in reserve aggregate consumer demand - the total demand for goods and serv- ices in an economy (consumer demand is from people rather than businesses) 10 1514. Major and emerging world economies HB Extended vocabulary prelude to sg an introductory event preceding another more important event shrink reduce or make smaller the vast bulk of by far the greatest proportion of hanging over overshadowing, casting doubt over incur (losses) suffer ‘outright complete Comprehension questions 1. Why does the dollar need to fall even further than it has? 2. How big is the USA’s CA deficit in dollar terms and in relation to GDP? 3. Why will the US trade deficit continue to grow even if the dollar remains at its present level? 4. In what way would faster economic growth in the rest of the world help reduce the US deficit? How big ‘would the impact be on the US deficit? 5. How must the USA’s trade deficit be financed? 6. What change is noticeable in the behaviour of foreign investors? 7. What form will most of the foreign capital inflow have to take? 8. Who are the largest buyers of US bonds at the moment? 9. What might cause governments to stop buying US bonds? 10. According to the article, in what way is a weak dollar good for the US economy?DISCUSSION QUESTIONS A. Discussion questions related to the text |. What do you think are some of the deeper causes of the huge US trade deficit? 2. What are some of the positive and negative effects of the CA deficit on the US economy? B. Additional discussion questions Do you think that the USA’s growing CA deficit is sustainable? Give reasons for your answer. 1, What are some of the reasons for the spectacular economic growth of China? 2. IsChina’s economic expansion something the world should be worried about or should it be seen as an opportunity worth exploiting? 3. What impact would a US recession have on the global economy? ROLE-PLAYING EXERCISES Ow Book 22.The ethics of WERRDIowing Student Examiner Your friend is shocked when he finds out that his company is Hele depsig of nec waste in the fdcatlandiit- His Supervisors have told him to mind his own business. He comes to you for advice: should he just forget about it or take it to the local newspaper? 28. Making your office more environment-friendly Student As the secretary ina small toxic-waste dispos- al company, you've become aware that your company is illegelly disposing of medical waste in @ local landfill. Your supervisors tell you to forget about it. But you're disturbed about it. You ask friend for advice about tak- ing your story to the local newspaper. Examiner You are the office manager in charge of a cam- paign to make your company more environment- friendly. Your CEO has asked you to present alist of proposals for environmental improvements in the office building where you work. What are your proposals? Your company is concerned about the envi- ronment, and is therefore running a cam- paign to make your entire office building more environment-friendly. You've asked your office manager to come up with some proposals.boandots 15. Societal issues and the economy GPM TAODUCTION TO THE TOPIC... + allocation: redirecting resources Gulden AAI aS eens The government budget = 2 z we itoicerdeel | acodorde This isthe governments fingncial plan, which includes the estimated revenues and expenditures for fétu hcg yee ¢ Rational budget is dfawn Up évety year and is presented to Parliament by the Minister “Or Finatice. The ftajor souree of government revenues is the income from taxation and Re Wh a revenues do not cover the expenditures, the budget is in deficit. One way of covering the deficit is tobor- row capital by issuing and selling government bonds. Te at oandrrean Red fi Areas of public expenditure Naa PERL TAR eo Be meg ‘The government makes corrections in 3 incoi inequalities among citizens through jncome and weal inequ transfer payments, such as pehsions, Social Security and disemployinent benefitg, Transfer payments a Tah Age sug pa also include imterest payments on the nati ie nd Subsidies id to farmers and others, [tip gener- ally accepted that a government should provide a wide range of goods'#hd services, sich aSlaw and otder, (courts, the police) total debs , public infrastructure and culture, There are services, suchlas educa- tion and health care, which are provided by both the market and the State. Moose Lu Oita des ¢ DORON | — quodiite Se The perbioN Stent SOROS = MEO EN ts Ohio, The government has the responsibilty of taking care of relied people, One can receive a pension from the social security authority. In the framework of th peng System, the pension contribution of the active population is paid \o pensioners. Membership ina private pension fund also enSures payment for peopl reaching REN aE eit payments are invested in safe state securities to earn interest for them. In the adtvaince-savjfigs Systein the money accumulating ip their ersqqal accounts will be paid in the form of an annuity or can be inherited. Valkstarf pena teen Security for the years after retirement. Leer t ort =o ACR JOU pn aa Bases: q The ageing population —~" While overpopufation is oie ofthe major causes ofthe problems the third world is facing, the developed countries’ welfare’ ies have a rapidly ageing population. The number of rpjred people has never _ gator shan Wis Today, anc will comin to,grow ip the future The increase in life peat -makes dis- Opoitiondte Claims upon the s6dial safety net (pension system, health care system, social benefits et.)Vocabulary exercises based on the introductory text A. Match each item in the left-hand column with one similar in meaning from the list opposite. 1. society a. average number of years a person is expected to live 2. framework bb, system of social insurance 3. indeficit c. becoming older 4. transfer payments d, regular payment to the state 5. social security €. money accumulated to be paid later 6. contribution £ gradually increasing in amount 7. advance-savings g showing debit balance 8, accumulating h. the community 9. ageing i. income received from the state by people | who give no goods or services in return 10, _ life expectancy j. structure B. For each item listed below, find in the text a word or phrase given in bold that is similar in meaning. assigning for new (ie.different) purposes sums of money received by the state sums of money spent obiaimasaloan —aguspntntenentsintnnanentneeneneee safety ensure/offer retired people withdrawal from active working life received from someone who has died independent, supported by contributions freely given esse 8. a715. Societal issues and the economy HUNGARIAN TEXT Exercise 1. Cover the English words and expressions given on the right and try to guess the English equiva- lents of the underlined parts of the Hungarian text . Exercise 2. After checking your guesses against the equivalents listed on the right, give an oral summary of the text in English. Almunia: az unié tagdllamaiban minél elébb reformok kellenek Reformok nélkiil az eléreged6 eurépai térsadalmak' néhdny é¢ milva nem fogjdk tudni kiadésaikat finanszirozni; minél el6bb indulnak meg a reformfolyamatok’, annél kevesebb lakos- sdgi dldozatvallalissal‘ jarnak - mondta Joaquin Almunia, az Eurépai Unié gazdasigi és pénziigyi biztosa‘ a Libération cimt francia napilapban pénteken megjelent interjujaban. Az Eurdpai Uni lakossdgdnak’ szdma 2050-re nem fog val- tozni, de a 65 éven felettiek’ sz4ma 58 millidval fog novekedni’, a munkaképesek’ szdma pedig 48 milliéval fog cskkeni. Jelenleg négy aktiv munkavallals tart el” egy nyugdijast’, 2050-ben mar ket aktiv feladata lest ez. Ha semmi nem valtozik addig, az id6- sekkel is foglalkoz6 ellatérendszerek azaz az egészségiigy, a szocidlis ellétés” és a nyugdijrendszer Ossze fog omlani™ - hangstilyozza" a pénziigyi biztos. ‘Almunia felhivta a figyelmet: egy dllam nem jelenthet csédat", de keriilhet” olyan helyzetbe, hogy a kizseférénak" az ésen*, és a nyugdifiak biz- tosftisdhoz" a szocidlis jérulékok" emelésén kival nem marad mas lehetésége. Ez a szocialis modell végét jelentené Eur6paban, A reformoka biztos szerint a lakossdg egy része sedméra nyil- vinvaléan hétralépést® jelentenek. De azoknak, akik ijeszt- getésre* hasznaljak a reformokat, észre kellene venniik*, hogy ahol megvaldsultak” ott még soha nem vezettek negativ ered- ményre”. Bizonyos szocidlis csoportoknak le kell majd mondani- uk kivaltsdgaik* egy részérél a kézjé érdekében”, de minél elébb vezetjuk be a reformokat, anndl kevésbé lesznek féjdalmasak. Vildggazdasdg 2006. november (1339 n) 1 ageing European societies 2 finance expenditures 3 reform processes 4 readiness to make sacrifices 5 economic and financial commissioner 6 population 7 people over 65 8 will increase by 58 million 9 active workforce 10 workers provide forisupport UI pensioner 12 social security systems 13 social care 14 will collapse 5 stresses 16 declare bankruptey 17 can get into 18 public sphere 19 debt payment 20 tax hike 21 provision of pensions 22 social contributions 23 a step back 24 scare tactics 25 notice 26 where they were implemented 27 result 28 will have to give up their privileges 29 forthe sake of the public goodTIP ENGLISH TEXT When I’m 64 HO acer odode tira wound Falling birth rates, longer fie spaus and the imminent reliement of the baby boom generation have combined to cast. ee eee Europe. Betws now a d 2030, the Continent will lose 20 million workers. These are demographic changes of a ritaghitude not Seen since consecutive world wars ravaged Europe in the first half of the twentieth century. The proportion of people over 65 years of age will rise by more than 50%, Instead of four workers to support every retiree, well have only tnvo, with disastrous consequences for our pension systems. The challenges, though, are more than just fiscal. Many of today's retiring workers have critical skills that Europe will need to stay competitive in an increasingly globalized economy. Whether or rot we can maintain the pension plans we have now, we simply can't afford to be without those skills and manpower. If we can't produce enough younger workers to replace the retirees, at some point Europe may find itself with an unusual problem: more good jobs than skilled workers to fill them. The threats to Europe’s economic growth prospects are self-evident. The demographic problem is exacerbated by state pension plans that encourage employees to retire early. What's necessary isa cultural transformation: changing the preferences for early retire- ment among workers, while employers overcome their bias toward hiring younger workers. ‘Many older workers would like to keep on working, but can’t because they would lose benefits by doing so, or because of inflexible corporate policies about part-time or lexitime work. More people than at any time in history get not merely compensation but pleasure and a sense of aay from their work. Most of us could imagine doing something interesting and fulfilling, as_ 1 as gainfully economic, after we reach eligibility for retirement. Keeping these people in work ld be a triple win: It would reduce the strain on government resources even as it provides more Skilled workers fr businesses and moze divers and productive careers for people so that "living longer” really does mean "living better”. By Hans Ulrich Maerki The Wall Street Journal, 29 October 2007 (1770 n) (0) Important terms baby boomer generation — those born after World War Il from ‘1946-1964 (in 2007, those between 43 and 61 years old) demography — the study of changes in numbers of births, deaths, mar- rages, diseases, ec. (demographic changes, demographic problems) retiree - a person who has retired flexitime — 2 system in which employees can choose at what time they start and finish work (also called flextime) ‘compensation - money paid for work done gainfully economic — generating income (ie. of economic value) ligibility for retirement — the state of being qualified/enttled to retire 10 mul15. Societal issues and the economy Wi Extended vocabulary — lifespan the number of years that a person lives imminent retirement retirement in the immediate future cast a long shadow (idiom) cause doubt or uncertainty magnitude size or importance self-evident obvious, clear bias one-sided inclination, prejudice Comprehension questions What three demographic features are causing uncertainty in Europe? . What impact will baby boomer retirement have on the labour market in Europe over the next 20 years? . What will the ageing population mean for the pension system? |. Besides financial problems related to retiring workers, what other major challenge will Europe face? . In what way does the government make this demographic problem even worse? . What sort of a “cultural transformation” is needed to address this demographic problem? Often workers of retirement age can’t continue working even if they want to. Why is that? 3. Inaddition to earning money, what other benefits does work bring to people? 1. Inwhat 3 ways would everyone win if people who are eligible for retirement were kept in the workplace?| DISCUSSION QUESTIONS A. Discussion questions related to the text 1. Whose responsibility is it to provide pensions for retired people ~ the government's, or should pensions be the personal responsibility of private citizens? Why? Where should the money come from to finance pensionst Can the government afford to pay pensions without at the same time raising taxes? B. Additional discussion questions higher education? ll] ROLE-PLAYING EXERCISES a, Top management: to bite youth or wisdom? Student Which sectors of the economy should be financed by the state? How do demographic problems affect public spending? ‘What are some of the changes that Hungary's participation in the Bologna process has brought about in Examiner Youre the HR Director at an international com- pany that is seeking to hire a new top manager. Two people have been shortlisted for the job ~ a talented 30-year-old and a 50-year-old with a solid track record. Your CEO would like to know how the company would benefit from hiring one or the other, and the possible drawbacks. 30, Incentive scheme Student ‘As the CEO of an international company, you are faced choosing between 2 candidates who have been shortlisted for a top management job ~ a 30-year-old and a 50-year-old. You want your HR Director to think about the benefits of hiring one or the other. Examiner As sales manager at your company, your task is to develop a new incentive scheme for your sales staff. Should pay be based on individual perform- ance or based on the team, in which case profits are shared? You meet with a colleague to decide an the pros and cons. You are the colleague of the sales manager, whose task is to decide between an incentive scheme based on individual performance or based on team performance. You meet to dis- cuss the pros and cons of both. 101