In a decision that may spell opportunity for U.S. investors with ambitions in the Hungarian media market, the socialist-liberal government of Prime Minister Gyula Horn just announced a dramatic downsizing of the nation’s largest terrestrial network.

State-owned Magyar Televizio (MTV), Hungary’s only national web, will lose 1,000 jobs as a result of this recent government edict, enabling the state to save about $1.7 million a year.

Other upheaval is anticipated. Analysts predict that MTV’s well-organized unions will soon respond by striking. But the firings cannot be implemented without parliamentary ratification, and labor action is not likely, say analysts, until lawmakers meet to vote on the government’s decision.

The ruling coalition’s huge parliamentary majority makes it almost certain that the firings will be rubber-stamped by Parliament.

MTV President Adam Horvath said he will resign if forced to order the mass layoffs.

Horvath argued that his administration already has implemented belt-tightening measures. Two weeks ago, the network announced that the production of in-house programming would be decreased, and that the web would rely more on archival material to fill its daily lineup.

The decision to downsize at state TV is widely seen as an admission that MTV is a luxury that Hungary’s government can no longer afford. With the Horn administration now reeling from budgetary pressures, the likelihood exists that the government will next decide to privatize one of MTV’s two national channels.

Len Fertig, president of Central European Media Enterprises Ltd. (CME), the same company with interests in the Czech Republic’s highly successful commercial network Nova TV, said that the economic “difficulty” Hungary is experiencing could compel the government to sell one of MTV’s frequencies. But nothing is certain.

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