PM for talks in Hungary

Prime Minister Eddie Fenech Adami is expected to leave for Budapest tomorrow morning for talks with Hungarian Prime Minister Peter Medgyessy.

This will be the first time Dr Fenech Adami is having talks with a head of government in his capacity as prime minister but not as leader of the Nationalist Party. It is possible this will also be Dr Fenech Adami's last official visit amid speculation that his resignation as prime minister could be imminent.

So far Dr Fenech Adami has hinted he intended to step down as head of government soon but has stopped short of giving a date.

The talks between the two heads of government are expected to focus on their country's final preparations to join the European Union on May 1.

Dr Fenech Adami is expected to call on the Hungarian President.

The prime minister, who will be accompanied by Foreign Minister Joe Borg, is also expected to preside over the official opening of the Maltese embassy in Hungary.

Like Malta, Hungary's economic situation is bleak, with the government recently admitting it had overestimated the strength of the Hungarian economy and underestimated the difficulties of the European economies, which are their market. Last January, the Hungarian prime minister sacked his finance minister, claiming he failed to deliver on his prognosis of a healthier economy.

With 10 million inhabitants, Hungary was part of the Austro-Hungarian Empire, which collapsed during World War I. With the end of the communist system in 1990, the economy experienced a substantial drop in GDP, with a GDP per capita of $9,130. After key reforms were undertaken in 1995, the economy proved to be resilient and by 1999 the national production was back at the level of 1989. The country is now seen as an advanced transition economy owing much to the intense reform progress, a flexible labour market and a sound legal framework.

Dr Fenech Adami is due back tomorrow evening.