Vol. 14, Special Issue, 2018

Vol. 14, Special Issue, 2018

  • Csaba Lentner

On the Renewal of Economic Thinking

Prior to the crisis that erupted in 2007-2008, there was a general consensus among the key economic policy theoreticians that financial regulation was not a macroeconomic instrument, and the mission of monetary policy called for the “single aim, single instrument”, while doubts regarding the efficiency of fiscal policy became an entrenched pattern. In this approach, predilection to market participants’ automaticity and the minimization of the state’s role in economy organisation, control and regulation constituted the generally accepted pattern, and central banks operated as “islands” in the world of government finances.

Thus the most important goal expected of monetary policy was the stabilisation of inflation, at a low level, possibly around 2 per cent. The reason for this was that back then the stabilisation of inflation was believed to also stabilise the output gap, and the closed output gap was thought to ensure optimum GDP growth, also accepted for welfare considerations.

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Hungarian Public Finances and Economic Policy

  • Pál Péter Kolozsi – Csaba Lentner – Bianka Parragh

The Pillars of a New State Management Model in Hungary

The Pillars of a New State Management Model in Hungary

Cohesive society, trust and social cooperation are among the social arrangements and meta-institutions required for building good institutions and a well-managed state. Before the global financial crisis, Hungary was characterized by unsustainable public finances, a flawed and irresponsible fiscal policy, and consequently, weak economic fundamentals. This represented a suboptimal state management, with the basics of cooperation between the state and the economic actors were seriously damaged. For this reason, by the beginning of the decade, the renewal of state management and, above all, public finances had become imperative. The first step was the adoption of the Fundamental Law (new constitution), including a chapter on public finances.

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  • József Varga – Sándor Kenyeres

Current Questions of the Transformation of Hungarian Taxation

Current Questions of the Transformation of Hungarian Taxation

In this paper the authors provide an international comparison of the Hungarian tax system. The main claim made in this publication is that although taxes are relatively high in Hungary compared to the regional competitors, and this seriously affects Hungary’s competitiveness, the recent years have seen a number of positive developments in changing the tax system and eliminating the asymmetries of consumption and work-related taxes. This paper provides an in-depth analysis of the transformation of the Hungarian tax system between 2008 and 2017. It sets forth a set of possible tools for reducing the shadow economy and presents the significant measures taken to that effect in Hungary. At the end of the paper, the authors provide an analysis of the paradigm change envisaged in 2018, which will have a substantial impact on the future, and briefly discuss the most important upcoming changes in taxation.

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  • Péter Novoszáth

New Hungarian Economic Philosophy to Improve Households’ Financial Situation

New Hungarian Economic Philosophy to Improve Households’ Financial Situation

As a result of the neoliberal economic philosophical doctrines that spread in the 1980s, decreasing attention was paid by researchers and other experts in the European Un-ion to developments in households’ financial position and consumption in boosting economic growth. This is despite the fact that the examples set by the increasingly faster growing countries, especially India, China, Brazil, Mexico and South Africa, seem to markedly confirm that developments in incomes and household consumption have an increasing role in the acceleration of economic growth. As globalization and the 2008 economic crisis undermined the financial position of households in the European Union, and thus also in Hungary, and a growing part of the population was thrust into increasingly deeper poverty, so people started to become once again aware of the actual consequences of deterioration in households’ financial position on developments in economic growth.

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  • Márton Járosi – Pál Kovács

Energy Policy of Hungary

Energy Policy of Hungary

In Hungary, the energy sector was modernised on the basis of public ownership after World War II. Hungary’s large, centrally controlled and vertically integrated energy systems were established at that time. Simultaneously with the regime change, west-ern-based energy orientation also began in the energy sector and in 1990 it continued with the implementation of privatisation. Hungary’s accession to the European Union provided grounds for and reinforced the process ideologically. This was followed by full liberalisation called “market opening”. The policy of the second Fidesz government, formed in 2014, is characterised by the restoration of an energy policy serving national interests. This process is described in the article in a European perspective.

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  • Petronella Molnár – Szilárd Hegedűs

Municipal Debt Consolidation in Hungary (2011-2014) in an Asset Management Approach

Municipal Debt Consolidation in Hungary (2011-2014) in an Asset Management Approach

The purpose of this study is to present Hungarian debt consolidation, its root causes and features in terms of local governments’ asset management. As an additional aim, it intends to reveal the characteristics of the Hungarian municipal system, the causes that led to debt consolidation and the rule-based measures taken to prevent future indebtedness. The study focuses on the effects of debt consolidation on asset management in the Hungarian municipal system, and particularly on the operation of cities with county rights, as they have important regional duties. There are 23 of them with roughly 2 million inhabitants, thus in the aggregate they represent as many people as the capital city. This article reveals the reasons underlying the difficult financial situation of local governments, the solutions and subsequent impacts on municipal assets.

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  • András Bethlendi

Sovereign Defaults and How to Handle Them

Sovereign Defaults and How to Handle Them

This study shows that since the Keynes-White dispute in the middle of the 20th centu-ry, the global economic policy thinking is clearly determined by White’s views up until today. In the global monetary system, debt restructuring solutions are subordinated to the global economic order, and not to national economy policies, as shown by the recent examples of Greece, Hungary and Ukraine. According to this thinking, basically the debtor is held liable for imbalance and over-indebtedness. Obviously, the system cannot solve balance of payments problems between countries and the ensuing debt crises. The free movement of goods and capital is given an absolute priority.

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  • András Kecskés

Investing Safely and Lucratively: What is New in Hungarian Investment Law?

Investing Safely and Lucratively: What is New in Hungarian Investment Law?#SUP#1#/SUP#

The aim of the article is to give an overview of the development of laws on investments in Hungary. The paper aims to establish the concept of investment in Hungarian law. A key finding is that there is no general, all-encompassing investor concept in Hungarian law, as the definition may vary depending on the act reviewed. The paper outlines the changing role of the central bank in Hungary. As hedge funds have an important role in the financial sector, a brief overview is given of the regulatory changes relating to them. The conclusion of the paper is that the Hungarian trends in investments follows the general worldwide trends.

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  • Bálint Teleki

The Role of Agencification in the Post-2010 Financial Stabilization in Hungary

The Role of Agencification in the Post-2010 Financial Stabilization in Hungary

Agencification has had a major role in the institutional development and handling of the financial crisis in the European Union. In this article it is examined whether this institutional trend, alongwith the institutionalistapproach ofRodrik, has played asimilarrole in post-2010 financial stabilization in Hungary, and if so, exactly how it affected the pro-cess. The focus is on public administration, which was renewed on the Fundamental Law enacted in 2011, and providing a basis for the new legal and institutional framework for the regulation and supervision of the financial markets.

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Hungary's Regions, Competitiveness and Country Image

  • János Amrik – Gusztáv G. Hittig – Zsolt Gál – Judit Bárczi – Zoltán Zéman

Investing in the Future

Investing in the Future

The purpose of this study is to investigate empirically the role of innovation activity in 16+1 cooperation, within the Central and Eastern Europe (CEE). We also identified those internal and external factors, which might cause improvements in innovation performance of CEE companies. Our main focus was on technology-based research and innovations. We applied qualitative research methods. Our findings demonstrate that CEE companies have significant contribution to performance. We found that key success factors of these organisations are based on four elements: knowledge management, access to financial resources, managing formal and informal networks, as well as achieving synergies between technological and non-technological innovations. The preparation of the analytical study was facilitated by being part of a Slovenian-Hungarian MASH European Grouping of Territorial Cooperation and thus, through our cross-border relations, we have more information, we are deeper into the functioning and / or non-functioning EU systems.

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  • Tibor Pintér

The Integration of Hungary into the European Union – Economic Aspects

The Integration of Hungary into the European Union – Economic Aspects

Hungary became a member of the European Union on 1 May 2004, together with nine other, predominantly Central and Eastern European countries. The establishment and tightening up of institutional relations with the European Union started in the period before this date. In the course of the accession negotiations, Hungary had to fulfil a large number of criteria included in accession chapters; and the political deals and legislative harmonization laid the basis for Hungary to be able to succeed as an EU Member State. There is a wide range of approaches to integration, of course: in addition to the political and social dimensions, economic integration is also a legitimate, scientifically used and discussed concept. The statistical data examined in this study show that the Hungarian economy’s state of integration is controversial.

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  • Judit Sági – István Engelberth

Regional Development and Well- Being of Regions in Hungary

Regional Development and Well- Being of Regions in Hungary#SUP#1#/SUP#

The purpose of this study is to formulate policy views from the perceived trends in re-gional development, as measured by the change in regional well-being indicators and urban prosperity factors. The theoretical foundations of these development policies are formulated by place-based regional strategies. Based on the OECD database on well-being indicators, ranking by the Global Urban Competitiveness Research Centre and the International Congress and Convention Association, the authors have found that despite regional disparities and the centrum-periphery gaps, well-being in Hungarian regions has improved. Moreover, Budapest has good potentials in strengthening connections and accelerating development, and may display its advantages in attracting global production factors.

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  • Dávid Fekete

Latest Results of the Győr Cooperation Model

Latest Results of the Győr Cooperation Model

Nowadays partnership cooperation and city networks are of increasing significance in the operation of large cities. The essence of the model is that the key to local economic development, boosting innovation and increase in competitiveness is close cooperation between higher educational institutions, economic stakeholders and governing bodies to form the future of the region. Győr, a county capital, is the 6th largest city in Hungary. It is the centre of the most rapidly growing economic region, with its main employer being AUDI Hungaria, which in 2017, employed more than 12,000 people directly and nearly another 10,000 indirectly. The Győr Cooperation Model has four main stakeholders at the moment: the Hungarian government, the Municipality of Győr, the Széchenyi István University and the economic partners, especially AUDI Hungaria.

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  • Lajos Veres

The Current State and Future of the European Danube Region Strategy (EDRS)

The Current State and Future of the European Danube Region Strategy (EDRS)

The European Danube Region Strategy (EDRS) is a macro-regional development strategy and Action Plan for regions and countries in the Danube River Basin. Its purpose is to regulate the sustainable development of the Danube macro-region and the protection of its sites, landscapes and cultural values. The strategy plays a particularly important role in promoting sustainable transport, in linking energy systems, in environmental protection, and in the preservation of water resources in order to improve the business environment and offer a wide range of opportunities for economic development in the macro-region. This study presents the European Danube Region’s Strategic Action Plan and its priorities, paying special attention to Hungarian activities and businesses.

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  • Péter Szatmári – György Suha

International Development Policy Structures for Cooperation in Science, Technology and Education in Hungary

International Development Policy Structures for Cooperation in Science, Technology and Education in Hungary

In the context of Hungarian development policy, scientific and educational cooperation has a key role. The primary aim of this paper is to give an overview of the significant elements of the current international development cooperation and international humanitarian activities in Hungary. Secondly, it analyses, in a dimensional approach, the opportunities of policy and organisational structures and funding mechanisms for science, technology and innovation in developing countries. This article recommends more subtle ways of reforming political decisions that could support innovation with a deeper insight into some aspects of Hungarian “best practices”. Finally, it touches upon issues of tertiary education including the identification of funding instruments and interactions between the private sector and government actors.

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  • Gábor Kutasi

Stability of CEE Banks in the Crisis Years. Capital Adequacy and Too-Big-to-Fail Parent Banks in CEE

Stability of CEE Banks in the Crisis Years. Capital Adequacy and Too-Big-to-Fail Parent Banks in CEE

The paper analyses the factors of capital adequacy in the banking FDI of Central and East European countries by relying on the Bankscope database. The main hypothesis is that parent ownership mitigated the impacts of the financial crisis on commercial banks, as parent banks capitalized those affiliates which turned red in household and corporate lending. This type of cross-market rebalancing is tested by a regression analysis. Several different factors were identified such as the too-big-to-fail phenomenon of parent banks, the FX rate volatility, the changing monetary environment represented by a 3-month market rate, the fiscal shock caused by sector-specific taxes and the risk of debtor failures represented by proxy of non-performing ratios.

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  • István Tózsa

Hungarian Country Equity

Hungarian Country Equity

This study tries to shed light upon the unfavourable Hungarian reputation in Europe and the value of Hungarian country brand. In doing so, it explains the components and the formation of country image, association, awareness, loyalty and equity as well. The study concludes with showing the measures with which even small countries can improve their rankings in Simon Anholt’s global nation brand and good country index charts. These charts are based on the largest scale social big data study ever conducted and they exercise influence on the countries’ economic prospects. The study also reveals the global regions where the Hungarian government should focus country marketing in order to achieve the most rapid economic benefits.

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  • László Árva

Economic and Technical Factors Behind the Rise and Fall of Economic Globalization and Some Consequences in Hungary

Economic and Technical Factors Behind the Rise and Fall of Economic Globalization and Some Consequences in Hungary

Although globalization has been going on for quite a time, after 1970 it took new forms. Foreign direct investments were made in increasing amounts just to optimize the value chains of large transnational companies. The activities requiring unskilled workers were outsourced to underdeveloped peripheral countries like China, Vietnam and Malaysia in Asia, and after 1990, to Romania, Slovakia or Hungary in Central and Eastern Europe. At the same time the activities that require skilled and high-quality labour were kept in Western Europe. TNCs made profits on the difference between the low wages paid in peripheral countries and high prices charged in developed ones.

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Social Policy

  • Judit Sági – Csaba Lentner – Tibor Tatay

Family Allowance Issues

Family Allowance Issues

Decline in the desire to have children is a common problem in the developed world, and it is a challenge in post-soviet countries, including Hungary. Changing lifestyles, perceptions and financial stress are the underlying reasons. The Czech, Slovakian, Spanish, Portuguese, Irish and French government interventions are analysed with focus on family subsidies and fiscal policies, in comparison to the decisions taken by the Hungarian government after 2010. Research is built on the assumption that child benefits (family allowances and housing subsidies) increase the willingness to have children.

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  • András Giday – Szilvia Szegő

Towards the “Child-to-Parent” Based Pension Allowance (“C2P”)

Towards the “Child-to-Parent” Based Pension Allowance (“C2P”)

Our basic assumption is that the pension reform, paid employment and child rearing (including housework) are inextricably interlinked and a policy for one “life stage” cannot be reformed without consideration to the entire family life. The proposed child-to-parent based pension allowance (“C2P”) aims at remedying the worsening interconnectedness of two different deficit types: population and financial deficit in the pension regime. The demographic basis of a sustainable population and pension scheme necessarily includes children. We discuss a model which can improve interaction between child-rearing and the pension scheme. The current pension schemes typically allocate only a minimal allowance (about 2-3 per cent of the total pension budget) to those who raise children.

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  • Bence Balassa – Tamás Bezsenyi

The Organisation of Accelerating Economic Offenses During the Change of Regime

The Organisation of Accelerating Economic Offenses During the Change of Regime

In his book titled The Shape of Time. Remarks on the History of Things, George Kubler criticised the nature of chronologically and linearly approached and explained historical concept. He claims that applying biological metaphors to the periodical changes in history results in the adverse consequence that it presumes repetitious life cycles in different eras of the past. Shaping a new criminal method or trick is mutatis mutandis an initial sequence-starter object, just like a painting projecting a new, original ap-proach. However, not only the existence of the original work of art is necessary, it must be subject to reliable verification, we cannot always identify the first perpetrator of the given criminal method.

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  • Tamás Prugberger – Hilda Tóth – Andrea Szőllős

The Development of the Hungarian Labour and Public Service Laws After the Regime Change

The Development of the Hungarian Labour and Public Service Laws After the Regime Change

The first Hungarian government that took office after the change of regime was also the first in the post-communist region to codify regulations similar to the West-European labour and public service law. The intent of the new Hungarian codification was to reconcile employers’ and employees’ interests. Hungary joined the European Union on 1 May, 2004. In the course of the accession negotiations, many labour law directives were incorporated into Hungarian law and order. Therefore, our labour law regulations could be regarded as EU-compliant. When the legislature re-codified labour law in 2012, the aim was to confront international economic challenges so as to make labour law regulations more flexible and increase employment and economic growth. Meanwhile, significant modifications in the public sector directly served this goal by establishing a new life and career model for civil and public servants.

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Religious Policy, History and Ideologies

  • Stephen Count of Bethlen

The Role of Calvinism in the Development of Modern Economy

The Role of Calvinism in the Development of Modern Economy

In 2017 the world has celebrated the 500th anniversary of Reformation, for this occa-sion countless events and publications commended the significance of this historical event, thus the work of Martin Luther and of course John Calvin as well. Surprisingly, the economic aspects of Calvin and Calvinism have not been stressed, although it seems that the national economy literature, but from other point of views in the scientific world, such as theology, political sciences and history has been controversially working for over more than a century about this topic. This study seeks to fill this gap after the jubilee year. It is achieved by colliding the two extreme positions that Calvin has no effect on the economy or, on the contrary, they see him as the forerunner of capitalism.

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  • Z. Elisha Bán

A Religious Order on Trial. Cistercians in Socialism

A Religious Order on Trial. Cistercians in Socialism

In this historical retrospection, as a member of the order concerned, I recall the disgraceful harassment our convent underwent as I myself experienced or heard as a contemporary. Although others have also described these events with historical im-partiality, personal evidence is perhaps not futile at a point when the last “witnesses of great times” are passing away. With my comments and evaluations I do not intend to pass infallible judgements on people, rather I would like to give graphically render all the likeable and annoying people I met in my life. In order to present unity, continuity and interrelationships in the historical period and in the interest of maintaining the accuracy of certain dates, I rely strongly on the doctoral thesis written by Eszter Cúth Gyóni in 2014 (The history of the Cistercian order in Hungary after 1945), who based her research to a major extent on the minutes of the security organisations of the single-party state.

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  • Miklós Kásler

Ignaz Semmelweis, the Saviour of Mothers

Ignaz Semmelweis, the Saviour of Mothers

The author describes the life of the most important Hungarian physicians, Ignaz Semmelweis, the circumstances surrounding his death, the story of his discovery, and reactions by his contemporaries and the next generations. He focuses on the historical, intellectual and scientific historical relations that paved the way for Semmelweis’s thesis, its proof and its acceptance. In the opinion of posterity Semmelweis was an excellent researcher and a great humanitarian, who fought for others’ lives until his death without sparing his own health. His tragic fate was raised to heroic heights by the fact that he did not live to see the practical use of his life-saving discovery, and even his death was caused directly by the very disease he had described and identified a prevention for.

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  • Adél Vehrer

Táltos, Witch, Incubus, Succubus and Other Beings in Hungarian Folklore and Mythology

Táltos, Witch, Incubus, Succubus and Other Beings in Hungarian Folklore and Mythology

The study of Hungarian people’s folk beliefs has long been a major field of research in ethnography. Studies focus on rural people’s theories of the functioning of the world, mythological figures and people with supernatural powers. In folk culture this worldview and knowledge was passed from generation to generation up until the second half of the 20th century. However, hardly any of these mythological figures have survived in the public mind. This is exactly why research in this topic and a summary of the previous achievements are important, and this study will raise a few typical and important questions.

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  • Antal Birkás

The Protestant Reformation: Origins, Impact and Heritage

The Protestant Reformation: Origins, Impact and Heritage

By the end of the 16th century the different branches of the Reformation had created their own churches, or denominations, in the Carpathian basin. Over half the total population of Hungary and Transylvania were Calvinist, about a quarter were Lutheran, while the remainder were Unitarian, Catholic, and Orthodox believers. Therefore nearly 90% of the population were Protestants. The first part of this study discusses the beginning of the Reformation in Hungary and the way it spread. In the second part I analyse the heritage of this spiritual movement in relation to four different fields.

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Academic Workshop and Reviews of Books About Hungary

  • Géza Sebestyén

Proactivity and Innovation as a Means of Central Bank Renewal

Proactivity and Innovation as a Means of Central Bank Renewal

The 2008-2009 global crisis created major challenges for fiscal policy, monetary policy and the financial regulatory authority at the same time. To respond to these challenges, proactive and innovative solutions were needed. This paper presents the niche volume of the Magyar Nemzeti Bank (National Bank of Hungary), which describes the measures that resulted in the turnaround of the Hungarian fiscal and monetary policy.

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  • Zoltán Sipos

Review of Book Entitled Management for the Benefit of the Public

Review of Book Entitled Management for the Benefit of the Public

The handbook entitled Management for the Benefit of the Public. Public Finance Admin-istration and Management includes studies by well-known Hungarian authors, mainly economists. The book review emphasizes that in addition to being a gap filler innovative reference work, it is an excellent textbook for public service experts as well as for specialists in the early stage of their careers. Significance of the economic policy reforms and the specific need for a new type of public service managers are highlighted in this book. The author of the review points out that the professional methods, needs, required knowledge differ in the public and private sectors.

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  • Ernő Huszti1

On the Change of Regime in Public Finances and the Theoretical and Practical Features of the Hungarian Method

On the Change of Regime in Public Finances and the Theoretical and Practical Features of the Hungarian Method

In the period after the 2007-2008 crisis, the practical methods and academic schools advocating that economic growth and financial stability are maintainable through the state’s proactive and reasonable economy engineering also strengthened in Hungary. One of the most prominent and trendsetting professors of these efforts is Csaba Lentner, who outlined, in his book Change of Regime and Financial Policy, ideas worth familiarizing with and inviting professional discussions. More than a quarter of a century after the change of regime in Central and Eastern Europe, the applied economic policy models and system taxonomies are repeatedly compared and new comparative methods emerge overwhelmingly, con firming the significance of and academic grounding for statecraft, including public financing and good governance.

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  • János István Németh

1956 in the Oral Tradition in Sokorópátka

1956 in the Oral Tradition in Sokorópátka

In her new book, Dr Adél Vehrer, ethnographer, associate professor and an emblematic personality of her generation in this discipline, explores the essence of the national unity created during the 1956 Hungarian Revolution and Freedom Fight, an event that also influenced international history. This review aims to highlight the correlations in this complicated process, in the hope that the book, while serving our generation, will be a cu-riosity in the future. The English translation of the book was published simultaneously with the Hungarian version.

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