* Closure comes after report of minister's helicopter trip
* Journalists try to resuscitate paper, talks with owner
* EU Commission says "very concerned" about developments
By Marton Dunai and Gergely Szakacs
BUDAPEST, Oct 10 Journalists at Hungary's main
leftist daily Nepszabadsag gathered on Monday to mull ways of
resuscitating the paper, with a senior editor saying an abrupt
move to close it was meant to silence criticism of the
Owner Mediaworks said on Saturday it had suspended the
60-year-old newspaper and its employees after the publication
piled up significant losses despite cost cuts. It said it would
revamp the organisation.
The closure was the latest wrinkle in a shake-up of
Hungary's commercial media landscape, where businessmen seen as
close to the right-wing government have steadily enhanced their
Since coming to power in 2010, Prime Minister Viktor Orban
has locked horns with foreign partners over reforms which
critics say have eroded democratic checks and balances and
weakened the independence of the media.
"The Nepszabadsag editorial team wants to stick together and
carry on working," deputy editor in chief Marton Gergely told
Reuters in a temporary shared office where staff gathered to
discuss approaches to obtaining severance, acquiring the
Nepszabadsag brand and securing funds for a fresh news outlet.
Gergely said that Mediaworks' business arguments did not
hold up as losses appeared relatively small over the last two
years and journalists had taken two pay cuts of 10 percent each.
It was unclear how much money these cuts had saved Mediaworks.
A Mediaworks statement said the newspaper had incurred
losses worth 5 billion forints ($18.4 million) since 2007 due to
a fall in circulation, and that it was on track for a
"significant" loss this year as well.
"We believe the (closure) happened because of what we were
doing," Gergely said. "It is not necessarily due to the coverage
of the past one or two weeks. The paper was shut down because
they felt we could not be disciplined otherwise."
In its final edition on Saturday, Nepszabadsag reported that
a minister in Orban's government used a helicopter to fly to a
wedding. Earlier it also reported that central bank Governor
Gyorgy Matolcsy had employed his girlfriend in lucrative jobs
Mediaworks executives were not immediately available for
comment about the future of the newspaper, in which the
Socialist party held an almost 30 percent stake until 2015.
Nepszabadsag (People's Freedom) was founded during Hungary's
abortive popular uprising against Soviet domination in 1956.
Government spokesman Zoltan Kovacs has said press freedom is
"doing well" in Hungary. Orban's Fidesz party has said it
regarded the closure as a "reasonable business decision" with a
party vice chairman saying it was "high time" the paper shut.
The European Commission, which has clashed several times
with Orban over reforms affecting the media, the judiciary and
central bank, expressed alarm about the latest development and
said media freedom and pluralism were at risk in Hungary.
Nepszabadsag is wholly owned by Mediaworks, a company
controlled by Austrian businessman Heinrich Petzina, who has
long had ties to Hungary's top business and political circles
but whose main partner fell out of favour with Orban this year.
Petzina's interests range from chemicals company BorsodChem
to FHB Bank, in which he holds a 25 percent
stake. Petzina's main business partner at FHB has been Chairman
Zoltan Speder, who also holds a quarter of the bank's shares.
With Speder's business interests under state investigation,
the fate of the pair's media holdings, including Petzina's
tenure at Mediaworks, appears up in the air. The independent
weekly Figyelo reported recently that Petzina had met with Orban
to talk about Nepszabadsag. Petzina has declined comment.
"The financial investor (Petzina) is getting rid of
Mediaworks," media analyst Gabor Polyak of the Mertek Institute
said. "The only potential buyers are oligarchs close to Fidesz."
Most important television and radio channels have come under
state control since Orban took office in 2010. One of the two
largest commercial TV channels, TV2, is run by a businessman
close to Orban, as well as a major political daily and a
mass-circulation daily that is distributed free of charge.
With Nepszabadsag out, the only notable opposition dailies
left are the small, leftist Nepszava and Magyar Nemzet, run by a
one-time Fidesz magnate who fell out of favour with Orban.
(Additional reporting by Gabriela Baczynska in Brussels;
Editing by Mark Heinrich)