Born five days apart in 1938, István Szabó and Jiri Menzel have lived parallel lives as film-makers, writes Daniel McLaughlinin Budapest.

'Ingmar Bergman once asked me why I didn't write my films," recalls Czech director Jiri Menzel. "I told him I didn't have enough up here, and tapped my head. And he said it's not that you need - it's this and this," Menzel laughs, pointing to his heart and his crotch.

Hungarian film-maker István Szabó smiles and nods in agreement, as the two Oscar winners share thoughts on life and the movies for a documentary to mark their 70th birthdays, which they celebrated together in Budapest this week.

If Bergman, the legendary Swedish auteur, was extolling the need for sensitivity and courage in cinema, then he would have found like minds in Szabó and Menzel, who survived spells of great success and relative obscurity, adulation and scandal, to be still making films as they enter their eighth decade.

Born five days and 500km apart in 1938, they saw their nations plunged straight from the horrors of Nazism and the second World War into the Soviet empire, which laid a deadening hand on the arts and used tanks to crush dissent in Budapest and Prague.

Russian troops quashed Czechoslovakia's drive for liberal reform in 1968, when Menzel was only one year into adapting to life as an Oscar-winner. Closely Observed Trains was Menzel's first major film, an adaptation of a novel by compatriot Bohumil Hrabal, and is widely regarded as the high point of the New Wave movement in Czechoslovak cinema terminated by the Soviet invasion.

Menzel went on to film several works by Hrabal, and their shared love of life's simple pleasures and eye for its ironies and coincidences helped make them fine artistic partners, as well as good friends.

Closely Observed Trains is set at a tiny provincial railway station in Nazi- occupied Czechoslovakia, and charts the growing pains and amorous adventures of a shy young clerk, into whose life the reality of war finally explodes.

Like many of Menzel and Hrabal's creations, it depicts the quiet triumphs and disasters of ordinary lives, dappled with unexpected joy and less surprising disappointment, and shows how they can suddenly be caught up in and transformed by momentous events.

British director Ken Loach has called the Czechoslovak New Wave his greatest inspiration, praising the way it "just allowed something to unfold and had a quality of observation: the sense of timing, the unhurried rhythm, the framing of the shots, and the relaxed humour".

Menzel became a master of that technique, seen most recently in his lavish 2006 adaptation of Hrabal's I Served the King of England, which the director fought for years to put on screen - at one point even whacking a rival for the film rights with a cane before a stunned auditorium at an international film festival.

As wry and self-deprecating as Szabó is guarded and aloof, Menzel insists, however, there is nothing complicated about his style - and insists that good casting is vital. "You have to choose faces well because an audience has to look at them for one and a half hours. I have a very simple system with casting - can I imagine that I would want to go with this person on a trip? If not, then I don't choose him."

"I always loved the films of Renoir, and Fellini; the way they saw life was close to how I saw it, and I loved how they make an audience enjoy themselves," Menzel tells Szabó in a documentary that follows them around Budapest and Prague. "But when I first assisted my film-school teacher on set, I was terrible. I would have fired myself at the end of the day one."

Having made a short film while performing his military service, a friend offered him the chance to make Closely Observed Trains.

"Without reading the manuscript I said yes, and straight after military service, I went to the studio to make it. That's when I found out that three good directors had rejected it before it came to me. Maybe they were scared - and maybe if I'd read it first, I would have been scared too."

Menzel's 1967 Academy Award for best foreign film inspired film-makers across eastern Europe, Szabó says. "The film's success made us all so happy, because it was as if our generation had made an impact and we were accepted into the history of film. It was like one of us winning, suddenly the world paid attention to us. It was very important."

Szabó's own Oscar triumph came much later, with his 1981 film Mephisto. It stars Klaus Maria Brandauer as an actor who collaborates with the Nazis to save his career and, like many of Szabó's films, asks how an individual can live a life of honesty and integrity in a society that threatens to crush anyone who does not bend to its will.

"I made the film in light of our experiences from 1945-1980, and they are visible in the film, and things were happening in the world to make the audience sensitive to those issues," Szabó says.

"It was luck and coincidence that, at that time, the intelligentsia around the world was posing that question: 'are we marionettes or do we play an active part in things?'"

The Oscar boosted Szabó's reputation outside Hungary and helped him attract major actors to star in his English- language films, such as Sunshine, starring Ralph Fiennes, in 1999 and 2004's Being Julia with Annette Bening.

But his many admirers at home and abroad were stunned by his admission two years ago that he had been an informer for the communist secret police while studying at film school, after they threatened to prevent him ever working in the cinema. The revelation shed a new and disturbing light on the recurrent themes of Szabó's films - identity, betrayal, power, integrity, ambition - but he was adamant before intense media scrutiny that he had made an acceptable choice at a time of terrible moral dilemmas.

This was 1957, a time of terror in Budapest following Moscow's brutal suppression of the previous year's anti-Soviet uprising, and Szabó said he told the authorities "a lot of nonsense" to distract their attention from a fellow student who had taken up arms in the revolt.

"I am grateful to fate, and subsequently I can be proud of what happened," he said in 2006. "The work for the secret police was the bravest and most daring endeavour of my life, because we saved one of our classmates after the revolution of 1956 from exposure and certain hanging."

The episode is not mentioned in Szabó's birthday documentary with Menzel, and he is loath to talk publicly about it, recommending instead that the curious watch his films to try and understand how his four years as a reluctant informer affected him.

The subtlety of Szabó's psychological studies, and the relative liberality of communist Hungary, allowed him to escape severe censorship, while Menzel was barred from film-making after 1968 but gradually made his way back into the business.

They have seen communism collapse and watched their countries join the European Union and, at 70, they are now planning their next projects for the big screen. "Film is a journey," Szabó says. "And there is not a single film-maker who knows at the start where his film will end."