Getting Hotter in Hungary

As we have noted on Afoe in recent weeks Hungarian society seems badly divided and faces daunting economic adjustments (and here). This weekend’s municipal elections seem to have resolved nothing, with both sides seeming effectively able to claim some sort of victory:

Preliminary results released by the election office, with some nearly all the votes counted, showed Fidesz winning the mayorships in 15 of Hungary’s 23 largest cities, as well majorities in 18 of 19 county councils.

The Socialists retained power in most of Budapest’s 23 districts and Budapest Mayor Gabor Demszky — supported by the two-party governing coalition — won his fifth consecutive term since the 1990 return to democracy.

Not surprisingly under the circumstances the temperature is rising fairly rapidly. Prime Minister Ferenc Gyurcsany yesterday asked the Hungarian parliament to hold a vote of confidence in his government (and this will now take place on Friday). On Sunday night Hungarian President Laszlo Solyom called on Gyurcsany to step down.

With the outcome of Friday’s vote seeming to lean in Gyurcsany’s favour the opposition Fidesz party are getting frustrated and restless. Opposition leader Viktor Orban is already crying ‘foul’:

Opposition leader Viktor Orban of the Fidesz party said the confidence vote was a “deceitful and worthless trick.” He called instead for a constructive vote of no-confidence in parliament, in which the coalition would be forced to name a new prime ministerial candidate.

While Lajos Kosa, a Fidesz vice president, is being downright provocative:

The budget will come and further austerity measures worth 1,000 billion forints ($4.6 billion) will come too and then in the spring all of us will be chased out (from parliament), all of us, because a general uprising may break out in the country

Indeed the party is currently threatening to boycott the vote:

We will not be there… we won’t take part in this comedy,” Fidesz parliament faction leader Tibor Navracsics told a news conference.

Which all takes us back to that early guest post by P O’Neill where he perceptively warned:

But an older concern is working its way back onto the agenda: how to handle an economic crisis in a member country……However, the risk of the latter type of crisis in a member country is now quite high.”

Hungary’s Reform Programme

Just a bit of background info to accompany Doug’s post on AFOE:

“Everybody in Hungary knows that real income will decrease in the next two years … and very significant social groups will feel their interests hurt. If this simple rejection is transformed and mixed with national radicalism and social populism, then this is a dangerous thing,” Gyurcsany (Ferenc Gyurcsany, Hungary’s Prime Minister) said.

He has said that Hungary aims to meet eurozone criteria on the public deficit, national debt and inflation by 2009 and adopt the common currency by 2013.Last week, Hungary submitted to the European Commission a revised plan to prepare for adoption of the euro. Under the plan, the public deficit would be slashed from 10.1 percent of gross domestic product GDP) this year, the highest in the EU, to 3.2 percent in 2009. Although it is an ambitious programme, some analysts have called on the government to cut spending further in social areas such as pensions, in order to tidy up the country’s shaky finances, a recipe Gyurcsany has so far rejected.

The so-called euro convergence programme, not deemed aggressive enough for some, has also sparked protests in Hungary and led to a huge drop in the government’s popularity. The reforms include ending free public university education and overhauling the state-run healthcare system that is teetering on the edge of bankruptcy, by introducing co-payments for visits to the doctor and to the hospital, among other things. The aim of the plan is to put a greater financial burden on citizens and curtail the welfare state, which is becoming increasingly hard to finance in a society that, like much of Europe, is growing older.

This information also has some relevance to the debate which is raging on this thread about reform.