HUNGARY: Newly re-elected prime minister Ferenc Gyurcsany has pledged to guide Hungary through its greatest period of reform since the collapse of communism, while the long-time leader of the opposition Fidesz party has offered to resign after a dismal defeat.
"The most intensive reform period since the regime change is about to begin," Mr Gyurcsany said yesterday, after his Socialist coalition increased its parliamentary majority in a ballot that centre-right Fidesz was expected to win until just a few months ago.
The Socialists and their allies became the first government to win re-election in Hungary since the end of communist rule, securing 210 of the 386 seats in parliament, against 164 for Fidesz and 11 for the conservative Hungarian Democratic Forum.
"I'm not asking for a grace period from voters," Mr Gyurcsany (44) said. "We will start preparing the activities of the second Gyurcsany government; we will start planning the necessary measures right away.
"I know the challenges we face," insisted the millionaire former businessman and communist youth leader.
Foremost among them is the task of slashing a budget deficit that is the EU's largest relative to the size of the economy, while avoiding austerity measures that could strangle public services and plunge thousands into unemployment. The deficit must be halved by 2008 to allow Hungary to meet EU criteria for adopting the euro as planned in 2010.
Amelia Torres, spokeswoman for EU Monetary Affairs Commissioner Joaquin Almunia, said yesterday that Hungary had paid mere "lip service" to the bloc's budget rules and had until September 1st to present a new plan for balancing its books.
Mr Gyurcsany insists huge savings can be made by rooting out inefficiency in a bloated public sector and that attracting more foreign investment rather than slashing services or raising taxes is the best way to fill state coffers.
Meanwhile, Fidesz licked its wounds after a second consecutive defeat at the ballot box.
"For every mistake . . . I have to take responsibility," said Viktor Orban, declaring that the forthcoming Fidesz conference would vote on his fate as party leader.
"Everybody will offer to resign, the president and the vice-presidents, and the national congress will make a decision and the work continues," he said.
A hero for many Hungarians after calling for the withdrawal of Soviet troops in 1989, Mr Orban was prime minister from 1998- 2002 but lost much support after taking Fidesz sharply to the political right.