Hungary Socialists upfront about spending cuts this election

By bne IntelliNews January 28, 2010

Kester Eddy in Budapest -

Hungary will continue to curb state spending, re-start stalled reforms in the public sector, and improve transparency in both government and the corporate world if a Socialist government is re-elected in April's general election, claims Attila Mesterhazy, the Socialist Party's (MSzP) prime ministerial candidate.

In a meeting with the foreign press in December after he was selected as the governing party's PM candidate - the current "caretaker" premier, Gordon Bajnai, is standing down - Mesterhazy, a 35-year-old economist who has served in each of the three Socialist-led governments in Hungary since the transition to democracy 20 years ago, also promised to eschew "promises to the people that are not realistic" in the campaign leading up to the first round of elections on April 11. "That's important; it's why there has always been some disappointment among the people after the elections," Mesterhazy said.

Mesterhazy was referring to the decision to make cuts in state spending in 2006, which had been tough but necessary because of the deteriorating government finances. This had inevitably "led people to hate us," since the Socialists had made no mention of such cuts in the campaign for the 2006 elections, which the party won. To make matters worse, an audio recording surfaced in September of 2006, allegedly from a closed-door Socialist Party meeting, during which the then-PM Ferenc Gyurcsany could be heard admitting they had lied to the public for the "last one and a half to two years" in order to get elected.

Mesterhazy stressed that the tough decisions his party has made while in government have resulted in financial stability, with Hungary expected to meet its budget deficit target of 3.9% of GDP in 2009 and 3.8% in 2010. "With these figures, Hungary will be one of the best in Europe. This is quite a new phenomenon. That's why I think the [PM] Bajnai programme has been successful... that will serve as a basis to build a new economy, with economic growth of 3.5-4% from 2011," he said.

Doomed mission

However, the chances of a third consecutive Socialist victory have been looking extremely thin for some years: recent events, including a wave of scandals at public companies and the twin blows of state cutbacks and the world financial crisis - resulting in a contraction in the economy of 6.5-7.0% in 2009 - have left the Socialists trailing in the opinion polls. Fidesz, the main opposition party led by former anti-communist student activist Viktor Orban, has a 63% rating among decided voters based on promises to create jobs, improve law and order, and increase state involvement the economy.

Even more alarming for the Socialists is the rise of Jobbik, a far-right party that has attracted many voters in areas such as the deprived northeast of the country, a former Socialist stronghold. Mesterhazy, who accepts that Jobbik "asks the right questions, but gives wrong and unacceptable answers," insists he is not on a doomed mission. "We need national and [Socialist] party modernisation. We need reforms in the economy and society. We have failed [to fulfil] these reforms in the last eight years, sometimes due to us, sometimes due to the harsh rejection of opposition. We have to stop these kinds of [antagonistic] politics, because we cannot further develop Hungary," he said.

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