Hungary’s center-right Fidesz party could win big election victory

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Center-right party could sweep Hungarian election

BUDAPEST, Hungary — A center-right party could win a two-thirds parliamentary majority in Sunday’s second round of national elections, clearing the way for its plans to fight the nation’s deep recession, widespread corruption and bloated public sector.

Viktor Orban’s Fidesz party won 52.7 percent of the votes and 206 parliamentary seats in the first round on April 11, and analysts see a strong chance it will obtain the 52 seats it needs for the two-thirds majority from the 121 seats to be decided Sunday.

Such a strong mandate would give Fidesz unprecedented power to pass legislation practically at will, without having to secure support from the opposition.

Changes it is expected to enact include transforming the national and local government structures, granting citizenship to ethnic Hungarians living in neighboring countries and halving the number of parliamentary deputies.

Fidesz, which headed the government coalition in 1998-2002, also would be able to elect the country’s next president — Laszlo Solyom’s 5-year term ends in August — and choose members of the Constitutional Court, the State Audit Office and officials at other public institutions.

“It’s a great opportunity, but at the same time it’s a huge risk,” said analyst Peter Kreko of Political Capital, a Budapest research and consulting firm. “If there is political failure in the reforms … they will have full responsibility and can’t blame anyone else.”

In its 20th year since the collapse of communism and the 1990 democratic elections, Hungary is paying the price of postponed reforms, costly campaign pledges and the continued appeal of a paternalistic state.

Only a loan of 20 billion euros ($27 billion) from the International Monetary Fund and other institutions saved the country from defaulting on its debts in late 2008, while record-high unemployment levels and a recession in which the economy shrunk by 6.7 percent last year present a real challenge for the next government.

IMF-approved austerity measures imposed by Prime Minister Gordon Bajnai over the past year have helped stabilize the Hungarian economy.

Fidesz is expected to negotiate with the IMF for a higher budget deficit than the current 2010 target of 3.8 percent of GDP, giving it room to consolidate loss-making state companies and possibly implement modest tax cuts.

“Essentially, Fidesz will deliver reform plans in return for a deficit target which is less detrimental to the growth outlook,” said a report from investment bank Morgan Stanley in London, pointing to what Orban said would be “the key question” for his government.

“At the center of our economic policy are not austerity measures but how to generate economic growth,” Orban said after the first round of elections. “I can’t carry out any kind of economic or budget rationalization unless the Hungarian economy is put on the path to growth.”

Still, analysts said that Fidesz could struggle to satisfy voters yearning for easy solutions.

“Fidesz’s popularity … is to a considerable extent based on illusionary expectations of the party’s supporters concerning a painless way out of Hungary’s current situation,” said Sandor Richter at the Vienna Institute for International Economic Studies.

Fidesz has promised to clear up at least a dozen notorious corruption cases linked to the outgoing Socialist government and some already being investigated by police and prosecutors.

The party has also vowed to reduce bureaucracy by, for example, simplifying the tax system and cutting the number of ministries.

The other parties are calling on their voters to prevent an overwhelming Fidesz majority, claiming it would endanger democracy by leaving Fidesz without strong political oversight.

“The rest of the politicians will be just puppets,” said Socialist Party candidate Attila Mesterhazy. “They won’t be able to exert any influence on anything.”

The Socialists won just 19.3 percent of the votes two weeks ago, a crushing defeat after eight years in government. Nevertheless, they were able to hold off Jobbik, the surging far-right party and parliamentary newcomer which received 16.7 percent. A green group, Politics Can Be Different, won 7.5 percent and will be the only other party in the legislature.