ANALYSIS: Hungary's Gyurcsany heads for the hills as city heat builds

By Michael Logan Nov 6, 2007, 18:07 GMT

Budapest - Hungarian Prime Minister Ferenc Gyurcsany embarked on a tour of the Hungarian countryside Tuesday, ostensibly to promote his party, but you could be forgiven for thinking that he was fleeing the building heat in the capital city.

Gyurcsany has been under pressure for some time, both from the opposition and increasingly his own party members, as economic reforms inextricably linked with his name have brought his Hungarian Socialist Party (MSZP) to an all-time popularity low.

A Monday voting revolt from the MSZP, critical comments from MSZP colleague and House Speaker Katalin Szili, as well as continued speculation about his future will have done nothing to ease his mind.

The countryside is not exactly an MSZP stronghold - main opposition party Fidesz virtually swept the board outside of Budapest at local elections last year - but the prime minister may find a warmer reception amongst the enemy if the atmosphere within his own party is as bad is as believed.

Each time a new poll comes out it seems as though the MSZP's popularity cannot drop lower, yet each time it manages it. Latest figures show that 15 per cent of voters would vote in favour of the Socialists if an election were held now.

The current disaster is a world away from April 2006, when the Socialists became the first government to win back-to-back terms in power since the changeover to democracy in 1990.

The Socialists came within a whisker of an overall majority, but had to settle with a continued coalition with the liberal Alliance of Free Democrats.

However, austerity measures aimed at cutting the budget deficit - which at 9.2 per cent of gross domestic product in 2006 was the largest in the EU - and the leak of a profanity-ridden speech in which Gyurcsany admitted lying about the economy have put paid to the good times.

While the tape, leaked in September 2006, had the most immediate impact, prompting riots and huge protests, the unpopular austerity measures have been slowly eroding support for Gyurcsany and his troops.

While rumours of his imminent departure, circulating for some time now, are believed to be exaggerated, there appears to be growing feeling in the MSZP that Gyurcsany should slow the pace of reforms in order to appease voters.

This sentiment bubbled to surface on Monday, when the MSZP voted against government plans to merge several minor taxes.

While the actual laws themselves are largely insignificant, the fact that Gyurcsany's party voted against government proposals is rather more meaningful.

House speaker Katalin Szili, who party sources say is working to replace Gyurcsany, also chose her moment to express her displeasure about the party's popularity.

Speaking on radio over the weekend, Szili said that the MSZP could well lose the 2010 general election unless it changes its policies and warned that reforms were being carried out against the will of the people - a message clearly aimed at Gyurcsany.

She continued her blitz in an interview with the daily Nepszabadsag on Tuesday, saying that she had difficulty looking voters in the eye.

All of this has the main opposition party, Fidesz, rubbing its hands in glee, with some reports even suggesting that they are working out strategies on how to deal with Gyurcsany's replacement.

However, the opposition may well be acting prematurely. It is believed that Gyurcsany will be given until next summer to bring about an improvement in the polls.

If his economic reforms show positive benefits, he could win a reprieve, and the signs look good at the moment on the economic front.

The government is set to meet its deficit target of 6.4 per cent this year and will likely meet the 2008 target as well.

Inflation is slowly falling after peaking at 9 per cent earlier this year and economic growth is expected to pick up again after a slump this year.

The only problem is that it is mainly economists and international investors who will be heartened by these improved statistics.

Voters are only likely to show their approval if they feel their wallets filling up again after being hit by energy price hikes, tax rises and fees for visits to the doctor as part of the austerity package.

The international markets may well be firmly on Gyurcsany's side, but there is still a good chance he could make way for someone else before the 2010 general elections.

Whether Szili, or any other potential candidate, would be capable of heading off what looks increasingly like certain election defeat in 2010 is another matter entirely.