Election 2006: Socialists in Hungary Back to Work with Second Term

The increased strength of the coalition should mean that there is a better chance of a reformist administration being created, with half of the MSZP-SZDSZ programme already put in place under the '100-steps' and national development programme.

Turnout was a medium-range 64.3%, with fine weather following severe floods in recent months. The complicated electoral system means voters cast two votes in the first round, one for a constituency and one for a regional party list. Where constituency candidates do not achieve 50% in the first round, the top candidates enter a second-round run off. This year, 171 seats were to be decided upon in the second round, 110 of them constituency seats. This is why the larger parties often bargain with smaller parties to withdraw candidates so as to ensure the vote is not split and the run-off lost, which can reduce the overall standing of the smaller parties. The MSZP, although its winning margin increased, certainly could not have achieved the victory alone. Some estimates placed SZDSZ support at 10-15% of the electorate, meaning that the election may be a wasted opportunity for them if they do not increase their influence in government. Although they had some success in making their imprint on the government programme during the last term of office, they have consistently sought to push for the implementation of a flat-tax regime and have been studiously ignored by MSZP. However, their liberalising influence could be critical if the main macroeconomic challenges are to be met.

The first major test of the government's commitment will be a framework on tackling the deficit which it is to submit to the European Commission by September. However, there are local elections later this year, which could complicate any planned austerity measures. The government also loudly denied claims made by Fidesz during the election campaign that it was planning a major austerity drive. Instead, the electorate has been promised a shift in investment and financing; also, the government has refused to bow to pressure for ending an infrastructure-development programme, which has weighed heavily upon the budget. However, the government will have to keep to its cost-cutting plans through the state administration if it is to retain short-term credibility with the electorate and it could be only after October's local elections that stronger measures can be taken. SZDSZ Economy Minister Janos Koka said that the first steps to cutting costs would be the reduction of the 17 government ministries to ten or 12. However, although the smaller SZDSZ has always been in a position to be more liberal than MSZP by virtue of its reduced responsibility, it cannot take for granted its ability to convince MSZP that the sweeping cuts are possible.

Orban Loses the Battle… and the War?

Despite a close first round on 9 April, the main opposition Fidesz was unable to unseat the government, and in fact saw the coalition majority increase, raising questions over the future of Fidesz leader Viktor Orban. He had angered many in the party earlier in the month when he renounced the demand for the prime minister's post in a future Fidesz government, attempting to win over the smaller Hungarian Democratic Forum (MDF) into agreeing to a coalition partnership. Orban also threatened to resign in the face of defeat, but the energetic leader has too much drive to simply disappear, although he may need to question his lack of appeal with the electorate. In the end, the voters were unconvinced by Orban's accusations that Gyurcsany was a 'neo-communist' (a former leader of the Communist youth party wing) and that the MSZP were serving foreign interests with their commitment to privatisation and the markets. Strictly speaking, there is no rival to Orban in the party, but he has sown the seeds for his own removal; deputy Fidesz leader Pal Schmitt is already preparing for the upcoming party conference, having stuck the knife in his leader during the final weeks of campaigning.

Outlook and Implications

From a practical point, there are 30 days to convene the first parliamentary session, with up to two months allowed for cabinet formation. This should not take so long in practice, nor should there be any question of the approval of the cabinet. Prime Minister Gyurcsany's popularity will be primed at present. While his own rise to becoming the country's richest businessman as well as the Socialist champion of privatisation attracts admiration and jealousy from various quarters, few can argue that he has not had a positive impact on the popularity of the MSZP, who were languishing in the polls when he took over the party from former Prime Minister Peter Medgyessy. Although this is largely swept under the carpet now, Gyurscany was ruthless enough to take power from his former ally and mentor Medgyessy, so it should not be forgotten he is stronger that may be readily apparent. This quality should be put to good use in implementing strong reforms and in cutting the deficit, with the renewed mandate the coalition has been given to continue with their national development programme.

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