BUDAPEST (AFX) - Hungarians chose continuity in giving the Socialist-led government a historic second term, leaving it with the task of getting the former communist country's economy under control, particularly its ballooning deficit.
Leading Hungarian and international businessmen took out a full-page advertisement in several newspapers Monday calling on the government that was re-elected Sunday to carry out 'economically sustainable and responsible policies.'
The businessmen from the US, British, French, German, Italian, Swiss and Hungarian chambers of commerce called on Socialist Prime Minister Ferenc Gyurcsany to bring down the public deficit, reduce government bureaucracy and reform the health care system.
Analysts have urged the next government to immediately tackle the country's deficit, which reached 6.1 pct of GDP last year and threatens to delay the planned adoption of the euro in 2010 if it is not brought down to below 3 pct by 2008.
Political analyst Krisztian Szabados told AFP the outcome of Sunday's general election, the first time a government has been returned to power since the demise of communism in 1989, was a sign that Hungarians were ready to be realistic.
'In the past 16 years, in every election those who promised more won,' Szabados told Agence France-Presse.
'This time a modernization program and welfare program competed and ... modernization won (for the) first time in Hungary,' he said.
The election pitted Gyurcsany, a 44-year-old millionaire turned politician, against Viktor Orban, 42, a former anti-communist firebrand who has become Hungary's leading conservative.
Szabados said that Orban had promised welfare and other benefits more than twice the amount of Hungary's deficit.
Such 'populism didn't work,' Szabados said, adding that people simply did not believe Orban.
The Socialists and the liberal Free Democrats increased their parliamentary majority, winning 210 seats in the 386-seat parliament, up from their previous total of 198.
Gyurcsany is expected to announce a package of major economic reforms in the comings weeks to tackle the budget deficit.
Gyurcsany has said he will only take up his post if the leftist coalition first approves his reform plans, which are expected to include an overhaul of the inefficient state administration and healthcare sectors.
Economic analyst Zoltan Torok said this will not be easy as Gyurcsany owes his popularity to increased government spending.
'The past four years have been a continuous electoral campaign to sweeten the waters,' said Torok, who works at the Raiffeisen bank in Budapest.
He said Gyurcsany had, for instance, 'increased public sector employees wages without demanding that workers be more efficient' and had increased pensions and cut taxes.
'People just lived better and better. It was like a free lunch for voters,' Torok said, saying this was due to the increasing deficit and to ideal investment conditions for emerging market countries like Hungary. Such conditions can easily change, Torok said.
'I'm a little bit sceptical about the future as I think the government is not apt to do what is necessary,' Torok said.
The head of the US chamber of commerce Laszlo Nemethy said he felt progress would only be possible if the opposition cooperated with the government, as such items as municipal reform require a two-thirds majority in parliament.
'It's too early to tell what is going to happen,' Nemethy said. By Michael Adler; email@example.com afp/cw COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited