Wednesday, May 03, 2006

Hungary's election

Hungary's election

The re-election precedent
Apr 27th 2006 | BUDAPEST
From The Economist print edition

A sign that politics in central Europe may be maturing

THE first rule of post-communist politics in central and eastern Europe has long been that, whatever a government does, it will be voted out of office. All the reforming administrations of the early 1990s met this fate. So did the softly-softly governments that replaced them.

Such constant changes of government have made outsiders fearful over the fragility of these new democracies. Few prime ministers or parties have completed a full term. Nowhere in the region has a prime minister yet served two full consecutive terms at the head of the same coalition. Parties have been launched, merged and folded with bewildering speed. And, in some countries, populists of extreme right and left are troublingly successful.

This week's news from Hungary may herald a change, towards governments that can sometimes win again. After the second round of the election, on April 23rd, the ruling centre-left coalition led by Ferenc Gyurcsany took 210 of the 386 seats in the lower house of parliament, against only 164 for the conservative opposition led by Fidesz. Fidesz's outspoken leader, Viktor Orban, who was prime minister between 1998 and 2002, proved divisive and unconvincing. Even his announcement after the first round that he would not seek to be prime minister again failed to win voters back. At least, unlike some earlier elections, this one was free of anti-Semitism, coded or otherwise.

Mr Gyurcsany's victory was largely personal. A youthful, smooth-talking tycoon with links to the communist-era elite, he is now a keen Blairite, Atlanticist and market-friendly, quite unlike the older ex-communists who still dominate his Socialist Party. He handled Hungary's smaller parties cleverly, keeping his liberal allies, the Free Democrats, happy and also wooing a moderate right-wing party, Hungarian Democratic Forum. This party then doomed Fidesz by refusing to co-operate with it in run-off votes.

The Socialists' slick campaign contrasted with Fidesz's gaffe-strewn effort. Mr Orban gained a few votes on the far right (the main extremist party saw its vote fall by half, to 2%). But he did not appeal to the centre. Having dominated Hungary's right-wing politics for more than a decade, he is now talking of quitting. A big shake-up of the political right looms.

Mr Gyurcsany faces a more immediate test: how to fill the gaping holes in Hungary's public finances, many of which his own government created in a pre-election binge. This year's budget deficit is approaching 8% of GDP; including such off-balance-sheet items as road-building, it would be nearer 10%. The current-account deficit is over 8% of GDP, one of the biggest in Europe. Foreign investors are edgy.

The government promises “reform without austerity”. It intends to bring in insurance-based health-care and to cut the number of ministries and municipalities. “Our objective is to transform the work of the state so that it is not a burden, but instead serves us,” Mr Gyurcsany has said. Yet, as Juliet Sampson of HSBC, a British-based bank, puts it, “given the Socialists' record on reform, we'll believe real fiscal adjustment is on the way when we see it.”

Elsewhere in the region, re-election may start to become a habit, not a fluke. Many in Poland's minority ruling party, the right-wing Law and Justice, want an early election, hoping to win it. The Czech prime minister, Jiri Paroubek, stands a chance of staying in power after the election in June (though perhaps with his Social Democrats in a different coalition).

It would help if only honest, reformist governments were re-elected, and not spendthrift, soft-talking, sleazy ones. Yet Slovakia's Mikulas Dzurinda is the only prime minister who fits the happier description so far, when he won again in 2002. And he now faces defeat in this summer's election.

Mr Dzurinda's mentor, Mart Laar, who was prime minister of Estonia in 1992-94, believes it is futile to worry about re-election. “Just do the right thing,” he argues, and the voters will eventually appreciate it. That brought him back to power in 1999, though for only a partial term. Now a backbencher who spends much time abroad preaching the virtues of the flat tax and economic reform, Mr Laar laughs off any talk of a comeback. His fans hope that he may be dissembling.

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