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Saturday, March 21, 2009

Hungary Prime Minister Gyurcsany Resigns



Hungary's Prime Minister, Ferenc Gyurcsany, announced this morning (Saturday) his intention to resign as Prime Minister. Gyurcsany informed a congress of the Socialist Party of his decision following a sharp fall in the popularity of his government.

Gyurcsany will now inform the Hungarian Parliament of his decision (probably on Monday), and attempt to initiate a "constructive" no confidence vote, by which means it is hoped that a new candidate for PM will emerge. Early elections are currently thought to be unlikely, although it is not clear at this point how the minority coalition partners will react.

Well, we now have a clear pattern being established following the recent IMF interventions in Iceland, Latvia, Hungary etc - the government collapses under the weight of the measures. Basically, and as I said during the week, what we have unfolding before us in Hungary is a tragedy, since the rigid enforcement of the deficit ceiling without external fiscal injections from the EU, simply means that the economic contraction feeds upon itself.

I hear that I am the obstacle to the co-operation required for changes, for a stable governing majority and the responsible behaviour of the opposition," he was quoted as saying on Saturday by Reuters news agency. "I hope it is this way, that it is only me that is the obstacle, because if so, then I am eliminating this obstacle now. "I propose that we form a new government under a new prime minister."

Irrespective of whether or not Gyurcsany was part of the problem rather than part of the solution, and despite the fact that Hungary may benefit from having a new leader, the issue is a much bigger one than the office of Prime Minister.

Amongst other matters, this is the principle "bottleneck":
The source said talks with parliamentary parties would start next week to pick a new premier as soon as possible to pass much-needed budget measures with a stable majority.

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