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Thursday, January 24, 2008

March 9 Assigned to Referendum

Hungarian President László Sólyom has this week assigned 9 March as the date for the proposed referendum. Portfolio Hungary give the results of an IPSOS poll 48% of those polled said they would turn out at the referendum, which was forced by the main opposition party Fidesz to abolish the doctor visit fee, the daily hospital stay fee and university/college tuition fee.

52% of the respondents said a victory of the ‘yes' votes should prompt the government to cancel these measures, while 36% of them said the cabinet should resign in this case.

The researcher said 69% of Fidesz voters and 45% of Socialist Party (MSZP) voters said they would cast their vote, but the majority of both group would say ‘yes' to all three questions.

Since the measures the opposition party want to overturn are really at the heart of the austerity package being implemented, I'm not really sure how Ferenc Gyurcsány could survive a defeat (which doesn't mean to say he won't be able to). The quantities of money - estimated to be only several hundred million euros - are not that important, but they are important symbolically - since they involve a recognition of the fact that with rapid demographic ageing Hungarian really can't afford a 2 star welfare system, let alone a 5 star one. This is a tragedy, but that is the way it is, and money can't be whisked up out of nowhere to change things. Of course it would help if people started - at the official level - to face up to the rather dire mix of macro economic policy problems Hungary is now drifting rather perilously into.

According to Reuters:

BUDAPEST, Jan 23 (Reuters) - Hungary's President Laszlo Solyom has set March 9 as the date for a referendum proposed by the main opposition centre-right Fidesz party on abolishing doctor and hospital visit fees and university tuition fees.

The referendum, dubbed by Fidesz as a vote of confidence on the government, aims to overturn some of the key economic reform measures of the ruling Socialists, whose popularity has been hit by the unpopular measures. "This is about the future, not the past," Fidesz Deputy Chairman Zoltan Pokorni told a press conference on Wednesday.

The Socialists popularity has fallen to about 13-16 percent, according to polls, while support for Fidesz is about 34-40 percent.

Polls also indicate the referendum questions would pass easily but turnout, traditionally very low at referendums, may be a problem.

Political think-tank Political Capital said if turnout is high and the vote is valid, it may weaken Prime Minister Ferenc Gyurcsany's position but does not mean that the government will fall or that he will be replaced.

"The Socialists, taking political rationality into account, wouldn't have to automatically replace their prime minister, but in case of defeat, Fidesz would clearly talk about the complete failure of the government and their programme, which would make political stabilisation difficult," Political Capital said.

The Socialists' ratings suffered after they took action to lower the budget deficit to about 5.7 percent of gross domestic product in 2007 from over 9 percent a year earlier through tax and price hikes coupled with spending cuts.

The Socialists have dismissed calls for the government to quit if defeated in the vote.

Doctor visit fees generated about 22 billion forints ($125 million) in 2007, helping reduce overall healthcare costs.

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