the resignation of Prime Minister Peter Medgyessy and will shortly name a successor. The government crisis overshadowed Friday’s celebrations for a National Day to honor King Stephen, who introduced Christianity and Hungarian Statehood here over one thousand years ago.
The Socialist announcement came after Medgyessy threatened to resign in the wake of what has become Hungary’s worst political crisis since the collapse of Communism and as analysts expressed concern about the perceived lack of stability in the new European Union member state. (Pictured: Medgyessy offering his resignation).
Earlier at a hastily organized press conference in the Parliament building, Prime Minister Medgyessy urged the liberal coalition partner Alliance of Free Democrats, to trust him.
RESTORING TRUST
“Either the Free Democrat party restores it trust in the prime minister by tonight or it creates the conditions by August 26 for the election of a new prime minister,” he said. Medgyessy added he would otherwise hand in his resignation to the Hungarian president by early August 27.
Already growing tensions within the Socialist-Liberal cabinet came head to head this week when the no nonsense premier, a former banker and business consultant, dismissed a Liberal economy minister as part of a major cabinet reshuffle. In addittion the liberals never forgave him for revelations two years ago that he acted as a spy for the Communist regime.
Medgyessy told a BosNewsLife reporter at the time that what he did was in the interest of Hungary. The government sackings were seen as part of Medgyessy’s plan to give new momentum to his unpopular administration ahead of scheduled elections in 2006.
RAISING PENSIONS
Although his Cabinet initially won public praise for raising pensions and salaries at an unprecedented rate, it later was forced to back down on several social promises as it had to cut a ballooning deficit because of Hungary’s ambition to adopt the Euro.
Public anger has been mounting especially over changes in areas such as the energy sector, claimed Budapest based analyst Tamas S. Kiss, of the energy news service Platt’s.
“People are really worried now because the promises have been broken especially in the energy sector," Kiss told BosNewsLife, which has its news headquarters in Budapest.
PRICES INCREASE
"Prices of energy are increasing, and house hold prices are increasing. The government is also selling and privatizing MOL, the national oil and gas company as much as it can, so people are really concerned,” he added.
Opinion polls suggest that after already devastating European elections, only roughly 20 percent of Hungarians would vote for Medgyessy’s Hungarian Socialist Party. But about one in three adult Hungarians would vote for the largest right wing opposition party, Fidesz. Right wing politicians have already suggested the current cabinet "can only function as a care taker government," although ealy elections were not yet expected.
Medgyessy was believed to be replaced by the 45-year old Prime Minister’s Office Chief Peter Kiss after party talks Saturday, August 21. However financial analysts have expressed concern that Hungary, which was once seen as an island of political stability, will now lose its appeal.
Foreign investments were already down due to concern over high salaries combined with government measures and rising nationalism, while the Hungarian Forint is seen weakening in the wake of the political upheaval.
WITH AUTHOR STEFAN J. BOS
