Referendum billed as judgement on Hungarian government under way

Other News Materials 9 March 2008 08:07 (UTC +04:00)

Polls opened in Hungary early Sunday morning as voters were set to decide whether to abolish fees for medical treatment and higher education in a referendum billed as a judgement on the government. ( dpa )

The centre-right opposition Fidesz party, which collected hundreds of thousands of signatures to call the referendum, has said Prime Minister Ferenc Gyurcsany's government should resign if it loses the vote.

However, Gyurcsany has said he will not go regardless of the result.

"A referendum about a visit fee that barely exceeds a euro will, I confess, not only not shake, but essentially not affect our government," Gyurcsany told dpa. "We will continue with our policies and will make new proposals."

The fees are part of unpopular austerity measures aimed at reducing the budget deficit - and, ultimately, at getting Hungary ready to adopt the euro.

While the measures have so far cut the deficit from 9.2 per cent of gross domestic product in 2006 to an estimated 5.7 per cent in 2007, they have hit economic growth, and forced up inflation and unemployment.

The measures, coupled with the September 2006 leak of a tape on which Gyurcsany admitted lying about the need for austerity measures prior to that year's general election, have dramatically cut the government's popularity.

Pollsters have shown that the government would only receive 15 to 20 per cent of the vote if general elections were held now.

If the opposition scores a victory in the referendum, as it is expected to do, there is likely to be little immediate change to the deficit reduction plans, since the government says it will not replace the lost revenue, which runs to hundreds of millions of dollars.

Some analysts, however, say a defeat could weaken Gyurcsany's position further and hurt the country's economic reforms in the long run.

In the short term, others have warned that a victory for the opposition could spark a temporary return to the rioting that followed Gyurcsany's admission he lied.

"We believe there could be a radical extremist reaction to the referendum and the fact that Gyurcsany won't resign," Krisztian Szabados, director of the Political Capital Institute think tank, told dpa.

For a referendum to be valid, at least 25 per cent of the electorate must vote the same way. Polls close at 19:00 pm (1800 GMT).