Hungary's parliament repeals medical and tuition fees
( dpa ) - Hungary's parliament on Monday passed a bill repealing fees for medical treatment and higher education that voters overwhelmingly rejected in a recent referendum.
Over 80 per cent of those who cast ballots on March 9 voted to cancel fees for doctor visits, hospital stays and tuition fees in a move seen as a blow to the government's ability to carry out further economic reforms.
The vote in parliament was largely a formality, with 199 members of parliament backing the bill to scrap the fees from April 1. Some 149 opposition lawmakers abstained from the vote.
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 cancellation of the fees will have no immediate impact on the deficit reduction process, however, as modifications to replace the lost revenue from other sources - put forward by centre-right opposition party Fidesz, which called the referendum - were struck down.
Fidesz wanted to use funds from the national lottery and other sources to replace the lost revenue, estimated at 50 billion forints (289 million dollars) this year. However, the government has said that doctors and hospitals will just have to cope with less income.
Gyurcsany, speaking in parliament before the vote, acknowledged the wider implications of the referendum result, saying that delaying reforms could scare off investors, hit the Hungarian forint and also keep interest rates high.
The government has seen its popularity tumble since the September 2006 leak of a tape on which Gyurcsany admitted lying about the need to take economic action prior to that year's general election.
Riots broke out following the leak of the tape, and unrest has continued ever since, with right-wing groups sporadically clashing with police.
The unpopular austerity measures, which have seen taxes rise, energy prices go up and spending cut, have helped the ruling Hungarian Socialist Party plunge to approval ratings of 15-19 per cent in polls.
Most analysts believe Gyurcsany now has a limited amount of time to win back support, with his party nervously keeping on eye on the next general elections in 2010.
This could well mean a serious dilution of reforms or possibly even Gyurcsany's resignation, most analysts agree.