Hungary’s Parliament passed the 2010 budget, a key condition of a financing deal with international lenders, despite opposition criticism that it fails to boost the recession-hit economy.
By pushing the budget through parliament by 201 votes to 179, Prime Minister Gordon Bajnai's socialist MSzP government ensures its own survival in power until elections due in early 2010. It targets a deficit of 3.8% of GDP, one of the lowest in the European Union, that meets a pledge to the International Monetary Fund and the EU which saved Hungary from financial collapse with a $25.1 billion loan last year.
Since he took over in April, Bajnai has cut pensions, trimmed utility price subsidies and public sector pay to put the budget on a sustainable path after a collapse in confidence deeply undermined Hungary's markets amid the global crisis.
Budget cuts and improved global sentiment mean Hungary can now finance itself from the market again, but it remains mired in its worst downturn in almost two decades and tangible growth may begin only in 2011. Both the central bank and the opposition have warned there were risks of a deficit overshoot. With the budget passed, no major items remain on the government's agenda until elections due in April or May 2010, which the unpopular socialists are widely expected to lose.
The main opposition Fidesz party, which opinion polls show is well placed to score a landslide victory in next year's election, has said it would rewrite the budget. (Reuters)