Hungary’s PM defies calls to quit

Ferenc Gyurcsany, Hungary’s prime minister, on Tuesday defied calls for his resignation and vowed to press ahead with public-sector reforms after the worst street violence in the Hungarian capital since the fall of communism.

The Socialist premier condemned rioters enraged over his extraordinary admission that he had lied about the state of the economy to win re-election.

Demonstrators had stormed the headquarters of Hungarian public television in Budapest shortly after midnight on Tuesday morning. More than 150 people were injured in clashes with police.

“I put my political life at stake for this. Either there will be a new Hungary or I shall not continue,” he said.

The events in Hungary fuel concerns that the European Union’s newest members are facing growing political instability and resistance to reforms required for their economic integration.

Last night, a crowd of about 1,000 protesters gathered in front of parliament under a steady rain. They were accompanied by hundreds of riot police.

All five political parties represented in parliament condemned Monday’s riot, though representatives of the opposition centre-right Fidesz party expressed sympathy for the public’s frustration.

Fidesz urged the prime minister to go in what it called a “moral crisis”.

Monday’s protest was triggered by an audio recording, leaked to the press at the weekend, in which Mr Gyurcsany admitted that his Socialist government had lied repeatedly to voters about state finances.

He was trying to galvanise his party to end the deceit and push ahead with real reforms.

Hungary’s budget deficit is expected to top 10 per cent of gross domestic product this year. Both the Socialists and Fidesz waged election campaigns in the spring that ignored the rising deficit and featured competing spending promises. The Socialists won the contest and Mr Gyurcsany quickly followed with a budget austerity programme and plans for public sector reforms. Fidesz leaders have since attacked Mr Gyurcsany for concealing the extent of Hungary’s budget deficit during the campaign and denying plans for austerity measures.

The Hungarian forint and bonds dropped by the most in a month. Against the euro, the forint fell as much as 1.5 per cent, trading at 272.83 late on Tuesday.

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