Gyurcsany Package Meets Strong Opposition

Opposition parties and interest groups in Hungary are questioning the direction of the government's reform policy and resisting the announced budget cuts. Political analysts cannot rule out social unrest and economic turmoil in the coming months.

There are few social organizations and lobbyists in Hungary who praise the proposed budget cuts of the government.  The Hungarian Chamber of Commerce and Industry claims that the Gyurcsany administration’s program hurts  competition, raises inflation and instability and increases unemployment. The Chamber claims that next year’s budget adjustment would be financed by a 92 percent increase in taxes.

László Parragh, the Chamber’s president, while agreeing with the administration’s efforts to balance the budget, argues that the cuts will hurt businesses and favor only the political elite. He also doubts that the proposed layoffs of civil servants would have enough of an  impact on the large  bureaucracy. He predicts that  some future  measures will be blocked either by the parliament or the Contitutional Court. The chamber believes the tax increases will actually cut rather than increase tax revenues. 

According to Sociologist István Kemény with such severe budget cuts, maintaining or improving the current level of government services would be impossible. He also doubts that the healthcare reforms would lower government expenditures, instead  it would require increase of taxes. Kemeny would rather introduce property taxes but concedes that in the short run for political reasons the government can only tighten the current taxes. 

According to a survey conducted in May by the Hungarian research group, Marketing Centrum, the majority of those polled supported the reforms.  However,  69 percent of the population equated the reforms with modernization, and only 49 percent equated it with a tightened budget. While 62 percent opposed higher tuition fees, about the same percentage favored immediate healthcare reform. The majority said that a higher level of care could be achieved with competing insurance companies. At any rate, citizens already feel the effects of higher taxes, increased utility fees, more expensive  public transportation and probably, tuition and medical appointment fees.