Hungary pledges reforms

HUNGARY: Hungary's Prime Minister-in-waiting, Mr Peter Medgyessy, sought yesterday to reassure foreign investors after ousting…

HUNGARY: Hungary's Prime Minister-in-waiting, Mr Peter Medgyessy, sought yesterday to reassure foreign investors after ousting conservatives in a bruising poll race, while promising to narrow the gap between rich and poor.

The former banker, speaking a day after the Socialists won decisive run-off elections in the leading EU candidate state, also pledged to repair relations with Hungary's neighbours which had been damaged by nationalist fears. Hungary's leftwards poll tilt calmed fears that the formerly communist country would follow a European trend towards election gains by nationalist and far-right parties, who slumped in the Hungarian polls.

"Hungary has chosen the road of social democracy, on which currently Britain and Germany are treading, and I trust that France will tread the same road, too," Mr Medgyessy told reporters after his election victory.

Analysts said Mr Medgyessy, who has called for national reconciliation after the fierce passions aroused by the campaign race, faces a tough task. "It will be a difficult period to govern because the result is very close," said Mr Tamas Fritz, commenting on the 10-seat majority in the 386-seat parliament won by the Socialists and the liberal Alliance of Free Democrats.

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Mr Medgyessy underlined his government's commitment to incentives for foreign investors, such as tax holidays and other cost-cutting measures, which have made Hungary the most booming economy in the region.

The pro-market Socialists and liberals won 198 seats in parliament, against 188 for Mr Viktor Orban's Fidesz party.