ECONOMY MINISTER Gordon Bajnai told Hungary yesterday that it must make “immediate and painful” changes to combat the economic crisis, as he took a major step towards becoming the country’s new prime minister.
Mr Bajnai (41) won overwhelming support from the ruling Socialist Party to become the new premier, following the resignation last month of Ferenc Gyurcsany, whose widespread unpopularity prevented him from pushing through the tough reforms that Hungary needs to make.
Mr Bajnai is now expected to secure the endorsement of the liberal opposition Free Democrats, giving him the majority required to win parliamentary approval as prime minister in a vote planned for April 14th.
Hungary was forced to seek a €20 billion loan from the International Monetary Fund as the economic crisis took hold, forcing down the value of the forint currency and driving up the cost of financing the country’s huge budget deficit and external debt. Officials already admit that the economy will shrink by more than a predicted 3.5 per cent this year, as foreign demand for its exports dries up, with some estimates suggesting a contraction of 6 per cent.
“We have to deal with the crisis, or else the crisis will deal with us and that’ll be much tougher,” Mr Bajnai told the Socialist Party congress, as he laid out plans to slash state spending by freezing public-sector salaries for two years, cutting pensions and other benefits, scrapping the so-called 13th month payment for state employees and raising the age of retirement.
“Hungary has no time to waste, the crisis is no longer just in overseas news reports, it’s the Hungarian reality,” Mr Bajnai said.
“I don’t want to become a great orator, I want to be a successful crisis manager, so I’ll give you the merciless truth: if we don’t act now, tomorrow will hurt even more, and the day after tomorrow will be unbearable.” About 50,000 mostly right-wing Hungarians rallied in Budapest yesterday to demand early elections, but Mr Bajnai hopes to lead Hungary until a scheduled vote next spring.
“My goal is that in 2010, you and I, the members of the crisis management coalition, can say that Hungary remained standing and managed the crisis well. I am putting it in the simplest and most ruthless way: Hungarian people have the choice of losing their jobs or temporarily giving up several percentages of their wages.”