HUNGARY:HUNGARY'S EMBATTLED Socialist government was braced for defeat last night in a referendum on controversial reforms aimed at bolstering the country's struggling economy.
The poll, called by the opposition Fidesz party, asked whether Hungarians wanted to abolish new charges equivalent to €1.20 for every visit to the doctor and for each day spent in hospital, and annual tuition fees of €400 for every university student.
Turnout was predicted to be about 40 per cent and opposition to the reforms was expected to be about 80 per cent. The referendum would be binding if a quarter of Hungary's eight million registered voters rejected the reforms.
Abolition of the cost-cutting measures would be the latest blow to the coalition government of the prime minister, Ferenc Gyurcsany, whose approval rating is a mere 19 per cent.
After beating Fidesz in the April 2006 general election, the government was plunged into crisis five months later when, in a leaked recording of a speech to Socialist officials, Mr Gyurcsany admitting to lying about the grim state of the economy in order to win the poll.
The admission triggered huge demonstrations and even riots in Budapest but failed to unseat the premier, who insisted that he would push through unpopular tax hikes, spending cuts and public service redundancies to try and balance Hungary's lopsided budget.
Despite the unpopularity of the measures at home, Mr Gyurcsany has been praised by EU finance officials for reducing what for many years has been the bloc's biggest budget deficit, albeit at the cost of higher unemployment and inflation and very low growth.
"The political consequences depend on the turnout," said Fidesz leader Viktor Orban.
"The people's anger and disappointment is very, very strong and to convert that negative energy [ and] to strengthen the spirit of democracy is the real challenge."
Mr Gyurcsany, meanwhile, has played down the significance of the referendum and promised tax cuts in 2009, ahead of an expected general election in 2010.
The prime minister and his coalition partners, the Alliance of Free Democrats, called the referendum a populist attempt to block Hungary's modernisation.
"This vote is about to what degree demagoguery and populism can be victorious in Hungary," said Free Democrat Balint Magyar, a former minister.
Analysts say defeat in the referendum would not wreck government cost-cutting plans or topple Mr Gyurcsany, but may widen rifts in the Socialist party and ruling coalition.