HUNGARY: Hungary's Socialist prime minister Ferenc Gyurcsany is under pressure to resign after he admitted telling party colleagues that the government had repeatedly lied to the public and made serious mistakes during its first term in office.
On a leaked tape recording of a party meeting in May, a month after the Socialist-led government won re-election, Mr Gyurcsany said only "divine providence, an abundance of cash in the world economy and hundreds of tricks" had kept Hungary's economy afloat, as it laboured under the largest per-capita deficit in the European Union.
"We lied in the morning, and we lied in the evening," he told the meeting in a 25-minute speech that was peppered with obscenities, in which he said the government's failure to overhaul the economy had made painful reforms inevitable.
"There is not much choice, because we screwed up. Not a little, a lot. No European country has done something as boneheaded as we have," he said.
"Evidently, we lied throughout the last year-and-a-half, two years."
Mr Gyurcsany, a millionaire businessman, took control of the Socialists in 2004, when polls showed them trailing far behind the right-wing Fidesz party.
He reversed the slide in popularity to make his government the first to win re-election since the end of communism in 1989, but has since admitted that to secure a second term he obscured the real size of the budget deficit and backed imprudent tax cuts.
The government now hopes to limit the 2006 budget deficit to 10.1 per cent of gross domestic product, rather than its pre-election target of 4.7 per cent, and has announced major spending and employment cuts - as well as new and higher taxes and direct fees for health services and university tuition - that are deeply unpopular.
The Socialists are set to fair poorly in next month's local elections.
"This is an unprecedented crisis in the history of Hungarian democracy and Ferenc Gyurcsany is not part of the solution, but the problem," said senior Fidesz member Tibor Navracsics. "He is now persona non-grata in Hungarian politics."
Hundreds of people rallied outside parliament in Budapest demanding Mr Gyurscany's resignation, while analysts wondered who had leaked the tape and why.
"The Hungarian Socialist Party supports prime minister Ferenc Gyurcsany," said Istvan Hiller, the party president. "We will push through reforms - we won't back down."