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Last Updated: Thursday, 26 August, 2004, 17:14 GMT 18:14 UK
New Hungarian PM faces popularity test
By Ben Richardson
BBC News Online business reporter

Ferenc Gyurcsany is applauded after winning the nomination as Hungary's prime minister
Mr Gyurcsany will want to keep the applause going until the elections
Before accepting the post of Hungary's sports minister last year, Ferenc Gyurcsany held a press conference where he laid bare his finances.

The millionaire businessman had decided that if he was going to be a politician, it would be better to show his cupboards were bereft of skeletons.

Supporters of the 43-year-old, who has just been picked as Hungary's next prime minister, say that the country needs that kind of openness if it is to meet ambitious economic goals.

Certainly the party that selected him to replace outgoing premier Peter Medgyessy is in need of a pick up as it prepares for elections in 2006.

Tough times

Support has plummeted for the Socialist Party-led coalition as spending promises, one of which boosted public sector wages by 50%, have given way to the harsh reality of strict budget controls.

The party recently lost out to the opposition Fidesz, or Young Democrats, in European elections and polls quoted by Hungarian media show the Socialists with an approval rating of about 20%.

One of the first challenges Mr Gyurcsany faces is communicating to voters the reasons behind much-needed changes that are likely to hit them in the pocket.

For any new prime minister, the emphasis by definition has to be on presentation
Zsolt Papp, economist at ABN Amro

"It's a dilemma all politicians face," said Zsolt Papp, senior economist at ABN Amro in London. "How do you raise living standards while tightening fiscal policy?"

Finance Minister Tibor Draskovics has vowed to slash spending to bring the country's budget deficit and inflation rates closer to European Union levels so that the trade-bloc's new addition can join the euro in 2010.

Capping wages and limiting social programmes is never popular, especially in a country where the average wage is still a fraction of west European levels and many people feel they have been left behind by a decade of change.

"For any new prime minister, the emphasis by definition has to be on presentation," ABN Amro's Mr Papp explained. "From what he says, he seems to have identified the basic problems. The question is whether he can do anything about it."

Friend or foe?

An inability to get a message across clearly and forcefully were significant factors in the downfall of Mr Gyurcsany's predecessor.

Mr Medgyessy, a former communist secret agent turned banker, had tried to breathe new life into his cabinet by sacking economics minister Istvan Csillag.

Peter Medgyessy, Hungary's outgoing prime minister
Mr Medgyessy's failure to get his point across proved telling

The move against Mr Csillag - a key figure in the Free Democrats, a junior member of the governing coalition - proved controversial.

When Mr Medgyessy threatened to resign unless his decision was implemented, the party faithful produced a list of replacements rather than letters of support.

Mr Gyurcsany may find it easier to unite the coalition because, unlike his mentor Mr Medgyessy, he has close ties to the Socialist party.

Born in the west Hungarian town of Papa in 1961, the father of four took an early interest in politics, becoming vice-president of the Democratic Youth Alliance.

He later worked as an adviser to Mr Medgyessy between 2002-2003, winning a place on the Socialist party's executive committee in 2003. He was made minister of children, youth and sport the same year.

Working life

As well as climbing the political ladder during the 1990s, he also managed to build up a business that today makes him one of Hungary's richest men.

Friends described Mr Gyurcsany to BBC News Online as someone with tremendous energy, who is straight-talking and full of ideas.

They conceded that he sometimes may come across as overbearing and like a "stern priest", but counter by saying that he is someone who dislikes formality and is relaxed enough to be seen around the Houses of Parliament in a pair of jogging shorts.

One key skill, those around him said, is his ability to close deals in a way where no-one feels like a loser.

Should Mr Gyurcsany's appointment get presidential approval, as is widely expected, his success will hinge on making Hungarian voters feel like they are the winners.

Country profile: Hungary
26 Aug 04  |  Country profiles

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