Orban Becomes PM for Recession-Hit Hungary

Stefan Bos | Budapest
29 May 2010

With the sound of trumpets echoing throughout the neo-gothic parliament building in Budapest, an honor guard carrying flags walked slowly into the assembly where Victor Orban was to be sworn in as prime minister of Hungary.

The ceremony came after 261 lawmakers voted for him and the program of his center-right government. But 107 legislators voted against Mr. Orban, while 18 others did not take part in the vote.

In his oath for office, Mr. Orban promised to uphold the constitution and to seek God's guidance in his work.

Mr. Orban, who was also prime minister between 1998 and 2002, took the oath Saturday after ousting the Socialist party in elections last month.

His eight ministers of the center right cabinet were appointed later in the day by President Laszlo Solyom.

Mr. Orban, 47, told parliament that he realizes he takes over a country mired in political tensions and struggling to overcome its deepest recession in nearly two decades.

He says he hopes that an economic fact-finding committee looking into public finances will present an interim report to the government next week. Mr. Orban adds that his government faces the task of "changing the constitution, saving the health care system, restoring public order and putting the economy back onto its feet."

Mr. Orban has yet to unveil details on how he wants to finance his economic plans, which include reducing unemployment from a 17-year high.

Hungary was the first European Union member state to receive international financing to avoid bankruptcy during the global credit crunch. The International Monetary Fund along with the EU and World Bank pledged roughly $25 billion to help Hungary and its population of 10 million return to economic growth.

Mr. Orban's government will have to re-open talks with international lenders later this year.

International investors and analysts have expressed concerns however about the independence of Hungary's central bank in this process, after Mr. Orban suggested he may dismiss the bank's governor for alleged mismanagement. Mr. Orban later pledged to seek new ways of cooperation.

Investors also fear the new administration will loosen fiscal policies, although EU nations from Greece to Britain are being forced to cut spending to shore-up Europe's weakening euro currency.

Additionally, Mr. Orban faces tensions with neighboring Slovakia. Just before he became prime minister, Hungary introduced legislation that will potentially grant millions of ethnic Hungarians in neighboring nations Hungarian citizenship.

Slovakia has condemned the move and retaliated with its own law banning double citizenship.

Yet, for now, many Hungarian legislators, stood united behind Mr. Orban as they sang the Hungarian anthem in parliament Saturday. He later went outside where thousands of supporters waited in front of the parliament building.

Mr. Orban's Fidesz party won two-thirds of the assembly's 386-seats in last month's general elections. That is the largest parliamentary majority since Hungary's first democratic elections in 1990, following decades of Communist rule.