Once shining star, Hungary falters

The political and social crisis that has engulfed Hungary for almost three weeks intensified on Thursday as the main right-wing opposition party Fidesz announced a massive street rally for Friday.

The rally, which could spark further violence, coincides with a vote of confidence called for by the beleaguered prime minister, Ferenc Gyurcsany.

After defeat in local elections on Sunday and criticism from the nation's president, the prime minister – under fire for recent revelations that he lied about the country's economy in the run-up to his reelection last spring – called the vote of confidence in an attempt to defuse the crisis.

Fidesz leader Viktor Orban, who labeled the vote a "dirty trick," responded by calling his supporters out onto the street and vowing to keep them there until Mr. Gyurcsany resigns.

With neither party ready to back down, the stage is set for a battle over the future of Hungary's young democracy. If Gyurcsany manages to retain power, his government would have several election-free years to solidify and strengthen the country's progress.

But should the opposition succeed in ousting the prime minister, it would be a major victory for the populism and political squabbling that has stalled Hungary's climb out of communism since 1989.

It could also show the way the wind is blowing in the rest of Central and Eastern Europe. Hungary led the way as the region transitioned from communism. Now, with political problems also afflicting its neighbors, Hungary's plight may well symbolize the problems facing democracy across the entire region.

The real threat to stability comes from the fact that Fidesz has no constitutional way to remove Gyurcsany. The backing of the coalition ensures victory for the prime minister in the confidence vote, and the only option left open to Mr. Orban is people power.

Fidesz has in the past been able to amass hundreds of thousands of supporters for political rallies, and many fear that the large-scale demonstration could lead to a repeat of the violent scenes that blighted the first few days of the crisis.

"Hundreds of thousands of people will be on the streets and I don't know if Fidesz can control the right-wing extremists," says Krisztian Szabados, director of the independent Political Capital Institute. "I expect demonstrations and riots to continue," he says.

Part of the reason that Orban is so desperate to oust the prime minister is the fact that this may be his last chance at power.

Until a recording came along of Gyurcsany admitting he and his Hungarian Socialist Party party had lied, the former prime minister's political career was on a downward spiral after two general election defeats in a row. If he cannot defeat a severely weakened Gyurcsany now, he never will.

"It is urgent for Fidesz to force the prime minister out quickly," says independent political analyst Gabor Torok. "If events stay within the constitutional framework, the opposition will sooner or later run out of tools."

However, it is a risky strategy, and Orban could well find himself blamed if violence breaks out in the crowd.

Many see the trouble as an inevitable consequence of the divisive politics that has split Hungary for many years. The legacy of communism has been constantly raised to stoke up tensions in an effort to avoid serious policy dilemmas, and the 2002 elections, which have been described as the most poisonous in Hungary's history, made things worse. When Fidesz lost the 2006 election as well, the bitterness did not go away.

So, when the government released an unannounced austerity package shortly after April's election, raising taxes and energy prices and talking about cutting back on the size of the state, Fidesz immediately went on the offensive. Even so, it was not yet a crisis. All sides accepted that the huge budget deficit had to be decreased in order to adopt the euro. The only argument was over how to go about it.

Then came the tape and suddenly Hungary was plunged back into political chaos. Only this time violence came with it.

Both President Laszlo Solyom and Ibolya David, one of Hungary's most popular politicians and the leader of the smaller right-wing party, the Hungarian Democratic Forum, have appealed for calm and a consensual political solution, but their demands have gone unheard.

Indeed, many have even raised the tone to the point of hysteria. One prominent Fidesz politician, the mayor of Debrecen, Lajos Kosa, issued an apocalyptic warning of what may happen if Gyurcsany does not resign.

"In spring they (the people) could remove us all from parliament; rebellion could break out," he said on public television Tuesday.

Such predictions seem unlikely to come true, however, and some analysts feel that protestors may quickly get bored and go home.

"While we expect maybe more than 100,000 people on Friday, we do not think that this is going to be sustained, turn violent, or paralyze the country," says Istvan Zsoldos, an emerging markets analyst at Goldman Sachs in London.