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Hungary voters must choose between calm or strife -PM

Written by: Staff
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BUDAPEST, Mar 15 (Reuters) Hungarian Prime Minister Ferenc Gyurcsany today said voters at next month's elections face a choice between calm and strife, as the latest opinion poll showed his party edging ahead of the opposition.

Gyurcsany delivered a national day speech in front of a huge crowd of supporters of his Socialist party and said the conservatives would aggravate rather than heal political rifts. A small band of right-wing hecklers booed the speech.

''Please choose: freedom, openness, good intentions, a calm voice or strife. This is the question, so choose,'' said the 44-year-old millionaire.

The opposition Fidesz party says Gyurcsany and the Socialists have failed average Hungarians during the party's four years in power, while enriching themselves.

Fidesz leader Viktor Orban, a former prime minister, accuses the Socialists of living off a network of connections going back to its days as communist rulers. The sentiment strikes a chord with some Hungarians ahead of the poll.

''Go back to your posh villa, you communist traitor,'' shouted one middle-aged heckler in traditional Hungarian clothes.

Fidesz, which lost power to the Socialists in 2002, led in opinion polls for much of the past two years but Gyurcsany's charismatic style and rising living standards in the new European Union member have put the Socialists back in the race.

OPINION POLL An opinion poll by the Median institute showed the Socialists marginally ahead with 40 percent support to Fidesz's 39 per cent among decided voters.

With support for the Socialists' co-ruling liberal allies at 6 per cent, the two would have enough seats to form a majority in the next parliament and become the first government in Hungary's post-communist history to retain power.

The election winner will have to overhaul Hungary's creaking public finances which form the main obstacle to Budapest's plans to adopt the euro in 2010.

Economists say this year's budget deficit may overshoot its already high target of 6.1 per cent of gross domestic product by 2 percentage points, well above the EU's 3 per cent limit.

With the current account also showing a 9 per cent gap, Hungary relies on short-term capital inflows to finance its borrowing needs, making it vulnerable to currency shocks.

The forint was hit by a bout of turbulence last week, falling 4 percent against the euro, prompting Gyurcsany to promise reform if he stays in power.

The Socialists have repeatedly broken promises to the European Union to rein in the deficit and financial markets are sceptical about its assurances.

But they are even more alarmed about Orban's promises to cut taxes sharply and boost already generous pensions -- measures set to increase the deficit in the short-term.

''We view the Socialists under the leadership of PM Gyurcsany as more likely to implement reforms if elected,'' HSBS said in a recent note to investors.

Some investors are also uneasy about Orban's promises to follow a more ''patriotic'' economic policy which could include reversing a recent privatisation of Budapest airport, which the Socialists sold for 2.2 billion dollars to Britain's BAA.

REUTERS SHR KN2155

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