SCENARIOS-What next as Hungary seeks new prime minister?

BUDAPEST, March 26 Thu Mar 26, 2009 1:32pm EDT

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BUDAPEST, March 26 (Reuters) - Hungary's ruling Socialists scrambled to find a new prime minister on Thursday after the frontrunner candidate, Gyorgy Suranyi, pulled out of the race and two other candidates were rejected by their potential ally.

The Socialists continue talks with the Free Democrats, whose votes they need to elect a new prime minister to replace Ferenc Gyurcsany, who will step down next month to allow a new government to handle the economic crisis. [nLQ392185]

Gyurcsany plans to organise a "constructive vote of no confidence" in parliament, expected in mid-April.

A Socialist party source said Mihaly Patai, the chief executive of UniCredit's local unit was among the names considered. Media reports also mentioned Peter Felcsuti, Peter Balazs and Antal Pongracz as possible candidates.

Here's what may happen next:

GYURCSANY STEPS ASIDE, SUCCESSOR SELECTED

Gyurcsany initiates "constructive vote of no confidence". At least a fifth of the 386 members of parliament are needed to propose the vote in parliament. Parliament then votes the incumbent out and a successor in, without an election.

Gyurcsany's successor must be acceptable to the Free Democrats, who have 19 seats and whose support is needed to have parliament approve the candidate.

The Free Democrats want deeper cuts in taxes and state spending to help the ailing economy. The Socialists, polling 16-17 percent support, may be reluctant to agree to deeper social spending cuts as job losses mount and trade unions plan protests.

GYURCSANY RESIGNS

If Gyurcsany formally resigns, the government's mandate ends. If a new prime minister nominated by President Laszlo Solyom is not approved by parliament within 40 days, Solyom has the right to call an election.

PARLIAMENT DISSOLVES ITSELF

Parliament can also dissolve itself, with a simple majority vote. In that case, a new election must be held within 3 months.

POSSIBLE CANDIDATES FOR PM

* MIHALY PATAI, 55, economist, chairman and CEO of the Hungarian banking unit of UniCredit CRD.MI and chairman of the Budapest Stock Exchange. Between 1988 and 1993 he was assistant to a World Bank director in Washington. He headed the Hungarian insurance arm of Allianz from 1996 to 2006. He speaks English, German and Russian.

* PETER FELCSUTI, 59, is a renowned banker, chief executive of the Hungarian arm of Raiffeisen International RIBH.VI and chairman of the Hungarian Bankers' Association. He was a founder of the local branch of Citibank, as well as Unicbank, which changed its name to Raiffeisen. Speaks fluent English, Russian and Spanish. Felcsuti rejected his name being put forward as speculation.

* PETER BALAZS, 67, economist, professor of the Central European University's International Relations and European Studies Department. He was the first commissioner to represent Hungary in the European Commission in 2004, appointed by the then ruling Socialist-led government. In the early 1990s he was secretary of state in the Ministry of Industry in a conservative government, later he served as ambassador in Denmark, Germany and at the European Commission.

* ANTAL PONGRACZ, 62, economist, deputy CEO of Hungary's biggest commercial bank, OTP OTPB.BU. He worked for several years in the Finance Ministry. Later he had key posts in commercial banks, headed the state lottery company between 1994 and 1998 and the national air carrier in 1998 and 1999. Pongracz said he has not been contacted about the candidacy. (Reporting by Krisztina Than/Marton Dunai/Sandor Peto)

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