Socialists launch election drive, vow to rehabilitate Hungary
* Party chief Mesterhazy says to revive economy, restore trust
* PM Orban's party still strongest; half of voters undecided
By Marton Dunai
BUDAPEST, March 9 (Reuters) - Hungary's opposition Socialists launched their campaign for 2014 elections on Saturday by pledging economic revival and an end to a perceived anti-democratic drift and troubled foreign relations during Prime Minister Viktor Orban's time in power.
Orban has often clashed with the European Union, United States and international lenders over windfall taxes on banks and energy firms and a slew of legislation that critics say have cemented Fidesz's grip in the civil service, courts and media.
His conservative Fidesz party has angered many voters with deficit-fighting tax rises and constitutional amendments to tighten its hold on an array of national institutions.
The Socialists, who governed from 2002-2010, were trounced at the last election amid a severe economic slump and corruption scandals. But they have yet to rebound much in voters' minds, now polling 12 percent compared with Fidesz's 26 percent.
The left-wing opposition must team up with the newly formed Together 2014 party of former premier Gordon Bajnai to have any chance of winning the next national vote. The parties plan to hold talks about forming an alliance later this year.
About 12,000 Socialist supporters gathered in Budapest's biggest sport arena to hear Chairman Attila Mesterhazy say the party had been rejuvenated and a comprehensive programme had been drafted to take on Orban.
With broad strokes Mesterhazy paid heed to all groups of society, promising to make unemployment benefits available for a period of six months instead of three months currently, raise the minimum wage and improve healthcare.
He condemned Fidesz's economic policies and said it would take at least two years to restore growth and create jobs in Hungary's economy, which shrank by 1.7 percent in 2012.
"To do this first we need to restore confidence. To restore confidence we need clear rules and a transparent government..., a new balance between the state, market and consumers ... and an end to corruption."
He promised to reinvigorate bank lending and distribute European Union development funds more efficiently.
Orban says he has fixed an economic mess and high budget deficit inherited from his Socialist predecessors and stopped Hungary following Greece into financial freefall.
Mesterhazy also said the Socialists would work with grassroots groups and unions to rehabilitate the rule of law starting with the constitution which Fidesz overhauled.
He said a Socialist government would be cooperative not confrontational in foreign relations, repairing damaged ties with the European Union and other international partners.
"We must not wage a freedom fight against Europe, rather cooperate in an alliance so that we can represent our national interests better," Mesterhazy said.
Fidesz upset many Hungarians by nationalising pension fund assets, introducing new taxes on financial transactions and telecommunications and increasing influence over education, cultural institutions, the media and the judiciary.
But since Fidesz's landslide election victory in 2010, the left-wing opposition has been fragmented and unable to capitalise on Orban's loss of about a million supporters and the undecided view of almost half the eight million electorate.