April 8, 2010 / 3:53 PM / 7 years ago

PREVIEW-Fidesz seen winning Hungary vote by landslide

* Opposition Fidesz seen winning, may get two-thirds

* Far-right Jobbik expected to get into parliament

* Fidesz needs to boost economy, enact structural reforms

By Krisztina Than and Marton Dunai

BUDAPEST, April 8 (Reuters) - Hungarians will vote on Sunday in an election that looks set to bring a landslide victory for the centre-right opposition party Fidesz, giving it a strong mandate to enact reforms and lead the economy out of recession.

The elections on April 11 and 25 are expected to transform Hungary's political landscape, as the Socialists who have ruled for eight years are routed and a new far-right party, Jobbik, is set to enter parliament.

Fidesz, led by the 46-year-old Viktor Orban, looks likely to win an overall majority, and could even secure the two-thirds of seats that would give it a platform for broad structural reform.

"What's at stake is whether after 20 years, the country will be set on a path that would make more of the Hungarian population feel that democracy ... is also good economically," said political analyst Zoltan Kiszelly. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

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Three surveys on Thursday put Fidesz on around 40 percent of all voters, the Socialists around 13 percent, Jobbik around 8-11 and undecideds or non-voters on 30 percent or over. Among decided voters, Fidesz has over 60 percent support. [nLDE6370EW]

Hungary's complex two-round election system makes it hard to predict the allocation of seats from surveys, but the Republikon Institute said it expected Fidesz to win 267 seats, the Socialists 62, Jobbik 47 and LMP 10. Pollster Median said Fidesz could even get 275 seats.

TWO-THIRDS MAJORITY?

A two-thirds majority -- 258 seats or more -- would empower Fidesz to pass laws to shrink the local government sector, and even to change the constitution written after communism collapsed in 1989.

Whether it gets this number will probably not be known until the second round of voting on April 25, and much may depend on how much support Jobbik gets and whether the green liberal LMP crosses the five percent threshold to enter parliament.

The far-right Jobbik, which some say could displace the Socialists as second party, has capitalised on public anger over job losses and corruption, and on resentment towards a large Roma minority, especially in the poor northeast.

Fidesz last ruled between 1998 and 2002, when the economy was growing fast and foreign investment was pouring into central Europe, but it will face a very different challenge this time.

The economy contracted 6.3 percent last year and is seen stagnating this year HUGDP1.

High state spending had forced the Socialist government to keep tax at punitive levels. But after a deal with the International Monetary Fund and EU in 2008 that saved Hungary from default, it enacted spending cuts to slash the 2009 budget deficit to 4 percent of GDP.

The economic crisis has taken a tough toll on Hungarians who borrowed heavily in the boom years, mostly in Swiss francs, and saved little.

The macroeconomic imperative in Hungary is clear: it needs a credible medium-term economic plan to bolster the economy, and to bring down its public debt from 80 percent of GDP to a sustainable level. This might put eventual adoption of the European single currency on the horizon.

ECONOMIC REFORM

Economists say that to secure long-term economic growth, Hungary must overhaul an inefficient health system, cut state spending further, reform education to generate more skilled workers, and lower taxes.

Fidesz has promised to create 1 million jobs in 10 years, boost lending and support small businesses, as well as slashing taxes, and most Hungarians are now looking to it above all to restore their living standards.

"We are dead last among the countries (in the region). The government works the way foreigners dictate. Corruption is everywhere," said Katalin Kossanyi, 68, a pensioner.

Tamas Sztanko, 29, said: "If we must, we will vote for them (Fidesz) so that they have the majority to carry out the reforms that this country needs."

Fidesz will have to walk a narrow fiscal path, trying to reassure international lenders and markets while keeping the populist, nationalist Jobbik -- with which it has ruled out any cooperation -- at bay.

"Initially, Fidesz will be walking through a minefield. It will have to show success in areas where it will not be simple at all," said Peter Kreko of the Political Capital think tank .

Reforms could be especially hard to sell to the population in view of Fidesz's anti-reform rhetoric of recent years.

"If Fidesz does not manage to give social and economic legitimacy to democracy, then ... Jobbik may capitalise," said political analyst Kiszelly. (Writing by Krisztina Than; Editing by Kevin Liffey)

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