Hungary's minority government survives first vote

BUDAPEST (Reuters) - Hungary's minority Socialist government survived its first parliamentary vote on Tuesday with the support of its former coalition partner, which quit the government at the end of April.

The motion, to name new ministers to replace outgoing personnel from the smaller liberal party, was passed by 200 votes for and 142 votes against.

The Socialist government of Prime Minister Ferenc Gyurcsany has 190 seats in the 386-member parliament and the Alliance of Free Democrats, who left the coalition, have 20 MPs.

The key test for the Socialists will be the 2009 tax and budget laws, due to be debated in the autumn and winter, and the Free Democrats have said they could oppose those bills if there are not public spending and tax cuts.

The smaller party has pledged not to bring down the government ahead of elections due in 2010, largely because they would be wiped out if elections were held today, political analysts say.

Investors are watching the performance of the Socialists closely with some fearing a return to overspending in the run-up to the elections.

Hungary still runs the biggest budget deficit in the European Union relative to the size of its economy, even after the government cut the deficit to 5.5 percent of gross domestic product in 2007 from 9.2 percent in 2006.

"For a high proportion of (Socialist) members of parliament political survival is now on the line. Approaching the next elections personal survival strategies could come to the forefront," said the Perspective Institute, a conservative think-tank, in a research report.

(Reporting by David Chance; Editing by Jon Boyle)