April 25, 2010 / 6:27 PM / 9 years ago

Instant view - Hungary's Fidesz wins 2/3 majority

BUDAPEST (Reuters) - Hungary’s centre-right Fidesz party secured more than two thirds of parliamentary seats in Sunday’s second round of voting, according to preliminary figures from the National Election Committee.

Following is reaction from analysts:

GYORGY BARCZA, K&H BANK

“This is positive for markets.”

“It’s positive as there is a chance to change laws that require a two-thirds majority, and with such a strong mandate the government will perhaps be braver (in pushing reforms).”

“Tax reform, and local government reform, plus overhauling state administration — these will have to be the key issues.”

“They will likely have to come to agreement with the IMF and will probably have to carry out some kind of tax cut already this year as this is politically an important issue with municipal elections also coming in the autumn.

“The IMF will likely be to some extent lenient if they receive a pledge for structural reforms, for serious changes in 2011-2012.”

GERGELY SUPPAN, TAKAREKBANK

“In the near term markets can give a vote of confidence in the new government but they will have to come out with their plans rather quickly.

“We may see some specific measures already in the days ahead. Some things have already leaked between the two rounds, on the basis of these it is likely that they are serious about halving the number of local government and parliament MPs.

“They apparently also want to clamp down of bureaucracy, but this will take more than one day.

“All this has to be seen against the backdrop that room for manoeuvre is limited so they will obviously make a push to make it larger, therefore they will pledge to eradicate corruption.

“I think they will come to agreement with the IMF quickly as they have already held consultations.

“Among analysts it is a rather widespread view that they will offer reforms in exchange for bigger room for manoeuvre, the question is what time frame we are looking at and when they can start.

“There are about 8,000-9,000 tasks performed by the state, they will take more than one day to halve, this is a process that requires months, maybe even years.

“If they start (reforms) quickly, that can trigger a positive market reaction in the longer run as well.

“Near term, there will be a vote of confidence in the new government and then the market will blend into the global environment, it will be driven by themes of Greece and the global recovery.

“If they act quickly, the forint can firm a bit but it must be said that this result was by and large priced in already.”

Reporting by Sandor Peto

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