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Hungary president names Viktor Orban next PM

BUDAPEST (Reuters) - Hungary’s president named centre-right Fidesz party leader Viktor Orban as the next prime minister on Friday and said the new government’s main task will be to boost the economy.

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Orban, whose party won elections by a landslide in April and ousted the Socialists after eight years, is expected to form his government by the end of this month.

“For the post of prime minister, I will propose to parliament Mr. Viktor Orban,” President Laszlo Solyom said after opening the inaugural session of the 386-seat parliament.

“Parliament will soon start the debate of the government programme and the accepted programme will to a great extent define the tasks of parliament as well... The primary task is to fix the economy.”

Solyom said the incoming government, which will have a very strong mandate, will have to overhaul the system of education, curb corruption, fight poverty and foster better integration of Hungary’s large Roma minority via jobs and education.

Fidesz has 263 of 386 seats in the new parliament, a two-thirds majority that is enough modify key legislation including the constitution, electoral law and the law governing the local government sector, which is in need of deep reforms.

The other parties in the new parliament are the Socialists with 59 seats, far-right Jobbik with 47 and green LMP with 16, while there is one independent MP.

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Orban’s government will need to meet voters’ expectations for an improvement in the economy after a 6.3 percent contraction last year, and austerity measures by the Socialists.

It will also have to reassure financial markets that it would reduce Hungary’s debt, which is the highest in central Europe at around 80 percent of GDP, and which keeps Hungary vulnerable to negative shifts in investor sentiment.

Fidesz has said it would try to get the International Monetary Fund and the European Union to allow a higher budget deficit this year than the Socialists’ 3.8 percent target, and promised a three-year tax cutting programme starting from July 1 to boost economic growth.

But it has so far failed to present a consistent economic policy plan.

“We’re still waiting to get a feeling of the overall plan of government, the cohesive whole of spending and cuts, priorities and the balance between all three,” said Peter Attard Montalto at Nomura. “I don’t yet get this cohesive sense of a whole policy direction.”

Reporting by Krisztina Than; Editing by Maria Golovnina