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New Hungarian Leader Wants Closer Ties With Russia - 2002-04-22

Incoming Socialist Hungarian Prime Minister Peter Medgyessy says he wants to re-establish close ties with Russia while renegotiating subsidy arrangements with the European Union. Mr. Medgyessy, a former Communist, made the announcement as he presented a program for the first one hundred days in government, following his election victory Sunday.

Speaking to reporters, Prime Minister-elect Peter Medgyessy made clear that his Hungarian Socialist Party and its smaller liberal partner, the Alliance of Free Democrats, want to re-establish a close relationship with Russia.

The former Communists-turned Socialists have criticized the outgoing conservative Prime Minister Viktor Orban for not even visiting Russia once, during his four years in office.

Mr. Orban, a fierce anti-Communist, was actually one of the first politicians in the last days of Soviet rule in Hungary to publicly demand the withdrawal of Russian troops in 1989.

However, Mr. Medgyessy, a former Communist finance minister, says his country should look towards the future and aknowledge that Russia has changed under the leadership of President Vladimir Putin.

“There are big opportunities for economic relations,” he said. “This is why I visited Russia a few weeks ago and met with some Russian leaders. I am convinced that Hungary can re-enter the market.”

Establishing closer ties with Russia is just one of the policy priorities of the incoming Socialist-Liberal administration. Mr. Medgyessy also said his government wants Hungary to join the European Union, the 15-member European trading block, in 2004.

However, in his program for the first one hundred governing days he said that the incoming administration wll start "without delay" talks with the E.U. on "the improvement of financial conditions of accession in the interests of agricultural producers."

Many in Hungary remain uneasy about European Union plans to allocate to farmers in new member states just 25 percent of what farmers of existing member states currently get. This figure would gradually rise to one hundred percent by 2013.

But European agriculture commissioner Franz Fischler has said that granting immediate full direct payments to farmers in candidate states would in his words "create stark income differences" with the non-agricultural work force.

Although a breakthrough is not expected in favor of Hungary, Western diplomats have suggested that the E.U. may be more inclined to negotiate with Mr. Medgyessy, who is seen as more pro-Western and less nationalistic than outgoing Prime Minister Orban.

In a further sign of his perceived less nationalistic style, Mr. Medgyessy announced he will close down the controversial Centre for Country Image, set up by the current center right Government. The money saved would be used instead for such programs as free school lunches for children. He also wants to support families, pensioners and students; increase the salaries of teachers, healthcare workers and state employees by 50 percent and make the minimum wage tax-free. Mr. Medgyessy says there is enough room in the budget to pay for all these social benefits:

“We did not calculate the affect of these measures [on the budget] for the first 100 days,” he said. “But we calculated for the entire program. Hungarian economic growth, if led professionally, can also generate the necessary resources for this.”

Mr. Medgyessy projects an annual economic growth of six percent by the end of his term, up from the roughly three-percent forecast for this year.

Many of the suggestions made by Mr. Medgyessy are not much different than those proposed by the center-right alliance of outgoing Prime Minister Orban.

But analysts say Mr. Medgyessy's less autocratic style seems to have endeared him to voters in Hungary's fourth parliamentary elections since the collapse of Communism.

In addition to establishing an independent media, Mr. Medgyessy has agreed to restore weekly parliamentary sessions as part of the country's move towards democratic governance.