Taxing Digest

With 97.2% of the votes counted, Fidesz seemed to have got 263 seats in the legislature of 386 seats, five more than the 258 needed to control two-thirds of parliament.

“Les promise that we will work to deserve this confidence, “said Lajos Kosa, one of the main leaders of Fidesz, a crowd celebrating the victory in the center of Budapest.

Fidesz had earned the right to form the next government in the first round of voting on April 11, but two-thirds majority to pass laws will allow without the support of the opposition.

The now ruling Socialist Party will have 59 deputies in the next parliament, followed by far-right Jobbik, 47, and a Green Party, Politics Can Be Different, with 16. There shall be one independent deputy.

Fidesz, who led the ruling coalition from 1998 to 2002, has promised to cut payroll massive national and local governments to simplify the tax system, allow citizenship to ethnic Hungarians in neighboring countries and to halve the number of deputies.

Twenty years after the collapse of communism and democratic elections of 1990, Hungary is paying the price reforms have delayed and costly campaign promises and persistent appeal of a paternalistic state.

Only a loan of 20,000 million euros (27 billion) IMF International and other institutions saved the country to declare a moratorium on payments of its debts at the end of 2008, while record levels of unemployment and a recession in which the economy contracted 6.7% last year presented a real challenge to the new government.

Fidesz is expected to negotiate with the IMF to establish a budget deficit higher than the target for 2010 of 3.8% of GDP, thus obtaining a margin maneuvering to consolidate state-owned companies suffering losses and possibly implement modest tax cuts.