Hungary´s Liberals Rule Out New Coalition

Fodor said the issue of early polls could only be raised if the government fails to present a programme which is acceptable to SZDSZ.

Hungary's small liberal party, which quit the Socialist-led coalition in April, on Saturday ruled out forming a new coalition with the Socialists.

Gabor Fodor, president of the liberal Alliance of Free Democrats, also said after meeting the leader of the main opposition party Fidesz that the liberals would help Fidesz force an early election only as a last resort.

The Free Democrats (SZDSZ), who have 20 MPs in Hungary's 386-seat parliament, had indicated they would support the Socialists from outside a formal coalition and called on the government to return to its plans to cut state spending and taxes.

Fodor, who is due to meet Socialist Prime Minister Ferenc Gyurcsany next week, said: "I wish to lead SZDSZ ... as a responsible opposition party which holds the government accountable for its programme."

Fodor said the issue of early polls could only be raised if the government fails to present a programme which is acceptable to SZDSZ.

The right-of-centre Fidesz, which held power from 1998-2002 and which has a huge poll lead over the Socialists, has called for an early election, saying the Socialist minority government is unable to resolve Hungary's economic problems.

The Socialists, who have 190 MPs, need the backing of the Free Democrats to pass the 2009 tax and budget laws in parliament at the end of this year.

Economic reforms in Hungary, whose economy was the slowest growing in the 27-member European Union in 2007, were halted after the Free Democrats quit the government. Some investors fear the Socialists will spend heavily ahead of the next election due in 2010.