Hungary's main opposition party Fidesz said on Tuesday it would try to force a referendum in which it would ask voters to put a halt to privatisation.
Zoltan Pokorni, Vice-President of the centre-right party, said sell-offs had already reduced the public sector to a bare minimum.
"This government has no authorisation for (privatisation)," he told a news conference.
New Prime Minister Ferenc Gyurcsany set up his government on Monday, weeks after the ruling centre-left parties dumped Peter Medgyessy from the post amid fears that they would be defeated at elections in 2006.
"Hungarians in the (2002) election campaign have voted approval for the Medgyessy government to carry out a welfare reform, and this remains the moral ground for (the rule of) the Socialist-Free Democrat (government) coalition," Pokorni said.
The government already has major budgetary problems, and a referendum, which would be held automatically if Fidesz can get 200,000 signatures calling for it, could limit its room for fiscal manoeuvre.
Fidesz has already proved capable of getting the support needed for referendums on other issues.
A ban on sell-offs could cut state revenues by billions of euros which had been earmarked for motorway construction and which Hungarian politicians believe are vital to lift voter confidence ahead of an election on 2006.
"It would be bad for the government of course as it will miss the money and Fidesz may not come out of that well either in the eyes of foreigners (investors) -- this is a quite unusual referendum issue," said Zsolt Papp of ABN AMRO in London.
Firms still in partial or full state ownership include a oil group MOL , electricity grid MVM, the Hungarian Post, transport companies and the lottery firm Szerencsejatek Rt.
The Hungarian government earlier this month said the 2004 budget deficit would come out at 5.0-5.3 percent of gross domestic product, compared with a target of 4.6 percent of GDP, making the third year in a row of broken budget promises.
Many analysts believe the Hungarian government will not have any room to cut the deficit by 2006 and a World Bank economist said recently that Hungary's budget deficits are the most closely tied to the electoral cycle of anywhere in the region.
According to the latest opinion poll, by Szazadveg-Tarki, Fidesz had the support of 52 percent of decided voters, a 20 percentage point lead over the Socialists.
Pokorni said only a few firms, which ensure safety and security for the people, had not been sold off.
"This is the same debate as in any western European country," he said. "Analysts put state ownership at around 10 percent in Hungary now and in old European Union member states this figure is twice as high."
The Socialists have accused Fidesz of trying to move the country back into its communist past by opposing privatisation.
Source: Reuters
06.10.2004