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Published: Monday February 17, 2014 MYT 1:40:02 AM
Updated: Monday February 17, 2014 MYT 1:41:05 AM

Hungary's PM Orban sets out stakes for April vote

Hungarian Prime Minister Viktor Orban presents his annual state-of-the-nation speech in Budapest, February 16, 2014. Orban's ruling centre-right Fidesz party has a firm lead in opinion polls ahead of elections due in April. REUTERS/Bernadett Szabo

Hungarian Prime Minister Viktor Orban presents his annual state-of-the-nation speech in Budapest, February 16, 2014. Orban's ruling centre-right Fidesz party has a firm lead in opinion polls ahead of elections due in April. REUTERS/Bernadett Szabo

BUDAPEST (Reuters) - Hungarian Prime Minister Viktor Orban offered voters on Sunday a choice between his government and a return to a post-communist regime he said had taken Hungary to the brink of collapse.

With a parliamentary election due on April 6, Orban's ruling centre-right Fidesz party has a firm lead in all opinion polls over the leftist opposition alliance led by the Socialists.

Orban, whose party secured more than two-thirds of the seats in parliament in the last election in 2010, said his government had cut the budget deficit below 3 percent of economic output, cut energy prices for households and turned around the economy.

Inflation is the lowest for over 40 years and the economy is growing, Orban said in a speech to hundreds of supporters.

"We know very well that today there are two paths ahead of us, we must choose between two options, two ideologies and two forces," the prime minister said.

"The future or the past. It's very simple: building the future, or a restoration of post-communism."

Orban's government has rewritten swathes of Hungarian law, including the constitution in a way that critics say cements its hold on power while using a hefty bank levy and special taxes to cut the budget deficit. His government has also nationalised private pension fund assets worth about $14 billion.

Orban, 50, who rose to fame in 1989 as a young dissident at the time when Hungary rejected Communism, said Socialist governments between 2002 and 2010 had ruined the country which needed a bailout from the International Monetary Fund in 2008.

"We must defend what we have achieved so far," he said.

Orban said his government had stabilised Hungary's finances at the cost of fighting back an "attack by Brussels bureaucrats" when Budapest imposed heavy windfall taxes on banks and mostly foreign-owned energy, telecoms and retail companies.

After a series of voter-pleasing measures, including big utility price cuts for households, higher salaries for teachers and generous child care benefits, his Fidesz party had 30 percent public support in a recent poll by Ipsos, while the leftist alliance had 23 percent approval.

The alliance is led by Socialist party leader Attila Mesterhazy, whose party wants to scrap the 16 percent flat tax introduced by Orban, which it says favours the rich, and to phase out windfall taxes on banks and other business sectors.

The alliance has yet to unveil its own electoral programme.

In a statement on Sunday, Mesterhazy said Orban's speech was "cowardly and full of lies, as it was missing reality" because four million Hungarians were living below the poverty line.

Orban said Hungary was facing a "historic opportunity", predicting an economic upswing in central and eastern Europe.

"We can set it as a goal that taxes on labour would be even lower in Hungary... that we will have the cheapest energy in Europe, and that all those who want to work would have a job," he said.

Data on Friday showed Hungary's economy grew by 2.7 percent in annual terms in the fourth quarter, faster than the 2.1 percent estimated by analysts.

However, its public debt at around 80 percent is still the highest in central Europe, which keeps it vulnerable to contagion from an emerging market selloff as the United States unwinds its own stimulus. This has pushed the forint to two-year lows versus the euro in the past few weeks.

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