Hungarian Prime Minister Ferenc Gyurcsany rejected opposition calls to quit Tuesday after anti-government riots he called the country's "longest and darkest night" since the end of Cold War.

The riots, in which 150 people were hurt, followed the leak of a tape on Sunday in which Gyurcsany said he and his Socialist party had lied for four years about Hungary's budget in order to win a general election in April.

Thousands of people took to the streets of Budapest late on Monday, occupying and setting fire to the state television building and fighting with riot police in the first such violence since late 1980s.

Higher taxes and fees for healthcare and university tuition had prompted protests before the release of the tape sparked a violent backlash that weakened the Hungarian forint and other currencies across central Europe.

"The longest and darkest night of the third Hungarian republic is behind us," Gyurcsany said on state television. "The borderline between freedom of expression and serious disruption has been obscured."

There are plans for a big student demonstration Thursday, seen attracting 10,000 people, which the organizers fear could be hijacked by the opposition.

The soaring budget deficit has forced European Union member Hungary to abandon plans to join the euro single currency in 2010, with analysts now saying 2014 was more realistic.

Tuesday, about 500 anti-government demonstrators had gathered outside parliament by midday. Police presence was light and a correspondent at the scene said the gathering was peaceful.
 
Five parliamentary parties passed a resolution condemning the violence; but political analysts said the involvement of extra-parliamentary far right parties Jobbik and MIEP might diminish the value of the statement.

"It is clear that Jobbik wants to use this opportunity as a fast lane to replace MIEP on the political spectrum," said Zoltan Kiszelly a political analyst.

PM: resigning out of question

A defiant Gyurcsany, facing the biggest challenge in his two-year premiership, said resigning was out of the question and he would continue with the tough reforms.

"I had spent three minutes on Sunday night thinking about whether I should step down or whether I had a reason to step down, and the conclusion I came to is that absolutely not," said Gyurcsany, a 45-year-old millionaire.

The protests came two weeks ahead of local elections on October 1 and follow a slump in the ruling Socialist Party's popularity to 25 percent in polls from 40 percent at the election.

The main Fidesz opposition urged the prime minister to go amid what it called a "moral crisis" while Ibolya David, leader of the smaller opposition Hungarian Democratic Forum, told Hungarian MTV television: "the prime minister should abandon public life".

However, Gyurcsany, who tried to dampen the furore by saying he was referring to how the entire political class had not been honest over the state's finances for years, said he had the backing of his Socialist Party.

"The party is 100 percent behind me, there's not a single dissenting vote... But I admit, in the past four months, I failed to convey the message about the need for reform," he said.

The prime minister has said his taped comments to party members were intended to force them to admit to their mistakes and back much needed reform measures.

He won April's election partly on a promise of tax cuts but has since imposed tax hikes and benefit cuts worth US$4.6 billion in 2007 alone to curb Hungary's budget deficit which will surge to 10.1 percent of gross domestic product this year.

Investors who hold billions of dollars of Hungarian bonds are worried over the fate of the reforms, which most economists see as the only way to rescue the country's strained finances and keep up hopes of joining the euro zone.

Despite Gyurcsany's reassurances, financial markets remained concerned there would be more riots and the government may still abandon parts of planned fiscal austerity measures.

(China Daily September 20, 2006)