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Hungary reforms hobbled by coalition’

Hungary was on Monday night heading for a minority government after members of parliament from the junior coalition partner voted in favour of withdrawing its ministers from the centre-left government.

The decision, expected to be ratified by the Free Democrat party’s executive committee on Monday night, is likely to leave the Socialist-led government of Ferenc Gyurcsany, prime minister, unable to push through a deeply unpopular restructuring of the country’s state sector.


A weak minority government would also call into question Hungary’s ability to maintain the reforms prescribed by the European Commission and the IMF if it is to join the eurozone.

Although Mr Gyurcsany’s government has made painful and unpopular cuts to public spending and increased taxation over its two years, analysts say there has been little progress on fundamental structural reforms and that a minority government would have even less chance of pushing such reforms through.

Eszter Gargyan, an economist at Citi, said that, though the government had managed

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