BUDAPEST - Hungary's prime minister stunned the country Saturday by announcing his resignation because he had become an "obstacle" to the reforms needed to pull the country out of its worse financial crisis since the end of communism nearly 20 years ago.
Ferenc Gyurcsany, of the ruling Socialists, made the unexpected announcement at his party's congress saying that he was keeping a pledge he made in January last year to change the leadership if the embattled party's popularity failed to recover.
He accepted his reputation was badly damaged when state radio in 2006 broadcast a speech he made at a party meeting in which he admitted lying about the state of the economy to win elections a few months earlier. The broadcast sparked weeks of protests and riots that left hundreds injured.
"I'm being told that I myself am the obstacle to the co-operation and stable government majority needed to implement changes," Gyurcsany told party members. "If this is so, I will eliminate this obstacle."
He said a year had passed since he made his promise. "Support for us has not grown. On the contrary, it has diminished," Gyurcsany said. "I propose forming a new government with a new prime minister."
Instead of early elections, legislators are likely to chose a new prime minister who will name a new government to be in place until parliamentary elections scheduled for mid-2010.
Hungary has been badly hit by the global financial crisis and has received a $25.1 billion loan from the International Monetary Fund and other institutions.
Investors' confidence about the country's ability to meet debt payments has substantially weakened the forint, the Hungarian currency, preventing the central bank from lowering interest rates to help boost the economy, which is expected to shrink by as much as five per cent in 2009.
Gyurcsany said that he will officially notify parliament of his decision Monday and called for a meeting of his party in two weeks to choose a candidate to head the new administration.
Parliament could elect the new prime minister April 14, state news agency MTI reported, citing unnamed sources in the Socialist Party.
It was not clear if the candidate would be from the Socialists, a compromise candidate from another party or an independent.
Parliament named Gyurcsany as prime minister in late 2004, after his predecessor, Peter Medgyessy, was ousted midway through his four-year term amid dwindling popularity.
Gyurcsany won a full term outright in April 2006 but was badly damaged by the revelations of the broadcast a few months later.
"At an important time, I failed to speak clearly and as a result my credibility was significantly damaged," Gyurcsany said Saturday. He acknowledged that he struggled to lead the country after the 2006 riots.
"As time went by, we had fewer and fewer allies and trust also diminished," Gyurcsany said. "While I managed to retain the party's support ... support from the voters was constantly falling."
A poll released Wednesday by research firm Median showed that Gyurcsany's popularity stood at just 18 per cent -- the lowest ever for a prime minister since Hungary's return to democracy in 1990. The poll had a margin of error of between two and six per cent.
