Hungarian Parliament will hold confidentiality vote today at 11:30 CET. Five hours were be allotted for the discussion of the confidentiality proposal.
Our view: We see it very likely that the Prime Minister will get support form the majority of the parliamentary members today, since both coalition parties have expressed earlier, they will vote in favor of Mr Ferenc Gyurcsány.
We see that the disappointed larger opposition party Fidesz could keep protesters on the street for the remainder of October, but we see it likely that the current government could reserve its position.
On a medium-term, however, we see that market will focus on the expenditure side reforms to be voted on by the parliament. We see that without a cooperative opposition, the government could face difficulties to approve the larger scale reform, which would require supermajority. We see some chance for the reform plans to soften, as simple majority refomrs could easier get support.
The expected timeline of parliamentary approval of expenditure side reforms is:
1)Healthcare reform by beginning of 2007
2)Local governmental reform by mid 2007
3)Pension system reform by end 2007