Office, BMI with Western Europe over the next -- years. challenges and threats to stability Rise Of The Right: Elections in April ----, which yielded another supermajority for the centre-right Fidesz party in parlia- ment, suggest more than just a swing away from the political centre ground. ...The far-right s rise could put relations between ethnic groups in Hungary and wider relations with Western European institutions at risk. Socio-Ethnic Tensions: Related to the rise of far-right politics, Hungary is also fast demonstrating itself as one of the least toler- ant societies in Central and Eastern Europe, particularly with the far-right Jobbik party gaining an estimated -- of the vote in the ---- general election while the Slovak National Party has generally garnered only ---- of the vote in recent years and the Czech Republic s far right similarly has no serious political presence. Persistent reports of physical attacks as well as state discrimination with respect to employment opportunities have left the minority prone to higher rates of poverty and social exclusion. ...This dynamic will undoubtedly put pressure on the fiscal accounts and call attention to the need for further reforms to the pension system. The employment situation will also need to be addressed, particularly given that Hungary has one of the lowest labour participation rates in the EU. EU Relations: Having joined the EU in ----, economic and political convergence has progressed steadily in Hungary.
...Following the re-election of the governing Fidesz party on April -, Hun- gary s policy programme will remain centred around supporting govern- ment revenues via punitive taxes on business, and populist rhetoric railing against the EU. With radical nationalists Jobbik now the main opposition we expect a more overtly nationalist agenda from the gov- ernment in order to mitigate right-wing dissent. ...The constitutional amendments made during the previous parliament (---------) brought the government into direct confrontation with the European Union, as Brussels criticised Budapest for changes that it perceived to be anti-democratic. These included restrictions on paid political advertising (although the government was still allowed to run adverts), reducing the power of the Constitutional Court, preferential treatment for those in traditional (ie heterosexual) marriages, and restricting the ability of students who have received state grants to leave Hungary following their graduation. We do not expect to see any shift in the government s policy stance in the months or years ahead, with Prime Minister Vik- tor Orban s programme of placing punitive taxes on publicly unpopular industries, such as banking, utilities and telecom- munications, continuing to garner widespread support. ...This poses threats to the stability of Hungarian financial assets in the coming quarters. With --.- of government bonds held - Business Monitor International Ltd www hungary Q- ----
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