After Gordon Bajnai has received the support from both the majority of MSZP and SZDSZ factions, it is very likely that he can be the successor of Ferenc Gyurcsány.

Following de facto resignation of the Prime Minister of Hungary there are two likely scenarios: 1) early elections or 2) a new government supported by the socialist MSZP and the liberal SZDSZ.

The process that started in the autumn of 2006 with the Olaszliszka lynching seems to be completing its course. Political discourse on the Roma question has swung from one extreme to the other.

Tensions within the Socialist Party are rising, both generational and ideological. The stability of the is not yet affected, but the real test will be the passing of the 2010 budget later this year.

The economic crisis has the government with little room for maneuvering until the 2010 election. Fidesz seems to have abandoned hopes for an early election and plans on taking over in 2010.

Biofuels production offers an economic growth potential for Hungary in the short- and medium term, moreover, first-generation biofuels may utilize annual surpluses of agricultural production.

The financial rescue package has restored the confidence in the Hungarian economy and currency in the short run. However, there is a risk that the crisis will amplify the existing deficiencies.

In the past few weeks Ferenc Gyurcsány’s position has stabilized somewhat. The „spy scandal” will remain the most important political topic in the coming period.

The fate of Prime Minister Ferenc Gyurcsány and the minority government will be determined by the two major issues before Parliament this fall: the tax legislation and the budget.

The PM offers a tax cut deal in the following four years, but only in line with the convergence program and only if there is extra income deriving from a much more transparent taxation culture.

The Apollo-affair and the attacks against Hankook reveal the contradictions in the political strategy of Fidesz: the conflict between the opposition position and the pre-government position.

The government will reveal its action plan for Parliament’s autumn session in late August or early September. SZDSZ will decide on whether or not to support the government after they have seen it.