Ferenc Gyurcsány's position has stabilized for the moment, it can only be maintained if he is successful in garnering parliamentary support for the proposals of the minority government.

The US subprime crisis will substantially reduce economic growth in the US and in Europe. As a result, Hungarian exports will likely decline and reduce the chances of a healthy economic growth.

The new government is not likely to initiate reforms and it will possibly enact popular measures to cater former MSZP voters. Ferenc Gyurcsány's has significantly weakened, but he has no alternative.

The consequences of the 9 March referendum and the ongoing coalition crisis have sharply raised the vulnerability of the Hungarian currency (

Following the referendum the position of the PM has become unstable, the coalition tensions have risen.Hence the risky moves of the Prime Minister in the last days.

While the results of the referendum is a big defeat of the government, reshuffle is not expected in the next few months, but policy changes will follow.

The referendum on 9th March is exceptional, since democratic countries rarely hold referenda on the abolition of point-of-delivery charges for health care and of university tuition fees.

Ferenc Gyurcsány tried to undermine the last push of Fidesz by announcing potentially popular initiatives, while Fidesz tries to win voters in the political centre.

The parties are trying to present the referendum according to their priorities. Whatever the result, major political shift is not expected in the short term.

Parties are preparing their campaign for the referendum on 9 March. The result will alter the strategies of the government and the opposition as well.

The Political Risk of Hungary and the region has increased in the previous months because of the actions of the Hungarian Guard (Magyar Gárda).

Ferenc Gyurcsány’s position as the head of the government and MSZP has improved. SZDSZ has also strengthened, which could make it a possible ally to FIDESZ in seeking early elections.