Hungary's Prime Minister to Step Down Amid Economic Turmoil

"I propose the formation of a new government with a new prime minister," Gyurcsany said on Saturday, March 21, at his party's congress, according to Hungarian newswire MTI.

He said he would inform the parliament on Monday and suggest a new prime minister be elected at an extraordinary meeting of his Hungarian Socialist Party, to be held in two weeks. He did not name a possible successor.

The arrangement would be a constructive vote of no confidence and would not lead to early elections.

Gyurcsany became prime minister in 2004 and was re-elected in 2006. Since then, he has struggled to maintain a parliamentary majority as economic conditions deteriorated along with his popularity.

Though Gyurcsany did manage to cut the country's budget deficit from over 9 percent of GDP in 2006 to around 3.3 percent in 2008, Hungary had to accept a $25.1-billion rescue package from the International Monetary Fund last fall to avoid a financial meltdown.

He had failed to win public support for his wider economic reforms, while tax hikes and spending cuts drove his popularity to record lows.