With tensions building up on behalf of social groups and trade unions which have already lead to a sequence of demonstrations on the streets of the capital in late 2014, Viktor Orbán will have to pay close attention to keeping public opinion at bay while making efforts to reduce the budgetary deficit, countering accusations of corruption and balancing between closer economic and political ties with Russia on the one hand and the Western alliance on the other.

Tax increases to balance the budget are expected to hit some harder to others, with largely foreign-owned retail chains and tobacco producers being worst affected.

While opinion polls show that the popularity of Mr. Orbán’s Fidesz party has decreased over the past months due to a sequence of unpopular moves such as the announcement of the internet tax or tax hikes which are feared to take a toll on the labour market, the government will not be at risk of collapse in 2015 because Fidesz still has a significant lead over the opposition, which has yet to evolve into a coherent entity due to differing positions on a number of issues.

In spite of the often hostile rhetoric towards the European Union and the United States, Hungary will not sever ties with its Western allies due to its dependence on European investment and funding; similarly, the government will be careful not to completely alienate Washington and will continue to support sanctions against Russia until mid-2015, when they will start to expire.

However, the U. S. government will continue to use allegations of corruption and measures such as the visa ban against six Hungarian officials accused of wrongdoing to pressurise the country and fend off its agenda of rapprochement with Russia amid the ever-more apparent power struggle over border areas such as the Ukraine.

In 2015, the Hungarian government’s main challenge will be to assuage domestic dissent and prevent its own international isolation, the analysis concludes.

Click here to read Stratfor’s full analysis

Source: hungarytoday.hu