Violence Escalates in Hungary Protests

BUDAPEST -- Hungarian Prime Minister Ferenc Gyurcsany defied opposition pressure to quit Tuesday after anti-government riots he called "the longest and darkest night of the republic" left 150 people injured.

The worst riots in Hungary since the end of communism followed the leak of a tape Sunday in which Gyurcsany said he and his Socialist party had lied for four years about Hungary's budget in order to win a general election in April.

Thousands of people took to the streets of the capital, Budapest, late Monday, attacking the state television building in clashes which left 150 police and protesters injured.

Higher taxes and fees for health care and university tuition had prompted protests before the release of the tape sparked the violent backlash. On Tuesday, about 500 anti-government demonstrators began a new protest outside the parliament. Police presence appeared light.

The protests come two weeks ahead of local elections on Oct. 1 and follow a slump in the ruling Socialist Party's popularity to 25 percent in polls from 40 percent at the election.

Monday's demonstration with around 10,000 people in front of the parliament turned violent when some protesters stoned and set fire to the state television building, occupied part of it and looted it.

The main Fidesz opposition urged the prime minister to go amid what it called a "moral crisis," while Ibolya David, leader of the smaller Hungarian Democratic Forum, told MTV "the prime minister should abandon public life."

However, Gyurcsany, facing the biggest challenge in his two-year post as prime minister, received backing from his Socialist Party to stay on and implement his economic policies.

"The job of the institutions of the republic is now to strengthen people's faith that calmness can be restored," a defiant Gyurcsany told a news conference Tuesday.

Gyurcsany also retains the support of coalition partner, the alliance of Free Democrats.

The prime minister won April's election partly on a promise of tax cuts but has since imposed tax rises and benefit cuts worth $4.6 billion in 2007 alone to curb Hungary's budget deficit, which will surge to 10.1 percent of gross domestic product this year.

Investors who hold billions of dollars of Hungarian bonds are worried that Gyurcsany may be forced out of office or to abandon his economic policies, which most economists see as the only way to rescue the country's strained finances.

On Tuesday, the forint weakened slightly against the euro from five-week highs on Monday, and was trading at 274.12 to the euro, down from Monday's close of 270.42.

It slid as low as 274.90 on a report, which the government denied, that Gyurcsany had resigned.

Financial markets remained concerned that there would be more riots, which could push the government to abandon parts of planned fiscal austerity measures.

Ratings agency Standard & Poor's said Hungary's BBB-plus credit rating, which is on a negative outlook, was not under any immediate pressure due to the riots.