Budapest  - Hungarian President Laszlo Solyom gave a sombre New Year's address on Thursday and called on the nation to find a way out of an economic and political crisis that, for Hungary, is well into its third year.

"We stand before an uncertain and critical year, and however regrettable it may be, it is not possible to give you a traditional New Year's greeting," said Solyom.

"In just a few years, after being a model country we are now bringing up the rear," Solyom said. As he spoke, Hungary's small neighbour to the north, Slovakia, was starting the year with a new currency, the euro.

Hungary was the only one of the new EU members in the region to slide into a recession last year, and analysts predict that the economy could shrink by as much as 3 per cent this year.

"Defining a clear way out (of the present crisis) and implementing urgent fundamental reforms is the responsibility of the government," said Solyom. He said, however, that he was not addressing politicians, but speaking to all "well meaning people."

The country is rigidly divided between the left and sympathisers with the governing Hungarian Socialist Party and supporters of the populist centre-right Fidesz party. The past two years have also seen an increase in the activity of the extreme right.

"It is necessary at just such difficult times, as self-aware and responsible people, to reject those who want to use us, whether for financial or political ends," said Solyom before wishing the country a happy New Year. (dpa)