Budapest = The Hungarian parliament on Monday voted by 209 votes to 171 in favour of the government's 2009 budget bill.

Although the result was expected, it nevertheless put an end to months of debate and speculation over the exact details of the budget and the viability of Hungary's unpopular socialist government.

Finance Minister Janos Veres said the government's latest economic forecast had taken into account possible worst-case-scenarios.

"In place of economic growth the government is accounting for a one percent contraction in the economy, and a fall in investment and domestic consumption," he said.

The budget is based on expected revenue of 8.3 billion forints (31.1 billion euros), against expenditure of 8.96 billion euros. With other surpluses and deficits factored in, the government predicted that the overall budget deficit in 2009 will be 2.6 per cent of national GDP.

One of the main criteria for entry into the Exchange-Rate Mechanism II system (ERM-II) - essentially a waiting room that EU countries must spend a couple of years in before they can adopt the euro - is a deficit of less than 3 per cent.

In the summer of 2006, Hungary's budget deficit stood at 9.2 per cent, the highest in the EU at the time, and joining the eurozone seemed a distant dream. Just months into its second term office, the socialist-liberal government brought in a package of tax hikes to rein in the deficit.

When, in September, a recording was leaked of Prime Minister Ferenc Gyurcsany admitting that his party had deliberately hidden the reality of Hungary's dire economic situation in order to secure re-election, riots broke out in Budapest. Since then, sporadic unrest and platoons of riot police have become part of the backdrop to life in the Hungarian capital.

Only a few months ago there were doubts over whether Hungary would be able to pass a budget at all. The coalition government split in April when the junior partner, the Alliance of Free Democrats, quit in frustration over the Hungarian Socialist Party's refusal to implement swingeing cuts to public spending.

The socialists remained in government, but no longer had an outright majority in parliament. Gyurcsany said he would resign if government was unable to get a budget bill past parliament.

In the end, the global economic crisis forced the government's hand. The International Monetary Fund (IMF), the EU and the World Bank had to step in with a 20-million-euro stand-by loan at the end of October as Hungary's economy, and it currency, the forint, teetered on the brink of collapse.

Shortly afterwards, partly under pressure from the IMF, which put up the bulk of the loan, the government announced public sector cuts, notably the abolition of a traditional "thirteenth month" bonus payment enjoyed by public sector workers and a cap on similar bonuses to pensioners.

This was one of the main reasons that the main, centre-right opposition party Fidesz cited for voting against the budget on Monday.

"Fidesz finds unacceptable, and cannot vote for what is first and foremost an austerity budget, which takes away the thirteenth month wage from public sector workers, as well as a significant part of that of pensioners' thirteenth month payment," said Mihaly Varga, former finance minister, now deputy head of the party that has commanded an overwhelming lead in opinion polls since the summer of 2006.

Public sector workers, from teachers to firemen, last week announced a nationwide strike for January 12 next year after the government refused to back down on what at least one union leader said amounts in real terms to a cut in wages by one sixth.

Since Wednesday Hungary's main international airport in Budapest has been practically paralyzed by industrial action, and a nationwide railway strike began on Saturday evening.

On the other hand, despite his popularity taking another battering, Gyurcsany's job once again looks safe for the time being. Although they were not happy with it, the public spending cuts made the budget just palatable enough to the Free Democrats for them to tip the balance in its favour during Monday's vote in parliament. (dpa)