Mr Jarai said that state redistribution should be scaled back to below 40pc in the medium-term, while public administration should undergo substantive structural reform.

    Implementation of the cuts within the next four to five years would cause social tension, but putting them off for ten years would impede improvement in Hungary's competitiveness. Tax reform and tax cuts are also needed for improving competitiveness, Mr Jarai added.

    Mr Jarai said the Bajnai-government has been focusing only on cutting the deficit, while a number of other problems were left unaddressed. Mr Jarai added that the Bajnai-cabinet lowered the deficit statically, without restructuring budget spending, which means the relatively low deficit is difficult to sustain.

    Mr Jarai told MTI on Tuesday that he would take a position in a Fidesz-led government. "(Opposition head) Viktor Orban said I have to work, and naturally I will be glad to do my part in any position," Mr Jarai said.

    General elections are scheduled for April, and present opinion polls suggest Fidesz will win.