The Politics of Confusion; Hungary's rags-to-riches leader is on the left, and criticizes anticapitalist rivals on his right.(Interview)

Byline: William Underhill

Three years ago Ferenc Gyurcsany was a self-made millionaire, little known outside Hungary's business community. Today he's the country's prime minister, championing a new-look brand of social democracy in Central Europe. He spoke to NEWSWEEK's William Underhill in Budapest. Excerpts:

UNDERHILL: You're often compared to Tony Blair. Do you welcome that?

GYURCSANY: I admire Tony Blair because he was brave enough to raise some questions that had not been raised, mainly about how you could combine economic growth and social cohesion. The old type of social democrat always focused on social cohesion and forgot the obligation to develop competitiveness. But Britain is very different from Hungary. It would be a great mistake to copy them. We have a million people here who don't even have the money to meet their basic needs.

Isn't this a difficult moment to press the case for reform?

We are trying to manage two controversial things: to push down the budget deficit while also developing the [nation's] infrastructure. And this creates a conflict. But we can manage it if we can maintain an annual growth of 4 percent. That would generate enough added revenue, and we can also cut taxes.

Is it just coincidence that we have seen three new social-democratic prime ministers emerge in Eastern and Central Europe in recent months?