Prime Minister Ferenc Gyurcsany apologized Friday for not confronting economic realities before April's general elections, speaking before a vote of confidence in Parliament.
Gyurcsany said he and his government had not been brave enough to face up to unsustainable policies but insisted he did not consciously mislead the country.
"I must reject accusations that the first Gyurcsany government falsified data, that it knowingly misled or deceived the people," he said.
Hungarians have been protesting against the prime minister since Sept. 17, when Gyurcsany was heard, in a leaked recording, admitting that the government lied about the economy to win April's general elections.
In a May speech to Socialist lawmakers, Gyurcsany said his first government _ the first to win re-election in post-communist Hungary _ "lied throughout the last year and a half, two years.
"It was totally clear that what we are saying is not true. ... And at the same time, we did nothing for four years. Nothing," Gyurcsany said May 26 at the closed meeting. "Instead, we lied morning, evening and night. I don't want to do it anymore."
But on Friday, the prime minister said the lies he had been referring to were about unsustainable policies implemented by Hungary since 2001 that led to a false sense of security and created illusions about the stability of the economy.
"Maybe we have to apologize because we allowed appearances to be maintained; what is more, we ourselves sustained the illusion that higher, larger incomes could be accomplished without better achievement," Gyurcsany said.
"I did not have the courage to tell the voters to their eyes that everything I did, everything we did, everything that many, many people did and believed in in Hungary for the past years, was based partly on self-deception, partly on lack of valor," he said.
In the last few months, Gyurcsany's government has started implementing austerity measures and some reforms aimed at lowering the state budget deficit, which at over 10 percent of gross domestic product is the largest in the European Union.
Gyurcsany said the austerity and reforms would have negative effects next year before leading to improvements.
"In 2007, the purchasing power of averages incomes will fall by around 2-3 percent, wages by an even higher proportion," he said, adding he expected more balance in 2008 and that wages and development would again increase from 2009.
"As a consequence of reforms in the health sector and education, disorders in the public sector, the constant lack of funds and the troubles stemming from it will significantly fall, in places disappear, " Gyurcsany said. "The quality of public services will improve."
Opposition lawmakers have been calling for Gyurcsany's dismissal and the formation of a government of experts to find a solution to the country's economic crisis.
Gyurcsany _ whose coalition suffered large setbacks in Sunday's nationwide municipal elections _ requested Friday's vote of confidence to reinforce political support for his austerity package and the transformation of the country's inefficient public sector.
Gyurcsany's Socialists and their smaller associates, the Alliance of Free Democrats, have 210 seats in the 386-seat legislature, so the prime minister is expected to survive to vote. Otherwise, the government must resign.