Hungary's ruling coalition clashed Saturday when junior coalition party the Alliance of Free Democrats (SZDSZ) rejected Prime Minister Ferenc Gyurcsany's calls for a change at the head of the health ministry. ( dpa )
Gyurcsany, speaking at a conference of his senior Hungarian Socialist Party, admitted that a new law to introduce private capital into the health insurance system, passed in February, enjoyed little support among the general populace. He said that along with a new policy a new minister was needed.
"We must acknowledge that a significant part of the country currently doubts that this law serves its interests," he told around 3,000 delegates.
The government is facing a serious loss of voter confidence and it also recently lost heavily in a referendum, called by the main opposition party Fidesz, which forced it to cancel fees for medical treatment and higher education.
The loss was considered a serious blow to the government's plans to carry out further economic reforms. The fees, as well as the private capital plans, are part of unpopular austerity measures aimed at reducing the budget deficit and, ultimately, at getting Hungary ready to adopt the euro.
Another referendum on the private capital model looks likely later this year, and the Socialists appear ready to back off from the unpopular plan with one eye on general elections in 2010.
The SZDSZ and Health Minister Agnes Horvath, however, are determined to stick to the plans to revamp the health insurance system despite the referendum loss, and the debate has caused serious tension in the coalition.
The junior party on Saturday, following Gyurcsany's announcement, said in a statement that Horvath had been doing an "excellent job" and that it was not prepared to sacrifice her.
Some elements within the Socialists have already called on the SZDSZ, which is polling at a meagre 1 per cent, to accept that the private capital model is dead or to leave the coalition.
Should the coalition collapse, the Socialists would be faced with attempting to run the country with a minority government.
The Socialists are believed to favour watering down the health insurance reform, which originally saw 22 partially privatized funds replacing the current central fund, by keeping the system entirely state owned and only creating regional funds.
Gyurcsany told delegates that his party would make a new proposal on the health insurance reform within a few days and warned the SZDSZ not to behave like a "resentful lover."
He also called on them to "get down from their high horse" over the reform measures.
The unpopular measures - which have seen taxes rise, energy prices go up and spending cut - have helped the Socialists plunge to approval ratings of 15-19 per cent in polls.
While the measures have so far cut the deficit from 9.2 per cent of gross domestic product in 2006 to an estimated 5.7 per cent in 2007, they have hit economic growth, and forced up inflation and unemployment. The September 2006 leak of a tape on which Prime Minister Gyurcsany admitted lying about the need to take economic action prior to that year's general election also contributed to the popularity slide.