Smaller party in Hungary's coalition expected to approve leaving the government

Delegates from the smaller party in Hungary's Socialist-led coalition were expected on Sunday to approve a decision by the party leadership to leave the government by April 30.

The Alliance of Free Democrats and the Socialists had been bickering for months about economic and social reforms. Their split was accelerated by Prime Minister Ferenc Gyurcsany's decision in March to dismiss Health Minister Agnes Horvath, a Free Democrat.

Free Democrat chairman Janos Koka said the coalition, which has governed since 2002, "cannot solve the country's most serious problems," which have weakened Hungary economically.

"We have to admit that the country is in a bad mood and more and more citizens think we are headed in the wrong direction," Koka said to more than 500 party delegates.

For now, the Socialists are expected to continue in a minority government.

Recent polls show support for the Free Democrats at around 3 percent, below the 5 percent minimum needed to get into the parliament.

Hungary has been struggling to reduce its budget deficit, which has been the largest in the European Union in the past few years.

Weeks of protests and riots broke out in September 2006 after Gyurcsany could be heard admitting on a leaked recording that the government had lied about the state of the economy to win re-election that April.

Higher taxes and austerity measures have been imposed to cut the budget gap and Hungary is also suffering from high inflation and low economic growth.

The Free Democrats are also facing an internal crisis after local media uncovered serious allegations of fraud, later confirmed by party officials, during a 2007 party congress that elected Koka as party chairman and the rest of the current leadership. New internal elections are scheduled for June.

Environmental Affairs Minister Gabor Fodor, who lost to Koka last year and plans to run again for party chairman next month, said he supported leaving the coalition but left open the possibility of renewing ties with the Socialists if he wins the internal vote.

Elections are next planned for around April 2010 and both Koka and Fodor warned against early parliamentary elections, which could result in an ample victory for Fidesz, the main center-right opposition party led by former Prime Minister Viktor Orban.