Hungary govt says no changes, health reform goes on

BUDAPEST, March 20 (Reuters) - A cabinet reshuffle in Hungary is not on the agenda and the government will push on overhauling the ailing health sector, the ruling Socialists and Free Democrats said on Thursday.

Leaders of the two parties denied media reports of a rift in the coalition and that the Socialists had planned to snatch the health ministry away from their much smaller Free Democrat partners to put the brakes on healthcare reform.

"One thing we definitely agreed on today is that there won't be a cabinet reshuffle or ministry swap," Health Minister Agnes Horvath said after a meeting of senior members in both parties.

Prime Minister Ferenc Gyurcsany, who also heads the Socialists, called the meeting under pressure from his party to reconsider or possibly abandon the health reform after losing an opposition-backed referendum that struck down doctor visit fees.

But he said no change at the ministry was on the agenda and the parties only discussed how to press forward with the reform -- meant to relieve pressure from the bloated state budget -- and did not considering abandoning the sector's overhaul.

The government has sought to introduce private capital into the run-down health system because it lacks the funds to do it on its own and must also cut the biggest budget deficit in 27-nation European Union.

A recently passed health bill would introduce private insurers as of next year and generate fresh capital of at least 120 billion forints ($733.7 million) from the sale of 49 percent stakes in new funds.

But the opposition has threatened to initiate another referendum over the privatisation in a vote also likely succeed, giving rise to further concern among the Socialists.

Some Socialists, including Parliamentary group leader Ildiko Lendvai, say the government must halt the selloff in the sector, but the Free Democrats say private capital is necessary.

"The introduction of private capital for the Free Democrats is an absolute priority," Horvath said. "Without it, there's no improvement in efficiency."

The two parties agreed to continue negotiations next week. (Reporting by Balazs Koranyi; Editing by Michael Winfrey)