Rift in Hungary's Ruling Coalition

THE emergence of an ultra-nationalist faction within Hungary's ruling coalition could split what is considered the East bloc's most solid regime.

A widening rift in the Hungarian Democratic Forum (HDF) - the largest party in the country's two-and-a-half-year-old ruling coalition - between members espousing anti-Semitic conspiracy theories and critical colleagues "could do a lot of damage to Hungary's reputation as an island of stability in a sea of chaos" in Eastern Europe, a Western diplomat here says.

Recent strains surfaced in August, when leading party member Istvan Csurka published a manifesto in the HDF weekly which to many smacked of neofascism.

He cited an international conspiracy among communists, bankers, Jews, and the parliamentary opposition - a "left-wing bloc" with "Bolshevik roots" - to explain what ails Hungary.

Mr. Csurka also idealized a "middle class rooted in the volk" and cited the decline of Hungarian youths' "genetic roots," which, he wrote, stems from unnamed "handicapped social strata" with whom "we've been living together far too long."

East Europe's political flux provides "opportunities for a new Hungarian living space," he wrote, and only unspecified "firm, autonomous steps" by the government, avoiding "the crooked game of consensus" with the parliamentary opposition, will save the party.

Csurka is not a fringe figure. The well-regarded playwright is a founder and vice president of the HDF and publisher of its weekly paper, Hungarian Forum.

The response from Prime Minister Jozsef Antall and other centrists has been muted so far.

Csurka is "well within the fold of the [HDF]," says Antall spokesman Laszlo Balazs. While the press has "grossly exaggerated the matter," he says, "a healthy dose of benign neglect would do much better for soothing this affair and the emotions whipped up than endless emotional discussions.... [Csurka] himself doesn't think that he meant very seriously this idea about the Jewish conspiracy." Circulation widens

Since the manifesto appeared in the Csurka-published Hungarian Forum, however, it has been reprinted as a pamphlet, and the paper ran another essay citing a Jewish conspiracy on Sept. 3.

The prime minister, whose father saved Polish Jews during World War II, is not considered anti-Semitic, and he has repeatedly ruled out any forcible Hungarian border revision.

But observers think Mr. Antall fears a stronger anti-Csurka stance could fray the party further. "He may have to take more account of his right wing than of [public] opinion in the country as a whole," a Western diplomat says. "The dangers and risks are there" that Csurka's defection could undo the coalition, he adds.

"If [Antall] takes the high ground and says, `There's no room in our party for views like this...' [Csurka] could take a large group with him," another diplomat says. "That could mean the end of the government."

A notable exception to official moves to play down Csurka's remarks was HDF parliament member Jozsef Debreczeni, who on Aug. 27 called Czurka's 20,000-word manifesto "a Nazi ideological foundation."

The party presidium, however, took Mr. Debreczeni to task three days later, saying Csurka's work "in fact helps in forming the HDF's long-term strategy."

Antall said that while some of Csurka's comments were indeed "politically harmful and incorrect" - specifying only Csurka's comparison of the International Monetary Fund to the Red Army - these were his "personal opinions." The HDF, Antall says, has "equal space" for various camps. Party spinoffs

While claiming he supports HDF unity, Csurka launched his own foundation, the Hungarian Way, "to prepare the national-minded Christian middle classes to lead the country." Observers think the body is the germ of a new party. Meanwhile, four other HDF members of parliament last week started the Liberal Forum Foundation, which founding member Debreczeni says could become a party of its own.

Clues about closed-door party meetings hint at an indecisive center. The HDF's parliamentary group, having announced it would try to force Debreczeni to retract his "Nazi" comment at a meeting last weekend, ultimately failed to vote on the issue. Party elections scheduled for November have been postponed indefinitely.

Csurka's manifesto stirs memories of the country's fascist years, during which 680,000 Jews died or were killed, were deported, or pressed into "labor brigades." Csurka's piece also plays both on an apparently common longing for chunks of the Magyar Kingdom which the allies awarded in 1920 to today's Romania, Serbia, and Slovakia, and on fears about the plight of ethnic Hungarians living there.

Some observers fear rising unemployment - 11.1 percent in August and forecast to hit 20 percent by the end of 1993 - could boost Csurka's backing. Results of the latest poll, taken before the manifesto appeared, put Csurka's popularity rating at 35 percent.

The latest poll gives the HDF an 8 percent popularity rating. Its coalition with two smaller parties got 16 percent. Csurka's support within the party is unknown - HDF members' guesses range from 10 percent to 80 percent.

"It's a very difficult calculus," the diplomat says. Disowning Csurka "could present a Le Pen-like phenomenon and a party to go with it," referring to the French nationalist opposition leader, Jean-Marie Le Pen.

Hungary has "a stable democratic system," he says, "but it is also a young one."