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Finnish PM says government could collapse on Friday

Finnish Prime Minister Juha Sipila speaks during a meeting of the Nordic Council in Reykjavik on October 28, 2015.
Halldor Kolbeins | AFP | Getty Images
Finnish Prime Minister Juha Sipila speaks during a meeting of the Nordic Council in Reykjavik on October 28, 2015.

Finnish Prime Minister Juha Sipila said his centre-right coalition government could collapse on Friday if it fails to reach agreement on healthcare reforms that envisage spending cuts of up to 3 billion euros (£2.14 billion).

The reforms are a key part of the government's plan to balance the public finances over the long term in Finland, a eurozone member country now mired in recession.

"It is very likely that I will go to meet the president tomorrow," Sipila told a news conference, meaning the resignation of the three-party government.

Sipila added that, in the absence of a compromise deal on health reform, he would prefer not to call snap elections but to form a new government from the current parliament.

Sipila and his Centre party, which has rural roots, wants to divide the country into 18 regions where governmental bodies would decide on health care services.

But the National Coalition party, led by Finance Minister Alexander Stubb, favours a model of just five regions, arguing that a smaller number would ensure a more equal share of resources between the regions. It also says a larger number would threaten financial savings.

The third coalition partner, the nationalist Finns Party, has accepted Sipila's proposal.

National Coalition earlier on Thursday asked for a time-out, but Sipila said they had spent quite a lot of time already seeking a solution.

"It is not about just a number (of regions), it is about the whole structure and content of the reform," he said.

The coalition, which took office in May, has had difficulty finding common ground on several thorny issues, including labour market reform and the handling of Europe's migrant crisis.

The anti-immigration Finns Party has already withdrawn its support for some government plans following a steep decline in its support.

Overhauling the health care system, billed as the country's most important reform of the decade, has long vexed politicians. The previous left-right government put the reform on hold due to disagreement among the parties as well as constitutional worries.

Finland has a generous welfare system but its population of 5.5 million is ageing fast and is also spread thinly over a large territory, with many Finns living in small, remote communities.