ROBERT FICO'S VIEWS ON ELECTIONS AND ECONOMIC

C O N F I D E N T I A L BRATISLAVA 000407

SIPDIS


E.O. 12958: DECL: 04/20/2014
TAGS: PGOV PREL ECON LO
SUBJECT: ROBERT FICO'S VIEWS ON ELECTIONS AND ECONOMIC

REFORMS

REF: FEBRUARY 17 WELLS-MCKNIGHT-THAYER E-MAIL

Classified By: Amb. Ronald Weiser for reasons 1.4 b and d


1. (C) Summary. The Ambassador met privately with Robert
Fico on April 19 to discuss several topics including Ivan
Gasparovic's win over Vladimir Meciar in the presidential
elections on April 16. Fico made it clear that Smer would
not accept any MP defectors from Meciar's Movement for a
Democratic Slovakia (HZDS),suggesting that they join other
parties. Fico also spoke positively about some of the
economic reforms the current GOS has implemented and offered
some modifications he would make as PM. Fico is starting to
use less rhetoric and express more policy ideas for a future
coalition that he might lead, and showed interest in good
relations with the U.S. End Summary.

Fico's Thoughts About the Elections
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2. (C) Fico told the Ambassador over lunch at the CMR that
Gasparovic's win over Meciar further highlighted how much
Meciar's support has eroded over time. Fico indicated that
Smer would not accept any MP defectors from HZDS, adding that
he would encourage them to join other parties, including
Gasparovic's Movement for Democracy (HZD). (Note: Given
that HZD is not represented in parliament, any MPS who want
to leave HZDS might look to join Vojtech Tkac's People's
Union (LU) that broke away from HZDS after the 2002
parliamentary elections as an interim measure.) Pointing out
that HZD still garners 3-4 percent popular support without a
party in parliament, Fico views HZD as a future coalition
partner for Smer.

Now Focused on 2006 Parliamentary Elections
--------------


3. (C) With the failure of the referendum on early
elections, Fico stated that he is now focused on winning the
next parliamentary elections, currently scheduled for 2006,
and becoming prime minister. He told the Ambassador that
there is no will within parliament to call for early
elections because the 90 deputies needed to disband
parliament are not willing to give up the benefits and pay
they currently receive. Recent opinion polls show that
Fico's Smer would be the big winner while most other parties
in parliament would likely lose seats if the elections were
held now.

Economic Policies and Reform
--------------


4. (C) Fico spoke at considerable length about his views on
the strategy of implementing economic reform and future
policies he would support. He opined that when a government
initiates a reform plan, it should work more closely with the
opposition because these are long-term measures that will
likely take longer to implement than the term of the ruling
government and should remain after the government changes.
He strongly supports the incentives that the GOS has put into
place to encourage foreign investment, but added that the
government should offer incentives to Slovak companies for
creating jobs at home, which he supported during the 2002
campaign. A Smer-led government would leave the corporate
tax rate and labor law alone, while making some changes to
personal tax rates and the VAT. Fico supports increasing the
VAT on certain items, but lowering it on essentials such as
gasoline, foodstuffs, books, and transportation like many
other EU countries.


5. (C) Fico suggested that Finance Minister Ivan Miklos's
goal of keeping the budget deficit below 3.9 percent of GDP
to help put Slovakia on an early course to join the Euro zone
is misguided. Fico thought that a higher deficit brought
about by increasing spending on infrastructure and education
may be worth delaying Slovakia's entrance into the Euro zone.
He suggested that if the GOS does not spend more money on
completing major highway projects, such as the north-south
and east-west highways, and on education, Slovakia might not
be competitive against countries like Ukraine, Bulgaria, and
Romania in the future. Fico expressed his concern that as
these countries become more attractive to foreign investors
as they become more stable, and with them having lower wages,
Slovakia might become less competitive. He added that the
European Bank for Reconstruction and Development was willing
to loan money for these types of projects, but Miklos was
unwilling to borrow.



6. (C) Fico told the Ambassador that Russian and French
companies were interested in supplying two reactors at the
Mohovce nuclear facility. Mohovce has two completed reactors
and two more buildings completed which do not yet have
equipment installed. He said that a Russian company
(probably RAO) was willing to finance the project because it
would generate significant revenue as Europe's electricity
needs continue to grow.


7. (C) Fico indicated that he intended to visit Libya in late
May now that he has received U.S. assurances that we have no
objection to such a trip (ref). He would very much like to
visit Washington between May 15 and 24 for one or two days
before he goes to Libya (septel).

Comment
--------------


8. (C) In this conversation with the Ambassador, Fico
started to express positive program
ideas for a future coalition that he envisions heading,
rather than simply pointing out the faults of Prime Minister
Dzurinda's government. Fico's remarks on economic reform
suggest that he has accepted the major reforms that Miklos
has implemented and that his proposals are only tinkering on
the margins. The GOS does offer incentives to Slovak
businesses that create local jobs, but, to date, these
companies have not had the capital to invest that foreign
companies bring. Fico's ideas on improving infrastructure
and education likely will bolster his support. He used less
rhetoric than in past meetings and clearly showed he is
interested in maintaining a good relationship with the U.S.

WEISER


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