NEPAL: KING'S CONFIDANT SAYS MONARCH OPEN TO

S E C R E T KATHMANDU 000692 SIPDIS STATE FOR SA/INS NSC FOR MILLARD LONDON FOR POL - GURNEY E.O. 12958: DECL: 04/11/2014 TAGS: PGOV NP SUBJECT: NEPAL: KING'S CONFIDANT SAYS MONARCH OPEN TO NEGOTIATIONS WITH PARTIES REF: A. KATHMANDU 683 (NOTAL) ¶B. KATHMANDU 651 Classified By: AMB. MICHAEL E. MALINOWSKI. REASON: 1.5(B,D). ¶1. (S) On April 12 royal confidant Prabhakar Rana told the Ambassador that King Gyanendra had agreed, as proposed by the U.S. Ambassador in agreement with the Indian and UK Ambassadors, to resume discussions with political party leaders through an as-yet unnamed Palace envoy (Ref B). Rana said he would pass this message to the party leaders. The talks are to be kept confidential and not to be presented as undertaken at the behest of the Palace. According to Rana, the King envisions two possible scenarios evolving from these discussions. First, the parties suggest a consensus candidate or candidates (whose acceptability to all sides will have been thoroughly vetted by the Palace-appointed mediator) to head an all-party government. Alternatively, the King could propose a basket of names from which the parties would choose a consensus candidate for Prime Minister. ¶2. (S) Rana expressed growing concern at the turbulent political situation. The parties and Palace seem farther apart than ever, he observed, while Maoist activities are on the increase, exacting a severe toll on the economy. The Government's continued talk of elections in such an environment seems unrealistic. That the King is seen as presiding over an impending catastrophe will further undermine respect for the monarchy as an institution, Rana fretted, but he does not seem to appreciate the urgency of the situation. Rana said he has asked Finance Minister Lohani to brief the King on the deteriorating economic situation, while a parallel briefing by Foreign Minister Thapa would highlight the concerns of the international community. ¶3. (S) On April 13 Ambassador Malinowski and Indian Ambassador Shyam Saran will meet with senior party leaders to advance the plan. On April 14 the Indian Ambassador plans to travel to New Delhi to brief the Indian government on efforts to encourage a rapprochement between the Palace and the parties. He also expects to speak with the King. Ambassador Malinowski will reinforce the need for accommodation in his farewell calls on the King, the Prime Minister and the party leaders. MALINOWSKI