KDH ULTIMATUM: EITHER RUSKO GOES OR WE DO

C O N F I D E N T I A L BRATISLAVA 000663

SIPDIS


E.O. 12958: DECL: 08/17/2015
TAGS: PINR LO PGGOC
SUBJECT: KDH ULTIMATUM: EITHER RUSKO GOES OR WE DO

REF: A. BRATISLAVA 618

B. BRATISLAVA 626

Classified By: Ambassador Rodolphe Vallee for reasons 1.4 b and d.


1. (C) Summary: The latest threat by coalition partner KDH
to leave the government if Prime Minister Dzurinda doesn't
fire Economy Minister Pavol Rusko (ANO) is more serious than
previous bluffs. No matter what happens, there is not enough
support in parliament for early elections (90 votes are
required) to take place before June 2006. Therefore, even if
ANO or KDH were to leave the government, it would probably
hobble along until then. Although there are other
possibilities for reconstituting a majority government, such
as adding HZDS, they are too unpalatable to present a
realistic option for Dzurinda right now. End Summary.


2. (C) On August 16, Pavol Hrusovsky and other leaders of the
Christian Democrat Party (KDH) presented Prime Minister
Dzurinda with an ultimatum: either ask President Gasparovic
to recall Economy Minister Pavol Rusko, or KDH will leave the
government. Hrusovsky met with Dzurinda at one o'clock in
the afternoon to inform him of the KDH position, then
announced the move at a five o'clock press conference.
Hrusovsky demanded that Dzurinda make a decision by the time
of the coalition council meeting scheduled for August 22.
Dzurinda postponed the council meeting until August 23.

KDH is Serious
--------------


3. (C) All of our KDH interlocutors (and even those outside
the party) have told us the party was completely serious in
its threat to leave the government. KDH and Rusko's New
Citizens Alliance (ANO) party have clashed continuously over
the past two years about issues such as abortion, separation
of church and state, and most recently education reforms.
Recent revelations that Rusko while in office borrowed 100
million crowns (over three million dollars) on notes of
credit from a now-deceased businessman, which Rusko has
refused to explain, were the final straw. Hrusovsky
spokesperson Michal Dyttert told us, "There is no other way
to react to these financial scandals; there are limits. Our
Interior Minister (Vladimir Palko) is an honorable man; our
Justice Minister (Daniel Lipsic) has made fighting corruption
his priority in office; they cannot continue to sit at the
same table as Rusko."


4. (C) KDH leaders tell us there will be a full-court press
against Rusko now; they believe TV Markiza's (partially-owned
by Rusko--ref A) license will not be renewed next spring due
to financing issues and management problems, thereby taking
away Rusko's prime propoganda medium. KDH officials
speculated that at least two ANO MP's would abandon Rusko if
push came to shove, in which case the coalition would lose
not 11 but nine MPs.

SDKU: Hopes Dzurinda can hold it together
--------------


5. (C) Despite this, insiders from Dzurinda's Slovak
Democratic and Christian Union (SDKU) were not panicking.
SDKU secretary Kamil Homola told us that it was "the same old
song" from KDH. It would be very simple for Dzurinda to fire
Rusko, but that would only be the first step. The KDH was
not taking responsibility for what would follow. Dzurinda
told the former Charge that he needed Rusko at least through
December to pass next year's budget (ref B). The coalition
already relies on independent MPs to pass legislation; it
can't afford to lose either KDH or ANO. Homola lamented that
Dzurinda is always stuck resolving disputes between the
coalition partners, but expressed full confidence that he
would be able to do it again this time.


6. (C) That said, other SDKU members consider the situation
"very serious" and suggested that Rusko would not survive the
huge pressure from KDH. They note that Rusko is a fighter
and would prefer to bring the whole government down rather
than leave gracefully. Dzurinda is using delaying tactics
and hoping people will calm down while he weighs his options.
Foreign Minister Eduard Kukan, also a vice-chair of SDKU,
down-played the sense of crisis and told the press that the
government was not about to fall. Other SDKU members believe
that the "crisis" was being overdramatized by both
politicians and the media; KDH would not give up its powerful
ministries.

SMK: Sides with KDH on Principal, but is not Suicidal
-------------- --------------


7. (C) The Hungarian Coalition Party (SMK) is not
interpreting the KDH ultimatum so dramatically. SMK leader
Bela Bugar agrees with Hrusovsky that Rusko must explain the
loans. However, SMK will not walk out of the GOS in
solidarity. The party would have to give up too much power

and positions at all levels.

ANO: United Behind Rusko
--------------


8. (C) ANO, meanwhile, stands firmly behind Rusko, and ANO's
main priority is to keep it that way. ANO's secretary
general noted that Dzurinda is going to lose no matter what
decision he makes. If ANO leaves, it will use all means
available to attack the government and especially KDH.

Possibilities
--------------


9. (C) Dzurinda still could find a solution that will allow
KDH to save face and to back down. For example, Rusko could
give an "explanation" of his loans that would be acceptable
to KDH and SMK. As one keen analyst noted, Dzurinda is a
"world champion in settling disputes among political
players," though he admitted that this time it could be very
hard.


10. (C) If either ANO or KDH were to leave, the government
would still hobble along for several more months, although
passing a budget for the next year would be very difficult.
It requires 90 votes in parliament to call for early
elections, and none of the parties currently in the coalition
would support such a move, even if they left the government.
Thus, the earliest that early elections would likely be held
is June 2006, rather than September 2006.


11. (C) Rumors are rampant of a "deal" between SDKU and
Vladimir Meciar's Movement for a Democratic Slovakia (HZDS)
to cooperate after the next parliamentary elections. Dyttert
speculated that Dzurinda could "substitute" HZDS now for KDH.
However, this would hurt both Dzurinda and Meciar in next
year's elections. SDKU voters hate Meciar; HZDS voters hate
Dzurinda. Any possible deal would have to be kept under
wraps until the votes were in.


12. (C) Comment: Despite numerous scandals and internal
conflicts during the past two and a half years, the Dzurinda
government has remained stable. Jutice Minister Lipsic
(KDH) has assured the press that there is no threat of early
elections (before June 2006). This leads us to believe that
even if KDH were to leave the government to remind its own
voters that it still has scruples, Dzurinda would remain at
the helm and policies would remain largely unchanged.
VALLEE


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