COALITION DYNAMICS IN SLOVAKIA

C O N F I D E N T I A L SECTION 01 OF 05 BRATISLAVA 000890

SIPDIS

SIPDIS

NSC FOR STERLING
OSD FOR SADOWSKA

E.O. 12958: DECL: 11/02/2016
TAGS: PGOV PREL ECON KJUS SOCI PINR LO
SUBJECT: COALITION DYNAMICS IN SLOVAKIA

REF: A. BRATISLAVA 839

B. BRATISLAVA 879

C. BRATISLAVA 838

D. BRATISLAVA 594

E. BRATISLAVA 842

F. BRATISLAVA 666

G. BRATISLAVA 830

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

SUMMARY
--------------


1. (C) After four months in office, Prime Minister Robert
Fico of the Smer party has demonstrated his strong,
personalized control the government. Embassy Bratislava
provides its analysis and lessons learned so far:

-- Fico makes the final decisions in all matters of
importance; his increasing domestic popularity strengthens
this role.
-- The Slovak government has become more inwardly-focused and
nationalistic than during the eight years of the previous
coalition.
-- Coalition partners SNS and HZDS have little impact on
policy with the exception of some pocketbook issues where
Fico thinks he can buy their concurrence with his policies.
-- Concessions to coalition partners have been made in the
judicial sector, in the distribution of funds, and
appointments to GOS positions.
-- Many Smer government officials have little or no
experience in decision-making or government administration;
this lack of experience leads to a lack of confidence and a
reluctance to meet with outsiders (including us).
-- Less accessibility of mid-level government officials means
less predictability.
-- The government's non-consultative style causes
difficulties for domestic and international partners.
-- An argument based on international acceptance will not
hold much sway with the current government, which is obsessed
with domestic popularity ratings and has seen them rise with
the debate about acceptance.
-- Fico generally will not take steps that would endanger
foreign investment.
-- The current government coalition could last all four
years, if only because SNS and Meciar have few other options.
-- KDH is the wildcard; if it recovers from its internal
split in the next year or two, it could either replace HZDS
in the existing coalition or, if Fico's popularity dips, join
an SDKU-SMK-KDH-HZDS coalition.
-- Meciar remains the most unpredictable on day-to-day
policy, with his main concern his personal protection against
legal problems.


FICO IS IN CHARGE
--------------

2. (C) At the end of four months in office, Prime Minister
and Smer party Chairman Robert Fico is solidly in charge of
both the government and his party. Fico consults nominally
with coalition partners Jan Slota of the Slovak National
Party (SNS) and Vladimir Meciar of the Movement for a
Democratic Slovakia (HZDS),but they have little impact on
policy. Both junior partners accepted fewer ministries than
they proportionally had a claim to and both Chairmen agreed
not to take cabinet positions in return for their parties
joining the governing coalition.


3. (C) Fico has a mixed record in implementing his campaign
promises. He is, for example, pulling most Slovak troops out
of Iraq and canceling co-payments for doctor visits and
prescriptions. But his election rhetoric on economic issues
has been greatly moderated (ref A); for example, he has not
eliminated the flat tax rate. The lack of changes to the
economic sector has been a relief to foreign investors and
overlooked by domestic voters.


4. (C) The Prime Minister's popularity continues to grow in
Slovakia despite, and perhaps partially because of, the
censure that Slovakia and Smer are receiving internationally,
primarily for including SNS in government. Strangely, Fico is
seen by some as the protection against SNS and HZDS, despite
the fact that he is the one that brought them into the
government, and he has become the "victim" of their antics.
In October, opinion polls showed that over 45 percent of the
population supports Fico compared to the 29 percent of the
vote his party received on election day in June. Most

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observers foresee the current coalition completing its four
year term - some predict even eight years. The many
non-party member ministers are expendable and can be easily
fired as scapegoats to keep popularity ratings high. And of
course there is the issue of whether Fico is physically
capable of sustaining such a workload (see ref B regarding
his recent health problems).


5. (C) The drawback to Fico's one-man governing style is that
he is so busy micromanaging that he is said to be
inaccessible, even to his closest party confidants.
According to the Vice Chairman of HZDS, Milan Urbani, even
the Smer Minister of the Interior, Robert Kalinak, says that
Fico is unavailable for party members. Urbani added that
Smer's 50 MPs are dissatisfied with their lack of interaction
with Fico. Smer "sponsors" - many of whom are former HZDS
members with whom Urbani has connections - are also upset.
Urbani told PolChief that Fico and Vladimir Poor have argued
and that Juraj Siroky, whom Fico listens to the most, is
unhappy that Fico has not followed his advice on several
occasions.


COALITION INTERPLAY
--------------


6. (C) Smer: With increasing popularity, Smer is sitting in
what should be a comfortable position domestically. However,
since Smer has never been in government before, and SNS and
HZDS have been out of government for almost a decade, most of
the current government officials have little experience in
running a ministry or being in charge. One Smer appointee at
the MFA, for example, asked the DCM for advice on dealing
with another part of the Slovak bureaucracy. Those with
political experience are more accustomed to being in the
opposition - and blaming problems on others rather than
taking a statesmanlike approach. This lack of experience
feeds into a lack of confidence. Mid-level government
officials are often inaccessible and sometimes defensive.
Fico, in particular, has reacted in an angrily
defensive-aggressive manner to several political challenges,
for example saying that former Agriculture Minister Zsolt
Simon, a member of the Party of the Hungarian Coalition (SMK)
should be charged with abuse of public authority after Simon
questioned the ethics of Agriculture State Secretary
Zahumensky, a Smer appointee whose private business is
receiving millions in agricultural subsidies. On October 27,
Fico accused SMK of using "dirty tricks" against the
governing coalition from morning till night. Zahumensky
later resigned, leaving Fico looking rather foolish for his
rant against SMK's "swine-like" behavior. In response to the
Party of European Socialists (PES) suspending Smer's
membership (ref C),Fico claimed that the suspension was a
result of his party standing up to monopolies, implementing
policy for the people, and choosing not to include SMK as a
governing partner. SMK has become a common target for Fico
and other government officials, though SDKU is the larger
political rival.


7. (C) Slovak National Party (SNS): SNS has turned into a
compliant coalition partner for Smer. According to some
coalition insiders, Jan Slota plays his political cards as a
businessman rather than a politician - seeking positions in
government for his party members to control resources more
than policy. He stays quiet in public so long as he gets his
way behind closed doors, but speaks to the press (and often
makes statements which embarrass Fico) when he is unhappy.
SNS makes no policy demands on Smer. Even after a
re-organization of the flow of euro-funds which caused SNS to
lose the authority for one billion euros, the party still has
five billion euros worth of funds for distribution in the
three ministries it controls. Meciar's camp believes that
Fico and Slota hold decision-making meetings mano-a-mano
without Meciar, which incenses Meciar but, if true, shows
Slota's greater pliability as a coalition partner. Despite
this supposed closeness, the coalition is showing signs of a
lack of discipline. Parliament has repeatedly failed to
approve SNS's candidate to head the Institute of the Memory
of the Nation. As for Fico lashing out against SMK, we
believe that this sentiment comes from his own nationalistic
side rather than being the influence of SNS.


8. (C) Movement for a Democratic Slovakia (HZDS): Though part
of the coalition, HZDS is considered by Smer to be an
unstable partner and Meciar is reportedly unhappy in his
current role. Meciar, who has ambitions to become President,
does not feel he is getting the respect he deserves. The
Vice Chairman of HZDS recently complained that Fico refused

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the HZDS request for a coalition council meeting before all
government and parliamentary sessions. Meciar and HZDS have
been taking positions which irk Fico, such as publicly
supporting the two percent tax designation for NGOs and
charitable organizations (see below),while not endangering
their position as a coalition partner. Some believe Meciar's
"dissatisfaction" is simply acting out one of his personality
traits: the need to show every now and again that he "has
broad shoulders," i.e., is a force to be reckoned with.
Meciar has reportedly sent feelers to Mikulas Dzurinda of
SDKU about creating a new coalition, but this could not be
accomplished without KDH.


9. (C) Despite Meciar's dissatisfaction, HZDS's membership is
increasing because of its place in the governing coalition.
Though its ministries lack significant funds to distribute,
HZDS does have job positions to hand out. HZDS claims to be
bringing in new, younger members to the party, most likely
due to the distribution of jobs.


THE OPPOSITION
--------------


10. (C) Christian Democratic Movement (KDH): Rumors from
several sources have hinted that Smer would like to keep open
the option to replace HZDS with KDH. However, KDH remains
internally divided (ref D). Until KDH gets its own house in
order, it is unlikely to become a coalition partner either
for Smer or for SDKU in a three-plus-one scenario. For the
time being, party founder Jan Carnogursky has rejoined the
KDH presidium and the party pragmatists appear to outnumber
the principled faction led by Vladimir Palko and Daniel
Lipsic. Though Carnogursky entered the presidium by a narrow
margin, he has not remained on the sidelines, telling the
media, for example, that KDH should reassess its opinion of
Meciar while at the same time not ruling out sitting in a
government with SNS. If and when KDH gets its act together,
it could theoretically join a Smer-led or an SDKU-led
coalition. The KDH party congress should be held next summer
and may determine the future direction of the party. In the
meantime, one local commentator has noted that KDH and HZDS
have a similar base of supporters - conservative, rural
Catholics - and that HZDS may be taking KDH supporters since
one is in power and the other isn't.


11. (C) Social Democratic and Christian Union (SDKU): Leaders
of SDKU are keeping a low profile for the time being. While
Dzurinda, Ivan Miklos, and Eduard Kukan make the occasional
public statement criticizing the governing coalition, they
have apparently decided not to waste their energy while Fico
is at his most popular. Conventional wisdom says that SDKU
will wait for Fico to trip over his own mistakes before
making a concerted effort to regain control of the
government. Dzurinda publicly supported Carnogursky's
statement on Meciar, likely an attempt to lay the foundation
for an SDKU-SMK-KDH-HZDS coalition. Barring a KDH acceptance
of Meciar, SDKU may be hoping to absorb the slightly liberal
and/or pragmatic KDH supporters.


12. (C) Party of the Hungarian Coalition (SMK): Having
expected to be part of the governing coalition no matter
which of the larger parties received the most votes, SMK is
still licking its wounds in the opposition. According to SMK
Vice Chairman Pal Csaky, SMK was truly shocked when Fico
announced that SNS would be in the government. Now, the
party is sulking. Their people are being replaced in
national and regional governmental bodies, which spurs
dissatisfaction among party ranks. While by the end of the
previous government, SMK was developing responsible national
policies, e.g., in agriculture and environment, the party is
returning to an ethnic focus. Despite the current sniping
back-and-forth with Smer, if Fico wanted to replace SNS with
SMK in the coalition, SMK would accept. However, other
coalition adjustments are more likely than this scenario.


IMPACT OF THE COALITION
--------------


13. (C) Foreign policy: One difference between the current
coalition and the Dzurinda government is the GOS's lack of
consultation with appropriate partners in the international
sector. Though the withdrawal of Slovak troops from Iraq was
not a total surprise, the method of informing us was less
consultative than promised (ref E). While Fico claims to
care what EU partners think, his primary concern and the
basis for his political decisions is domestic policy and

BRATISLAVA 00000890 004 OF 005


power. Cross-border retorts with Hungarian counterparts are
aimed at domestic audiences. Retaining more individual power
by having compliant coalition partners means more to Fico
than the PES suspending Smer's membership.


14. (C) Nor is Fico always in synch with his foreign policy
experts at the MFA. The best example of this was the visit
of Serbian PM Kostunica, who took advantage of Fico straying
from his MFA's talking points to postulate that Slovakia does
not believe that Kosovo should become independent. The GOS
wants to deepen its EU membership by entering the eurozone
and Schengen treaty as soon as possible, yet the Government
Program Plan notes an intention to "activate" a relationship
with Russia (ref F). Smer party members have told us they
will follow EU mainstream on Cuba and Belarus. Fico is savvy
enough not to endanger foreign investment, but his foreign
policy is based on his popularity ranking rather than values.
As part of Fico's efforts to "commercialize" foreign policy,
i.e., give Slovak business interests a major priority, it
appears that Fico hopes to re-invigorate the weapons
industry. Former arms traders now occupy positions in
several government agencies, and deserve our close attention.


15. (C) Economic policy: Foreign investors have been
pleasantly surprised by the softening of Fico's election
promises in the economic sphere (ref A). The flat tax will
remain mostly unaltered and Slovakia will still aim to enter
the eurozone in 2009. However, doubts remain about Fico's
commitment to fiscal prudence if it conflicts with
accomplishing his pre-election promises in the social sector.
A public debate about the extent of energy regulation has
broken out between Finance Minister Pociatek and Economy
Minister Jahnatek, indicating internal schisms. An
additional area to watch is labor policy, as drastic changes
could make Slovakia less attractive to investors. Given the
political turmoil and unsteadiness in neighboring V-4
countries, Slovakia remains a good investment option in
central Europe.


16. (C) Judicial sector: To the extent that Fico has made
concessions to HZDS, the judicial sector has felt the impact
most of all. Justice Minister Stefan Harabin proposed the
closing of the Special Court for anti-corruption, dismissed
regional court chiefs who disagreed with him, forced a vote
on the issue by the Judicial Council without providing
detailed information (ref G),and began to work on a new
penal code. (The last new penal code was the result of many
year's work and took effect in January 2006.) Harabin has
since been nominated to the Constitutional Court by HZDS as a
"golden parachute". If Harabin moves to the Constitutional
bench, HZDS will retain the right to appoint a replacement
Justice Minister. HZDS officials have said they are looking
for a female candidate, though they haven't yet floated any
names. At any rate, the next Justice Minister would probably
not be as controversial as Harabin.


17. (C) Civil society: In a clear example of the new
government's non-consultative style, when the government
presented its budget plan, it included a provision to end the
ability of businesses to designate two percent of their tax
payments to go towards an NGO or charity of their choice.
(Individuals would still have this option.) Upon
questioning, the government said that this tax designation
was subject to considerable fraud and abuse. Rather than
consulting with the third sector to improve the designation
rules, the government simply announced its cancellation.
Opinions vary whether this was purely a financial move or
whether there was some intention to weaken NGOs. In the
backlash against the announcement, the NGO sector united to
lobby the government to keep the two percent designation.
HZDS came out in support of the NGO position, surprising many
since many NGOs originated during Meciar's prime ministership
in large part to remove him from office. Parliament is
supposed to decide the issue in early December.


18. (C) Transparency and the media: In addition to the
Embassy having less access to government officials, the new
coalition is less transparent overall. For example,
parliamentary sessions will no longer be broadcast live.
However, as with the two percent tax designation, it's
difficult to tell if there is a darker purpose behind this
move or if it is merely financial, given that parliamentary
broadcasts do not have a high viewership. The government is
attempting to exert more control over state-owned but
quasi-independent media outlets, such as Slovak Television
and Slovak Radio, by changing the rules of their boards to
replace directors more easily.


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COMMENT
--------------


19. (C) While part of the new government's inaccessibility
may be attributed to a necessary learning curve to overcome
its inexperience, it is also symbolic of Smer's
non-consultative style. With Fico enjoying record high
popularity, there's no impetus for the government to change
its mode of operation, and it is hard for us to predict GOS
moves. With such a strong hand, Fico should be able to
maintain his position as ultimate decision-maker for the full
length of the election cycle. Outside of the economic
sphere, Fico has generally kept his campaign promises. It
should be expected that when he makes a public decision
(e.g., pulling troops from Iraq),he will stick to it.
VALLEE