POSTCARDS FROM THE EDGE: FIDESZ CALLS FOR

C O N F I D E N T I A L SECTION 01 OF 02 BUDAPEST 002048 SIPDIS SIPDIS DEPARTMENT PLEASE PASS TO NSC - DAMON WILSON E.O. 12958: DECL: 10/09/2011 TAGS: PGOV KDEM ECON HU SUBJECT: POSTCARDS FROM THE EDGE: FIDESZ CALLS FOR PARLIAMENTARY BOYCOTT, PUBLIC DEMONSTRATIONS REF: BUDAPEST 2029 AND PREVIOUS Classified By: POL/C Eric V. Gaudiosi; Reasons 1.4 (b) and (d) ¶1. (SBU) Summary: Addressing the diplomatic community October 9, FIDESZ leader Viktor Orban underscored his demand for Prime Minister Gyurcsany's departure as "the only key to stability" in Hungary. The present government, he asserted, is "paralyzed" and lacks the political credibility to undertake reforms. "National unity is gone," he stated, and "the people are under attack." Maintaining that there is "no time for new elections," he called on the majority to "change plans or change leaders," reiterating his endorsement of a non-partisan "government of experts" to "manage the crisis" but signalling his willingness to cooperate with "another Socialist Prime Minister." FIDESZ will walk out every time the PM addresses Parliament, and will continue to organize demonstrations in the near term and "again in the spring." Orban also emphasized his intention to boycott the official 50th anniversary event and to organize "huge and hopefully peaceful" events on October 23. End Summary. GOVERNMENT PARALYSIS; PUBLIC PROTESTS ¶2. (C) Orban opened his remarks by referring to a recently-released tape of Minister of Local Government and Regional Development Monika Lamperth, who is quoted as stating that upcoming government proposals regarding the distribution of local development funds will "overwrite the assumption ... that FIDESZ will hand out the money." The Lamperth tape, he commented, is "the latest scandal" and further reflects the MSZP's deep roots to the "client network" of the communists. FIDESZ will be "very tough" in defense of the interests of local governments, and the party has asked Debrecen Mayor Lajos Kosa to lead its efforts on this front. (Comment: The appointment of Kosa, a moderate with an independent power base within the party, could be Orban's way to sideline a potential rival. For Kosa, the position offers high risks and high rewards: he cannot afford to be seen as "the MSZP's favorite FIDESZ member," but if he can establish a working relationship with the government - and a secure funding stream from the government - he will heighten the contrast between his constructive opposition and Orban's obstructionism. End Comment.) ¶3. (SBU) Turning to the broader political situation, Orban described the Gyurcsany government as "completely paralyzed," lacking the public credibility to carry out its reforms and the political solidarity to hang tough in the face of the economic impact of its austerity measures. For its part, FIDESZ will "maintain public demonstrations" in the near term as the Parliament debates the budget. Although "the weather can stop the protests," he stated, "the people are under attack" and could well return to the streets next spring. Orban specifically predicted demonstrations by groups including teachers, students, farmers, and the police, commenting that he could not "stop the protests," only work to "keep them peaceful." "THE MAJORITY MUST CHANGE ITS MIND" ¶4. (SBU) Orban predicted that the MSZP, "well-schooled in power," will realize the hopelessness of the present situation and see Gyurcsany's removal as "the only step to stabilize the situation." He maintained that FIDESZ will "not exercise power without new elections" in order to "set the right precedent" for Hungary's "young democracy," but asserted that the situation is too serious to "take three months for new elections." ¶5. (SBU) So serious, he continued, that the political parties should agree to a non-partisan "government of experts" to manage the situation over the next 12 - 24 months, a step he described as "political, not constitutional." Such a government would have its specific powers and tenure limited by agreement of the parties, he proposed, and could be agreed "in a day or two." Reiterating his commitment to "a constitutional solution," Orban also indicated his openness to the "far less effective" option of a new Socialist prime minister. Ultimately, the "majority must change its mind" and "either change its plan or change its leader." ¶6. (SBU) Until they do, Orban continued, "national unity is over." FIDESZ will walk out on the PM's speeches in Parliament and will cooperate with the MSZP during "the next government but not with this Prime Minister." With Gyurcsany's departure, he noted, "anything is possible; without it, nothing is possible." BUDAPEST 00002048 002 OF 002 "THE STATE IS THE ENEMY" ¶7. (SBU) Orban expressed his surprise at the "misunderstanding" of the government's convergence plan, characterizing it as revenue collection but not reform. He insisted that "reforms cost money" and that "reforms and austerity measures cannot happen at the same time." He reiterated his previous assertion that the best way to raise government revenues is to lower taxes, claiming that tax increases would drive up to 30% of economic activity into the gray economy. The people "know how to cheat" and will not pay taxes, he concluded, because they know "the state is the enemy." They recall from the communist era that "opposition is legitimate." "THOSE WHO INVEST ... WILL LOSE" ¶8. (SBU) Responding to questions from the diplomatic community regarding the upcoming 50th anniversary celebrations, Orban categorically rejected the possibility of participation in government-sponsored events. "The government is a lie," he commented, "and we will not participate in a lie" but rather organize events "100 times bigger." He also questioned whether President Solyom would choose to participate in the events with PM Gyurcsany. (Note: We have received no indication that the President, an official host of the commemorative events, is considering any such step. End Note.) ¶9. (SBU) Asked to comment on what will happen should the current impasse continue, Orban stated that growing "social, economic, and political unrest" would have "dreadful consequences" and could make it "difficult for Hungary to survive." "The people will not be the ones to start violence," he continued, but "the solution is in the government's hands." "Investors," Orban noted, are in "a difficult situation." "The present situation cannot be stabilized," he concluded, and "those who invest in it will lose." FOLEY