SURVIVOR HUNGARY: THE GYURCSANY GOVERNMENT'S

S E C R E T BUDAPEST 002230

SIPDIS

SIPDIS

DEPARTMENT PLEASE PASS TO NSC - ADAM STERLING

E.O. 12958: DECL: 10/29/2016
TAGS: PGOV KDEM HU
SUBJECT: SURVIVOR HUNGARY: THE GYURCSANY GOVERNMENT'S
NARROWING FOCUS

REF: BUDAPEST 2045 AND PREVIOUS

Classified By: POL/C ERIC V. GAUDIOSI; REASONS 1.4 (B) AND (D)


1. (S) Beset by continuing political attacks and public
protests, the Gyurcsany government is circling its wagons as
winter approaches. Although even the opposition concedes
that crowds will fall as the temperature does, few doubt that
they will return in force in the spring, when the full
economic impact of the austerity measures begins to take
effect.


2. (S) The government is already in triage mode, focusing
almost exclusively on day-to-day crisis management. Although
the government has tried to focus on governance and to
project confidence, it has often been fully occupied reacting
to the opposition's latest attacks. Although the PM rallied
the coalition for the October confidence vote (reftel),he is
paying a heavy price and has appeared tired and downbeat in
recent contacts. (As one observer commented, Gyurcsany is "a
middle-distance runner trying a marathon with no training.")
Even supporters concede that he has failed to make an
affirmative case for reform, leaving the opposition to
portray his austerity measures as both unfair and
unnecessary. The referendum proposed by FIDESZ to challenge
the fundamental tenets of the "Gyurcsany package" represents
the latest front in this war (septel).


3. (S) With the Prime Minister's Office seemingly fully
focused on its political survival and badly burned by what
Gyurcsany himself characterized as his efforts to do "too
much too soon" on reform, other issues are receiving little
high-level attention. Even before the protests, Gyurcsany's
centralized management style had concentrated authority in
the PM's office and left the Ministries with little
policy-making authority. In the present atmosphere, the
Ministries' natural instinct is often to await instructions
and thus often avoid decisions entirely. As we have seen
with the recent visit of the Holocaust Museum, extraordinary
engagement has been required to get the government's
attention, much less its action.


4. (S) Disquietingly, the government may be reducing the
scope of its agenda as well as the intensity of its efforts.
Economic and Transport Minister Koka, usually a close ally of
the PM,s, confided to the Ambassador on October 27 that
Gyurcsany had directed him to "cease fire" on his efforts to
illuminate the road construction bidding process (in which he
claimed to have already cut the cost by 40%),due to intense
pressure from members of his party. Gyurcsany's need to
maintain the party's support will give the MSZP's old guard
greater leverage to slow-roll elements of the reform package
they have long resisted.


5. (S) Our expectations regarding the GoH's willingness -
and fundamental ability - to engage in the near-term are
modest and declining. Often inclined to "overpromise and
underdeliver" in the best of times, the GoH now finds itself
consumed with domestic politics and accordingly less able to
undertake initiatives further afield. It will not court
further controversy at home and will take a de minimus
definition of "business as usual" in these unusual times. We
believe that progress on reform is the single most important
issue, and that its resolution is a necessary condition to
ensure Hungary's continued development from a consumer to a
provider of security in the international community. We will
remain actively engaged in pressing the government to act in
keeping with its commitments. We should be prepared, however
for their appeal to keep their ability to respond in the
context of their present political constraints.


FOLEY