MSZP INSIDER'S OUTLOOK: LABOR MINISTER KISS ON

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SIPDIS

SIPDIS

DEPARTMENT PLEASE PASS TO NSC FOR ADAM STERLING

E.O. 12958: DECL: 11/26/2016
TAGS: PGOV ECON KDEM HU
SUBJECT: MSZP INSIDER'S OUTLOOK: LABOR MINISTER KISS ON
REFORM, THE COALITION, AND THE OPPOSITION

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


1. (C) Summary: Minister of Labor and Social Welfare (and
MSZP Party Vice-President) Peter Kiss told Ambassador Foley
November 27 that the government is "sentenced to success" on
reform and will work in consultation with civic organizations
and political opponents. Frequently mentioned as a successor
should PM Gyurcsany move on (or be removed),Kiss downplayed
talk of friction within the MSZP, predicting Gyurcsany's
election as party president in February and underscoring that
economic success is the only foundation for the party's
political future. With regard to the opposition, he
maintained that FIDESZ president Viktor Orban would rather be
responsible for failure than let anyone else be responsible
for success. End Summary.

NO TURNING BACK ON REFORM


2. (C) Beginning discussion with the government's
convergence plan, Kiss framed the issue in the regional
context, noting the array of political and economic issues
confronting neighboring states. The Gyurcsany government is
now faced with a challenge to the public's welfare and to the
political order, and is committed to "solving both." The
goal remains Hungary's transformation into a "Western
country," and "vengeful tactics" were to be expected in
response to this challenge to "entrenched privilege." He
expressed continued confidence in the convergence plan and
emphasized the government's commitment to outreach to civic
organizations and political opponents. He believes
engagement with social groups - and allocation of EU funds -
will help defuse opposition.


3. (C) Responding to Ambassador Foley's question regarding
the potential increase in public dissatisfaction as the
economic impact of austerity measures hits home, Kiss
underscored the necessity of fundamental reform. "A leftist
government should not want to take these steps," he noted,
"but a responsible government must ... and the opposition
certainly won't." "We have been through worse," he commented
in a reference to the austerity measures of the mid-90's, and
the government would not "put money in a sack with a hole in
it" by disbursing EU funds without undertaking structural
reforms.


4. (C) Turning to the political scene, Kiss assured the
Ambassador that the MSZP would stand firm behind the reform
package. Acknowledging frequent discussion of his name as a
potential successor to PM Gyurcsany, Kiss remarked that
"normal people aren't waiting in line for Gyurcsany's job ...
or mine" but insisted that only economic success will ensure
the party's political future.


5. (C) For the moment, that future remains tied to
Gyurcsany. Kiss predicted that the PM "will become the MSZP
president" at the party's February congress, but did note
some advantage in keeping the positions separate so that "the
party won't collapse if the government does." (Comment: MSZP
sources tell us that Kiss - among others - has been
travelling frequently throughout Hungary on party business.
They are convinced that he will remain in position should
Gyurcsany stumble in his campaign for the party presidency.
End Comment.)

SZDSZ IN THE COALITION NO MATTER WHO'S ON TOP


6. (C) With regard to the dynamic within the junior
coalition partner SZDSZ, Kiss described party leader Gabor
Kuncze's upcoming departure as a "tremendous blow to his
party and to Hungary's political life." He believes there is
"no one of his ability within the party now," and is
uncertain whether either of the current favorites to succeed
Kuncze, Minister of Economy Janos Koka or MP Gabor Fodor, can
bring together "the liberal intelligentsia and the liberal
investors." In any event, Kiss is confident the SZDSZ "won't
make the mistake of leaving the coalition."

THERE'S OPPOSITION, AND THERE'S ORBAN


7. (C) Addressing the prospects of a thaw in relations
between the government and the opposition, Kiss suggested
that "FIDESZ's interests argue for communication; Orban's
interests argue against it." Only the pretext of an external
enemy allows Orban to retain his party leadership, Kiss
maintained, and he appears intent on keeping the entire party
"trapped in a castle with locked doors" in order to maintain
his personal control. Kiss cited recent polls indicating a
decline in FIDESZ's popularity as proof of Orban's increasing
difficulty "controlling the spin" as the public tires of his
campaign against the government. He reaffirmed the

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government's willingness to engage with the opposition and
noted that "there are several others who have the ability to
lead the party ... if they have the opportunity."


8. (C) Kiss responded to the Ambassador's question regarding
President Solyom with a heavy sigh. "In the long run," he
finally stated, Solyom's tenure may help "clarify the role of
the presidency ... even if that's not his intention."
Solyom's tendency to speak out on political issues (and on
the opposition's behalf, in the government's view) may
encourage people to "consider political attitudes and not
just the lack of political activism" in the future selection
of the president.


9. (C) Comment: A long-time MSZP insider and leading member
of the party's old guard, Kiss reputedly owes his cabinet
position to Gyurcsany's desire to keep his rivals close.
Kiss framed his support for reform in more political than
economic terms, often referring to the convergence plan as a
means to the end of partisan advantage. If he is betting on
the convergence plan, it is the result of calculation rather
than conversion. Kiss was sharpest in his political
observations. His comments re FIDESZ track closely with
others' assessment of the opposition's dilemma (septel).
Turning that same analytical skill on the MSZP, Kiss is
likely to see few advantages to an open challenge for party
leadership in the near-term. In the longer-term, however, he
may find opportunity if the ongoing struggle weakens both the
opposition and the PM. End Comment.

FOLEY