STRESS FRACTURES: MP'S CROSS PARTY LINES ... AND

C O N F I D E N T I A L BUDAPEST 001818

SIPDIS

SIPDIS

DEPARTMENT FOR EUR/NCE; PLEASE PASS TO NSC FOR ADAM STERLING

E.O. 12958: DECL: 11/06/2012
TAGS: PGOV ECON KDEM HU
SUBJECT: STRESS FRACTURES: MP'S CROSS PARTY LINES ... AND
THE GOVERNMENT

REF: BUDAPEST 1756

Classified By: P/E COUNSELOR ERIC V. GAUDIOSI; REASONS 1.4 (B) AND (D)


1. (SBU) A rare breakdown in party discipline occurred
during Parliament's session on November 5, when MPs from the
governing MSzP broke ranks to oppose a measure proposed by
the Gyurcsany government regarding the imposition of property
taxes. Making matters even stranger, opposition MPs rushed
to fill the void, joining the SzDSz to provide sufficient
votes to ensure the passage of the proposal and thus
introduce a system of assessment based on actual value rather
than physical area.


2. (SBU) The battle lines shifted improbably throughout the
day's debate. FIDESZ and MSzP MPs united to reject a
government proposal to combine various individual taxes, but
the vote on a separate measure governing taxes for banks saw
FIDESZ align with the SzDSz to oppose a government proposal
supported by the MSzP. Although SzDSz leader Janos Koka has
been quoted as calling for the PM to "control his own party,"
SzDSz spokesmen have hastened to add that the coalition
remains intact and committed to governing. (Note: There is a
degree of irony here, as Koka became the first Minister in
the history of post-transition Hungary to vote against a
government measure in a vote earlier this year. End Note.)
There was even a rare show of consensus across the political
spectrum with the agreement of all the parties to establish
an independent Budget Office to confirm the validity of
government data.


3. (SBU) Still, the stress fractures may spread to the
long-running debate over health care, an issue of particular
importance to the SzDSz ( and particular ire for many
Socialists. The influential MSzP party caucus has moved to
submit a number of motions regarding the government's health
care reform package before formal debate on the floor, and a
former MSzP Health Minister has stated publicly that he
expects "over a hundred" proposed amendments to follow.
After months of debate reduced the government's plan to an
awkward combination of private investment and public
ownership, another round of amendments may render an already
incomprehensible package wholly irrelevant.


4. (SBU) The waters have been muddied further by the recent
criticism of the Prime Minister by Parliamentary Speaker
Katalin Szili, who has stated that the party will risk its
future by continuing on the path of "reform without public
support." Szili, a long-time rival of Gyurcsany, was called
to the carpet at a private meeting of the MSzP leadership on
November 6, where other officials reportedly told her that
"the party has enough enemies without working to destroy
itself."

COMMENT: BEHIND OPEN DOORS


5. (C) In a political culture where votes are always along
party lines and internal disputes kept strictly within the
family, these events are, as one AmCham official observed,
little short of mayhem. Although issue-based coalitions
would encourage compromises over the long-standing pattern of
imposition and confrontation, this week's events seem
unlikely to be a great leap forward in Hungary's democratic
discourse. Indeed, the MSzP votes against the government's
proposal likely have far less to do with overhauling the tax
system - itself an important component of reform and improved
competitiveness - than with personal enmity for the Prime
Minister. Particularly after Gyurcsany's brinksmanship over
party finance reform (reftel),this may well be the party's
equal and opposite reaction. End Comment.
FOLEY