19TH CENTURY NERVOUS BREAKDOWN: SHADES OF THE PAST

C O N F I D E N T I A L BUDAPEST 001882

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SIPDIS

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

E.O. 12958: DECL: 11/25/2017
TAGS: PREL PGOV ENRG HU
SUBJECT: 19TH CENTURY NERVOUS BREAKDOWN: SHADES OF THE PAST
AS HUNGARY REGARDS 21ST CENTURY EUROPE?

REF: BUDAPEST 1979

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


1. (SBU) Our contacts across the political spectrum are
still talking about the thought-provoking visit of foreign
affairs columnist and commentator Robert Kagan November 19 )

20. In a series of meetings with officials in and out of
government, highlighted by remarks before a joint session of
the Parliament's Foreign Affairs and European Affairs
Committees, Dr. Kagan challenged opinion leaders to view
Hungary's policy decisions in a broader strategic context.


2. (C) Dr. Kagan's comments on the challenges posed by a
resurgent Russia and a hesitant European Union will
particularly complement our continuing efforts to focus minds
here in Hungary on issues beyond their borders and on
objectives beyond immediate gratification (Ref A).


3. (C) Both remain challenges. Bad news economically
(septel) and bad blood politically continue to limit
Hungary's event horizon. In fact, the public's gaze will
likely to be drawn even more strongly inward in the months
ahead as the opposition's referendum on elements of the
government's reform agenda approaches.

AMBIVALENCE AND ANTIPATHY


4. (C) The problem is conceptual as well as practical.
Foreign Minister Goncz noted to Dr. Kagan that the process of
transition in Hungary is still ongoing, and that often seems
to extend to its world view. There is some ambivalence
toward NATO, which grows as the Alliance's activities bring
it closer toward Russia's "Near Abroad." Although a recent
survey indicates sixty percent of Hungarians view NATO as
essential for security, fifty-eight percent of those surveyed
oppose Hungarian participation in ISAF operations.


6. (C) There is also considerable antipathy toward the
European Union. Even contacts strongly committed to the EU
frequently complain that the Union has failed to establish a
common energy policy while its traditional powers have sought
separate accommodations with Moscow. Others complain that
membership in the EU has not prevented what they see as
actions taken against ethnic Hungarian communities in
neighboring countries. Polling indicates that Hungarians'
choice of the EU as the preferred locus of decisions on
security has dropped to forty-one percent ) a decrease of
twenty-three percent since 2005. There will likely be more
resentment if the public blames Hungary's EU convergence plan
in part for rising inflation and declining growth.

HOW MUCH IS SMILING WORTH ( AND HOW MUCH DOES IT COST?


7. (C) This compounds a definite temptation to maintain
"balance" in relations with Russia ) which former Ambassador
Peter Balazs contrasted to the "emotional" policies of
countries like Poland and the Baltic states. As MOD State
Secretary Agnes Vadai asked Dr. Kagan, "why isn't our good

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relationship with Moscow a plus for Washington?" "After
all," she concludes, "smiling costs nothing." Indeed, some
here assert that there are even economic benefits. Although
we do not see the "dual dependence" Hungarian officials often
claim in their trade with Russia, there is certainly profit
for an influential few ( and with fewer strings than Western
companies attach with respect to transparency.

BUDAPEST 1900?


8. (C) Comment: This balancing act also offers the comfort
of historical familiarity. Hungary has been less than
successful in adjusting to a 21st century dominated by
"geo-economics" that Dr. Kagan believes the EU expected. It
is, however well-versed in the 19th century dynamic whose
overtones he discerns. Hungary is accustomed to dealing with
an active and ambitious Russia, but its preferred tactics may
well emphasize accommodation and highly selective activism.
This portends a degree of distance with states in the region
who share the same strategic dilemma but favor a more
activist approach. If Budapest perceives what Dr. Kagan
portrays as an era of rising competition among Great Powers,
its historical default may well be a lower profile. End
Comment.

FOLEY