Identifier
Created
Classification
Origin
07BUDAPEST392
2007-03-14 06:30:00
CONFIDENTIAL
Embassy Budapest
Cable title:  

GYURCSANY AND THE MSZP: STABLE, NOT SYNONYMOUS

Tags:  PREL PGOV KDEM HU 
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VZCZCXYZ0003
RR RUEHWEB

DE RUEHUP #0392/01 0730630
ZNY CCCCC ZZH
R 140630Z MAR 07
FM AMEMBASSY BUDAPEST
TO SECSTATE WASHDC 0930
C O N F I D E N T I A L BUDAPEST 000392 

SIPDIS

SIPDIS

EUR/NCE MICHELLE LABONTE

E.O. 12958: DECL: 03/12/2022
TAGS: PREL PGOV KDEM HU
SUBJECT: GYURCSANY AND THE MSZP: STABLE, NOT SYNONYMOUS

REF: A. REF A: BUDAPEST 00276


B. REF B: BUDAPEST 00282

C. REF C BUDAPEST 00343

Classified By: POL-ECON/C Eric V. Gaudiosi. Reasons: 1.4 (b) and (d).

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SUMMARY:
--------

(C)
C O N F I D E N T I A L BUDAPEST 000392

SIPDIS

SIPDIS

EUR/NCE MICHELLE LABONTE

E.O. 12958: DECL: 03/12/2022
TAGS: PREL PGOV KDEM HU
SUBJECT: GYURCSANY AND THE MSZP: STABLE, NOT SYNONYMOUS

REF: A. REF A: BUDAPEST 00276


B. REF B: BUDAPEST 00282

C. REF C BUDAPEST 00343

Classified By: POL-ECON/C Eric V. Gaudiosi. Reasons: 1.4 (b) and (d).

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SUMMARY:
--------------

(C) 1. Prime Minister Gyurcsany enters the Spring political
season firmly in control of a stable governing coalition and
Sr. coalition MSZP party, according to contacts across the
political spectrum. In the wake of the Fall 2006 protests,
uncertainty swirls around the March 15 National Holiday, and
how the government will react should violence recur. But
there is a broad consensus within the party that Gyurcsany's
position will not be compromised in any but the most extreme
scenarios. Despite political turbulence and uncertain state
of reforms, Gyurcsany's position has been bolstered by
perceptions of FIDESZ President Viktor Orban's continued
radicalization. All Embassy contacts see 2007 as a "hard
year" for the MSZP, perhaps made harder by Gyurcsany's
personal management style, but say a flexible approach by
Gyurcsany to implement reforms and a deluge of EU development
funds will raise public support for the MSZP. Jr. coalition
SZDSZ party elections in April and a FIDESZ-led referendum in
the fall will complicate Hungarian politics, but most agree
that they will not jeopardize the government's fundamental
stability. Many say the 2009 European Parliament elections
will be the true test for the future of the MSZP.

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MSZP-Gyurcsany Symbiosis
--------------

(C) 2. Prime Minister Gyurcsany's overwhelming 89% vote as
party president at the February 24 party congress solidifies
his position as undisputed leader of the party, the coalition
and the government (REF A). However, opinions differ about
whether or not the PM's brinksmanship helped or hurt his
position (NOTE: Gyurcsany stated publicly that "if I do not
get 75 percent of the vote, I do not want to be President or
Prime Minister"). Many party loyalist were privately enraged
by what that called "Gyurcsany's blackmail" of the party, and
the PM himself has confided to us that his election to the

party presidency will not solve his problems with the
opposition or within the MSZP.

(C) 3. What is clear is that for the time being, the MSZP is
Gyurcsany's show to stage. According to independent
political analyst Krisztian Szabados, to implement his reform
package, Gyurcsany is "forced to seek balance" between
numerous interest groups within his party. According to MSZP
Member of Parliament and party foreign policy chief Attila
Mesterhazy "MSZP members support the party first and the
individual second." PM Gyurcsany is the "undisputed leader
now, because he is the best person for the job at this time,"
elaborated Mesterhazy. He concluded, however, that
"Gyurcsany must cooperate with the party." Gyurcsany does
not have carte blanche to impose his will, or his reforms.

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POWER STRUCTURES: REAL AND IMAGINED
--------------

(C) 4. Many believe that Gyurcsany's move to create
co-executive VP's in the party congress was to insure that
his close ally Ferenc Juhasz would serve as number two in the
party hierarchy and implement the PM's plans. Mesterhazy
believes that real authority flows from Gyurcsany to Vice
President Peter Kiss, to faction leader Ildiko Lendvai, to
co-executive VP (and Minister of Defense) Imre Szekeres and
lastly to Juhasz. Said Mesterhazy, relative newcomer Juhasz
wanted "his place at the table" and has been rewarded with a
high risk-low reward position that "takes all the blame" if
reforms and the party are unsuccessful in 2007-08. According
to MSZP Presidium member and Member of the European
Parliament Edit Herczog, "the power still lies with the party
- not the Prime Minster." Ironically, this echoes criticism
of the MSZP's "Bolshevik" structure leveled by FIDESZ faction
leader Tibor Navracsics (REF B).

--------------
SZDSZ ELECTIONS AND THE COALITION
--------------

(C) 5. The coalition partner SZDSZ party's upcoming
presidential elections will pit Member of Parliament Gabor
Fodor against Minister of Economy Janos Koka. According to
Mesterhazy "neither SZDSZ candidate is good for the MSZP,"
though he quickly added that neither candidate will "leave
the coalition." Neither candidate commands the same level of
power as outgoing SZDSZ president Gabor Kuncze, within in
their party, and Mesterhazy cautions that "neither Fodor nor
Koka can keep people in line." For the MSZP this means that
Gyurcsany will constantly be plagued by dissenters to
reforms, most notably in health care.

(C) 6. The SZDSZ election could also bring a cabinet
re-shuffle as the party is free to choose between three of
four portfolios in the Gyurcsany government. (NOTE: the
SZDSZ is currently responsible for the health care, economy
and foreign affairs portfolios, one of which it could trade
for environmental protection). The race is too close to call
as Fodor appeals to the liberal intelligentsia and Koka is
more popular in the party leadership. Both call for distance
with the MSZP, though neither advocates dissolving the
coalition.

--------------
ORBAN AND THE OPPOSITION
--------------

(C) 7. At the FIDESZ congress in January, party president
Viktor Orban retained clear control of the political right,
leading the opposition into attack mode versus the Gyurcsany
government. According to Krisztian Szabados, Orban's
"continued radicalization of FIDESZ will lead to increased
political risk, but will not threaten the government's
stability." To mobilize party loyalists, Orban will likely
continue his populist rhetoric and continue to reject all
contact with the Gyurcsany government, which he considers
illegitimate. FIDESZ members tell us the party will continue
Parliament walk-outs whenever PM Gyurcsany takes the floor.

(C) 8. That said, the opposition will be "unable to move the
MSZP party" according to MSZP member of parliament Gergely
Barandy, who joked that Orban's "radical talk" is good for
the MSZP. Buttressing his point, in a separate meeting MP
Mesterhazy said "social unrest are their tools; strong
support for the party are our tools; the MSZP party will not
bend under public opinion."

-------------- --------------
MILESTONES: 2007 REFERENDUM AND 2009 MEP ELECTIONS
-------------- --------------

(C) 9. The Hungarian Constitutional Court has ruled that
three agenda items (state control of health care
institutions, exclusive sale of medicines by pharmacies and
regulations re sale of farmland) on the FIDESZ sponsored
referendum planned for fall 2007 are constitutional. Party
spokesmen welcomed the Court's decision and say they will use
the referendum to criticize the government and call for PM
Gyurcsany to resign. Turnout for voting in the fall is
expected to be heavily pro-FIDESZ. The MSZP conversely
anticipates little fallout, but nonetheless acknowledges
pro-FIDESZ voters will dominate the balloting. Although the
referendum could take Hungary into largely uncharted
political waters, according to Edith Herczog, the questions
re health care "will only impact on the SZDSZ," which
traditionally focused on the issue. She says the referendum
will not be enough "to turn the party against Gyurcsany."

(C) 10. The European Parliamentary elections in 2009 "will
be critical for Gyurcsany" says MEP Hercszog. The MEP
elections will be less than a year before the 2010 Hungarian
national election campaigns kick-off. Said Herczog, the MEP
elections "will be a barometer" and will show if the MSZP has
the "public's trust." According to Herczog, strong socialist
turn-out for MEP elections will ensure Gyurcsany will be the
party's candidate in 2010. If not, she concludes, expect to
see the party "looking for a new candidate."

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COMMENT
--------------

(C) 11. Most contacts confirm that the PM will enjoy the
party's support - but not its affection - so long as he works
well with party insiders and does not try to "impose his
will." Gyurcsany, however, is known for working based on the
calculation of self interest rather than an interest in
people. He has long been noted for his penchant for making
decisions with little or no consultation. Only his closest
advisors are informed of his decisions with any regularity.
Many of his strongest supporters in the party point to the
last minute appointment of FM Kinga Goncz as an example of
Gyurcsany's "close-hold" decision making (note: Most MSZP
contacts tell us they learned of Goncz's appointment via the
media). Goncz is now telling close associates that she would
not be surprised if Gyurcsany decides to remove her (REF C),
and only hopes that she "doesn't find out about it in the
press." "Gyurcsany doesn't do personnel," notes ICDT
Director Istvan Gyarmati, and it increasingly appears that he
doesn't do personal either. If the PM does not include the
party more in the months ahead, say our contacts, he may not
be able to pass his ambitious reform measures. He may also
leave the door open for a challenger from within before the
2010 campaign.
FOLEY