SCENESETTER FOR DAS PEKALA'S VISIT TO BUDAPEST

C O N F I D E N T I A L BUDAPEST 000415

SIPDIS

SIPDIS

DEPARTMENT FOR EUR DAS PEKALA AND EUR/NCE DAVID KOSTELANCIK
AND MICHELLE LABONTE

E.O. 12958: DECL: 03/20/2012
TAGS: PREL PGOV KDEM HU
SUBJECT: SCENESETTER FOR DAS PEKALA'S VISIT TO BUDAPEST

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


1. (C) Domestic politics continue to dominate Hungary's
public discourse. Parliament is back in session, and the
parties are evaluating the impact of the March 15
demonstrations on what all regard as a critical year.
Recently elected as President of the Hungarian Socialist
Party (MSZP),Prime Minister Ferenc Gyurcsany still faces
strong opposition from without ... and often only tepid
support from within. With former PM Viktor Orban still at
the helm of FIDESZ despite reported challenges from within,
the opposition continues its calls for the government to step
down, and currently refers to a referendum to be held this
fall as the government's last chance to "heed the will of the
people."


2. (C) With the exception of energy security, which FIDESZ
has seized as a priority, foreign policy issues represent a
minor element and remain notably absent in partisan domestic
disputes. While EU membership allows the GOH to default to
the consensus position on many issues, there is growing
ambivalence about the value of EU membership among many
Hungarians. This is particularly true when faced with issues
such as the current austerity measures included in the
government's controversial "convergence plan." Hungary
remains selectively active on such issues as Cuba and the
Balkans, but often chooses to fly under the radar in their
activism, particularly when it comes to neighboring states.
Although most people agree that PM Gyurcsany has centralized
decision making in the Prime Minister's Office (PMO),it has
not had a positive effect on the interagency process, which
remains laborious and slow. When an issue does make its way
through the interagency process, the GOH still tends to
overpromise and underdeliver. The government has taken steps
to reorganize the PMO and to encourage the development of
both foreign policy and national security strategies, and
further reshuffling of the cabinet - potentially to include
the Foreign Minister - are in the offing. One constant in
our bilateral relationship is that the Visa Waiver Program
remains the number one issue.


3. (C) We developed your schedule to maximize opportunities
to discuss issues of mutual concern. At this time we have
confirmed the following meetings:

- Parliamentary Speaker Katalin Szili. Visa waiver will
likely be the main issue on Szili's agenda. Szili has worked
to raise her profile in foreign affairs through frequent
travel, and invited Speaker Pelosi to attend a June meeting
of Balkan parliamentarians in Budapest during her recent trip
to Washington. She is, however, somewhat on the outs with
her party (MSZP) after challenging Prime Minister Gyurcsany.
Szili met with DAS DiCarlo in Budapest earlier this month.

- Newly-appointed Chair of the Foreign and Security Policy
Council in the PM's office, Laszlo Valki. Valki is a highly
respected professor of international law and was a surprise
appointment to head the new and still vaguely defined Policy
Council. Although he has been clear that he is "no Henry
Kissinger," we are trying to cultivate our relationship with
Valki and his staff. The meeting should provide an
opportunity to cover the full range of issues, including
Russia, energy security, and missile defense.

- Foreign Affairs Advisor to President Solyom, Ambassador
Andras Gulyas. Post has experienced great difficulty in
establishing contacts with Solyom's office, as has the MFA.
Solyom has developed an independent and often divergent
approach to foreign affairs, highlighted by his recent trip
to Romania over the March 15 holiday. That said, the VWP has
been of central interest to Solyom's office, and this should
be a good opportunity to update them on current developments.
Also since Solyom has been vocal in the past on aviation and
environment issues, we have invited his office to nominate an
officer for the IV Program on aviation and climate change.

- The Parliamentary Foreign Affairs Committee: Chaired by
opposition MP Zsolt Nemeth, the committee is working to
maintain the spirit of bipartisanship as it establishes an
independent voice on foreign policy issues. Nemeth is
particularly interested in the issue of ethnic Hungarians
abroad, and has clashed with the government in his current
position while maintaining good relations with us. He most
recently challenged the government over energy security and
demanded to see what he called the government's secret plan
with Putin on Blue Stream (or, as some FIDESZ staffers call
it, "Red Stream.") Nemeth may also take strong exception to
our Human Rights Reform, which FIDESZ saw as failing to blame
the Gyurcsany government for prompting the fall
demonstrations.
- We are setting up a one-on-one, on the record interview
with a reporter from a Hungarian daily.

Dinner: The Ambassador will host a dinner on Sunday (3/25).
The invitees will include Hungarian government officials from
the MFA and Ministry of Justice and Law Enforcement as well
as parliamentarians representing a cross-section of the
political spectrum. Please note that the schedule for the
dinner is very tight and we will need to proceed directly
from the airport to the dinner.

On Monday (3/26),the Ambassador will host a dinner for you
at her residence with the Embassy Senior Staff. Prior to
dinner, you are scheduled to meet with Ambassador Foley for
drinks at her residence.

- You will also have occasion to participate in an Embassy
town-hall meeting during your visit.


4. (U) We look forward to welcoming you in person.
FOLEY