READOUT OF DAS PEKALA'S BUDAPEST CONSULTATIONS

C O N F I D E N T I A L SECTION 01 OF 02 BUDAPEST 000504

SIPDIS

SIPDIS

DEPARTMENT EUR/NCE MICHELLE LABONTE

E.O. 12958: DECL: 04/02/2012
TAGS: PREL PGOV CVIS KDEM ENRG HU
SUBJECT: READOUT OF DAS PEKALA'S BUDAPEST CONSULTATIONS


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


1. (C) Summary: EUR Deputy Assistant Secretary Mark Pekala
used his March 25-27 visit to Budapest to underscore to GOH
decision-makers, advisors and opinion leaders our commitment
to a continued strong relationship with Hungary based on
shared principles and values. He also provided an interview
to the Hungarian weekly "Heti Valasz" and took the
opportunity to meet with the Embassy community in a town hall
meeting. His visit reflected strong consensus across the
political spectrum regarding the Visa Waiver Program, deep
divisions on energy security, and support on the Balkans.
End Summary.

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VISA WAIVER - BROAD AGREEMENT
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2. (C) Pekala updated Parliament Speaker Katalin Szili on
developments in the Administration,s effort to revamp the
visa waiver program (VWP) by strengthening its security
elements and working toward flexibility that would allow the
entry of new countries. Echoing remarks made by
representatives of the government and opposition parties at a
dinner hosted by Ambassador Foley the night before, Szili
thanked us for our efforts on visa waiver and underlined that
it is an issue that nearly all Hungarians follow and take a
personal interest in. (She even cited her hairdresser as
having asked her about the status of Hungary's inclusion in
the VWP during her last appointment.) Szili agreed that the
VWP would become a vehicle to help maintain the excellent
relationship between the United States and Hungary via travel
and exchanges. By contrast, FIDESZ parliamentary faction
leader Tibor Navracsics cautioned that a failure to address
the issue could cause "drift" between the U.S. and its
Eastern European Allies.


3. (C) In a separate meeting with Pekala, Andras Gulyas,
Foreign Policy Advisor to President Solyom, emphasized the
President's interest in the status of the VWP. He indicated
that Solyom sees the visa as primarily symbolic and feels
that Hungary's inclusion would show a certain equality by
allowing Hungarians to travel to the U.S. visa-free in the
same way that U.S. citizens may travel to Hungary. Gulyas
also underscored Solyom's continued concerns about individual
rights under any visa regime where personal data is
collected. Gulyas also noted in closing that Hungary had
paid a cost for its recent activism in Cuba with the recall
of the Cuban Ambassador for consultations and "questions"
within the EU.

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ENERGY SECURITY - OPEN DISCORD
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4. (C) When Pekala raised energy security and described U.S.
efforts to work with countries toward the goal of
diversification, Gulyas noted that the early 2006 shocks to
energy supplies in Hungary caused by Russia were a timely
warning to work on coordinated energy security policy. He
said that he hopes that the U.S. will continue to monitor the
situation in Hungary closely and watch how it is progessing
on such a policy and "catching up" with the rest of Europe.


5. (C) Laszlo Valki, Chairman of PM Gyurcsany's new Foreign
and Security Policy Council, indicated that he sees Blue
Stream as a more viable option but feels Russia is not a
predictable partner. He reported that the Russians had not
provided any definite details on Blue Stream during PM
Gyurcsany's recent visit to Moscow, characterizing the visit,
as well as Russo-Hungarian relations in general, as
"businesslike." Valki did comment, however, that the Nabucco
pipeline project appears to be encountering "opposition from
many sides," including the recent withdrawal of a French gas
company and the problems posed by the potential reliance on
unstable suppliers such as Turkmenistan and Iran. Pekala, as
in the meeting with Gulyas, stressed the importance of
diversification. He informed Valki that the U.S. was in
extensive discussions with Azerbaijan on, among other topics,
the supply of gas to Nabucco.


6. (C) In contrast to Valki's assessment of Blue Stream as
the more viable option, Foreign Affairs Committee Chair, and
FIDESZ MP, Zsolt Nemeth charged (in a separate meeting with
Pekala) that Gyurcsany and the MSZP with downplaying Russia's
true intentions and characterizing the question as an
economic one and not a security issue. Nemeth charged that
"that Russian imperial instinct" is alive and well, and added
that opposition efforts to speak out against Blue Stream are
met with government claims of "Russophobia." Nemeth
continued that the MSZP labels Nabucco as "unrealistic"

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whenever possible - when in fact Blue Stream is also beset by
serious technical, supply, and investment problems - and only
under pressure resorts to claims of neutrality in the Blue
Stream - Nabucco debate. Nemeth suggested that the way to
quiet the critics of Nabucco is to get Central Asian gas into
the pipeline as soon as possible. He also noted that the
opposition will try for a parliamentary declaration welcoming
the Berlin Summit, supporting Nabucco, and focusing on EU
common energy policy.

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BALKANS
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7. (C) Szili briefly touched on the Balkan issue, emphasizing
Hungary's interest and agreeing with Pekala,s basic points
that European and U.S. support of the Ahtisaari plan should
be unanimous and that Serbia must see a future for itself in
Europe. Toward that end, Hungary sponsors what she called a
"tolerance program" in Serbia where they use youth summer
camps and economic programs to promote tolerance and unity
across ethnicities. Szili is also eager to confirm Speaker
Pelosi's attendance at a June meeting with her Balkan
counterparts.


8. (C) Gulyas expressed support for the principle of minority
rights in general and for Ahtisaari in particular,
highlighting concerns about the impact of a Kosovo settlement
on the delicate dynamic in the Vojvodina.

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OUTREACH
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9. (U) DAS Pekala gave an interview to Hungarian weekly "Heti
Valasz" where he provided U.S. views on VWP, energy security,
relations with Russia, missile defense and the Balkans.


10. (U) He also held a town hall meeting, attended by Embassy
staff, where he discussed policy and management issues and
took questions from the audience on both subjects.


11. (U) Septel will provide details of discussions on missile
defense.


12. (U) DAS Pekala has cleared on this message.
FOLEY