SPEECH IMPEDIMENT: GYURCSANY'S INFAMOUS GAFFE ONE

C O N F I D E N T I A L SECTION 01 OF 02 BUDAPEST 000865 SIPDIS SIPDIS DEPARTMENT PLEASE PASS TO NSC FOR ADAM STERLING E.O. 12958: DECL: 05/29/2017 TAGS: PGOV PREL HU SUBJECT: SPEECH IMPEDIMENT: GYURCSANY'S INFAMOUS GAFFE ONE YEAR LATER Classified By: P/E COUNSELOR ERIC V. GAUDIOSI; REASONS 1.4 (B) AND (D) ¶1. (C) The first anniversary of PM Gyurcsany's now-infamous address to an MSZP party meeting has not passed without comment, as both the government and the opposition have used the occasion to reiterate their points and to recast their running debate. "NOW YOU DON'T TALK SO LOUD; NOW YOU DON'T SEEM SO PROUD ..." ¶2. (C) After a year of harsh criticism, violent demonstrations by the opposition, and fading support within the coalition, PM Gyurcsany continues to defend last year's remarks as "the most courageous political statement in Hungary since 1956." In an interview publishd this weekend, he admits to a sense of isolation but not to a sense of regret, upholding both his public assertion that reform is necessary and his private indications that shock therapy was needed to mobilize the MSZP. ¶3. (C) Throughout the past months, Gyurcsany has tried - with only middling success - to wrap himself in the cloak of reform and to equate attacks on him with attacks on Hungary's democratic institutions. He has cast his speech consistently as an example of candor and "political courage" (a term he has also used to describe his statements questioning the Nabucco pipeline),expressing his regret only for "handing the opposition another weapon to attack the government." His political currency, meanwhile, has suffered: the party rallied to him initially but now seems restive, with MSZP MPs most recently demanding improved consultation with the party caucus in a May 29 meeting with the PM. ¶4. (C) With his focus almost exclusively on tactical decisions, Gyurcsany's government is operating largely by inertia. The PM is on the defensive politically ... and often defensive personally. He has rallied to meet individual challenges such as last year's vote of confidence, but these are clearly a drain and a distraction. He has reduced both the pace and the scope of his reform efforts, which now seem likely to proceed sequentially over the coming months. In his public statements, Gyurcsany has downplayed the need for further austerity measures, highlighting only the need for continued fiscal responsibility. Ironically, this has satisfied neither an increasingly disaffected MSZP nor an increasingly assertive SZDSZ. As for public opinion, Gyurcsany's personal popularity has plummeted as low as 20% in some polls. ¶5. (C) This growing isolation has left many issues adrift, caught between ministries which are often disinclined to take action and a Prime Minister's Office (PMO) that has restricted decision-making authority without improving performance. As one observer noted, "Gyurcsany has been fortunate in his enemies ... but not in his staff." TARGETS OF OPPORTUNITY ¶6. (C) For the opposition, Gyurcsany's speech added a sense of outrage to their simmering discontent. The brinksmanship of the fall has given way to a more calibrated approach, but Orban's rhetoric continues to cast the issue primarily in terms of moral legitimacy. Although FIDESZ has been extremely flexible regarding its tactics, its various calls for a "government of experts," for public demonstrations, and for a referendum have all been designed to bring about Gyurcsany's departure. ¶7. (C) This approach has mobilized the party's base and cotributed to an enormous lead in current polling. But it also tarred FIDESZ by association with the far right, a charge they are working hard to rebut. In the longer term, the party's rush to seize on the speech may also have prevented FIDESZ from taking an objective - and overdue - look at its fundamental approach of offering ultimata rather than alternatives. Although the opposition is making significant strides in addressing its ability to engage on the substance of the issues, Orban is always tempted to focus on his personal conflict with Gyurcsany first ... and Hungary's constitution second. Under his leadership, FIDESZ remains locked in an awkward transition from dissident movement to political party. WHODUNNIT? ¶8. (C) The question of responsibility for the leak of Gyurcsany's speech remains the subject of widespread conjecture. Although the PM has repeatedly disavowed his intention to investigate the leak, current speculation points not to the opposition but to Minister of Labor and Social BUDAPEST 00000865 002 OF 002 Affairs - and Gyurcsany rival - Peter Kiss. A LEVEL PLAYING FIELD ... OF SCORCHED EARTH ¶9. (C) Comment: The current political landscape offers few clear advantages to either party. The divisions have deepened and the rhetoric escalated, but the only clear winner over the past year has been apathy. Although the government's popularity has dropped dramatically - and has yet to rebound - there have been no major demonstrations this spring. In the face of the government's more cautious approach on reform, the public seems resentful but resigned. If that remains the case, "the speech" will have done little to change the blood sport that i Hungarian politics. Although the issue will remain a frequent reference point in the public debate, it has yet to ennoble Gyurcsany or to empower Orban. End Comment. FOLEY