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

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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