THAT WHICH GOVERNS LEAST: HOW WOULD A MINORITY

C O N F I D E N T I A L SECTION 01 OF 02 BUDAPEST 000401

SIPDIS

SIPDIS

DEPARTMENT FOR EUR/NCE; PLEASE PASS TO NSC FOR ADAM STERLING

E.O. 12958: DECL: 04/17/2013
TAGS: PGOV PREL KDEM HU
SUBJECT: THAT WHICH GOVERNS LEAST: HOW WOULD A MINORITY
GOVERNMENT WORK?

REF: BUDAPEST 392

Classified By: P/E COUNSELOR ERIC V. GAUDIOSI; REASONS 1.4 (B) AND (D)


1. (SBU) The atmosphere remains one of uncertainty regarding
"the day after" the break-up of the coalition even as the
SzDSz's April 27 departure date approaches.

WHIPPING A MINORITY GOVERNMENT INTO SHAPE


2. (C) Barring a dramatic outcome to what has been a very
ponderous crisis, Hungary will enter the uncharted waters of
minority government armed with no precedent and exactly one
think-tank study. In the current acrimony, the fact that the
think-tank piece was commissioned before the break-up of the
coalition has been seized on by the SzDSz as "proof" that the
MSzP had considered - perhaps deliberately courted - the
break-up.


3. (C) In practice, minority government will likely mean a
significant expansion of lobbying and a significant
contraction of legislative output. Former Minister of
Justice and Law Enforcement Takacs predicts the government
will do as much as possible by executive agreement in an
effort to keep issues off the floor of Parliament. He
estimates that the "real priorities" amount o only one-sixth
of the Parliament's output. "We make Hungary look even
harder to govern than it is," quipped one observer.


4. (C) But coming to closure on even a limited agenda may
prove exponentially harder. With two MPs unable to serve for
medical reasons, the MSzP will have 188 representatives ) 6
shy of the 50 percent plus 1 required to pass most measures
in Parliament. Although this requirement pertains only to
members present and voting (i.e. even absences and
abstentions by the SzDSz would help give the MSzP a majority
if its members continue to vote en masse),most insiders tell
us that the party whips ) and likely the party bag-men -
will be earning their salaries in the weeks ahead, when
mobilizing the party factions will be critical. FIDESZ
leader Viktor Orban characterized a minority government as
"government by bribery."


5. (C) The division in Parliament will likely be reflected
at the local and regional level. There have already been
open exchanges regarding the MSzP's reconsideration of its
support for SzDSz Mayor Demszky in the Budapest City Council,
and our sense is that the Socialists will need the patronage
positions currently held by the SzDSz at all levels, both to
keep its own members in line and as leverage in its recurring
quest for votes from beyond its ranks.

IN THEORY (


6. (C) Although Political Scientist Gabor Gyuri (who wrote
the now-infamous think-tank study) notes that the end of the
coalition could be the beginning of broader consultation
across party lines, even talk of multi-party consensus has
not been cheap thus far. Discussions regarding the Hungarian
Democratic Forum's proposal to institute a flat tax were
short-lived, and the government's "New Ownership Initiative"
is already being dismissed as dead on arrival. Cabinet
Minister Peter Kiss told a select group of Ambassadors last
week that the government needs to improve its communication
and coordination with all parties, but it should not expect a
lifeline from the right. FIDESZ President Orban has assured
us privately that key foreign policy issues such as
Afghanistan will continue to receive the opposition's full
support, but on domestic issues the lines remain quite stark.


7. (C) In theory, a minority government could survive
through the next elections. Even the failure to approve a
2009 budget would not prove fatal, as the provision exists
for the automatic continuation of the previous year's
spending levels in the absence of a new budget. But there is
no deus ex machina to rescue the reform agenda. A minority
government would likely lack the political capital to revisit
health care reform and the financial capital to consider tax
reform.

HIGHER RPM'S; LESS TORQUE


8. (C) Comment: Ironically, the very lack of consensus
might be Hungary's best insurance against the fiscal
irresponsibility that has characterized previous
administrations late in their terms. As former SzDSz
President Gabor Kuncze points out, a deadlock on the budget
under a minority government "might be the best way to stick
to the Convergence Plan and to prevent pre-election spending
increases." But a minority government will find itself

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running much faster just to stand still. It will have to
hold the various factions of the MSzP in line before it can
even begin to work ) and likely work hard ) for the
additional handful of votes it needs in Parliament for the
issues it considers to be priorities. That will require the
patience, the consensual approach, and the resources the
government has not exhibited to date. End Comment.



FOLEY