SUMMER RERUNS: A PAUSE IN THE (IN)ACTION

C O N F I D E N T I A L SECTION 01 OF 02 BUDAPEST 000550

SIPDIS

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

E.O. 12958: DECL: 05/28/2013
TAGS: PGOV KDEM HU
SUBJECT: SUMMER RERUNS: A PAUSE IN THE (IN)ACTION

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


1. (C) The traditional summer "cucumber season" will be
longer than usual this year, with Parliament scheduled to be
on recess from June 9 through September 15. Although the
Parliament has passed bills on issues ranging from our
bilateral data-sharing agreement to Papa Airbase in recent
days, the government continues to shuffle slowly through its
latest cabinet reshuffle. New Ministers are in place at
newly-formed Ministries, but they seem to be getting up to
speed only slowly. None of the new Ministers, for example,
has had an introductory meeting with representatives of the
Diplomatic Corps, and the Ministries are still laboriously
moving into new office space.

FREEZE FRAME IN THE SUMMER


2. (C) In his public remarks, Prime Minister Gyurcsany has
characterized the months ahead as a time of "risk and
opportunity," noting that minority government will make
"government decisions easier but Parliamentary consensus
harder." Zoltan Kisfaludy, a former IV recipient who started
in mid-May as the Prime Minister's Deputy Chief of Staff,
believes that the challenge of ruling without a coalition
partner will now give the MSzP the opportunity to "rise or
fall" on its own. MSzP Deputy Faction Leader Attila
Mesterhazy believes that the summer will be "good for us,"
arguing that the months ahead will allow the government to
reach a new entente with the SzDSz ) especially if Janos
Koka loses his reelection bid on June 7 - and to act without
a critical Parliament in session.


3. (C) As for prospective changes at the top, Mesterhazy
bluntly notes that "if it would have been easy to replace
Gyurcsany we would have done so already." Although Defense
Minister Szekeres' Cabinet Chief tells us that "no one knows
what is going on inside Gyurcsany's head," First Lady Dr.
Klara Dobrev told Ambassador Foley May 28 that her husband
will be "hard to remove." She acknowledged that "you'll hear
plenty of rumors" ) the latest among them Gyurcsany's
intention to become the EU Tax Commissioner ) but she argues
that "no one else has his charisma." Ultimately, she
believes his support within the party leadership beyond the
Praesidium will allow him to remain in office in order to
"ride the rising tide" as EU assistance begins to resuscitate
the economy next year.


4. (C) Staffers in the PMO, meanwhile, are said to be avidly
circulating copies of "The West Wing" in search of
inspiration for the months ahead. By contrast, FIDESZ MP
Mihalj Balla describes the Ministries as "graveyards,"
comparing the Gyurcsany government unfavorably with former
Socialist PM Gyula Horn. As Kisfaludy admitted, the PMO will
seek to dictate the policy agenda but also to "control the
narrative" in the press in the months ahead. As FIDESZ
staffer Eniko Csontos notes with some asperity, "with a new
scandal every day," the government should be eager to guide
news coverage during the summer lull.

SERIOUS BUT STABLE CONDITION?


5. (C) The MSzP has clawed back slightly in the latest
polling, but continues to trail FIDESZ by up to forty points
in most surveys. Conservative commentator Istvan Stumpf
argues that the Socialists are using government positions and
government policy as tools to resolve their internal
disputes. He maintains that their smartest move would be to
submit to early elections now, hope that the smaller SzDSz
and MDF would fail to cross the Parliamentary threshold, and
take the opportunity to reorganize themselves in opposition
as Hungary evolves into a two-party system. Both Mesterhazy
and Kisfaludy are clear, however, that the MSzP will not
support early elections.


6. (C) But, many ask, what policies can they support? PM
Gyurcsany has called a curious "summit meeting" with his own
party for the week after Parliament's recess, with press
speculation describing the session as an attempt to hash out
a legislative agenda for the fall session. This will likely
include revision of the Health Care legislation and expansion
of nuclear power. All eyes are also turning to the coming
budget debate, with MSzP insiders expressing private concern
that the failure to win support for their draft budget would
further convince the public that the party is incapable of
governing.

THE FORECAST CALLS FOR PAIN


7. (C) FIDESZ has also been meeting behind closed doors ...
but public leaks of recent comments made by Party President
Orban have been in heavy circulation. According to press

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reports, Orban predicted "two years of pain" ahead in
managing the economy during a meeting with Political
Scientists on April 30. He also reportedly discussed halting
various projects - including the controversial Budapest metro
expansion ) and suspending increases in public subsidies.
With regard to domestic politics, Orban reportedly commented
that he would "follow (WW II-era Regent) Horthy's example"
and "spank the Magyar Garda and send them home." He is also
alleged to have claimed that FIDESZ ) under his leadership
) would win "the next three elections in Hungary."


8. (C) MSzP officials have quickly seized on Orban's speech,
dubbing it "Orban's Oszodi speech" in reference to PM
Gyurcsany's infamous "lies" address at Balatonoszod in 2006.
Early polling shows predictably strong opposition to the
prospect of reduced state support, and we expect the speech
to feature prominently in debate over the months ahead.
Indeed, the MSzP has moved quickly to exploit the speech,
blitzing the media with full-page ads accusing Orban of
practicing "the politics of revenge" and predicting a dark
future under a FIDESZ government.

CONFRONTATION AND KADARISM


9. (C) Sociologist Pal Tamas of the prestigious Hungarian
Academy of Sciences warns, however, that the continued din
could have diminishing returns. Noting recent opinion
surveys reflecting a clear majority of respondents viewing
the Kadar era favorably compared to the present, Tamas
believes many Hungarians prefer the illusion of "a past of
prosperity without competition" to a time of "economic
troubles and political intrusion." (Even Foreign Minister
Goncz has commented privately that the late Socialist period
is remembered fondly compared to a transition seen as
"leaving many behind.") Tamas' research indicates that
Hungarians are reaching saturation with a divisive political
debate that "is with them from the breakfast table to the
bedroom." This, he argues, is why the parties tend to
combine "their confrontational rhetoric and familiar,
Kadarist policies."


10. (C) Comment: That remains a dangerous combination.
Although the summer break may make the slow pace of minority
government less conspicuous, the growing gap between the
parties' promises and their likely accomplishments will
remain long after Parliament returns in September. One poll
indicates that over 80 percent of Hungarians believe the
country is headed in the wrong direction. From our
perspective, it is actually headed in two wrong directions
simultaneously: toward stasis in its policy and toward the
extreme in its rhetoric, reflecting a disturbing tendency to
"go backwards when the going gets tough." Stumpf has
publicly suggested that the Gyurcsany government represents
"the last nail in the coffin of the Third Republic." Even
with less activity likely over the summer ) or perhaps
because of it ) many are buying into the proposition that
the Hungary's straits are a reflection of flawed institutions
as well as flawed individuals and flawed ideas. End Comment.
Foley