PM GYURCSANY MAYBE OUT OF OFFICE BUT NOT OUT OF

C O N F I D E N T I A L BUDAPEST 000226

SIPDIS

DEPARTMENT FOR EUR/FO AND EUR/CE JAMIE LAMORE, PLEASE PASS
TO NSC JEFF HOVENIER AND KHELGERSON

E.O. 12958: DECL: 03/22/2014
TAGS: PGOV PINS HU
SUBJECT: PM GYURCSANY MAYBE OUT OF OFFICE BUT NOT OUT OF
POWER

Classified By: Acting P/E Counselor Jon Martinson, reasons 1.4 (b,d)


1. (U) Summary. In a surprise announcement at the Socialist
Party (MSzP) Congress on March 21, Prime Minister Ferenc
Gyurcsany told party members that he will step down as Prime
Minister following a successful constructive-vote-of-no-
confidence scheduled for April 14. Apologizing to party
members for "the mistakes I have made," the Congress
subsequently reelected Gyurcsany as party President with 85
percent support. Additional reshuffling of the party's
presidium, with former first Vice President Ferenc Juhasz and
Vice President Istvan Hiller now out, leaves four of the five
top party officials as non-Gyurcsany supporters as the MSzP
prepares for the upcoming European Parliamentary (EP)
elections in June. End summary.

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GYURCSANY'S SURPRISE ANNOUNCEMENT AND SUPPORT
--------------


2. (U) At the March 21 Socialist Party (MSzP) Congress, Prime
Minister and Party President Ferenc Gyurcsany astonished the
audience when he announced he would step down as Prime
Minister, proposing the formation of a new Cabinet with a new
Prime Minister within two weeks (septel). Although
unchallenged for party president, there were indications that
critical voices within the party would result in a relatively
large number of protest votes, raising the specter of
legitimacy even if Gyurcsany was reelected. However,
Gyurcsany's surprise announcement and very self-critical
speech, significantly altered the Congress' atmosphere, and
after a standing ovation, Gyurcsany was reelected as MSzP
President with 85 percent of the votes.

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PRESIDIUM SHIFT
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3. (U) There were three candidates for the two First-Vice
President positions. Incumbent, and Defense Minister, Imre
Szekeres was reelected with 85 percent support and Monika
Lampreth received 68 percent. Ferenc Juhasz, widely
criticized for inefficient performance within the party,
withdrew from the race, paving the way for Monika Lamperth.
She has served as the newly created "party chief of staff"
ever since Gyurcsany removed her as Social and Labor Minister
in 2008.


4. (U) While two of the incumbent Vice Presidents, Peter
Kiss and Istvan Ujhelyi, were re-elected with 76 and 71
percent support respectively, Attila Mesterhazy, who is a
popular Deputy Head of the party's parliamentary faction,
defeated Gyurcsany protege Istvan Hiller, currently Minister
of Education and Culture, from his position with 78 percent
of the vote.


5. (C) With these new elections four of the five top
officials are not Gyurcsany supporters. Peter Kiss, leader
of the Leftist Platform with MSzP, was Gyurcsany's rival in
the 2004 race to replace PM Medgyessy. Szekeres, Lamperth,
and Mesterhazy are all longtime Embassy contacts and
commented on past occasions about personal conflicts with
Gyurcsany. Additionally, another Embassy contact told EmbOff
on March 23 that Istvan Ujhelyi is typically the person found
next to the winner, and as such, only he can be considered a
real Gyurcsany fan amongst the top Socialist leadership at
the moment.


6. (U) The only serious rivalry during the Congress was for
the remaining seven seats in the 15 member party executive
board. While Finance Minister Janos Veres, Defense Ministry
Senior State Secretary Agnes Vadai, MEP Edit Herczog, and
Youth leader Laszlo Varga were reelected along with Ferenc
Juhasz and Istvan Hiller, Gergely Barandy is a new face,
winning a seat under the party's youth quota guidelines.
(Note: the party Charter requires two women and two young
politicians in the 15 member Presidium. End Note.)


7. (C) Comment. Gyurcsany's surprising announcement
potentially changes the Hungarian Government landscape, but

leaves him well positioned to play a continuing influential
role in politics. If the April 14
constructive-vote-of-no-confidence removes Gyurcsany from
office, he will still have significant opportunities as a
member of Parliament and party leader to influence Government
programs. While there are those in the Presidium who are
less supportive of Gyurcsany, the significant support during
the voting for Party President - pre-Congress estimates
suggested perhaps 70 percent support - may manifest itself in
increased support in the polls prior to the upcoming EP
elections. End comment.
Foley