PRIME MINISTER BAJNAI- A FRIEND IN NEED

C O N F I D E N T I A L BUDAPEST 000323 SIPDIS DEPARTMENT FOR EUR FO AND EUR/CE JAMIE LAMORE. PLEASE PASS TO NSC JEFF HOVENIER AND KHELGERSON E.O. 12958: DECL: 04/26/2014 TAGS: PGOV PREL ECON MARR HU SUBJECT: PRIME MINISTER BAJNAI- A FRIEND IN NEED Classified By: Acting P/E Counselor Jon Martinson, reasons 1.4 (b, d) ¶1. (SBU) Summary. During Charge's meeting to deliver President Obama's congratulatory letter, Prime Minister Gordon Bajnai outlined his views on the current economic restructuring plan and his first official international travel to the EU, NATO and Vienna. Noting a "slight shift in foreign policy," Bajnai said NATO, EU and the trans-Atlantic relationship will be his priority. He also addressed issues related to Guantanamo detainees, Afghanistan, and anti-Roma violence. Calling Hungary "a friend in need," the Prime Minister looks to senior USG officials for visible, political support. End summary. ¶2. (C) Charge Levine delivered President Obama's congratulatory letter to Prime Minister Gordon Bajnai on April 27. Bajnai expressed appreciation for the letter and, in response to a query as to the economic restructuring effort, the PM said that he is proceeding with determination, commenting that "we need to do it and the process is going well." Stating that he is "looking at a new start in many respects, Bajnai said his restructuring proposals are focused on "economic policy, the budget deficit and overspending" while also building a foundation for long-term stability. Noting that the both the pension reform proposal and mid-term tax changes for 2009 are currently with Parliament, Bajnai expressed hope that they can be passed by mid-May. ¶3. (C) Projecting a -6.0 percent GDP decline in 2009, Bajnai stated he hoped the country could still meet its 3 percent budget deficit target, but wanted to ensure that this goal did not add to the economy's decline. He noted that Hungary held private talks with the IMF and World Bank in Washington over the weekend, and is considering a higher deficit - up to four percent - but only if that would speed a recovery. ¶4. (C) Bajnai said that his foreign policy focus will be "slightly different," and he asked the Charge to pass the message to Washington that he "will not mix up interests and values." He commented that Hungary is part of a community - NATO, EU, trans-Atlantic - that is values-based, underscoring that this is his top foreign policy priority. While Hungary cannot ignore its interests, its values will be the guiding force. Traveling on his first official foreign visit April 27, Bajnai will meet with EU Commissioner Barroso and NATO Secretary General de Hoop Scheffer in Brussels, and then proceed to Vienna to meet with his Austrian counterpart April ¶28. ¶5. (C) Bajnai also responded to several Washington items of interest raised by the Charge. Noting that Hungary is still waiting for requested information on six Guantanamo detainees, the PM said he is personally ready to tackle the internal political issues, and will work with the EU to allow bi-lateral decisions on the acceptance process. On Afghanistan, the PM stressed that Hungary remains a reliable partner, although the current budget situation will delay the deployment of a second Operational Mentoring and Liaison team (OMLT) to Afghanistan until mid-to-late 2010. (Note. Sitting in on the meeting, Karoly Banai, the PM's Security and Foreign Policy Advisor, added that the delay is also related to the lack of an available Afghan Kandak unit, with which the Hungarian OMLT would work. End note.) ¶6. (C) Responding to the increasing number of fatal attacks on Roma, Bajnai expressed his "great concern," commenting that, "although not a party member," he raised his voice on the issue at a Socialist party meeting over the weekend. Bajnai said he directed his Justice and Law Enforcement Minister to raise the original 10 million forint (USD 50,000) reward for information leading to the conviction of the perpetrators to 50 million forints (USD 250,000). (Note. The Charge repeated Post's offer to provide FBI forensic assistance via the LEGATT, and Bajnai said he would ensure his Justice Minister was fully aware of the proposed cooperation. End note.) ¶7. (C) Comment. Soft-spoken, low-key, but fully engaged on a number of subjects, Prime Minister Bajnai appeared confident during his meeting with the Charge. Referring to his economic restructuring plan as "the most ambitious one-year plan in the EU," Bajnai said, that while the domestic political climate is not great, the current situation provides "a window of opportunity" for senior USG representatives to visibly support Hungarian restructuring efforts. The Prime Minister places great importance on the proposed Foreign Minister's meeting with the Secretary within the next six weeks and also suggested sending an invitation to either the President or Vice-President to attend the 20th anniversary commemoration of the opening of the Austrian/Hungarian border on June 27. Bajnai stressed the importance of high-level visits between Hungarian and U.S. government officials to help build confidence within both the financial and the domestic communities. Bajnai definitely sees the U.S. as a friend in court. Whether his government can survive long enough to make critical changes to the Hungarian economy and government structures, perhaps most importantly, the public mind-set on the need for real change remains his biggest challenge. End comment. Levine