VZCZCXRO4243
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV
DE RUEHUP #2269/01 3130841
ZNY SSSSS ZZH
O 090841Z NOV 06 ZDK
FM AMEMBASSY BUDAPEST
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0367
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

S E C R E T SECTION 01 OF 02 BUDAPEST 002269 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO NSC FOR DAMON WILSON AND ADAM 
STERLING 
 
E.O. 12958: DECL: 11/07/2016 
TAGS: PGOV KDEM ECON HU
SUBJECT: HUNGARY'S PARTIES PREPARE FOR A WINTER OF 
DISCONTENT 
 
REF: A) BUDAPEST 2236 B) BUDAPEST 2230 C) BUDAPEST 2229 
 
Classified By: POL/C ERIC V. GAUDIOSI; REASONS 1.4 (B) AND (D) 
 
¶1.  (S) Summary: Conflict between and within Hungary's 
political parties continues even as the likelihood of 
large-scale public demonstrations declines.  In a meeting 
with the Ambassador November 7, opposition FIDESZ party 
leader Viktor Orban alleged that the Gyurcsany government is 
enforcing party discipline by distributing public funds to 
MSZP officials and urged us to "follow the money."  MSZP 
insiders report that the Prime Minister is "shaken" but still 
firmly in control of the party ... for the moment.  They 
perceive jockeying for position among the FIDESZ leadership 
as well, and most observers predict protracted gridlock as 
Hungary approaches the holiday season. End Summary. 
 
"Limousine Socialists" ... 
 
¶2.  (S) In a meeting with Ambassador Foley November 7, FIDESZ 
leader Viktor Orban reiterated his denunciation of the 
Gyurcsany government's convergence plan as "taxation - not 
reform."  In response to the Ambassador's comments re 
Hungary's economic vulnerability, he evinced no willingness 
to move forward on reform by engaging on the substance of the 
debate (ref a).  As in previous contacts, he indicated that 
the opposition has neither the obligation nor the practical 
ability to propose alternatives.  (Note: FIDESZ MP Zsolt 
Nemeth, among the party's most vocal critics of the MSZP's 
"limousine socialists," summed up FIDESZ's "1-step economic 
program" as "dump Gyurcsany."  End note.) 
 
In Stolen Limousines? 
 
¶3.  (S) Orban did, however, launch a salvo at the government 
on the basis of corrupt practices, alleging that the 
government is using pay-offs - particularly from construction 
contracts - to enforce party discipline.  According to Orban, 
Gyurcsany is backing off on transparency initiatives not due 
to political pressure (ref b), but because he needs the funds 
to buy the continued loyalty of the MSZP rank and file. 
"Money," Orban stated, "will determine whether the party 
stays with Gyurcsany."  He also identified a 3 billion forint 
(approximately USD 15 million) line item in the budget for 
"pro-reform propaganda" as an alleged slush fund for the 
MSZP's use.  Orban strongly urged us to follow up with former 
FM Martonyi to "follow the money," particularly regarding 
party financing and the energy sector. 
 
¶4.  (S) Although FIDESZ continues to stick by its 
"excommunication" policy toward PM Gyurcsany in particular, 
Orban warned that the problem is endemic.  He alleged that 
former PM Medgyessey had been "created" and directed by 
financial interests, and charged that the same elements 
already "have paper on DefMin Szekeres" - among the potential 
successors should the MSZP look to replace Gyurcsany. 
 
Gyurcsany: "Shaken" but not Stirred 
 
¶5.  (C) MSZP MP (and Parliamentary Foreign Affairs Committee 
Deputy Chair) Vilmos Szabo minimized the prospects of any 
immediate steps to remove Gyurcsany.  In a meeting November 7 
following the Foreign Affairs Committee's discussion of 
Hungary's PRT in Afghanistan, Szabo described the PM as 
"shaken" but still firmly in control of the party.  Gyurcsany 
is "already in charge in all but name," Szabo commented, and 
the party has few alternatives.  Although his internal 
critics may continue to leak information, he believes the PM 
is unlikely to face overt challenges until next spring's MSZP 
party caucus.  At present, as one of our colleagues in the 
diplomatic community observed, "Orban is the biggest thing 
holding the MSZP together."  Szabo advised that his "friends 
in FIDESZ" often suggest that Gyurcsany's ouster would be the 
price of "returning to normal," but he noted that he can 
"always end the conversation" by suggesting Orban's 
resignation as FIDESZ party president as a quid pro quo. 
 
¶6.  (C) Despite his expression of support for Gyurcsany, 
Szabo was candid in describing the PM as almost completely 
distracted by the domestic situation and "unable to focus" on 
foreign policy (ref b).  As an example, Szabo noted that he 
had been unable to get the government to engage on the 
question of supporting democratic forces in Serbia, an 
important issue and one he suggested should be easy ... but 
not under the present circumstances. 
 
¶7.  (C) Szabo also expressed concerns re the government's 
operating efficiency, particularly regarding the near-total 
breakdown of communication between State Secretary Ferenc 
 
BUDAPEST 00002269  002 OF 002 
 
 
Gemesi in the PM's office (an office Szabo held during the 
first Gyurcsany government) and the MFA hierarchy.  He 
believes the PM has centralized authority for many issues in 
his office but is now unable to manage them effectively, 
joking that this approach "didn't work for the communists 
either."  He gave credence to recent reports that Gyurcsany 
will make personnel changes in the New Year, including by 
installing a Chief of Staff in the PM's office to help 
improve internal coordination. 
 
¶8.  (C) Much as FIDESZ members have predicted cracks in the 
MSZP's united front (ref b), Szabo suggested that FIDESZ 
members are also waiting in the wings if Orban crashes and 
burns.  As with many others - on both sides of the aisle - 
Szabo mentioned Debrecen Mayor Kosa as someone to watch, and 
also identified former Finance Minister and MP Mihaly Varga 
as another FIDESZ up-and-comer.  Though he sees continued 
political skirmishing in the near-term, Szabo believes a 
winter lull is likely.  He welcomed FIDESZ's proposed 
referendum (ref c) as a positive sign, noting that it would 
at least take the opposition's efforts "away from the street" 
and back into constitutional means of expression.  Looking 
back on the local elections, Szabo indicated that the 
opposition's strong performance in the regions could "make it 
easier" to make the personnel and funding cuts required by 
the convergence plan. 
 
Fear and Loathing in Budapest 
 
¶9.  (S) Comment: Winter may bring a cease-fire in large-scale 
protests but a fundamental truce remains unlikely.  As the 
publication HVG recently observed, the wide and growing gap 
between the right and left has become an almost theological 
divide.  Comparing the situation to Northern Island, HVG 
laments the current atmosphere of "poisonous snakes and 
poison chalices."  Orban's corruption allegations may be the 
latest card played in FIDESZ's continuing campaign against 
the government, but that does not mean that his charges are 
unsubstantiated, particularly in a political culture where 
changes of government have meant changes of personal fortune. 
 We will continue our efforts to promote transparency and to 
learn more about the tangled web of party financing.  End 
Comment. 
 
 
FOLEY