VZCZCXRO0098
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHUP #2382/01 3321201
ZNY CCCCC ZZH
P 281201Z NOV 06
FM AMEMBASSY BUDAPEST
TO RUEHC/SECSTATE WASHDC PRIORITY 0438
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 BUDAPEST 002382 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT PLEASE PASS TO NSC FOR ADAM STERLING 
 
E.O. 12958: DECL: 11/26/2016 
TAGS: PGOV ECON KDEM HU
SUBJECT: MSZP INSIDER'S OUTLOOK: LABOR MINISTER KISS ON 
REFORM, THE COALITION, AND THE OPPOSITION 
 
Classified By: POL/C ERIC V. GAUDIOSI; REASONS 1.4 (B) AND (D) 
 
¶1.  (C) Summary: Minister of Labor and Social Welfare (and 
MSZP Party Vice-President) Peter Kiss told Ambassador Foley 
November 27 that the government is "sentenced to success" on 
reform and will work in consultation with civic organizations 
and political opponents.  Frequently mentioned as a successor 
should PM Gyurcsany move on (or be removed), Kiss downplayed 
talk of friction within the MSZP, predicting Gyurcsany's 
election as party president in February and underscoring that 
economic success is the only foundation for the party's 
political future.  With regard to the opposition, he 
maintained that FIDESZ president Viktor Orban would rather be 
responsible for failure than let anyone else be responsible 
for success.  End Summary. 
 
NO TURNING BACK ON REFORM 
 
¶2.  (C) Beginning discussion with the government's 
convergence plan, Kiss framed the issue in the regional 
context, noting the array of political and economic issues 
confronting neighboring states.  The Gyurcsany government is 
now faced with a challenge to the public's welfare and to the 
political order, and is committed to "solving both."  The 
goal remains Hungary's transformation into a "Western 
country," and "vengeful tactics" were to be expected in 
response to this challenge to "entrenched privilege."   He 
expressed continued confidence in the convergence plan and 
emphasized the government's commitment to outreach to civic 
organizations and political opponents.  He believes 
engagement with social groups - and allocation of EU funds - 
will help defuse opposition. 
 
¶3.  (C) Responding to Ambassador Foley's question regarding 
the potential increase in public dissatisfaction as the 
economic impact of austerity measures hits home, Kiss 
underscored the necessity of fundamental reform.  "A leftist 
government should not want to take these steps," he noted, 
"but a responsible government must ... and the opposition 
certainly won't."  "We have been through worse," he commented 
in a reference to the austerity measures of the mid-90's, and 
the government would not "put money in a sack with a hole in 
it" by disbursing EU funds without undertaking structural 
reforms. 
 
¶4.  (C) Turning to the political scene, Kiss assured the 
Ambassador that the MSZP would stand firm behind the reform 
package.  Acknowledging frequent discussion of his name as a 
potential successor to PM Gyurcsany, Kiss remarked that 
"normal people aren't waiting in line for Gyurcsany's job ... 
or mine" but insisted that only economic success will ensure 
the party's political future. 
 
¶5.  (C) For the moment, that future remains tied to 
Gyurcsany.  Kiss predicted that the PM "will become the MSZP 
president" at the party's February congress, but did note 
some advantage in keeping the positions separate so that "the 
party won't collapse if the government does."  (Comment: MSZP 
sources tell us that Kiss - among others - has been 
travelling frequently throughout Hungary on party business. 
They are convinced that he will remain in position should 
Gyurcsany stumble in his campaign for the party presidency. 
End Comment.) 
 
SZDSZ IN THE COALITION NO MATTER WHO'S ON TOP 
 
¶6.  (C) With regard to the dynamic within the junior 
coalition partner SZDSZ, Kiss described party leader Gabor 
Kuncze's upcoming departure as a "tremendous blow to his 
party and to Hungary's political life."  He believes there is 
"no one of his ability within the party now," and is 
uncertain whether either of the current favorites to succeed 
Kuncze, Minister of Economy Janos Koka or MP Gabor Fodor, can 
bring together "the liberal intelligentsia and the liberal 
investors."  In any event, Kiss is confident the SZDSZ "won't 
make the mistake of leaving the coalition." 
 
THERE'S OPPOSITION, AND THERE'S ORBAN 
 
¶7.  (C) Addressing the prospects of a thaw in relations 
between the government and the opposition, Kiss suggested 
that "FIDESZ's interests argue for communication; Orban's 
interests argue against it."  Only the pretext of an external 
enemy allows Orban to retain his party leadership, Kiss 
maintained, and he appears intent on keeping the entire party 
"trapped in a castle with locked doors" in order to maintain 
his personal control.  Kiss cited recent polls indicating a 
decline in FIDESZ's popularity as proof of Orban's increasing 
difficulty "controlling the spin" as the public tires of his 
campaign against the government.  He reaffirmed the 
 
BUDAPEST 00002382  002 OF 002 
 
 
government's willingness to engage with the opposition and 
noted that "there are several others who have the ability to 
lead the party ... if they have the opportunity." 
 
¶8.  (C) Kiss responded to the Ambassador's question regarding 
President Solyom with a heavy sigh.  "In the long run," he 
finally stated, Solyom's tenure may help "clarify the role of 
the presidency ... even if that's not his intention." 
Solyom's tendency to speak out on political issues (and on 
the opposition's behalf, in the government's view) may 
encourage people to "consider political attitudes and not 
just the lack of political activism" in the future selection 
of the president. 
 
¶9.  (C) Comment: A long-time MSZP insider and leading member 
of the party's old guard, Kiss reputedly owes his cabinet 
position to Gyurcsany's desire to keep his rivals close. 
Kiss framed his support for reform in more political than 
economic terms, often referring to the convergence plan as a 
means to the end of partisan advantage.  If he is betting on 
the convergence plan, it is the result of calculation rather 
than conversion.  Kiss was sharpest in his political 
observations.  His comments re FIDESZ track closely with 
others' assessment of the opposition's dilemma (septel). 
Turning that same analytical skill on the MSZP, Kiss is 
likely to see few advantages to an open challenge for party 
leadership in the near-term.  In the longer-term, however, he 
may find opportunity if the ongoing struggle weakens both the 
opposition and the PM.  End Comment. 
 
FOLEY