Cablegate: Smer Party Congress Produces No Surprises: Fico Is

VZCZCXRO6846
PP RUEHAST
DE RUEHSL #0802/01 2751513
ZNR UUUUU ZZH
P 021513Z OCT 06
FM AMEMBASSY BRATISLAVA
TO RUEHC/SECSTATE WASHDC PRIORITY 0337
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 02 BRATISLAVA 000802

SIPDIS

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: PGOV PREL ECON PINR IZ LO
SUBJECT: SMER PARTY CONGRESS PRODUCES NO SURPRISES: FICO IS
IN CHARGE

REF: BRATISLAVA 553

BRATISLAVA 00000802 001.2 OF 002

1. (SBU) SUMMARY. Smer ("Direction"), the leading party in
Slovakia's governing coalition, unsurprisingly re-elected the
Prime Minister, Robert Fico, as Chairman of the party during
the annual party congress on September 30. Two of Fico's
closest advisors became Vice Chairmen, replacing two internal
critics. In his speech to the party members, Fico
highlighted GOS accomplishments in the area of social
benefits, promised the economy would stay on track to join
the euro-zone in 2009, showed distrust of foreign influence
in utility monopolies and politics, criticized the opposition
including SDKU and SMK members, and said that the official
announcement regarding the withdrawal of Slovak troops from
Iraq would be made in two weeks. Resounding more strongly
than any specific statement, Fico demonstrated that he
remains firmly in charge of Smer. END SUMMARY.

FICO STAYS, HIS CRITICS DO NOT
------------------------------

2. (SBU) On September 30, the social democratic party Smer
re-elected the country's Prime Minister Robert Fico as
Chairman of the party. Fico ran unopposed for the position
at the annual party congress, held in Trencin. Two of the
six Vice Chairman slots changed hands. Former Vice
Chairpersons Monika Benova-Flasikova, who as an MEP publicly
criticized Fico's inclusion of the xenophobic Slovak National
Party (SNS) in the government, and Igor Sulaj, who criticized
appointments within Smer and was disappointed not to receive
a government position himself, had fallen out of favor with
Fico. The party elected Culture Minister Marek Madaric and
head of the government office (equivalent to Chief of Staff)
Igor Federic as the new Vice Chairmen. Along with Deputy
Prime Minister Dusan Caplovic, who is also a party Vice
Chairman, Madaric and Federic are believed to be Fico's most
trusted advisors. Interior Minister Robert Kalinak, Speaker
of parliament Pavol Paska, and Member of European Parliament
Vladimir Manka complete the list of Vice Chairmen.

3. (SBU) Benova-Flasikova is considering running for mayor of
Bratislava. She would leave her MEP post if elected locally.
Smer has said the local city branch of the party will
determine whether Smer backs Benova-Flasikova or Zuzana
Martinakova, Chairwoman of the Free Forum party, a splinter
group from the opposition Social Democratic and Christian
Union (SDKU) party which did not make it into parliament
during the national elections last June. Smer should
announce which candidate it will support no later than
October 3.

FICO'S LIKES: SOCIAL BENEFITS AND THE EURO IN 2009
--------------------------------------------- -----

4. (SBU) Fico highlighted what he sees as the accomplishments
of the government so far, policies to benefit the little guy:
elimination of nominal fees for doctors' visits and
prescriptions, an increase in the minimum wage, and being on
track to deliver other social benefits such as a
restructuring of income tax deductions to draw more revenue
from the wealthy and an increase in benefits paid for the
birth of a first child. Despite the higher costs associated
with delivering increased social benefits, Fico insisted that
Slovakia could fulfill the Maastricht criteria for joining
the euro-zone in 2009. (COMMENT. We note that Fico's
promises on changes to the tax structure have been markedly
toned down from the campaign rhetoric. END COMMENT.)

AND DISLIKES: MONOPOLIES, OPPOSITION, FOREIGN INFLUENCE
--------------------------------------------- ----------

5. (SBU) Having negotiated with the gas utility SPP, whose
minority German and French shareholders have management
control, to lower their proposed annual consumer price hike
from 16 percent to 4.26 percent, Fico said he was ready to go
to battle with other foreign-owned utility monopolies, if
necessary. If unsatisfied with other monopoly negotiations,
Fico would propose legislative changes to give the regulatory
authority more control in the energy sector and resurrect the
idea of a separate (i.e., higher) taxation rate for certain
monopolies.

6. (SBU) Unsurprisingly, Fico criticized numerous aspects of
the opposition. He complained of landmines the outgoing
SDKU-led coalition left in government policy, such as a
deficit in the social security system due to pension reform.
He called on the Party of the Hungarian Coalition (SMK)
Chairman Bela Bugar to explain his meetings in Budapest and
any connection to Hungarian politicians and MEPs. He told
the gathering that Smer's membership in the Party of European
Socialists (PES) was not yet resolved (reftel). (NOTE. The

BRATISLAVA 00000802 002.2 OF 002

Vice President of PES traveled to Bratislava on October 2 to
meet with Fico. END NOTE.)

7. (SBU) Fico informed the Smer members that in two weeks'
time the government will make the official announcement of
the withdrawal of Slovak troops from Iraq. (NOTE. Privately
we have heard that although this will be the last rotation of
the full contingent, there will be a demining unit follow-on
that will concentrate on training. END NOTE.)

ALL HANDS ON DECK, NO ONE LEFT TO TEND THE MOTHERSHIP
--------------------------------------------- --------

8. (SBU) Days before the party congress, a new Smer MP told
Emboffs that the most unexpected challenge for Smer upon
entering government was how to continue the management of the
party structure. While in opposition, life for the
politicians and assistants had revolved around the party,
especially during the campaign. Now that they are in
government, nobody is left to run the party structure. Smer
has recognized the problem, the MP added, and is actively
recruiting workers to staff the Smer office.

9. (SBU) COMMENT. The Smer annual party congress brought no
notable surprises. Fico remains ever more firmly in charge,
with those who have disagreed with him voted out of their
leadership positions and closer allies moving up within the
party structure. END COMMENT.
VALLEE

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