US embassy cable - 04BRATISLAVA407

C O N F I D E N T I A L  BRATISLAVA 000407 
 
SIPDIS 
 
 
E.O. 12958: DECL: 04/20/2014 
TAGS: PGOV, PREL, ECON, LO 
SUBJECT: ROBERT FICO'S VIEWS ON ELECTIONS AND ECONOMIC 
 
REFORMS 
 
REF: FEBRUARY 17 WELLS-MCKNIGHT-THAYER E-MAIL 
 
Classified By: Amb. Ronald Weiser for reasons 1.4 b and d 
 
1.  (C) Summary.  The Ambassador met privately with Robert 
Fico on April 19 to discuss several topics including Ivan 
Gasparovic's win over Vladimir Meciar in the presidential 
elections on April 16.  Fico made it clear that Smer would 
not accept any MP defectors from Meciar's Movement for a 
Democratic Slovakia (HZDS), suggesting that they join other 
parties.  Fico also spoke positively about some of the 
economic reforms the current GOS has implemented and offered 
some modifications he would make as PM.  Fico is starting to 
use less rhetoric and express more policy ideas for a future 
coalition that he might lead, and showed interest in good 
relations with the U.S.  End Summary. 
 
Fico's Thoughts About the Elections 
----------------------------------- 
 
2.  (C) Fico told the Ambassador over lunch at the CMR that 
Gasparovic's win over Meciar further highlighted how much 
Meciar's support has eroded over time.  Fico indicated that 
Smer would not accept any MP defectors from HZDS, adding that 
he would encourage them to join other parties, including 
Gasparovic's Movement for Democracy (HZD).  (Note:  Given 
that HZD is not represented in parliament, any MPS who want 
to leave HZDS might look to join Vojtech Tkac's People's 
Union (LU) that broke away from HZDS after the 2002 
parliamentary elections as an interim measure.)  Pointing out 
that HZD still garners 3-4 percent popular support without a 
party in parliament, Fico views HZD as a future coalition 
partner for Smer. 
 
Now Focused on 2006 Parliamentary Elections 
------------------------------------------- 
 
3.  (C) With the failure of the referendum on early 
elections, Fico stated that he is now focused on winning the 
next parliamentary elections, currently scheduled for 2006, 
and becoming prime minister.  He told the Ambassador that 
there is no will within parliament to call for early 
elections because the 90 deputies needed to disband 
parliament are not willing to give up the benefits and pay 
they currently receive.  Recent opinion polls show that 
Fico's Smer would be the big winner while most other parties 
in parliament would likely lose seats if the elections were 
held now. 
 
Economic Policies and Reform 
---------------------------- 
 
4.  (C) Fico spoke at considerable length about his views on 
the strategy of implementing economic reform and future 
policies he would support.  He opined that when a government 
initiates a reform plan, it should work more closely with the 
opposition because these are long-term measures that will 
likely take longer to implement than the term of the ruling 
government and should remain after the government changes. 
He strongly supports the incentives that the GOS has put into 
place to encourage foreign investment, but added that the 
government should offer incentives to Slovak companies for 
creating jobs at home, which he supported during the 2002 
campaign.  A Smer-led government would leave the corporate 
tax rate and labor law alone, while making some changes to 
personal tax rates and the VAT.  Fico supports increasing the 
VAT on certain items, but lowering it on essentials such as 
gasoline, foodstuffs, books, and transportation like many 
other EU countries. 
 
5.  (C) Fico suggested that Finance Minister Ivan Miklos's 
goal of keeping the budget deficit below 3.9 percent of GDP 
to help put Slovakia on an early course to join the Euro zone 
is misguided.  Fico thought that a higher deficit brought 
about by increasing spending on infrastructure and education 
may be worth delaying Slovakia's entrance into the Euro zone. 
 He suggested that if the GOS does not spend more money on 
completing major highway projects, such as the north-south 
and east-west highways, and on education, Slovakia might not 
be competitive against countries like Ukraine, Bulgaria, and 
Romania in the future.  Fico expressed his concern that as 
these countries become more attractive to foreign investors 
as they become more stable, and with them having lower wages, 
Slovakia might become less competitive.  He added that the 
European Bank for Reconstruction and Development was willing 
to loan money for these types of projects, but Miklos was 
unwilling to borrow. 
 
 
6.  (C) Fico told the Ambassador that Russian and French 
companies were interested in supplying two reactors at the 
Mohovce nuclear facility.  Mohovce has two completed reactors 
and two more buildings completed which do not yet have 
equipment installed.  He said that a Russian company 
(probably RAO) was willing to finance the project because it 
would generate significant revenue as Europe's electricity 
needs continue to grow. 
 
7. (C) Fico indicated that he intended to visit Libya in late 
May now that he has received U.S. assurances that we have no 
objection to such a trip (ref).  He would very much like to 
visit Washington between May 15 and 24 for one or two days 
before he goes to Libya (septel). 
 
Comment 
------- 
 
8.  (C) In this conversation with the Ambassador, Fico 
started to express positive program 
ideas for a future coalition that he envisions heading, 
rather than simply pointing out the faults of Prime Minister 
Dzurinda's government.  Fico's remarks on economic reform 
suggest that he has accepted the major reforms that Miklos 
has implemented and that his proposals are only tinkering on 
the margins.  The GOS does offer incentives to Slovak 
businesses that create local jobs, but, to date, these 
companies have not had the capital to invest that foreign 
companies bring.  Fico's ideas on improving infrastructure 
and education likely will bolster his support.  He used less 
rhetoric than in past meetings and clearly showed he is 
interested in maintaining a good relationship with the U.S. 
 
WEISER 
 
 
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