Wikileaks - MCCXVIII

182374 12/11/2008 12:16 08BUCHAREST973 Embassy Bucharest CONFIDENTIAL P 111216Z DEC 08 ZDK FM AMEMBASSY BUCHAREST TO SECSTATE WASHDC PRIORITY 9022 INFO EUROPEAN POLITICAL COLLECTIVE PRIORITY C O N F I D E N T I A L BUCHAREST 000973

STATE FOR EUR/CE

E.O. 12958: DECL: 12/11/2018 TAGS: PGOV, PREL, RO SUBJECT: PRESIDENTIAL ADVISOR ON NEW GOVERNING COALITION: IT MAY ALL BLOW UP IN SIX MONTHS

Classified By: CDA Jeri Guthrie-Corn for 1.5 (b) and (d)

1. (C) Summary: Senior Presidential Advisor Sebastian Lazaroiu confimed that President Basescu had accelerated the formation of a new cabinet to avoid creating a sense of political drift that might have resulted if no new government were in place during the extended holidays. He was ambivalent about excluding the UDMR from the coalition, noting that it would be "good insurance" to have the UDMR as a partner if the PSD left the coalition, but it was also good to retain a "healthy" opposition by keeping them out. He said that what PSD head Geoana had gotten from the deal was the chance to sideline the PSD old guard and considate his hold on the party. Basescu's leverage was the threat to dissolve parliament if they failed to approve his PM pick, but this leverage would lose potency as the Presidential elections approached next year. In the meantime, Basescu's game plan was to draw in defectors from the PSD (and also from the PNL) before the coalition blew apart. End Summary.

2. (C) At a meeting with Polcouns 12/10, Senior Presidential Domestic Policy Advisor Lazaroiu confirmed that President Basescu had stepped on the gas to accelerate the formation of a new government. Noting the growing economic uncertainty both at home and abroad, Lazaroiu said that Basescu wanted to avoid creating a sense of political drift that might have resulted if no new government were in place during the extended holiday break.

3. (C) Asked whether the PSD's insistence on excluding the ethnic-Hungarian UDMR from the next government was a sticking point in creating a new coalition, Lazaroiu agreed, remarking that it was good to have the Hungarian vote in next year's election and "good insurance" to have the UDMR as a coalition partner if the PSD abandons the coalition. He added that many members in the PD-L camp were afraid of being "alone with the PSD." Lazaroiu subsequently mused that the PD-L and PSD together were a dominant political force, with over 70 percent of parliamentary seats. "For a healthy political system, you need a healthy opposition. If I were in the opposition, I would have a great time portraying the government as a Ceaucescu-style dictatorship...maybe we need to create an opposition."

4. (C) Lazaroiu warned that many cabinet picks being touted in the press were still highly speculative, as the "hard bargaining" had just begun. Nevertheless, the general outlines of the new government were clear: "There will be an even distribution of cabinet seats between us but we want the Defense, Interior, Education, and Health portfolios for sure. PSD Senate Speaker Ilie Sarbu would be Deputy PM, and the PSD gets the MFA and Finance portfolios." He confirmed that there had been debate over selection of the new Justice Minister, but said it was likely to be the PSD's Cristian Diaconescu who was an "excellent pick." He explained that the PD-L had vetoed Victor Ponta, as he was "too close" to former PM Nastase. With a PSD Justice Minister in place, "Nastase will be in deep trouble, and he can't claim that we went after him for partisan reasons." Asked about the impact on the anti-corruption effort if the PSD controlled the Justice Ministry, Lazariou replied breezily, "Don't worry, it's not that important a position. We were able to block (former Justice Ministers) Catalin Predoiu and Tudor Chiuariu from doing any real harm." Asked how much leeway PM-designate Teodor Stolojan had in choosing his team, Lazaroiu replied bluntly, "It won't be just him, Basescu gets the final word."

5. (C) Polcouns noted that the PD-L appeared to have driven a hard bargain with Geoana: was Geoana happy with the outcome and what he got out of the deal? Lazaroiu replied that it was "very difficult" for Geoana to resist pressures from us and from within his own party: "What we offered was the chance to sideline Iliescu and the old guard and to consolidate his position within the party." Lazaroiu predicted that tensions between the "good guys" and "bad guys" in the PSD would exacerbate over the next 2-3 months; it would be a "very dangerous game" six months to a year from now.

6. (C) Lazaroiu explained that Basesu's strongest card was the threat to dissolve the newly-elected parliament if they failed to approve his choice for Prime Minister. This card would lose its potency as time passed, and the PSD might be tempted to topple the Stolojan government by leaving the coalition. Moreover, the constitution prohibited dissolving parliament within six months of a Presidential election so any move to topple Stolojan and force early elections would have to take place beforehand: "that's what I would do if I were in their place," he said. Meanwhile, the race was on to maximize leverage before the coalition blew apart. There was "no trust" between the coalition partners, "but maybe we can reach out to the good part of the PSD, break them off." At the same time, the PD-L was reaching out to defectors from Tariceanu's Liberal party: "In 2-3 months, I might be able to get one-third to one-half of the liberals to defect." Another goal was to reduce the influence of oligarch Dan Voiculescu's Conservative Party: "We think Daniela Popa will agree to leave Voiculescu to join the PSD. Voiculescu is in deep financial trouble, and he might be finished, just like the extreme right parties." Lazaroiu also confirmed that another option if the PSD left the coalition was to simply change partners and ally with a PNL hopefully free of Tariceanu's leadership and a UDMR perennially eager to join the government.

7. (C) Lazaroiu said that the PD-L and PSD had a common interest in changing the current uninominal electoral system, which had given the PNL an advantage. Changing to a two-round majoritatian system would favor the biggest parties, and would be a "real danger" to the PNL. The PSD was happy with this, he added, since it would result in a two-party system with a center-left and center-right party. Asked how the government might otherwise leverage its huge parliamentary majority, Lazaroiu responded: "Good question--it would be stupid if we couldn't get anything to show for our 70 percent majority. Basescu wants to move on education, health, and constitutional reform." He warned that there would be little time to do this over the coming months. He added that Stolojan in his first term had been a hands-on, detail-oriented taskmaster with his cabinet, but he could not use the same stick that he used the last time: "If you don't do as I say, I'll resign."

8. (C) Asked why the PD-L finally opted to go into coalition with the PSD, Lazaroiu responded that PM Tariceanu and oligarch Dinu Patriciu controlled the PN-L. "It was what they wanted and it was impossible to organize any sort of anti-Tariceanu movement within the PN-L in the time we had...Patriciu was too strong." Polcouns noted that PNL contacts were now saying that a PD-L-PSD coalition was what Basescu wanted all along: was there any truth to this? Lazaroiu responded: "They're half right. We looked at whether we could form a minority government and we realized we didn't have enough qualified people in the PD-L to form a credible cabinet by ourselves; we looked at the PNL and it was the same story. The only party with talent to spare is the PSD." He concluded that the PD-L had some work to do in coming months: "We need to focus on building up the PD-L. I'm shocked at how weak the party organization is. It's an organization built for a party with a 15 percent share of parliament, not a ruling party."

9. (C) Comment: A coalition with the PSD is by no means a universally popular move with the PD-L faithful (note: CURS told us yesterday that their polls showed the move alientated 15 percent of Basescu's supporters), and Lazaroiu admitted as much when he noted to us that the hope was that Basescu could win back his base in coming months. He also acknowledged that the next government was an inherently unstable marriage of convenience where each side will attempt to maximise gains before the coalition explodes. A flaw in the PD-L plan is that while the Basescu side wants to ally with (and absorb) the so-called "good guys" in the PSD, it was actually many of the unreconstructed elements of the party, including party baron Miron Mitrea (and his constituency of local PSD leaders), that were clamoring to join the PD-L. While he never explicitly said so, Lazaroiu's game plan is reminiscent of his--and Basescu's--earlier avowed plans to break off sufficient numbers of defectors from other parties to create a majority "Presidential" party. The fact that Lazaroiu acknowledged the weaknesses of the PD-L organization underscores that he has plenty of work ahead and very little time before the Presidential election comes rolling around in late 2009. End Comment.

GUTHRIE-CORN