334. Memorandum From Fritz Ermarth of the National Security Council Staff to the President’s Assistant for National Security Affairs (Carlucci)1
SUBJECT
- U.S. Policy toward Hungary
I met on Friday2 with Sandor Racz, who as a young worker of 23 played a central role in the ’56 Hungarian Revolution. Since then he has [Page 1054] spent seven years in prison and years as an outcast denied any permanent work. He was able to get a visa to this country only as a result of strong pressure by Ambassador Palmer on the Hungarian authorities.
His message to me, and the US government, was that the current Hungarian government remains fundamentally illegitimate, and that we must not be taken in by the slick efforts of sophisticated PR types who do a good good of selling the world on what a good place Hungary now is. He said we should be more demanding of the Hungarians in exchange for our economic help.
In a way he is right. We have tended to give the Hungarian regime the benefit of the doubt because in many ways it is the best of the lot in Eastern Europe. Nevertheless, best does not mean good.
At some point the US Government will have to come more squarely to grips with this problem. Hungarian economic reforms are not doing the job, and the economic prospects are for things to get worse before they can get better. Kadar has just done the biggest personnel shuffle in decades; reformers generally lost out. Whether he is for or against further reform and whether he succeeds or fails, Hungarian political life is likely to become more tense and the authorities probably will have to take tougher and more visible control measures. These will tarnish its good image generally, but especially with the banking community whose cooperation is needed to keep the Hungarian economy afloat.
Hungary is not the nasty place Romania is, nor as volatile as Poland. But it could be the site—as could any of the East European countries— of a sudden blow-up that would dramatically alter the East-West landscape as has occurred time and again in the past. Systemic instability will persist until Moscow allows truly popular regimes to emerge. This is what we should be pressing for more vocally.