Question: Is there a deadline for a response?

Ambassador Kounalakis: I don’t think that’s really relevant, because they said they were going to respond, so we’re just waiting to hear back.

Question: Could you describe the importance of this letter to help an average Hungarian understand its meaning? Some say that it is a last warning for Hungary, or is it only a letter from a politician to a politician, from a colleague to a colleague?

Ambassador Kounalakis: A letter like this is one form of diplomatic correspondence and there are many forms that correspondence takes. Maybe it would be more helpful for your listeners to know that we have had quite a bit of engagement with the government. We’ve talked with them for many months about some of the things that were happening in Hungary, about the major reforms, and we have shared with them some very specific concerns as to how the reforms could negatively impact the system of checks and balances and the independence of democratic institutions. So these conversations, these correspondences in many forms, have been going on now for quite some time. I can also tell you that the doors were open to us and we believed that our comments were going to be taken very seriously which is why we are so greatly disappointed that, in fact, it appears that almost none of our concerns were seriously considered.

Question: What are the circumstances of writing a letter in this nature? Can an average radio listener imagine that the Secretary of State sits at her desk in Washington D.C. grabs the keyboard and writes a letter or are there many advisors? How do you form these kinds of concerns which are in the letter?

Ambassador Kounalakis: Maybe I can answer your question in this way. Secretary Clinton came here in June and from the time even before she came, but specifically when she was here, she became personally aware and engaged in what was happening in Hungary. I’ve known her for twenty years and we had some very substantial talks about the reforms that were taking place here. She felt compelled to speak publicly, to urge the government at that time, to keep an eye on the importance of democratic institutions. That is what she said publicly, when she was here. You can see her personal engagement and we have been working to follow up on these concerns now for many months. And again, she did send a follow-up letter building on these concerns that we have been talking about with the government.

Question: What happens if those suggestions are not taken into account by the Hungarian government? Could there be formal steps beyond diplomacy, some kind of sanctions?

Ambassador Kounalakis: Why don’t we just focus a little bit on where we are right now, because the situation has been changing very quickly? When the Secretary sent her letter the constitution hadn’t come into effect. Today, as we sit here on January 5th, it is in effect. Our concerns were not seriously considered and we’re very disappointed about that. But that doesn’t mean we’re going to stop urging the government to reconsider these decisions. We will continue to urge them to recognize that the United States, as a friend and an ally, and as the greatest champion of democracy in the world, is recognizing that elements of Hungary’s reforms could weaken checks and balances and weaken democratic institutions. We are going to continue to ask them to respond in a meaningful way to these concerns.

Question: In your everyday work are there ongoing discussions with Hungarian officials?

Ambassador Kounalakis: I can tell you that the doors have been open to the United States, to me, to my colleagues here in the embassy, which is all the more reason why we are disappointed not to have seen a real response to the concerns we’ve been raising. The transatlantic relationship has in my view, since I’ve been here the last two years, has become stronger and our communications have been very open. This adds to the disappointment that towards the end of last year, as many of these major decisions were made, we didn’t really see our concerns reflected in the decisions that were ultimately made.

Question: Are the concerns focused on the new constitution, or basic law, or also on economic issues? The European Union, Brussels, has concerns because of some steps, such as on the sovereignty of the national bank. Are concerns in Washington more about the democratic institutions, checks and balances? Is there a difference?

Ambassador Kounalakis: Certainly, I believe there is quite a bit of overlap in concerns that have been expressed between Brussels and the United States. I can boil it down to some very specific laws where we felt that checks and balances were not sufficient and the independence of the institutions was not fully bolstered. Those are in the areas of the central bank, and we share the concerns that have been recently expressed out of Brussels, but also with judicial reform and with the way the media law over these last months has been implemented. Also, and this is a little less on independent institutions, but one of the other core elements of any democracy is freedom of religion. The way the religion law had been adopted, and the fact that we had received assurances that the concerns raised by the international community would be addressed, and then when they weren’t, added to the disappointment we feel now after the events at the end of the year.

Question: In terms of independence, the Hungarian Prime Minister responded clearly to his critics that no one has the right to tell the democratically elected government of Hungary what to do.

Ambassador Kounalakis: Hungarian laws are for Hungarians to determine. The United States is not telling Hungary which laws to adopt. I have always expressed our respect for the democratically elected government of this country and for the fact the election was free and fair. I have said that consistently, but when you are talking about elements of the major reforms that we believe significantly impact Hungarian democracy, then we are going to speak out. We have and we will continue to speak out, but it is always with respect and from a friend. Nevertheless, these are serious concerns of ours.

Question: Could there be consultations among the transatlantic partners or the European Union and the United States on Hungary? If yes, on what level?

Ambassador Kounalakis: We live in a community of democracies and Hungary has made headlines around the world. I think it is perfectly natural that within our community of democracies we are talking to one another and sharing our concerns and our observations.

Question: There is very current topic, the IMF standby loan or EU-IMF standby loan. Do you think it is necessary for Hungary?

Ambassador Kounalakis: The negotiations between the IMF and Hungary are just that, between the IMF and Hungary. Of course, we are very encouraged and very supportive that it appears they will start some informal talks again and we hope that those will go toward improving the possibilities.

Question: What are you hearing, also as a business expert, from investors? How do they see the events here in Hungary?

Ambassador Kounalakis: As a business person, I can tell you that one of the most, if not the most, important element in decision making is certainty and predictability. It has been fairly well recognized that with the pace of reforms that have been happening here, that has impacted predictability. In order for the climate to improve, predictability also has to improve.

Question: Are you hearing from investors who want to come, invest here? Or are they just waiting now?

Ambassador Kounalakis: I don’t want to get into any of the conversations I’ve had with businesses other than to go back to this very basic principle, which is, if a company is able to predict what the regulatory regime is going to be like and what the tax regime is going to be, they are in a position to make a decision. If they are not able to predict these things, then it’s very difficult to make a decision.

I also have to add that I’ve spent two years in this country and I see tremendous possibility and the U.S. companies that have been operating here for many years want to stay; they like operating in Hungary. You have tremendous infrastructure, a beautiful capital city, beautiful cities in the countryside, committed and hard working people in the work force, educated people in the work force and frankly when you look at the cost of operating elsewhere in Europe, Hungary is still a very good value. I think all of those positive attributes still exist, but without predictability it is much more difficult to be able to attract business.

Question: You have been two years in Hungary, is it a much different country now than when you arrived as Ambassador?

Ambassador Kounalakis: I wouldn’t really know how to answer that question. I could tell you that my perception of the country is different just by virtue of living here for two years. It is a complicated country and it is only really through living here and talking to people and learning the history that you can begin to develop an appreciation for it. I’m very fond of this country; I’ve had some incredible experiences and met some really truly remarkable people. So, if anything has changed, I’d say that I have more of an understanding of Hungary and Hungarians.

Question: And as a last question, this is a special year in your country, the year of the elections. Will it affect your work here in Budapest as an Ambassador?

Ambassador Kounalakis: Not really. The bulk of what we do, certainly what I do in Hungary, is not really impacted by politics. I’m here to serve the interests of the United States, which are to strengthen and enhance our bilateral relationship and I think when you step outside the United States into the Foreign Service it is not so very impacted. Of course, as someone who spent a lot of her life involved in elections, I’ve been watching very closely the process so far and I think it’s going to be very interesting to see how it unfolds.

Question: Maybe you are watching the race as a spectator?

Ambassador Kounalakis: I suppose so.

Question: Thank you very much.

Ambassador Kounalakis: Thank you."

Source: U.S. Embassy Budapest