US embassy cable - 05PARIS2006

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 002006 
 
SIPDIS 
 
E.O. 12958: DECL: 03/24/2015 
TAGS: PREL, PGOV, ECON, ELAB, FR, EUN 
SUBJECT: CHIRAC WINS EU COUNCIL'S BACKING ON HOT-BUTTON 
ISSUE FOR FRENCH VOTERS 
 
REF: PARIS 1856 
 
Classified By: Political Minister Counselor Josiah Rosenblatt for reaso 
ns 1.4 (b) and (d). 
 
1.  (C) Summary: Playing on collective nervousness over polls 
suggesting that French voters could reject the draft EU 
constitution in the May 29 referendum, President Jacques 
Chirac persuaded fellow EU heads of state and government 
March 22 to send back to the drawing board the Commission's 
"services directive" that had become the rallying cry of 
critics of the "ultra-liberal" constitution -- especially on 
the French left.  In posing as the defender of the European 
social model, Chirac calculated he could arrest the slide 
towards a "no" on May 29, which would constitute a major blow 
to France's position as a leader in Europe -- and to his own 
domestic political ambitions.  As seen from Paris, EU heads, 
in bowing to Chirac's political needs, acknowledged in some 
measure that a French rejection of the constitution would 
have serious consequences for the European construction.  The 
stakes are high for Chirac, perhaps explaining why he -- and 
our GOF contacts -- steadfastly refuse to speculate on 
"what-if-it's-no" scenarios.  End summary. 
 
2.  (C) Emerging from the March 22-23 European summit in 
Brussels to give waiting journalists his take on the results 
of talks with fellow EU leaders, Chirac wasted no time in 
getting down to the issue that had dominated the Council 
meeting, despite its absence from the official agenda.  The 
first question he took, from French television, gave him his 
opening.  Hadn't his EU colleagues just given him "a serious 
boost" in his campaign to win a 'yes' to the draft EU 
constitution in France's May 29 referendum?  By agreeing to 
send back for revision the Commission proposal on opening the 
European services market, hadn't the Council helped him 
reverse the trend towards a 'no' vote in France, Chirac was 
asked.  With two opinion polls earlier in the week having 
registered that, among those who had decided, "no" voters 
were for the first time more numerous than supporters of the 
Constitution -- by 52 to 48 percent in the most recent 
survey, Chirac knew he needed to address a clear message to 
his domestic audience.  First, said Chirac, "I don't know 
anyone who imagines that France could reject the 
constitutional treaty.  One could be wrong, naturally, but 
that was not (EU leaders') motivation."  Moreover, said 
Chirac, the services directive, known in France as the 
Bolkestein Directive, for its principal drafter, Dutch 
Commissioner Fritz Bolkestein, "has no relation to the 
constitution" which "will very significantly increase social 
entitlements, social guarantees, and by consequence diminish 
the risk of a downgrade of social welfare standards." 
 
3.  (C) Chirac was striking a familiar note for many in 
France in casting himself as the defender of the European 
social welfare system, but the vehemence with which he 
expressed himself struck some as transparently playing to the 
gallery in order to advance his domestic political agenda. 
It was widely noted here that his press conference remarks 
and his reported statement behind closed Council doors that 
"ultra-liberalism is the new communism of our age" led 
Council President and Luxembourg Prime Minister Juncker to 
remark to French reporters that he "didn't know that you have 
a socialist government in France."  Chirac's initiative to 
discredit and send into limbo the Bolkestein Directive was a 
gambit clearly calculated to remove from the 'no' campaign's 
aresenal what most observers believe had been the single 
greatest reason for the big increase in no camp adherents. 
"Economic growth and social cohesion have to go together," 
Chirac told the press, "that's what we call the European 
social model."  In this context, Chirac went on, leaving no 
doubt in anyone's mind, "I had to remind (my colleagues) of 
France's total opposition to the services directive." 
 
4.  (C) MFA Cabinet Advisor for the constitution referendum 
campaign Guy Chauvin told us March 23 that Chirac's ability 
to win the support of the Council for a demand for a major 
revision of the Bolkestein Directive was clearly encouraging 
for supporters of the constitution.  Technically, he said, it 
is true that there is no legal connection between the 
directive and the constitution, but in the minds of French 
voters, the issue had taken on a symbolic importance 
disproportionate to its actual significance.  The directive's 
central "country of origin" principal, Chauvin explained, 
allowed opponents of the constitution to suggest that the 
directive, like the allegedly unrestrained, 
free-market-oriented constitution itself, would open the door 
to competition in France from service workers in new member 
countries.  The French public fears that new member state 
workers' purported willingness to work for lower wages and 
under more demanding conditions would bring down the average 
level of compensation and work-place health and safety 
standards.  Recognizing that much of the criticism was 
overblown, Chauvin nevertheless acknowledged that Chirac had 
to act to counter it. 
 
5.  (C) That Chirac was able to succeed is indicative of the 
collective nervousness that the trend towards a no vote in 
France has inspired among EU and mainstream French political 
leaders.  Having first enlisted the support of German 
Chancellor Schroeder, Chirac went on during the March 22 
Council dinner to "arrive at the end of dinner -- without, I 
should say, major difficulties -- at an agreement to send the 
directive back to square one," Chirac told the press. 
France's EU partners have clear equities in the French 
referendum outcome, Chauvin told us.  A no vote from France 
would put the entire constitutional project in doubt.  Former 
French President and principal architect of the constitution 
Valery Giscard d'Estaing told the press that a French no 
would precipitate "an open crisis in Europe."  Failure to 
ratify the constitution by any member state would mean that 
it would not come into force, Chauvin said.  And while a no 
vote from a traditionally Euro-skeptic country like Ireland 
or Denmark might be overcome by some means, a no from France 
would undo more than two years of negotiations. 
 
6.  (C) Chirac tried to make clear what was at stake for 
France in Europe during his press conference.  First assuring 
his audience that he respected the right of every Frenchman 
to vote as he chose, Chirac went on to warn that "if France 
blocks the European construction, the consequences will not 
be negligible, and it would lose a large measure of its 
authority, which is in any case necessary in tomorrow's 
Europe."  A no, of course, would also have major negative 
consequences for Chirac's own political ambitions and for 
those of many of his fellow French politicians, a subject to 
be addressed septel.  Chauvin and his colleague, MFA Cabinet 
Advisor for European Affairs Valerie Bros, affirmed that a no 
vote in the referendum would be a major blow to French 
ambitions not only within Europe, but for Europe in the 
world.  Legally, Chauvin explained, failure to ratify the 
constitution would mean that the Europe of 25 members would 
continue to be governed by the Nice Treaty, which the GOF has 
judged inadequate to the task.  Apart from the inefficiency 
of decision-making in the Council that is apparent under 
Nice, rejection of the constitution would also deny the EU 
the greater visibility and authority it had hoped to achieve 
with such constitutional innovations as a permanent Council 
presidency and an EU foreign minister, Bros said. 
 
7.  (C) So how would the GOF react to a no vote?  "Would you 
have to renegotiate the constitutional treaty?  Would France 
ask to 'opt out'?  Would France leave the European Union," 
Chirac was asked at his Brussels press conference.  "Do you 
want me to tell you what I really think," Chirac threw back. 
"Well then, I can't imagine that we would find ourselves in 
that situation."  Our GOF contacts were similarly reluctant 
to answer the question.  "Now we are in a more political 
phase (of the campaign) and the consequences of a no vote 
have to be explained, Chauvin told us.  "But what we haven't 
done is a really profound analysis" of what would happen if 
French voters rejected the constitution.  Asked whether EU 
plans for future enlargements, especially Turkey's, would be 
affected, Bros said there was no connection between the two. 
Turkey's candidacy has its own dynamic and ground rules, 
which will not change even if the constitution does not come 
into force, she said.  For Turkey, the next milestone will be 
its decision on signing the EU customs union, with its 
implicit recognition of Cyprus.  Without that decision, 
negotiations will not open on October 3.  But as for other 
scenarios arising from a no vote in May, "we're just not on 
that wavelength," Chauvin said. 
 
Comment 
------- 
 
8.  (C) It remains to be seen whether Chirac's coup in 
Brussels will sufficiently impress no voters to reverse the 
trend in the polls.  The de-fanging of the "Bolkestein 
Directive," which had become symbolically important as 
evidence of a drift towards a more liberal, less socially 
secure Europe that the constitution is alleged to represent, 
will undoubtedly change some minds.  But as reftel makes 
clear, it is not Chirac's and the constutition supporters' 
only problem.  A more serious one -- evidence that voters are 
fed up with France's elitist governing class and with being 
taken for granted, and that they are preparing to use the 
constitutional referendum as an opportunity to express that 
anger -- appears to be so radical a development as to leave 
Chirac and the GOF with no adequate response.  In short, it 
doesn't look like there's a plan b.  Chirac indicated during 
his Brussels press conference that he would have more to say 
on the subject -- at a time of his choosing.  The chattering 
classes have not as yet made up their minds as to whether the 
French president will be equal to the task.  End comment. 
Wolff