US embassy cable - 05PARIS3668

C O N F I D E N T I A L SECTION 01 OF 03 PARIS 003668 
 
SIPDIS 
 
E.O. 12958: DECL: 05/26/2015 
TAGS: PREL, PGOV, ECON, FR, EUN 
SUBJECT: FRANCE IN EUROPE: WHAT'S AT STAKE IN THE MAY 29 
REFERENDUM 
 
REF: A. PARIS 3659 
     B. BRUSSELS 1556 
 
Classified By: Charge d'affaires Alex Wolff for reasons 1.4 (b) and (d) 
. 
 
1.  (C) Summary: Whether they accept or reject the draft EU 
constitution three days from now, French voters May 29 will 
have a major effect on their country's ability to influence 
the course of EU policy, and the future of the European 
Union.  Win or lose, Jacques Chirac is unlikely to give up 
his ambitions for France in Europe.  A yes would help him 
maintain French credibility as a natural leader within the 
EU.  A no will likely see more aggressive French attempts to 
force policy initiatives through by leading "core groups," 
although with less credibility than at present.  Ironically, 
the referendum campaign's focus on domestic politics and 
voter discontent with social and economic conditions, and the 
country's political elite, has diverted attention from the 
vote's implications for Europe and France's self-assigned 
place at its center.  Ref. A explores the implications of the 
May 29 vote for the French at home.  End summary. 
 
If it's yes 
----------- 
 
2.  (C) If voters May 29 decide to prove the pollsters and 
the majority of pundits wrong by accepting the constitution, 
they will validate what European Studies professor and 
commentator Sylvie Goulard describes as the historical 
advance of the European project with France at its center. 
More direct, President Chirac May 19, flanked by German 
Chancellor Schroeder and Polish President Kwasniewski, said 
that "the future of our country and of our children is at 
stake" in the vote.  "France must have the ambition to remain 
one of the principal engines of the European construction." 
 
3.  (C) With Germany's upper house expected to complete the 
ratification process on May 27, joining Spain and others in 
the ranks of those who have delivered on their leaders' 
commitments, France sees its principal EU partners as having 
already successfully ferried across the ratification divide. 
If France votes yes, Chirac can confidently take his 
accustomed place beside Schroeder and Spanish Prime Minister 
Zapatero, and among the EU founding six (depending on the 
Dutch outcome) as the prime movers of European integration. 
Moreover, France will have boosted its credibility with the 
EU's ten newest members.  As noted by Robert Schuman 
Foundation Chairman Jean-Dominique Giuliani, the ten are 
skeptical about France's commitment to EU solidarity and 
scandalized by the domestic debate's fear-mongering about the 
EU constitution's promotion of job flight to eastern Europe 
and the eventual influx of cheap labor from the new member 
states. 
 
4.  (C) A yes vote will also strengthen France's ability to 
achieve its objectives in the important negotiations over the 
EU's 2007-2013 budget.  France hopes to preserve the 
advantages its farmers derive from the Common Agricultural 
Policy (CAP), eliminate the British rebate and team with 
Germany and other net contributors to hold the projected 
increase in spending to 1 percent of combined EU member GDP, 
against the wishes of the Commission and the new member 
states for a larger increase.  Strengthened by a yes vote on 
the constitution, Chirac could proceed confidently to enlist 
his close partners' support and cut the deals necessary to 
achieve his objectives, at least in theory. 
 
5.  (C) Sciences Po professor Goulard sees Turkey's presence 
at the heart of the referendum campaign as more than an 
expression of fears and opposition among the extreme right 
over the entry of a large Muslim country into the EU.  That 
is certainly present, but so is a sense that Chirac and other 
EU leaders went forward with the most recent, 10-member 
enlargement without any recourse to voters.  Chirac is thus 
held responsible for the consequences of the enlargement, 
real or imaginary, including "delocalization" or outsourcing 
of jobs to the east, and a sense that the EU may be losing 
its way and purpose with each successive enlargement.  Chirac 
has done what he can to address those concerns and prevent 
them from translating into a no vote on May 29.  He has done 
this by promising an eventual referendum on Turkish 
membership and enacting legislation making referendums 
mandatory for any future enlargements after those of Romania 
and Bulgaria in 2007.  That said, the view here is that no 
matter what the outcome, the referendum debate has revealed a 
pervasive unease with enlargement and resentment over being 
excluded from enlargement decisions.  Hence, France is likely 
to adopt a more skeptical stance on future enlargements and 
negotiations with Turkey. 
 
If it's no 
---------- 
 
6.  (C) If, on the other hand, voters confirm the trend 
toward no which the 11 most recent public opinion polls 
indicate and which most analysts believe will occur, 
rejection of the draft constitution by France will very 
probably eliminate any chance of its coming into force in its 
current form.  Having chosen to put the draft to the voters 
in a referendum, the French government cannot later resort to 
parliamentary ratification, nor can Chirac and his government 
ignore the message of a no.  The EU has successfully dealt 
with no votes on other treaties, for example the initial 
rejection and subsequent re-votes and acceptance of the 
Maastricht treaty by Denmark in 1992 and the Nice treaty by 
Ireland in 2001.  However, analysts agree that the fixes 
found in these cases, an opt-out clause for Denmark and 
assurances on its neutrality for Ireland, do not offer a 
precedent for a viable solution for France.  If the no 
prevails, it will be for such a multiplicity of reasons in 
France that neither model would suffice. 
 
7.  (C) That leaves the possibility of a renegotiation of the 
treaty, which proponents of the current draft have labeled 
the siren song of the no side.  Superficially, the idea of a 
new negotiation to address French concerns on social issues 
may seem attractive, European Affairs Minister Claudie 
Haignere wrote recently, but in reality, there would be 
almost no chance of persuading France's partners to reopen 
the text, which many of them would have approved.  Moreover, 
starting at a disadvantage, France would be very hard pressed 
to negotiate a better deal than the one it now has.  "There, 
we move from the improbable to the impossible," Haignere 
wrote.  "If we reopen the negotiations, our partners will put 
back on the table all of the concessions they had to make," 
Haignere continued.  "The incorporation of the Charter of 
Fundamental Rights, the pride of place of social issues and 
the recognition of public services, the cultural exception, 
the Council voting rules that favor large countries like 
France, the secular nature of the constitution," will have to 
be negotiated again, "and we will be negotiating from a 
position of weakness." 
 
8.  (C) Without question, a no vote on Sunday would reduce 
French influence in Europe and its ability to affect the 
direction of policy for a significant period.  Chirac, in 
exhorting fellow citizens to avoid this fate, stated bluntly 
that "France will cease to exist politically in the heart of 
Europe" if the answer is no on May 29.  A French no would 
immediately call into question the continued viability of the 
Franco-German partnership and the central position of the 
founding six (possibly further to be weakened by a Dutch no 
June 1).  Europe Minister Haignere reminded voters that there 
is nothing pre-ordained about France's place in the center of 
decision-making in Europe.  "This idea ... is an illusion ... 
that Europe turns around France like the earth around the 
sun," Haignere wrote.  "Our country's role has always been 
central, but France counts in Europe only as much as it is a 
force for initiative."  That power would be greatly 
diminished by a no vote. 
 
9.  (C) Unwilling to accept a place of lesser influence in EU 
councils to which a no vote would relegate him, Chirac would 
very likely aggressively push small group initiatives with 
France at the helm.  Such core group initiatives are foreseen 
by the Nice Treaty (although the constitution would make 
their genesis easier).  The difficulty for Chirac and France 
will be that a no will greatly erode their credibility with 
EU partners.  And because it will remain one of the most 
militarily capable and diplomatically active EU member 
states, few Common Foreign and Security Policy initiatives 
could successfully be mounted without France.  "A no would be 
catastrophic for our influence," Sciences Po Professor 
Goulard summed up.  "It would be immediately interpreted as 
the abandonment by France of the European project that it has 
promoted since its origins: that of a politically strong 
entity, organized, and capable of making itself heard in the 
world."  Already viewed with skepticism by the EU's new 
member states, a no would likely brand France an unreliable 
partner in their eyes, reinforcing their tendency to see the 
U.S. and NATO as the preferred guarantors of security.  In 
consequence, European Security and Defense Policy would be 
dealt a set-back. 
 
10.  (C) It is another of the ironies of the referendum 
campaign that by convincingly casting the constitution as an 
"ultra-liberal" vehicle for free-marketeers, the no side may 
well undermine France's ability to prevail in negotiations 
that will affect subsidies to farmers and potentially raise 
the cost of France's participation in the EU.  Former Europe 
Minister and present Socialist Party International Affairs 
advisor Pierre Moscovici has noted that in addition to making 
it much more difficult for France to achieve its aims in the 
budget negotiation, a no from France would deprive the EU of 
"a series of possibilities in terms of economic governance." 
Europe needs, among other things, "a Central European Bank -- 
that must remain independent -- which is a real economic 
power endowed with budgetary means and thus able to lead a 
Keynesian policy for relaunching the economy," Moscovici 
contends.  "The constitution supplies the first arms for 
going in that direction, notably in institutionalizing the 
Eurogroup (of euro currency nations)."  By attacking the 
constitution as a tool for big business and free-marketeers, 
anti-constitution forces in the PS are making more difficult 
the kind of concerted economic policy needed to address 
chronic unemployment and lack of growth, another negative 
outcome of a no vote May 29.  Moreover, investor confidence 
in Europe will be weakened and the decline in the value of 
the euro, already noticable in response to the possibility of 
a French no, will be confirmed. 
 
11.  (C) Finally, one of the messages French voters will send 
with a no has to do with their concern over the current 
10-country enlargement, and their fear of future enlargement, 
especially the entry of Turkey.  That is a message that no 
French government can afford to ignore, which makes it likely 
that France will move far more cautiously on all future 
enlargement decisions.  "It is the impact of enlargement on 
domestic French policy and on the EU itself that is fueling 
French people's discontent," European affairs commentator 
Goulard wrote recently in the Financial Times.  "Some worry 
about 'delocalisation' -- outsourcing -- social dumping and 
unfair competition, and denounce the consequences of the last 
wave of enlargement.  Others fear the next waves -- Turkey 
and beyond -- will make the birth of a politically coherent 
European entity impossible." 
WOLFF