US embassy cable - 05PARIS3813

C O N F I D E N T I A L SECTION 01 OF 03 PARIS 003813 
 
SIPDIS 
 
DEPT ALSO FOR EUR/WE, EUR/ERA, EUR/PPD, DRL/IL, INR/EUC AND 
EB 
DEPT OF LABOR FOR ILAB 
DEPT OF COMMERCE FOR ITA 
 
E.O. 12958: DECL: 06/01/2015 
TAGS: PGOV, ELAB, EU, FR, PINR, SOCI, ECON 
SUBJECT: CHIRAC GAMBLES AGAIN, ALLYING HIS PROTEGE AND HIS 
RIVAL IN NEW GOVERNMENT 
 
REF: PARIS 3722 
 
Classified By: Charge d'affairs Alex Wolff for reason 1.4 (b) and (d) 
 
SUMMARY 
------- 
1.  (C) In choosing former Foreign and Interior Minister and 
long-time collaborator Dominique de Villepin to head his new 
government, and center-right rival Nicolas Sarkozy to be its 
number two, President Chirac is attempting to unite the main 
factions that divide France's center-right in response to the 
resounding rejection of his policy in the May 29 referendum. 
The haughty and flamboyant Villepin epitomizes France's 
technocratic elite; he embodies the nationalist, Gaullist 
tradition committed to the state-centered, French social 
model.  The entrepreneurial and dynamic Sarkozy, who will 
remain president of Chirac's Union for a Popular Movement 
(UMP) party, is more of a self-made-man, projecting the 
possibility of more egalitarian, opportunity-centered success 
in a market-driven society.  The new government's priority 
will be tackling France's high unemployment.  It remains to 
be seen how well the Villepin-Sarkozy duo (with Chirac 
standing over them to referee) will fare.  The difficulties 
the new government faces -- daunting social and economic 
problems, clashing visions for social and economic policy, a 
largely hostile public and a particularly uncompromising 
political opposition -- may prove true the adage that 
politics makes strange bedfellows.  END SUMMARY. 
 
REACTING QUICKLY TO TAKE BACK THE INITIATIVE 
-------------------------------------------- 
2.  (SBU) President Chirac has reacted quickly to May 29's 
massive referendum loss (reftel).  In a carefully scripted 
and crisply executed set of moves on May 31, Chirac accepted 
the resignation of Prime Minister Jean-Pierre Raffarin, named 
Interior Minister Dominique de Villepin his successor, and -- 
to the surprise of France's jaded chattering classes -- 
convinced UMP president and long-time rival Nicolas Sarkozy 
to join the new government as Minister of State (effectively 
the number two position in the government) and Villepin's 
successor at the Ministry of Interior.  In a brief ceremony 
on the afternoon of May 31, Raffarin turned over the Prime 
Minister's Office ("Matignon") to Villepin.  The new 
government's top priority will be tackling France's 
endemically high unemployment, currently at about 10 percent 
of the workforce.  In a televised address to the nation on 
the evening of May 31, Chirac called for a "national 
mobilization" against the economic failings and lack of 
confidence that undermine France's national strength.  In his 
remarks, Chirac was careful to insist that, though all 
approaches to solving social and economic problems were on 
the table, restructuring France's social model was not. 
 
DRAMATIC GESTURE UNDER THE DURESS OF POPULAR DISAVOWAL 
--------------------------------------------- --------- 
3.  (SBU) Details of the deal-making that brought about a 
government led by Villepin, but with Sarkozy as number two 
are not yet known.  Most observers agree however, that it 
would never have happened had not the referendum signaled 
such a massive rejection of France's political class by 
ordinary people.  In the days following the May 29 referendum 
there is a palpable sense of crisis in political circles. 
France's political class feels its legitimacy is under attack 
-- by the onslaught of popular disavowal expressed through 
the referendum. 
 
4.  (SBU) The dramatic gesture of putting France's two most 
effective, high-profile and popular, but rival, center-right 
politicians to work repairing a widening "trust gap" is a 
calculated gamble on Chirac's part with no guarantee of 
success.  He has attempted to minimize chances of a fallout 
between his two ministers by assigning Sarkozy responsibility 
for a non-economic affairs ministry, perhaps foreseeing that 
Sarkozy's free-market approach and Villepin's more statist 
solutions to unemployment would have inevitably produced a 
clash.  To the question many observers are asking about why 
the ambitious Sarkozy agreed to accept Chirac's offer, 
Sarkozy himself suggested an answer.  In an exchange with 
parliamentary supporters who were advising him not to join 
the government, he reportedly asked them, "How would you feel 
about me if I just stood by while the ship sank?" 
 
ARBITER BETWEEN TWO BIG PLAYERS 
------------------------------- 
5.  (C) The referendum, to the extent it was a plebiscite on 
Jacques Chirac and his leadership, further weakened Chirac's 
already tenuous hold on the public's esteem.  By assigning 
himself the role of arbiter between France's two most visible 
political figures, Chirac regains some lost stature.  In 
addition, for Chirac, a hyperactive Sarkozy struggling with 
immigration policy, ethnic tensions and crime is better than 
a hyperactive Sarkozy occupied only with planning his run for 
the presidency in 2007 against Chirac (or a successor). 
Villepin would like to be that successor.  Villepin, like 
Chirac, is at heart a Gaullist, intent on preserving France's 
national power, and with it, France's social model.  Sarkozy 
is ever more overtly advocating a market-oriented approach to 
social and economic policy.  For example, in remarks 
following the announcement of referendum results, Sarkozy 
directly linked France's social model to France's 
under-performing national economy.  This division between 
more statist "Chiraquists" and more pro-business "Sarkozists" 
has long been present in the UMP, and involves much more than 
personal, partisan loyalties. 
 
TACKLING UNEMPLOYMENT AND LACK OF CONFIDENCE 
-------------------------------------------- 
6.  (C) In his first public declarations as Prime Minister, 
Villepin has let be known that he will give himself 100 days 
to "re-instill the confidence of Frenchmen and women."  A 
crash program to tackle unemployment is clearly the new 
government's primary mission.  In his first TV interview as 
prime minister, Villepin called for "action and more action" 
-- true to form, Villepin was long on inspirational rhetoric 
and short on convincing programs and details.  All 
indications are that the two key social and economic affairs 
ministers, Jean-Lois Borloo (Social Affairs) and Thierry 
Breton (Economy), will remain in place.  To them will fall 
the lead responsibility for devising, executing and figuring 
out how to pay the for the government's initiative against 
unemployment.  In his TV interview June 1, Villepin promised 
he would personally manage his government's attack on 
joblessness. 
 
NO QUARTER FROM THE OPPOSITION 
------------------------------ 
7.  (SBU) The Villepin-Sarkozy government-to-be is already 
under harsh criticism from the center-left Socialist Party 
(PS) and the centrist, Union for French Democracy (UDF).  The 
consensus among PS leaders seems to be to mask their own deep 
divisions engendered by the referendum by pitilessly 
lambasting the new government before its composition is even 
known.  (The new line-up will only be announced sometime 
before the new government's first cabinet meeting, scheduled 
for June 3).  The pro-Europe UDF, led by Francois Bayrou, 
sees Chirac's recourse to Villepin as a wholly inadequate 
response to the demand for change from the voters.  Bayrou, 
in statements high in political fire and brimstone and low in 
operational specifics, has called for a "refoundation of 
national policy" in response to the "fracture" revealed by 
the referendum. 
 
COMMENT 
------- 
8.  (SBU) It remains to be seen if Chirac's most recent 
gamble will work any better than many of his previous ones 
(French commentators point to his dissolution of the National 
Assembly in 1997 and his agreeing to put the EU constitution 
to a referendum as examples of decisions that backfired in a 
big way).  However, whatever their shortcomings (including 
short tempers and outsized egos) Villepin and Sarkozy are 
also both uncommonly talented, energetic, hardworking and 
able.  The grudging consensus among the political elites is 
that Villepin and Sarkozy are about the only really 
exceptional figures on the French political scene.  The 
daunting problems facing the new government, however -- 
institutional ineffectiveness; social and economic problems 
that are structural; clashing visions for social and economic 
policy; a mistrustful public; and a particularly 
uncompromising and partisan (although divided) center-left 
opposition -- are not the kinds of problems that yield to 
dramatic gestures and quick fixes.  END COMMENT. 
WOLFF