US embassy cable - 05PARIS7630

UNCLAS SECTION 01 OF 02 PARIS 007630 
 
SIPDIS 
 
SENSITIVE 
 
E.O. 12958: N/A 
TAGS: ECON, ELAB, FR, KBIO 
SUBJECT: NEW FRENCH BUSINESS REPRESENTATIVE PARISOT ON 
FRENCH ECONOMY AND CHALLENGES 
 
 
1.  SUMMARY.  France's new business spokesman Laurence 
Parisot believes France is still "quite competitive" despite 
the French public's negative perception of the private 
sector.  Parisot, who was elected as first woman president of 
the French employers association MEDEF in July 2005, told 
Ambassador Stapleton that it was essential to change the 
"anti-business reflex" that reigned in France.  She was 
cautiously optimistic on some aspects of Prime Minister 
Villepin's management of the economy, notably his proposed 
tax reform and new labor contracts.  Overall, she said he was 
"treading water".  She lamented the fact that her 
predecessor, Ernest-Antoine de Selliere (now president of 
UNICE) had done little to maintain links with U.S. business 
during the early years of the Iraq war.  Finally, she 
responded positively to the suggestion that the 
Franco-American Business Council be revived by interested 
investors, as a means of attracting increased U.S. investment 
to France. END SUMMARY 
 
2.  (U) Ambassador Stapleton met October 21 with Laurence 
Parisot, president of MEDEF, the French employers 
association. He was accompanied by FCS Minister Counselor and 
Econoff. MEDEF is France's umbrella employers' organization 
representing most businesses.  Parisot was elected in July 
2005 to replace Baron Ernest-Antoine de Selliere, who took up 
the Presidency of UNICE, the European umbrella employers 
organization (Union des Industries de la Communaute 
Europeenne) headquartered in Brussels. 
 
 
"THE WEIGHT OF THE PAST"( 
------------------------- 
3. (SBU) Parisot said she was "not pessimistic" about the 
state of the French economy. She said she thought the economy 
was burdened by the "weight of the past", notably its heavy 
public debt and its rigid labor laws. But she believed France 
was still competitive. She told Ambassador she thought Prime 
Minister Dominique de Villepin's performance so far was "not 
so bad", but that basically he was "treading water".  She 
highlighted his proposals to liberalize work contracts and 
tax reforms as potentially positive. 
 
UNIONS AND MANAGEMENT 
--------------------- 
 
4.  (SBU) Parisot said her top priority was to change the 
French public's perception of the private sector.  She said 
companies would have to strengthen their communication 
efforts and open up more to "civil society".  Curiously, 
according to MEDEF polling, the French public has a positive 
impression of individual companies, including the companies 
that they have worked for.  However, they have a negative 
perception of "business" and the private sector, in general. 
She herself has made an effort to include more entrepreneurs 
and small company CEOs at MEDEF, which has traditionally 
represented big business. She also said she would also try to 
effect a reform of the way employers worked with unions, 
notably to ensure that unrepresentative unions could not 
obstruct companies as they do now.  French politicians on the 
left and right, she said, were "afraid" of union leaders, and 
rigid labor laws remained in place. 
 
5.  (SBU) Parisot told Ambassador Stapleton she regretted the 
difficulties for American and French business during the 
beginning of the Iraq war, and was mildly critical of her 
predecessor Selliere for having done little to try to stem 
the animosity on both sides.  Both the U.S. and France have 
strong business and cultural links, but we cannot assume, she 
said, that relations will remain good.  Both sides need to 
"try doubly hard to reinforce" the relationships. 
 
FRANCO-AMERICAN BUSINESS COUNCIL? 
--------------------------------- 
6. (U) Ambassador encouraged her to respond positively to 
U.S. investors such as KKR's Henry Kravis and Disney's Bob 
Eiger, who had suggested reviving the Franco-American 
Business Council (FABC).  An annual exchange among a small 
number of CEOs and investors could be useful, the Ambassador 
suggested, but ought to be "business-driven".  Both agreed 
that such a forum should also include entrepreneurs and 
representatives of smaller businesses, in additional to the 
multinationals with interests on both sides of the Atlantic. 
 
 
COMMENT 
------- 
7. (SBU) COMMENT. Parisot won election to MEDEF in a 
lightning campaign, beating other more established candidates 
such as former Economy Minister Francis Mer and top textile 
executive Guillaume Sarkozy, brother to Nicolas, currently 
Minister of Interior. The first woman to take the job, 
Parisot has won some initial kudos in business circles for 
her fresh approach and outspokenness.  Her willingness to 
reach out to U.S. business is also positive. But she is new 
to tough union-management negotiations and the kind of 
political maneuvering this requires in France.  She is likely 
to have a slower learning curve and take longer to have an 
impact in this critical area. 
STAPLETON 
 
Please visit Paris' Classified Website at: 
http://www.state.sgov.gov/p/eur/paris/index.c fm 
Stapleton