CHIRAC WINS EU COUNCIL'S BACKING ON HOT-BUTTON

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