CONTINUED FRENCH OBJECTIONS TO FOUNDATION/FUND FOR

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 007275

SIPDIS

E.O. 12958: DECL: 10/17/2015
TAGS: PREL EAID EFIN EINV PGOV PHUM EU FR
SUBJECT: CONTINUED FRENCH OBJECTIONS TO FOUNDATION/FUND FOR
FUTURE

REF: A. PARIS 7243 (NODIS - NOTAL)


B. STATE 190583

C. STATE 189774

D. EMAIL BONO-ZEYA 10/14/05

E. EMAIL ALLEGRONE-ZEYA 10/7/05

Classified By: Political Minister-Counselor Josiah Rosenblatt, reasons
1.4 (b) and (d).


1. (U) This message contains an action request in para 7.


2. (C) Summary: In response to ref a-b demarches, senior MFA
and Elysee officials continue to voice objections to the
Foundation and Fund for the Future, relying chiefly on G-8
institutional arguments put forth in the October 7 letter
from MFA U/S-economic affairs Lapouge to UK G-8 Sous-Sherpa
Martin Donnelly (ref e). The bottom line we are hearing from
the French is that they do not want the Foundation and Fund
to be labeled G-8 initiatives, they will not contribute
bilaterally to either, and they will not support an EIB
contribution to the Fund, based on their view that EIB money
(and the French money that goes into it) should be
prioritized towards EU vice BMENA projects. End summary.


3. (C) Pol M/C, Econ Counselor, and emboffs used ref b-d
talking points to urge the GoF to take a more supportive
position on the Foundation and Fund for the Future,
reiterating U.S. intent to launch the initiatives with other
international partners at the Forum for the Future in Bahrain
and our expectation that France would respect our effort even
if it chooses not to join. In an October 19 discussion with
Pol M/C, MFA A/S-equivalent for North Africa/Middle East
Jean-Francois Thibault described U.S-French differences over
the Foundation and Fund as tactical rather than substantive.
Thibault stressed that the GoF supported BMENA, as seen in
its FM's participation at the December 2004 Forum for the
Future and its decision to send a minister to the recent
BMENA educational ministerial in Jordan. Thibault said the
GoF would send a minister, though unfortunately not the
Foreign Minister, to the November Forum in Bahrain. He added
that the U.S. had shown "courage" in launching BMENA, and
that perhaps the Europeans had been too "timid" on reform
issues, though they had their own action plans on the table.


4. (C) Revisiting established GoF positions, Thibault noted
that the GoF did not view the proposed Foundation and Fund as
part of the Sea Island consensus. Furthermore, France had
opposed creation of a foundation at the time the Sea Island
action plan was under consideration in 2004. Thibault also
reiterated arguments against creating new G-8 institutions,
as outlined in the Lapouge letter of October 7 (ref e).
Based on ref d guidance, Pol M/C pushed back the French
arguments, reiterating that the Sea Island action plan
envisioned creation of new projects under the Democracy
Assistance Dialogue and the Fund and Foundation were not
intended to be new G-8 institutions. Pol M/C also stressed
that the foundation would act within the law, providing
grants to legally registered organizations while seeking to
expand the scope of legally registered organizations, points
taken on board by Thibault. In the end, Thibault concluded
that the Foundation and Fund should not be labeled G-8
initiatives, a point which he said Diplomatic Advisor
Gourdault-Montagne would reiterate to U/S Burns during a
planned October 19 discussion (ref a).


5. (C) Thibault said the GoF accepted that the Foundation and
Fund initiatives would go on without French participation,
but clarified that France would not support an EIB
contribution to the Fund for the same reason that France was
not making a contribution to either the Fund or Foundation.
In the GoF view, EU money should be prioritized towards
EU/Barcelona and MEDA projects, not BMENA initiatives. The
U.S. and EU should work together towards common goals,
without "mixing" financing. Other EU member states were free
to make their own bilateral contributions as they pleased.
Thibault's view was reiterated in an October 21 follow-up
discussion with Elysee Middle East advisor Dominique Boche,
who told us the GoF would not support labeling as "G-8"
initiatives which did not enjoy the full support of the G-8.


6. (C) Economics Directorate G-8 Advisor, Cyrille Pierre,
echoed -- although less forcefully -- similar concerns in a
separate conversation with Econ Couns. He added the points
that Lapouge had made to us in ref e that the GOF was also
concerned about the absorptive capacity of countries in the
region and the fact that a proliferation of plans and
programs would only serve to make it more difficult for
target countries to identify how to access resources at their
disposal. Pierre was intrigued by our offer of "further
details" on both the Fund and the Foundation. He was
particularly interested in a draft Foundation Charter of
Principles. He urged us to share "anything you have that
will help convince us." He underlined for Econ Couns that
France wanted to encourage reform in the region and was
completely behind the commitments made at Sea Island. It is
only the ideas that have been developed after Sea Island, he
commented, that France feels "less comfortable" with.
Separately, Econoff also discussed points on the EIB with
Director of the French Treasury (which dictates the positions
the GOF representatives on the EIB take),Xavier Musca.
Musca thanked econoff for the points and said he had already
been familiar in broad terms with the USG's position. He
promised to take our views into account as Treasury discussed
the issue with the MFA but made no commitment that France
would support an EIB contribution to the Fund.


7. (U) Comment and action request: Embassy would
appreciate receiving any more detailed information that we
can share with the GOF on the Fund and the Foundation,
particularly the draft Charter of Principles. Nevertheless,
we are skeptical that more information will move the GOF away
from their basic objections to both the Fund and the
Foundation. End comment and action request.
Please visit Paris' Classified Website at:
http://www.state.sgov.gov/p/eur/paris/index.c fm
STAPLETON