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