Identifier
Created
Classification
Origin
05PARIS8673
2005-12-28 17:32:00
CONFIDENTIAL
Embassy Paris
Cable title:  

SYRIA: FRANCE'S THOUGHTS ON EIB LOAN

Tags:  ETRD EFIN PREL FR SY 
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281732Z Dec 05
C O N F I D E N T I A L PARIS 008673 

SIPDIS

STATE FOR NEA, EUR, AND EB

E.O. 12958: DECL: 12/28/2015
TAGS: ETRD EFIN PREL FR SY
SUBJECT: SYRIA: FRANCE'S THOUGHTS ON EIB LOAN

REF: STATE 229611

Classified By: Econ Couns Kenneth Merten for reasons 1.4 (b) and (d).

C O N F I D E N T I A L PARIS 008673

SIPDIS

STATE FOR NEA, EUR, AND EB

E.O. 12958: DECL: 12/28/2015
TAGS: ETRD EFIN PREL FR SY
SUBJECT: SYRIA: FRANCE'S THOUGHTS ON EIB LOAN

REF: STATE 229611

Classified By: Econ Couns Kenneth Merten for reasons 1.4 (b) and (d).


1. (C) Summary. French officials tell us that the EIB loan
to improve Syria's rural telephone network was approved
unanimously on 13 December. While the Foreign Ministry was
unaware and regretted the news that the loan had been
approved, Finance Ministry officials said they see no scope
for overturning the decision. End Summary.


2. (C) Poloff and Econ Couns discussed reftel points on the
EIB/FEMIP loan to Syria with MFA Acting-DAS-equivalent for
Egypt/Levant Martin Juillard and Finance Ministry European
Affairs official, Gerard Belet, respectively. Juillard told
poloff that our demarche was the first that the MFA had heard
of the FEMIP telecom loan, and he did not disguise his dismay
with the European Commission/EIB for not keeping capitals
informed, noting "this was not the first time" such a
disconnect had happened. He expressed general agreement that
this loan in particular was inconsistent with international
efforts to isolate Syria, and speculated that the primary
beneficiaries of European largesse in the telecom sector
would be President Asad's cousins (via his mother),the
Makhlouf family. As of December 23, Juillard explained the
MFA was working on the issue with the French Finance Ministry
and trying to determine whether the FEMIP telecom loan had
been approved by the EIB Advisory Council. He told concluded
that he could not give us a definitive answer yet, but
stressed that the MFA was seized with the issue and offered
to keep us posted.


3. (C) On our broader message discouraging all EU
loan/investments in Syria, Juillard stressed that the EU and
France had not enacted sanctions against Syria, therefore all
forms of assistance were not off the table. He cited a
planned EU loan to Syria's electricity sector (NFI) which he
said fell into the realm of acceptability because it was
purely development related. The telecom loan, however, was
completely different, he opined, as it benefited the regime,
and was very ill-timed.


4. (C) After receiving the USG information on the loan
earlier, the Finance Ministry's Gerard Belet told Econ Couns
on 27 December that the decision to approve the loan was
taken on 13 December and was unanimous. He explained that
this type of program fits in to the EIB's "mandate"
(presumably "infrastructure projects") in the region. He
added that Syria was under no EU sanctions and that it needed
the telephone upgrade which was justifiable from a
development point of view. Econ Couns suggested that given
the USG's points (reftel) and the U.S.-French cooperation in
the region (and on Syria in particular) that the GOF and EU
partners might want to consider whether there was scope for
revisiting the issue and canceling the loan. Belet said
"absolutely not; the decision has been taken."


5. (C) On 28 December, Poloff followed up with Bertrand
Besancenot, the DAS-equivalent for Egypt/Levant to hear what
the MFA had learned in their investigation. Besancenot
confirmed the Finance Ministry's report that the decision had
indeed been formally taken by EIB officials. He reported
that the MFA was displeased that the EIB did not consult with
member governments, especially when the loan decision made
was controversial. He said that at the next meeting of EU
member state representatives in Brussels, France would insist
on discussing how to improve coordination between EU foreign
policy priorities and EIB decisions. Regarding the loan
itself, Besancenot said the MFA had received a telegram from
their Ambassador in Damascus arguing that the loan was a good
idea, given that it would not target cadres but instead would
focus on poor areas of Syria that did not have sufficient
telecommunication resources.


6. (C) Comment: It is clear that the MFA was not only
piqued at the EIB's decision, but also at having to learn
about the European institution's decision from the USG first.
France is likely to be true to Besancenot's word in pressing
for closer political scrutiny of the EIB by member states,
especially when it discusses loans to countries of concern.
STAPLETON
Please visit Paris' Classified Website at:
http://www.state.sgov.gov/p/eur/paris/index.c fm

Stapleton