FRANCE HOLDS EU DISADVANTAGED BY UN SCALE OF

C O N F I D E N T I A L PARIS 006360 SIPDIS SIPDIS E.O. 12958: DECL: 09/22/2016 TAGS: AORC FR KUNR UNGA UNSC SUBJECT: FRANCE HOLDS EU DISADVANTAGED BY UN SCALE OF ASSESSMENTS REF: STATE 153946 Classified By: Political Minister Counselor Josiah B. Rosenblatt. Reas ons 1.4b,d ¶1. (SBU) In response to reftel points, MFA IO Acting A/S-Equivalent Marc Giacomini expounded on the disadvantages for the EU of the current UN scale of assessments in a September 19 meeting with poloff. Giacomini observed that the present 22 percent ceiling on the USG assessment of the UN budget constituted in effect an indirect tax on the EU, since the USG was underpaying relative to its share of world Gross National Income (GNI). He said the EU at 25 was now collectively paying 37 percent of the UN budget when its GNI share only stood at 26 percent. A renegotiation of the scale of assessments was in order. (Comment: He did not note however how much the EU's GNI share will increase when Romania and Bulgaria join in 2007.) ¶2. (C) Japan was the big winner, according to Giacomini, regardless of the variable mixes possible in weighting assessments according to a nation's GNI over the last 3 years and/or 6 years. Japan's assessment would soon drop to the neighborhood of 16 percent, even without changes to the current UN methodology. Brazil and Argentina, he suggested, were underpaying, because of distortions in their GNI share over the last six years caused by the 2001 economic crisis. ¶3. (C) Giacomini expressed discomfort with the notional Japanese proposal that all permanent members of the Security Council should pay minimal assessments of 3-5 percent. The problem was less the proposal itself than the reaction of China to its Japanese origins. He noted moreover that the Chinese contribution actually was nearing 3 percent already. We should be grateful, too, that Russia had volunteered to raise its contribution to 1 percent, although it was only bound to contribute 0.6 percent. ¶4. (SBU) Comment: Although Giacomini indicated no flexibility in the EU objective of reducing its collective assessment, he warmed to the demarche. The subject clearly struck a chord and he reveled in demonstrating his command of the topic. Giacomini, who just started as MFA IO PDAS-Equivalent after a stint in Geneva as deputy permanent representative, will travel to the UN in New York for consultations at an unspecified date. Embassy strongly recommends meetings with USUN, specifically regarding UN finances. Please visit Paris' Classified Website at: http://www.state.sgov.gov/p/eur/paris/index.c fm STAPLETON