FRENCH PRESIDENCY INSIDER ON HOW TO GET THINGS

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 001947

SIPDIS

E.O. 12958: DECL: 10/23/2018
TAGS: PREL PGOV ECON FR
SUBJECT: FRENCH PRESIDENCY INSIDER ON HOW TO GET THINGS
DONE WITH PARLIAMENT

REF: PARIS POINTS E-MAIL OCTOBER 15 (NOTAL)

Classified By: Political Minister Counselor Kathy Allegrone, reasons 1.
4 (b/d).

Summary
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1. (SBU) President Sarkozy's activist approach to the
financial crisis is playing well with the public
because the French see him as focused and
statesmanlike, State Secretary for Parliamentary
Affairs Roger Karoutchi told the Ambassador at a
working lunch October 20. A governing UMP party
insider and consummate legislative arm-twister,
Karoutchi stressed the importance French people attach
to state action during uncertain times and added that
if the country emerges from the crisis with relatively
little damage, President Sarkozy could earn a real
political boost. The current legislative debate on
the 2009 budget will be lengthy but the government has
refocused its priorities on areas that Karoutchi
predicted will help France weather the crisis and
enhance its competitiveness, such as funding for
research and technology. Noting that the Presidency's
ability to press ahead with reform will not last
forever, Karoutchi described the leadership's
aggressive tactics in pushing for change. The
Ambassador and Karoutchi also discussed overall
parliamentary strategy as well as the UMP's prospects
in upcoming European parliamentary and French regional
elections in 2009 and 2010. End Summary.

Crisis: Sarkozy's Activity Paying Off
--------------


2. (C) France will likely face a difficult period in
the coming year as unemployment rises and other social
problems emerge in the context of the economic
squeeze, Karoutchi predicted. But President Sarkozy's
active approach to the financial crisis is playing
relatively well with the public because the French see
him as focused, responsive and in charge. "People say
they are not sure if President Sarkozy can save us,
but in an ocean of bad news, at least he is doing
something," Karoutchi said. In his view, the
president's tenure as Interior Minister (2002-04 and
2005-07),during which he projected toughness on law
and order issues, instilled a sense of trust among
people in Sarkozy's ability to navigate change safely.
Karoutchi claimed that even top Socialist Party (PS)
leader Pierre Moscovici has approached him privately
to express relief that President Sarkozy is at the
helm during the tumult. In this context, if France
emerges from the crisis without too much damage, the
president will get considerable credit, Karoutchi
forecast. (Note: Polls show President Sarkozy's
approval ratings climbing. An Ifop survey released
October 19 indicated 43 percent of French people are
"satisfied" with his performance, a six-point increase
since September. End note.)

Government "Making Choices" On Budget
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3. (C) In the near term, parliament began October 20
what Karoutchi predicted would be a lengthy debate on
the 2009 budget package. Against the backdrop of the
crisis, the government is reordering its priorities
and "making choices," Karoutchi said. Some programs,
such as agricultural modernization and industrial
restructuring, will not receive the funding this year
the Presidency initially wanted to allocate. But the
government will push for spending in sectors that
could help France's competitiveness in emerging from
the crisis and beyond, Karoutchi said. He cited
scientific research, competitiveness poles and
technology as particular target areas. He expressed
confidence in the government's ability to see the
budget package as well as other reforms through to
passage, describing his general strategy on dealing
with parliament as inundating lawmakers with "urgent"
bills that are subject to limited debate. Doing so
creates an atmosphere in which inaction on the
measures would amount to parliament not doing its duty
in the eyes of the French people, he contended.

Arm Twisting in Congress
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4. (C) The October 14-15 passage of President

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Sarkozy's financial rescue plan exemplified
Karoutchi's approach. The Eurozone Heads met at the
Elysee on Sunday, October 12; then France's Council of
Ministers approved the draft legislation the same day
and the State Council reviewed it October 13. The
government transmitted the bill to the National
Assembly on the morning of October 14 and it passed
later that day. The Senate approved it the next day.
In managing this and other legislation, Karoutchi said
his policy is to impress upon lawmakers the urgency of
the measures and that "France is waiting" for its
parliament to act. Keeping the majority UMP in line
is relatively easy via old-school political arm
twisting. Karoutchi said he tells the deputies the
president follows the debates and votes closely and
"does not need any extra headaches." For its part,
the PS leadership was absent in the economic rescue
discussions, rejecting the package but making clear
that it would not actively oppose or inhibit passage.
"There was no PS strategy," Karoutchi said. Lower
level PS deputies were left to hammer out a deal. In
the end, the PS and the Green Party abstained (ref e-
mail),clearing the way for the bill to pass.


5. (C) Such a compliant congress -- and overall
societal readiness for change -- will not last
forever, Karoutchi acknowledged. In his view, part of
the government's success in pressing ahead with
reforms has been its method of making a dramatic array
of proposals simultaneously, keeping legislators on
their heels and all sectors of French society feeling
the force of change in unison. "French people have an
egalitarian streak," Karoutchi observed, noting that
"if they see one sector being targeted for reform,
people will rally to their side." In the current
context, everyone from teachers to dockworkers to
bankers are navigating new terrain. Maintaining a
fast pace of change is also essential, Karoutchi said.
"We understand that the forces of immobility in France
take time to mobilize," he quipped. As such, the
government continues to keep the reform docket full.

The Electoral Calendar
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6. (C) Looking ahead to European Parliament and
regional elections scheduled for 2009 and 2010
respectively, Karoutchi expressed guarded optimism.
With the European vote, he speculated that some UMP
candidates could benefit from a successful EU
Presidency for France and President Sarkozy. At the
same time, he assessed that European parliamentary
elections tend not to favor the right because of
internal divisions among "euroskeptics" and those who
favor greater integration. The 2010 French regional
vote is especially up in the air because of the
possibility of territorial reform that could redraw
the electoral map. As it stands now, things can not
get any worse for the UMP, Karoutchi said, as the PS
holds the top post in 20 of France's 22 regions (the
exceptions are Corsica and Alsace).

Comment
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7. (C) Karoutchi, 57, exuded confidence and good
humor during the lunch. His sanguine view of
President Sarkozy's standing tells only part of the
story. If the economic crisis deepens and the left
can somehow coalesce, the government's ability to
force change (and muscle through legislation) will
likely erode. As for Karoutchi's own prospects, he
hopes to head the UMP's list for the Ile-de-France
when regional elections are held in 2010. He faces a
strong challenge from Higher Education Minister
Valerie Pecresse -- and the possibility that Sarkozy-
led reforms may eliminate the position. We expect a
bruising battle between true political heavyweights.
STAPLETON