THE AMBASSADOR'S FAREWELL CALL ON PM FILLON

C O N F I D E N T I A L SECTION 01 OF 02 PARIS 000050 SIPDIS E.O. 12958: DECL: 01/15/2019 TAGS: PREL PGOV ECON FR SUBJECT: THE AMBASSADOR'S FAREWELL CALL ON PM FILLON Classified By: Ambassador Craig R. Stapleton, reasons 1.4 (b/d). Summary -------------- ¶1. (C) The U.S.-France relationship has enjoyed positive progress over the past four years, PM Francois Fillon judged during the Ambassador's January 12 farewell call; the Ambassador also presented a positive assessment. Substantive planning for the April 2-3 NATO summit in Strasbourg and Kehl, Germany is underway, PM Fillon remarked. With respect to the economic crisis, Fillon said he was "not too pessimistic" it could pass with relatively little damage as long as there are no new "catastrophes," although he acknowledged challenges in unemployment and a slowdown in the private sector in France. The conversation also touched on the Middle East, France's EU presidency, domestic reform efforts and progress toward the NASA Space Shuttle carrying a French payload. End Summary. Upbeat on Bilateral Ties -------------- ¶2. (C) PM Fillon and the Ambassador presented an upbeat assessment of U.S.-France relations during the Ambassador's farewell call at the Hotel Matignon. DCM Pekala and FM Fillon's diplomatic advisor Jacques Lapouge also attended the meeting. The prime minister lauded the progress in bilateral ties that has occurred during the Ambassador's tenure. In this context, the Ambassador noted that plans are advancing for NASA to add a Space Shuttle flight that could include a French payload (specifically, the Alpha Magnetic Spectrometer, or AMS). Details and funding are still being worked out, the Ambassador said. PM Fillon welcomed the progress on the issue, stating that it remains a priority for the French government. ¶3. (C) PM Fillon related that the U.S. presidential campaign was "surprisingly visible" in France last year, in large part because of the star power of the president-elect. France needs to "take advantage of Obama's popularity" to achieve more in the bilateral relationship and in the world at large, PM Fillon said. In this context, he predicted President Sarkozy would try to organize an early trip to Washington to meet with the new president. Meanwhile, planning for the NATO Summit is continuing. Without going into specifics, PM Fillon said the French government is having ongoing discussions about the substance of the event. On Economy, "Not Too Pessimistic" -------------- ¶4. (C) Turning to economic issues, PM Fillon judged that, absent any new "catastrophes," he was "not too pessimistic" about France's economic future. Consumption is steady and the holiday shopping season produced good results, but popular pessimism about economic conditions remains high. The private sector incentives the government introduced in 2007 appear to have worked, the prime minister assessed, although he cautioned that the initial solid progress in terms of unemployment could be in jeopardy with the jobless rate currently climbing. Another less rosy picture involves French private enterprise, where a trend of "preventively" cutting spending and freezing new hiring is harming economic opportunity. Note: The unemployment rate stood at 7.3 percent in mainland France at the end of the third quarter of 2008; economists have predicted that the rate could reach 8 percent by the second quarter of 2009. End note. Education Reform a Stumbling Block -------------- ¶5. (C) Despite the economic uncertainty, President Sarkozy's government has succeeded in implementing about "two-thirds of the reforms we wanted," PM Fillon said. The left remains incapable of uniting the French people in a "comprehensive critique" of the president's policies. At the same time, he predicted that the climate for further reform will be difficult over the next 18 months, adding that introducing changes to the education system will prove a particular challenge. He observed that while many labor unions have responded positively to PARIS 00000050 002 OF 002 reform, anger about the government's education proposals could galvanize opposition and create a unified protest movement. Nonetheless, the government plans to press ahead with proposed reforms in the coming year, with a particular focus on consolidating France's political map, reducing local taxes on businesses, and revamping professional training. Medal Presentation -------------- ¶6. (U) At the end of the session, the Ambassador told PM Fillon his tenure in France was "the opportunity of a lifetime." He presented PM Fillon with a medal depicting the Jean Cardot Liberty Flame sculpture, now standing in the Ambassador's Residence garden, for which the prime minister expressed warm thanks and appreciation. STAPLETON