VZCZCXRO2980
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHFR #1966/01 0861628
ZNY CCCCC ZZH
P 271628Z MAR 06
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC PRIORITY 5635
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 04 PARIS 001966 

SIPDIS 

SIPDIS 

E.O. 12958: DECL: 01/01/2016 
TAGS: PGOV PREL ECON ELAB FR EUN PINR
SUBJECT: FORMER PRESIDENT GISCARD D'ESTAING ON A TROUBLED 
FRANCE, UPCOMING PRESIDENTIAL ELECTIONS, AND NEXT STEPS FOR 
THE EU 


Classified By: Ambassador Craig Stapleton for reasons 1.4 (B & D). 

¶1. (C) SUMMARY: In a March 21 meeting with the Ambassador, 
Former President Valery Giscard d'Estaing characterized the 
current social upheaval in France over the First Employment 
Contract as the latest episode in France's deep-seated 
resistance to change ("in no way pre-revolutionary"). He 
argued for change through the creation of prosperity -- 
either through "shock treatment" or more incremental steps -- 
as the only way forward. Giscard seemed to view a Segolene 
Royal/Dominique Strauss-Kahn ticket as representing the 
center-left's best chance for victory in the 2007 
presidential elections, although these two mainstream 
politicians might have difficulty obtaining the support of 
the Socialist party's left wing. While clearly not enamored 
of Nicolas Sarkozy, whom he viewed as lacking in true 
presidential stature, Giscard was convinced he would be the 
candidate on the center-right, barring some unforeseen crisis 
that would allow Chirac to continue. Giscard argued that 
French voters are not anti-EU but are anti-enlargement. He 
asserted that they will be prepared after the elections to 
vote again on the EU constitutional treaty or renegotiate the 
existing text, but worried that the UK is drifting away from 
Europe. He lamented the absence of a true European leader, 
with the potential exception of German Chancellor Merkel, but 
described the Franco-German relationship as a rock for the 
ages. END SUMMARY. 

¶2. (C) The Ambassador met March 21 with a relaxed, 
expansive, and incisively insightful former centrist 
President Valery Giscard d'Estaing to discuss the current 
wave of unrest sweeping across France in opposition to the 
First Employment Contract (CPE), the domestic political scene 
in the run-up to the 2007 presidential elections, and next 
steps for Europe. 

CPE AND FRENCH AMBIVALENCE TOWARD CHANGE 
---------------------------------------- 

¶3. (C) Asked for his assessment of the current wave of 
strikes and demonstrations in reaction to the CPE, Giscard 
explained that regular bouts of turbulence were the norm for 
France since the French Revolution and reflected the deep 
reluctance, even resistance, of French society to change. 
This partly reflected France's history as a nation of 
hard-working, taciturn farmers, not open to the world, who 
had little in common with the free-traders of the Netherlands 
or the UK. While French society had produced its own "model" 
and could claim a glorious past, the fact was that its model 
was now obsolete, and no longer capable of producing economic 
growth. Giscard described a society on the defensive, 
characterized psychologically by negativism and rejection of 
anything new. This, as much as anything else, had played a 
role in French rejection of the EU constitutional treaty, and 
it was at play now in widespread opposition to the CPE. 

¶4. (C) Calling the CPE "unnecessary but acceptable in 
substance," Giscard noted that two-thirds of the 
demonstrators, namely employees in the public sector and 
civil servants, would not be affected in any way by the CPE. 
He characterized business as largely silent. (Comment: In 
fact, business leaders tend to see the CPE as a small, if not 
sufficient, step forward. End comment.) Giscard predicted 
that the demonstrators would gradually exhaust themselves 
over a period of three to four weeks, also in conjunction 
with a gesture by the government to soften the law. While he 
did not rule out the possibility of a general strike (Note: 
The next day of strike actions is March 28, but the unions 
have stopped short of calling for a "general strike." End 
note.), Giscard was categorical that France is not/not in a 
pre-revolutionary mood. (Comment: This is an assessment that 
tracks widely with that of pundits, who see reaction to the 
CPE as focused on preserving privileges rather than effecting 
change. End comment.) 

2007 ELECTIONS AND PROSPECTS FOR THE CENTER-LEFT 
--------------------------------------------- --- 

¶5. (C) Giscard refused to make any firm predictions about 
the outcome of the 2007 presidential elections, although he 
repeated the conventional wisdom that the French tradition of 
protest against the government in office would tend to favor 
the center-left Socialist Party (PS). Asked about Segolene 
Royal's current lead in the public opinion polls, Giscard 
said she was "brilliant" (of the same ENA class as PM 
Dominique de Villepin and her companion and PS First 
Secretary Francois Hollande), by no means a political 

SIPDIS 
extremist (he noted her father was a retired Colonel and her 
brother a member of the far-right National Front), honest, 
and presented well on television. Giscard thought Royal's 
strategy of not speaking out too much on the issues was the 

PARIS 00001966 002 OF 004 


correct one for the moment, as this allowed her to appear as 
a vessel for voters' hopes for change. At the same time, 
given her lack of high-level governing experience, Giscard 
thought Royal would do well to consider naming in advance her 
choice for PM in order to run as a ticket. 

¶6. (C) Giscard cited Dominique Strauss-Kahn as the logical 
choice from the standpoint of experience and capability, but 
noted that Strauss-Kahn represented the mainstream at a 
moment when the left wing was becoming increasingly vocal. 
Giscard believed Royal's strategy of appealing to the center 
was correct overall in the context of winning the presidency, 
but perhaps premature at this stage of the nomination 
process. At a minimum, Giscard opined, Royal should drop her 
frequent references to Tony Blair, as this risked 
antagonizing the left wing. Asked about other possible PM 
candidates, Giscard disparaged former PM Lionel Jospin as 
stiff and repetitious (he continued to push his book and had 
no new ideas) and thought him unlikely to accept anything but 
the presidency. Giscard dismissed former PM Laurent Fabius 
as a shameless opportunist, in an age when voters demanded a 
certain honesty from politicians. Giscard offered former 
Culture Jack Lang as one possibility, especially vis-a-vis 
the left wing of the party, given his credentials with 
intellectuals. Less kindly, however, Giscard characterized 
Lang as a "brilliant" culture minister, provided one 
understood "culture" as "entertainment." He not only 
appeared to be, but indeed was, a lightweight, and certainly 
not a statesman, Giscard declared. 

FRANCE IN NEED OF A THATCHER? 
----------------------------- 

¶7. (C) Asked whether France's perpetual sense of being in 
crisis might finally encourage voters to support more radical 
change, Giscard said he saw a need to make people happier 
through increased prosperity, and cited former Spanish PM 
Aznar as having convinced the Spanish electorate that 
prosperity would not be possible without reform. But he also 
held out the possibility of an even more radical, 
Thatcher-like "shock treatment," which he claimed only the 
center-right could administer given the center-left's 
enduring attachment to a large public sector. After 
reflection, however, he suggested that the government might 
best take a number of quick, pragmatic actions after the 
elections -- with no one step being seen as radical in and of 
itself and thus below the threshold of public consciousness 
and programmatic doctrine -- to reduce the wealth tax, drop 
taxes on main private residences (all Frenchmen want to own a 
house, he said), or refraining from replacing half of all 
retiring civil servants. 

¶8. (C) Asked to what extent the center-right should stand 
for change, Giscard was cautious and, citing the French mood 
described above, commented that the elections would be won by 
persuading voters to say "no" to the left rather than "yes" 
to the right. He thought the center-right was well 
positioned to claim that the socialists were soft on security 
and had no real proposals for reducing unemployment. In sum, 
according to Giscard, it would be a mistake to run too 
overtly on a reformist ticket. In that regard, he noted that 
Sarkozy had stopped using the word "break" with the past, 
which was widely perceived as too radical. 

SARKOZY THE ONE? 
---------------- 

¶9. (C) Giscard characterized Sarkozy as the center-right's 
leading candidate for the presidential elections -- although 
he had to assume that President Chirac was still holding out 
hope for a serious international crisis to lead to the 
"demand" that he continue to lead France. Giscard thought it 
helpful to Sarkozy's candidacy that he was associated with 
toughness on security and immigration issues, while 
characterizing Sarkozy's economic record as weak. Giscard 
also cautioned that Sarkozy's "hyperactivity" could be 
perceived as dangerous. Asked if Sarkozy would make a good 
president, Giscard noted that Sarkozy lacked the pedigree 
that the French people had come to expect, and characterized 
him as a sort of French "Clinton" in that regard. He 
acknowledged difficulty in perceiving Sarkozy as a figure of 
historical dimensions, notwithstanding his brilliance. 
Giscard hinted that Sarkozy might not survive more than a 
single term. 

¶10. (C) Asked to compare Sarkozy to PM de Villepin, Giscard 
said he wanted to avoid directly criticizing the Prime 
Minister of a current government. He nonetheless judged 
Villepin to be more a poet than a politician, although he 
admired his energy and personal accomplishments. Giscard 
concluded with the observation that the three most important 

PARIS 00001966 003 OF 004 


political offices in France would be up for grabs in 2007: 
President, Prime Minister, and Mayor of Paris. (Comment: 
Given the near certainty that neither Sarkozy or Villepin, if 
elected, would choose the other as Prime Minister, this would 
leave the Mayor of Paris as the consolation prize. Giscard 
apparently saw no obstacle in the fact that the center-right 
UMP party, through a primary election, had just chosen 
Francoise de Panafieu to run against PS incumbent Bertrand 
Delanoe. End comment.) 

NEXT STEPS ON EUROPE 
-------------------- 

¶11. (C) Calling the failed referendum on the EU constitution 
a "catastrophe" for France and Europe, Giscard accused the 
government of badly managing the issue. He recalled his 
attempt a month before the referendum to convince President 
Chirac to withdraw the referendum and to replace PM Raffarin 
instead and, before that, his effort to convince Chirac not 
to hold a referendum at all. Giscard insisted that the 
majority of those who voted "no" had voted against the 
government and Chirac -- especially many on the center-left 
who had been forced to support Chirac in the second-round 
2002 election against Jean-Marie Le Pen). Moreover, Giscard 
asserted, "although the USG does not seem to want to 
recognize this," widespread unease with EU enlargement also 
played a significant role. Giscard claimed, citing poll 
data, that the French public favored either re-approving the 
existing text or renegotiating it slightly, although this 
probably could not occur until after the 2007 presidential 
elections. (Comment: Giscard has a personal stake in 
preserving as much of the existing text, which he largely 
wrote, as possible. End comment.) 

¶12. (C) As for the future, Giscard judged that the real 
problem would be not France but the UK, which he described as 
"moving away from Europe." Giscard noted in this regard that 
the UK business and financial communities appeared to be more 
focused on Australia, China and the U.S. than Europe, perhaps 
because they perceive Europe as too complicated and less 
dynamic. Giscard also lamented the absence of authentic 
European leaders, with the potential exception of German 
Chancellor Merkel. He made clear his belief that such a 
leader need not necessarily be French, German, or British. 

¶13. (C) Asked whether reports of increasing Franco-German 
differences portended a drifting apart of these two 
countries, Giscard declared that this was happily not the 
case. Waxing emotional for the only time in the meeting, he 
said the two peoples now saw each other as partners, 
notwithstanding the suffering of the past (he evoked his own 
family's losses in wars against Germany, citing his 
grand-father's death in the trenches of WWI and his 
father-in-law's experience in a deportee camp in WWII). He 
stated that when French delegations attend international 
meetings, they feel most comfortable with the Germans. This 
might appear strange, he concluded, but it was true. 

¶14. (U) Giscard briefly mentioned his plans for traveling to 
the U.S. in the fall. 

COMMENT 
------- 

¶15. (C) Notwithstanding his critical acumen (it is 
impossible not to admire how sharp he remains), Giscard's 
arguments themselves reflect France's contradictory desire 
for change and preserving the status quo, or for effecting 
change by increment and stealth rather than offering the 
public clear policy choices. By that measure, PM de 
Villepin's platform of "change in continuity," as represented 
tangibly by the CPE, should have enjoyed more success. It is 
hard to square Giscard's judgment that reform should be 
implemented incrementally stealthily (Villepin's strategy) 
with his call for a "shock treatment" for France (that only 
Sarkozy could provide). Similar considerations pertain to 
his judgment that winning elections is more about 
discrediting the opposition than by running on a platform for 
the future. 

¶16. (C) Giscard mostly spoke in English, with a few 
digressions in French, in a manner that can only be described 
as sometimes elliptical but in which the choice of words 
always appeared deliberate and precise. As in past meetings, 
Giscard demonstrated his deep knowledge of European and U.S. 
history (he is currently reading a biography of Thomas 
Jefferson, whom he finds not very typically American) and 
geography. As he has done with previous Ambassadors, Giscard 
complained about the exaggerated stature Americans give to 
Lafayette -- whom Giscard dismissed as a "self-promoting 
member of the lower aristocracy" -- at the expense of the 

PARIS 00001966 004 OF 004 


contributions to American independence made possible by the 
policies of the French government and the actions of the 
French fleet, including a Vice-Admiral d'Estaing Giscard 
counts among forbears. 

Please visit Paris' Classified Website at: 
http://www.state.sgov.gov/p/eur/paris/index.c fm 

Stapleton