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### Viewing cable 05PARIS5335, ALLAN HUBBARD'S CALL ON INTERIOR MINISTER SARKOZY

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05PARIS5335 | 2005-08-04 10:10 | 2010-11-30 21:09 | CONFIDENTIAL | Embassy Paris

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    C O N F I D E N T I A L SECTION 01 OF 03 PARIS 005335

    SIPDIS

    STATE FOR EUR, DRL, AND EB
    COMMERCE FOR ITA
    LABOR FOR ILAB
    NSC FOR TRACY MCKIBBEN

    E.O. 12958: DECL: 08/04/2015
    TAGS: PREL ECON EFIN ELAB PGOV FR
    SUBJECT: ALLAN HUBBARD'S CALL ON INTERIOR MINISTER SARKOZY

    REF: PARIS 5232

    Classified By: Ambassador Craig R. Stapleton for reasons 1.4 (b) and (d
    ).

    ¶1.  (C) SUMMARY.  Ambassador Stapleton and National Economic
    Council Director Allan Hubbard met with Interior Minister
    Nicolas Sarkozy on August 1.  Sarkozy expressed his
    admiration for President Bush and said he looked forward to
    the opportunity to tackle France's economic and social
    problems with the same directness for which the President is
    justly famous.  Sarkozy confirmed that he would be running
    for President of France in 2007.  He said his own struggle to
    rise to high office, as the son of immigrants challenging
    entrenched elites, in part explained his deep admiration for
    America's values.  He said he would stress opportunity and
    making a "deep break with the past" -- by proposing
    significant change to France's social model -- in his 2007
    campaign.  On economic issues, Sarkozy reprised many of his
    now familiar policy themes: France's economic model holds
    back growth; people need to work more and be rewarded for
    doing so; and people need to be told the truth about the
    economic situation.  He was upbeat
    about France's future if the country seized the opportunity
    that reforms could bring.  He also tossed out a few of the
    "policy zingers" for which he is well known, notably "The
    European Central Bank confuses a strong currency with a
    strong economy," and "France needs to do what Reagan did in
    the U.S., Thatcher in Britain, and Gonzales in Spain."  End
    Summary.

    ¶2.  (U) Ambassador Stapleton and Allan Hubbard, Director of
    the National Economic Council, met with France's Minister of
    Interior, Nicolas Sarkozy on 1 August.  Sarkozy is also the
    president of the Union for a Popular Movement (UMP) party, a
    coalition of center-right parties founded by President Chirac
    in 2002.  The meeting took place in Sarkozy's office at the
    Ministry of the Interior and was also attended by Sarkozy
    Chief of Staff Claude Gueant and Interior Ministry Staffer
    Cederic Goubet.  Embassy Econ Counselor, Poloff and Economic
    Analyst (as interpreter) accompanied Mr. Hubbard and
    Ambassador Stapleton.

    ADMIRATION FOR PRESIDENT BUSH
    -----------------------------
    ¶3.  (C) Sarkozy expressed his admiration for President Bush.
    Sarkozy said that, like the President, he too was committed
    to keeping his word and to dealing honestly with the real
    problems of the country, "unlike the rest of those
    politicians."  Throughout the hour-long meeting, Sarkozy
    returned again and again to the importance of leveling with
    people.  He illustrated his point by saying the "French
    people have to be told the truth -- and they want to hear
    it."  He added that most politicians, and specifically
    President Chirac, just keep stringing the people along with
    their "constant tergiversating."  Economic Council Director
    Hubbard's presentation of the President's direct and
    principled tackling of America's major domestic challenges
    (taxes, social security, education), drew the high compliment
    from Sarkozy that he too would like to tackle the same
    problems, in the same way, for France.

    DISAGREEING WITH VERSUS UNDERCUTTING THE U.S.
    ---------------------------------------------
    ¶4.  (C) Sarkozy lamented the troubled state of U.S.-France
    relations during recent years.  He drew a sharp distinction
    between disagreeing with friends and undercutting them.  He
    said, "we should always be able to disagree."  Calling it
    something he "would never do", he cited President Chirac's,
    and then-Foreign Minister de Villepin's, use of France's
    Security Council veto against the U.S. in February 2002 as an
    unjustifiable and excessive reaction to a difference of
    views.  He added that he would have advised the U.S. not to
    undertake the invasion and occupation of Iraq -- but that
    that didn't prevent him from "feeling it personally when
    American soldiers die in combat."  He proudly pointed out
    how, at the height of anti-American feeling and anti-U.S.
    demonstrations (contemporaneous to Sarkozy's first stint as
    Minister of the Interior (2002 - 2004)), he took it as a
    personal responsibility to see to it that "no U.S. Embassy or
    Consulate was so much as touched" by demonstrators.

    IDENTIFYING WITH AMERICA'S VALUES
    ---------------------------------
    ¶5.  (C) "They call me 'Sarkozy the American,'" he said, "they
    consider it an insult, but I take it as a compliment."
    Sarkozy stressed how much he "recognized himself" in
    America's values.  He recalled how as a boy, he told his
    father that he wanted to grow up to be president.  He said
    his Hungarian-born father retorted, "In that case, go to
    America -- because with a name like Sarkozy, you'll never
    make it here."  Proving that wrong, Sarkozy said, was a
    touchstone for his efforts both to succeed and to transform
    France into a place where "outsiders" like him could also
    enjoy opportunity untrammeled by prejudice.  Comment:  Very
    much unlike nearly all other French political figures,
    Sarkozy is viscerally pro-American.  For most of his peers
    the U.S. is a sometimes reviled or admired, but decidedly
    foreign, other.  Sarkozy identifies with America; he sees his
    own rise in the world as reflecting an American-like saga.
    End Comment.

    FIGHTING FRANCE'S ELITE
    -----------------------
    ¶6.  (C) Sarkozy pointed to his own political career as an
    example of both his success and the difficulty of achieving
    it.  "I'm not a member of the elite...I'm someone who wants
    to speak for the France that gets up every morning and
    works," he said, as he recalled his own rise from "knowing
    nobody and beginning as a simple party supporter, and
    climbing every step in the ladder" to his current bid for the
    presidency.  With some vehemence, Sarkozy insisted on his
    having had to "challenge those stronger than me" every step
    of way.

    CONFIRMING HE WILL RUN
    ----------------------
    ¶7.  (C) Sarkozy confirmed his intention to run for president
    to Ambassador Stapleton and NEC Director Hubbard, saying, "I
    am going to be a candidate in 2007".  Outlining his campaign
    strategy, Sarkozy said, "we are going to propose change to
    the French people."  "I'm convinced that it can work...people
    want to believe they can succeed."  Sarkozy then touched on
    many of his specific proposals for providing more opportunity
    for the able and more support for the disadvantaged -- tax
    cuts, labor law reform, affirmative action, immigration
    reform, and monetary policy that "recognizes that the
    currency is an instrument for supporting a strong economy."

    RECALLING REAGAN, THATCHER AND GONZALES
    ---------------------------------------
    ¶8.  (C) On economic affairs, Sarkozy repeated his
    often-stated assertion that the French economic model is
    "bad."  France needs to do what Spain, the UK and other
    successful countries have done over the past twenty years;
    take the best of what they have done and adopt those policies
    in France.  In response to Mr. Hubbard's question on what
    Sarkozy's economic vision for France was, Sarkozy said that
    the French people have to understand that they need to work
    more and that the Government must make it more profitable for
    people who do so.  He said that France needed to a go through
    a period similar to the U.S. under Reagan, the UK under
    Thatcher, and Spain under Gonzalez.  "France is not an old
    country," he said, "but right now it's acting like one."

    INCENTIVES FOR TAKING INITIATIVE
    --------------------------------
    ¶9.  (C) Sarkozy explained his theory that unemployment
    benefits should be higher than they currently are for people
    immediately after they are laid off.  However they should
    quickly phase out to provide an incentive for people to look
    for work.  Unemployed people should be required to look for
    work; now they are not required to.  Echoing comments made by
    Finance Minister Breton, Sarkozy said, "people are ready for
    the politics of truth."  He added that his directly expressed
    assessments of France's economic problems and his insistent
    advocacy of work, innovation and entrepreneurship in fact
    contribute to his popularity.  "Some people told me never to
    say such things, people will hate you; clearly they don't
    hate me," he observed.

    OVER-VALUED EURO AND NO ALAN GREENSPAN
    --------------------------------------
    10  (C) On the deficit, Sarkozy said that for 25 years France
    has been living beyond its means.  Now it is paying the price
    for that.  He said that the U.S. had two advantages that
    France did not have: "Greenspan and the dollar."  He said
    that France was suffering from no longer having control of
    its own currency and observed that European Central Bank
    (ECB) president Trichet was pursuing exactly the wrong
    policies; "he confuses a strong currency with a strong
    economy."  Europe needed a pro-growth ECB, not one focused on
    fighting inflation only.  The U.S., he observed, "has often
    had its strongest economy when the dollar was at its
    weakest."  Turning to Chairman Greenspan, Sarkozy said, "he
    is a genius. A genius.  He has pursued exactly the right
    policies."

    FRANCE'S ECONOMIC CHALLENGES
    ----------------------------
    ¶11.  (C) Returning to his priorities for France, Sarkozy
    noted that France's biggest challenges were outsourcing, a
    lagging research sector, savings that are "too static and
    don't really help move the economy," and a lack of profitable
    mid-size companies; "we have lots of big ones and lots of
    really small ones, but few in between."  He sees natural
    strengths for France in the health, agriculture and food,
    transportation, communication and nuclear energy sectors.

    WORKING TOGETHER AT THE WTO
    ---------------------------
    ¶12.  (C) Responding to Mr. Hubbard's observation on the need
    for the Doha trade round to move forward this autumn, Sarkozy
    agreed, and noted that the EU needed to reach a better
    understanding with the U.S. on agricultural issues.  He said
    that U.S. and EU officials were talking but prescribed much
    more intensive discussion so that a common understanding
    could be reached.  If that happened, he believed the upcoming
    Hong Kong ministerial could be a success.

    COMMENT
    -------
    ¶13.  (C) For many years, Nicolas Sarkozy has been France's
    most popular politician.  Current polls show his approval
    ratings holding steady at around 60 percent, and defeating
    any probable opponent in 2007.  By experience and conviction
    -- his experience as interior minister and his "liberal,"
    free-market oriented convictions -- he seems particularly
    well-suited to lead France in meeting the key challenges it
    now faces: security in this era of global terrorism and
    prosperity in this era of adapting to economic globalization.
    In addition, Sarkozy's deep identification with American
    values -- opportunity, initiative, competition, society that
    sustains individual liberty as much as it supports national
    power, make him France's best hope for catalyzing the shift
    in social values that the French need to make if they are to
    take full advantage of globalization.

    COMMENT CONTINUED
    -----------------
    ¶14. (C) Sarkozy's vision for France is a powerful one, and,
    as his popularity reflects, it resonates with a big part of
    the electorate.  However, resistance to social change is
    particularly strong in France.  Attachment to the benefits
    and advantages that most of them receive, in one way of
    another, from the state -- the substance of the "French
    social model" -- is very strong among ordinary French people.
    Sarkozy's popularity may be a reflection of change the
    French would like to make, but are too conservative to in
    fact undertake.  End Comment.
    STAPLETON

`