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### Viewing cable 06PARIS3360, DOMINIQUE STRAUSS-KAHN ON CLEARSTREAM, HIS

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
06PARIS3360 | 2006-05-19 07:07 | 2011-02-10 08:08 | CONFIDENTIAL | Embassy Paris
Appears in these articles: http://abonnes.lemonde.fr/documents-wikileaks/article/2011/02/09/wikileaks-les-visiteurs-de-l-ambassade_1477418_1446239.htm

`

    VZCZCXRO0314
    PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
    DE RUEHFR #3360/01 1390737
    ZNY CCCCC ZZH
    P 190737Z MAY 06
    FM AMEMBASSY PARIS
    TO RUEHC/SECSTATE WASHDC PRIORITY 7572
    INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

` `

    C O N F I D E N T I A L SECTION 01 OF 04 PARIS 003360

    SIPDIS

    SIPDIS

    E.O. 12958: DECL: 01/01/2016
    TAGS: PGOV PREL ECON FR PINR EUN
    SUBJECT: DOMINIQUE STRAUSS-KAHN ON CLEARSTREAM, HIS
    PRESIDENTIAL ASPIRATIONS, AND FRANCE: A COMPREHENSIVE
    SNAPSHOT OF THE POLITICAL SCENE

    REF: A. PARIS 3178

    ¶B. PARIS POINTS OF 5/16

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

    ¶1. (C) Summary: In a remarkably wide-ranging tour de force
    equally remarkable for its candor, former finance minister
    and leading Socialist party presidential candidate Dominique
    Strauss-Kahn shared with Ambassador Stapleton May 16 his
    views that: the Clearstream scandal is far from over; the
    Socialist Party can win in the 2007 presidential elections
    and that there will not be a repeat of 2002; his most
    difficult hurdle in his quest for the presidency will be to
    win his party's nomination over Segolene Royal; tackling
    significant reform in France is all the more difficult for
    being necessary; France's main problem is its current lack of
    confidence in itself; and the Chirac presidency looks
    increasingly to be marked by failure. End summary.

    Clearstream and the Censure Motion
    ----------------------------------
    ¶2. (C) In a May 16 meeting with the Ambassador, Former
    finance minister, Socialist Party (PS) heavyweight and
    presidential contender Dominique Strauss-Kahn (known here as
    DSK) insisted on the seriousness of the censure motion vote
    tabled earlier by the PS, to be voted on later the same
    afternoon, in connection with the Clearstream scandal (see
    also ref A). While the outcome was a foregone conclusion,
    and such motions generally were little more than political
    "theater" given the institutional realities of the Fifth
    Republic, he asserted that it was nonetheless important.
    This was especially so given the decision by some leading
    center-right UMP governing party deputies (ref B) not to be
    present for the vote and center-right UDF party president
    Francois Bayrou's decision to vote for the censure motion.

    ¶3. (C) Although DSK dismissed Bayrou's decision as political
    posturing to maximize his own first-round presidential
    election chances (DSK judged that Bayrou would receive only
    6-9 percent of the first-round vote), he judged that an
    alliance with the left -- even if Bayrou switched to
    supporting the right in the second round -- could potentially
    have significant ramifications for a left-right face-off in
    the second round of the 2007 presidential elections. He
    hedged about the impact in the end, however, noting that most
    UDF voters were probably more to the right than their leaders.

    2007 Between Center-Left and Center-Right
    -----------------------------------------
    ¶4. (C) DSK was confident that the second round would be a
    contest between the UMP and the PS, notwithstanding the
    current popularity of extremist elements on the left and the
    right. But voters had learned from the 2002 elections, where
    their protest votes cost Jospin the elections. He predicted
    that the PS candidate would garner around 22-23 percent, with
    likely UMP candidate Sarkozy getting closer to 24-25 percent
    of the first-round vote. Chirac's initial 2002 score of less
    than 20 percent was, DSK asserted, an historical anomaly.
    DSK was adamant that far-right National Front leader
    Jean-Marie Le Pen would come in third. Even if he managed to
    exceed his initial score of 2002, it would still not be
    enough.

    Villepin Will Survive, Good for Left
    ------------------------------------
    ¶5. (C) DSK acknowledged when asked that it would probably be
    better for the PS if Villepin stayed in office until the end
    of Chirac's term, given that the prospects were for "one year
    of nothing." Even if Chirac did decide to jettison Villepin,
    it is not clear whom Chirac should name as a successor. DSK
    concluded that, if the current government managed to survive
    until the beginning of the World Cup in late June, then it
    would sail through the July/August holiday period. When
    September rolled around, the electorate would be more focused
    on the 2007 presidential elections than trying to boot the
    incumbent government out of office.

    ¶6. (C) Asked if this meant that the Clearstream affair would
    therefore soon be forgotten, DSK (in contrast to some)
    responded that "this was only the beginning." He was struck
    by secret investigator General Rondot's decision not to meet
    with the investigating judges, commenting that "this meant
    there was someone more he feared than the judges" (by
    implication, with something to hide). Explaining, he added
    that Rondot was a military guy who was obeying orders.
    Someone had told him to stonewall, which is why he had gone
    silent. Turning to a putative meeting on Clearstream between
    Chirac and Sarkozy, he said Chirac had asked Sarkozy what the
    risks were of Clearstream continuing, and Sarkozy had
    responded "100 percent." DSK concluded that, although the
    scandal might disappear from the public eye, the

    PARIS 00003360 002 OF 004

    investigations would continue. He lamented that France was
    not a more mature democracy like the U.S. DSK said that
    Sarkozy had rightly understood that voters felt touched by
    the scandal and were demanding justice, even if they could
    not understand it fully. His dilemma was that, if he stayed
    in the government, this would only bewilder voters and
    reinforce their alienation. Chirac, DSK continued, could
    have put an end to the story by changing prime ministers.

    Government Dead in Water
    ------------------------
    ¶7. (C) Turning to Villepin, DSK recalled his last press
    conference during which he had touted small improvements in
    the unemployment situation. But this did not fool anyone, he
    asserted. DSK explained that it was difficult to flaunt a
    tiny improvement in one area when, at the same time, the
    overall economic situation was not good and deteriorating,
    and social tensions were on the uptick. Moreover, the
    controversy over the First Employment Contract, a measure of
    little significance per se, had now made further reform
    almost impossible.

    Admiration for Sarkozy
    ----------------------
    ¶8. (C) DSK agreed that the PS had benefited from the
    Clearstream scandal, although he acknowledged that every
    party or figure had skeletons in the closet. He nonetheless
    complained that Sarkozy had overdone it in portraying himself
    as a victim and that this would reap little sympathy on the
    left. DSK characterized Sarkozy's overall strategy simply as
    one of being determined to win, but readily admitted that he
    was an extremely talented politician who had managed
    successfully to turn voters' concerns about growing crime,
    for example, to his own benefit. DSK expressed astonishment
    that Sarkozy was running on a platform of claiming that he
    "knew the solutions to France's problems, but would not
    reveal or implement them until elected." This was a
    permissible strategy for the opposition party, he complained,
    but was hard to sustain for someone already in power.

    Chirac Prefers Left to Sarkozy
    ------------------------------
    ¶9. (C) DSK also judged that Sarkozy had positioned himself
    so far to the right that he would have difficulty moving back
    to the center. He claimed there was a large number of Chirac
    supporters who would not vote for Sarkozy as president. DSK
    vigorously affirmed that Chirac was "an objective ally" who
    would prefer a victory of the left to having Sarkozy succeed
    him for a number of reasons: he did not deem Sarkozy a
    "worthy" successor (just as Mitterrand had favored Chirac
    over Jospin); he was a "radical-socialist" (in the French
    sense) at heart in any case, in contrast to Sarkozy, the free
    market "liberal." Chirac also feared Sarkozy was more likely
    than the left to pursue him in the courts for past scandals
    in which he was implicated. (Note: The French Radical party
    fits loosely into the Christian democratic tradition of
    capitalism with a strong social component.)

    Royal Leading for Now, But...
    -----------------------------
    ¶10. (C) Asked about the presidential nomination process in
    the PS, DSK referred to Segolene Royal's commanding lead in
    public opinion polls as a "collective hallucination" and
    reminded the Ambassador that, in France, those who were poll
    leaders six months before the elections -- Giscard d'Estaing
    in 1981, Balladur in 1995, and Jospin in 2002 were the most
    recent examples -- had invariably lost. DSK predicted that
    Royal would eventually crumble and that, if nominated by the
    PS, would not survive against Sarkozy. He noted wryly in
    that Sarkozy had already reached the same conclusion, which
    explained why he continued to extol her qualities as a
    potential candidate. DSK added that while she had a decent
    chance of winning the "internal" debate within the PS, she
    would have much more difficulty winning the "external" debate
    with Sarkozy, even with good advisors and handlers.

    Not of Presidential Timber
    --------------------------
    ¶11. (C) Within the PS, according to DSK, Royal was not as
    popular, as she drew much of her public support from the
    right and center. He claimed that 80 percent of the party
    was not behind her, and dismissed announcements of support
    from various mayors as falling far short of a snowball
    effect. DSK asserted that activists in the party "sensed,"
    for example, that Royal could not imagine herself in the
    international arena, for example, negotiating gas agreements
    with Putin; good advisors would not be able to make up for
    her rather shallow experience. He noted that she had not
    become the President of the Poitou-Charentes region by
    defeating former prime minister Raffarin, as has been
    claimed; she had simply won the seat that he had vacated.

    PARIS 00003360 003 OF 004

    She had never won a tough election battle, he contended, and
    there were no assurances that she would be able to do so. He
    described her several times as "fragile but not in the
    feminine sense," not up to a real debate on the issues. The
    problem, he admitted readily, was that she was currently
    popular and that even her most banal pronouncements -- such
    as being a "Blairite" in the positive sense when it was he,
    DSK, who had carried this label for years -- were greeted as
    major media events.

    DSK's Strategy for Winning
    --------------------------
    ¶12. (C) Asked to outline his own strategy for winning the
    presidency, DSK said that the party was currently divided in
    thirds between supporters of Royal, of him, and of former
    prime minister Laurent Fabius. His hope was that a debate --
    the holding of which he admitted would be difficult to
    arrange -- among candidates within the party would produce a
    choice based on substance and that candidate's potential for
    defeating Sarkozy. He did not believe Royal could win on
    either count. New PS members had joined on the basis of
    being able to participate in the outcome, and this could not
    occur without a debate; if Royal tried to prevent a debate,
    then she would be perceived as hiding something. DSK
    summarized his strategy as getting past the highest hurdle
    first: the key for him would be to come in at least second in
    the initial first round of the party's selection (not at all
    a sure thing), and then win in the second round. (Note: The
    clear implication was that if DSK and Royal survive the first
    round, the supporters of Fabius would shift their support to
    DSK in the second round.) Similarly, in the presidential
    elections, if DSK made it to the second round (which he
    believed would be possible for whoever was the PS candidate),
    then he would be the best positioned to defeat Sarkozy in the
    final round.

    Jospin Out; Hollande's Mistakes
    -------------------------------
    ¶13. (C) DSK did not believe that former prime minister
    Jospin would be the party's nominee, as he could not seek the
    nomination directly and the party was unlikely to offer it to
    him on a platter absent some serious crisis. DSK believed
    that he would benefit most from Jospin supporters, given
    Jospin's opposition to Royal and Fabius. DSK was critical of
    First Secretary Hollande, saying that he had yielded to the
    temptation of being a presidential candidate himself, when
    more even-handed treatment of other candidates would have
    assured him a place as prime minister in any new government
    and kept alive his presidential aspirations for the future.
    Hollande was described as a good tactician but poor
    strategist, who would be left out in the cold if Royal won,
    given his status as her domestic partner. DSK claimed that
    Hollande had initially proposed Royal's candidacy as a way to
    preserve his own chances, but that the sorcerer's apprentice
    had taken on a life of her own. This attempted
    "privatisation" of the party's agenda had damaged Hollande's
    reputation.

    Domestic Situation Key
    ----------------------
    ¶14. (C) Looking to the 2007 presidential elections, DSK
    criticized Villepin for putting students in the streets over
    a triviality (the CPE, or First Employment Contract) rather
    than something important and more worthy of a fight. The
    main issue, DSK said, is economic growth, not this or that
    reform of the labor code. France needed to focus on basic
    reforms, such as of its universities, not on whether a youth
    under 26 could be fired without a proper explanation. Given
    the overall sense of insecurity in France, particularly among
    parents who feared that their children would have worse lives
    than they, DSK thought foreign policy would play only a very
    modest role in the elections, notwithstanding the public's
    interest in Iran and terrorism.

    ¶15. (C) Nor did DSK believe that Europe would be a major
    election issue, since France was currently too obsessed with
    its own situation to look more broadly even toward Europe.
    DSK said the 2007 presidential elections would evolve around
    the same set of issues, with the left and right platforms
    being mirror images of each other. Sarkozy would emphasize
    immigration and security, and the left would emphasize
    employment and integration. He predicted that if Sarkozy
    succeeded in getting voters to focus on security, then he
    would win, whereas the left would need to emphasize the
    economy. He said the left had lost in 2002 because it had
    allowed the right to set the agenda.

    Whoever Wins Will Have it Tough
    -------------------------------
    ¶16. (C) DSK said that whoever won the 2007 elections would
    have little room for maneuver in effecting change. Things

    PARIS 00003360 004 OF 004

    would not be as easy as in 1997, when it was possible to
    stimulate the economy out of recession. The left would need
    to take risks if elected, and work harder to reform the
    system. It would be critical to act quickly, based on the
    mandate of an election. For the mid-term, DSK cited the
    importance of more investment in growth sectors. Over the
    shorter term, it was important for French companies to regain
    confidence in France. He blamed Chirac for creating anxiety
    in business and cynicism among the elites. Part of Royal's
    current success was that she had tapped into the country's
    need to have pride in itself. DSK suggested that little
    would remain of Chirac's European legacy besides a failed
    referendum and a proposal to reduce the value-added tax for
    French restaurants. France, he said, needed someone who
    could show the way forward. Sarkozy could do that, he said,
    but Royal would be unable to do so. There was not enough
    "beef" there.

    One Last Bold Step from Chirac?
    -------------------------------
    ¶17. (C) DSK concluded with the thought that it was not too
    late for Chirac to show true leadership. He could quit now,
    call for a renewal of France, call for early elections, and
    announce his resignation for a date that would permit both
    sides to prepare properly for them. In this way he could
    serve France and save his reputation. DSK stopped there,
    obviously concluding, but not saying, that Chirac would never
    do it.

    Comment
    -------
    ¶18. (C) DSK was lively and engaging, full of good humor, and
    remarkably modest and without pretensions. That may prove to
    be his undoing. While he was openly critical of Royal, he
    also readily admitted that she was doing many things right.
    And while he clearly viewed himself as the right man to lead
    France, he seemed reluctant to beat his own drum and was
    spare with prescriptions about what he would do if chosen to
    be France's next president. The impression left was that,
    while he may be the most capable and qualified candidate
    among the Socialists, he lacks the fire in the belly that
    would propel him to victory. He is one of those who would
    clearly be better governing than campaigning -- and therefore
    may never get the chance to govern.

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

    Stapleton

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