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Cablegate: French Research Gets a Budget Boost

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

UNCLAS SECTION 01 OF 03 PARIS 006874

SIPDIS

DEPT FOR OES, EUR/WE
WHITE HOUSE FOR OSTP
DEPT PASS NSF/INT/GOMBAY/SLIMOWITZ
DOE FOR OFFICE OF SCIENCE
USDOC FOR NOAA

E.O. 12958: N/A
TAGS: TSPL EFIN KSCA TPHY FR
SUBJECT: FRENCH RESEARCH GETS A BUDGET BOOST

REF: (A) PARIS 1081 (B) 04 Paris 7224

1. Summary: With an additional one billion euros for
research and 3000 more jobs, the Research and Higher
Education Ministry (RHEM) looks like one of the few winners
in the 2006 French budget process. Roughly one-third of the
increase is allocated to public research labs and university
research; one-third will serve as a fiscal incentive to
promote innovation; and one-third will go to the recently
established National Research Agency (NRA, ref A) to fund
specific research projects in accordance with GOF
priorities. Still anticipating the Research and Innovation
Bill and a multiyear financial commitment, some in the
science community remain skeptical. End summary.

New Budget Bottles...
---------------------

2. On September 28, the GOF set out its 2006 budget.
Because of a new Budget Law (septel), this budget is
presented in a new format. Allocations are no longer
associated with specific ministries but rather are presented
by missions, programs, and specific actions. The 2006
budget includes 34 missions, a number of which involve more
than one ministry. The "Research and Higher Education
mission" is entrusted to a new entity, the interministerial
Commission for Research and Higher Education (ICRHE),
overseeing both the civilian budget for R&D and the Higher
Education Budget. ICRHE in turn supervises 13 different
programs-the `metes and bounds' of which are still to be
worked out-affecting seven ministries. The new budget tool
is designed to provide a more holistic vision of scientific
research funding and facilitate parliamentary oversight of
the use of public funds. For the moment, however, with few
disaggregated figures, the new budget presentation makes GOF
comparisons with previous years difficult.

Just the figures
----------------

The ICRHE 2006 budget amounts to 20.7 billion euros, which
amounts to a 4.4% increase over 2005. (This overall figure
includes the Higher Education budget that was not within the
purview of the Research Ministry in 2005 (ref B). The 2006
research (and higher education) budget is as follows in
million of euros:

- Higher education/univ. research 10,125 (+10% vs. 2005)
- Scientific and technical research 3,602 (-02% vs. 2005)
- Space research 1,248 (+01% vs. 2005)
- Energy sector research 658 (+07% vs. 2005)
- Industrial research 527 (+24% vs. 2005)
- Other 4,527
-------------------------------------------
Total 20,700 (Approx.)


(Detailed budget breakdowns are unavailable for either
research disciplines or public research agencies.)

4. The 2006 budget is in line with President Chirac's
commitment in 2004 to increase spending for government
research by an additional one billion euros annually from
2005 to 2007. The budget increase for 2006 will be
allocated as follows:

- 389 million euros will serve to reinforce/augment funding
for traditional public research agencies and university
research;

- 340 million euros are earmarked as tax incentives to boost
industrial research in the private sector (1.2 percent of
GDP presently);

- 280 million euros will be used to fund priority
(public/private) research programs within the framework of
the policy defined by the GOF. This money will be
distributed via the NRA (see para 6).

"Priorities:" Merit-based Selection, Competitiveness,
International Attractiveness
--------------------------------------------- --------

5. The GOF will devote an additional 50.3 millions euros to
reinforce its "most successful teams" in public research
agencies. Part of the extra money is also earmarked for the
development or modernization of national scientific
equipment--such as SOLEIL (Synchrotron under construction at
Saclay near Paris), GANIL (high resolution gamma-ray
spectroscopy)-- and help France meet its international
commitments (e.g. CERN, and European Southern Observatory
ESO).

National Research Agency - New kid on the block
--------------------------------------------- --

6. The GOF has begun an ambitious effort to rethink its R&D
strategy, organization, evaluation, and funding as reflected
in the forthcoming Research and Innovation Bill. The 2006
research budget reflects the increase in importance of the
NSF-style National Research Agency (NRA) - in French, Agence
Nationale de la Recherche (ANR). Its 2006 budget amounts to
590 millions euros, a 70 percent increase over 2005. It
will be used to encourage basic and applied research
programs selected on the basis of a competitive, merit-based
review system; to help develop public/private partnerships;
and to facilitate technology transfer to the economic world.

Not forgetting industrial research.
-----------------------------------

7. The annual budget of the Agency for Industrial
Innovation, also established in 2005, is to increase
significantly. The cumulative total funding for industrial
innovation from 2005-2007 is to equal 2 billion euros. A
more attractive version of the tax incentive for research
(Credit d'Impot Recherche, or CIR) will be offered to French
companies, together with specific tax relief for "Young
Innovative Companies" and companies carrying out R&D in
newly designated "competitiveness clusters." Subcontracting
costs and expenses related to the hiring of young
researchers will be taken into account (reduction of social
security charges).

Public-private cross-fertilization
----------------------------------

8. To encourage "cross-fertilization" between public and
private research, the government will grant public research
labs working in partnership with the private sector a
specific label and additional subsidies (40 million euros to
be distributed to these labs by NRA in 2006).

Adding Scientists to the payroll
--------------------------------

9. The French government also announced the generation of
3000 new permanent posts in 2006: 1876 in universities (1079
teacher-researchers, and 797 engineers, technicians, and
administrators); 1100 in public research agencies, and 24
for higher education in the agricultural sector. This
effort will reportedly be "further pursued" in 2007.
Research grants for junior researchers (PHD/postdoc),
presently under the guaranteed minimum wages (or SMIG) in
France, will be increased 8 percent in 2006 and again 8
percent in 2007.

But no multiyear financial commitment in sight
--------------------------------------------- -

10. Aware of the deep discontent and growing expectations
in the science community, PM Dominique de Villepin announced
on September 29 that the 2007 research budget will benefit
by a similar hike as in 2006 and promised that "the public
effort in favor of research and higher education will
increase to 24 billions euros in 2010," representing a 26
percent increase over 2004. Research Minister Goulard said
that the GOF plans to devote an additional 19 billion euros
to research between 2004 and 2010, which should "act as a
powerful lever on the industrial sector and permit it to
realize the EU 2010 commitment of 3 percent of GDP to
research." However, French authorities have also been heard
to say that the new research bill package will not include
additional financial commitments beyond 2007.

11. Comment: Beyond the somewhat opaque 2006 budget figures
themselves and the usual controversy about whether tax
incentives should be considered as real budgetary funding,
the science community awaits the final draft of the Research
Bill. Many fear that it will blur the distinctions between
research and industrial policy. While the science community
at large does not appear ready to return to the streets, it
remains watchful of the government's every move.
STAPLETON

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