Cablegate: Employers Union Boss Says France at an Inflexion Point

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TAGS: ECON EIND EINV ETRD ELAB PGOV FR
SUBJECT: EMPLOYERS UNION BOSS SAYS FRANCE AT AN INFLEXION POINT

1. (U) Summary: In a September 6 off-the-record breakfast MEDEF
(French employers union) President Laurence Parisot told a group of
business leaders and opinion makers that France was at a turning
point. In a session that ranged from the Doha trade round, to
relations with labor unions, to France's upcoming presidential
elections Parisot said the choices facing France today would
determine whether it went down the road of progress or "poverty."
End summary.

2. (U) At an informal September 6 gathering of business and
political leaders (sponsored by the weekly L'Express) MEDEF
president Laurent Parisot said she was "optimistic" coming off
MEDEF's "summer university" that had featured EU President
Jose-Manuel Barroso. Barroso had told the MEDEF gathering that
France was a champion of globalization "without knowing it." But
Parisot said Barroso's message that EU member states were "equals in
dignity" had also been a useful dose of humility for a French
audience that has difficulty reconciling ambitions to lead Europe
with the reality of its inability, at times, to do so.

3. (U) In opening remarks focused on Europe, Parisot said she put
considerable stock in the EU's Lisbon agenda. MEDEF will embark on
an informational campaign to familiarize France's business class and
entrepreneurs with its content. Parisot said she would also ask the
GOF to appoint a "Monsieur/Madame Lisbon Agenda" -- someone with
sufficient gravitas to raise the visibility of the Agenda in France
and help shepherd reform. "(Lisbon) is a political ambition, it
needs to be known by the public."

4. (U) On France's upcoming presidential election Parisot said MEDEF
could live with "a market economy of the right or left, as long as
it's a market economy." MEDEF would prepare a "white book," to be
issued in November, outlining what it sees as key issues facing
France. Parisot said MEDEF plans to be "very present" in the
campaign and had established several internal commissions to develop
policy recommendations -- and remind all candidates of the French
business community's policy priorities.

5. (U) Among chief concerns, Parisot enumerated reform of the
collective bargaining system, reform of the unemployment system, and
educational reform. On the first point Parisot said she would
welcome stronger membership in French labor unions as a means of
creating more reliable "social partners" for French business. An
excessive state role in the bargaining process reduced the incentive
for workers to look out for their own interests, Parisot thought.
MEDEF supported constitutional reform that would reduce the role of
the state and give businesses and their "social partners" the right
to bargain and establish employment contracts directly.

6. (U) Parisot bemoaned the discourse of "class warfare" favored by
some unions, calling it completely out of touch with today's
economy. In informal conversation she could find common ground with
union leaders on the changing nature of employment in a 21st century
economy. But getting agreement to anything on paper was impossible,
she said. But Parisot stopped short of supporting a call for ending
the unions' monopoly in representing employees during collective
bargaining. France's extreme political left was "relatively strong"
and Parisot feared it could exploit the issue in a way that would be
"disastrous" for business.

8. (U) Asked for her views on the Doha trade round, Parisot said
MEDEF had encouraged progress in negotiations and was disappointed
with the current state of affairs. Its membership had become more
active in pressing its views during the negotiations, she said. And
MEDEF was becoming increasingly willing to "break taboo" and
disagree openly with French agricultural union, FSNEA, on WTO
issues.

9. (U) In a brief exchange on "economic patriotism" Parisot said she
had told Prime Minister de Villepin that she didn't necessarily
object to the principle, as long as it didn't involve constructing
commercial "Maginot Lines." The truest form of "economic
patriotism" would be to create a French policy environment that was
as attractive as possible for doing business, she concluded.

10. (SBU) Comment: MEDEF's high profile end-August "summer
university" and Parisot's comments at the September 6 off-the-record
breakfast indicate MEDEF and the French business community will look
to stake out a higher profile in the upcoming campaign than has
traditionally been the case here. (MEDEF has been somewhat the
wallflower during the Doha Round and during France's CPE debate last
spring.) The upcoming presidential campaign will be as much about
style as substance. A key part of the substantive debate, however,
will center on reform that calls for accelerated free-market
liberalization (advocated by the center-right) as against reform
that highlights continued, possibly increased, protections for those
most likely to be the losers in market-driven change (advocated by
the center left). What the French call the "peoplization" of
politics (i.e. the preponderant role of image in determining voters'
choices) does complicate the MEDEF's intention to spark serious
debate about the employment and investment practices of France in
the 21st century. However, such far-reaching debate, followed by

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the making of a clear-cut electoral choice, is long overdue, and
both the public and key leaders in the major political parties
recognize that. The MEDEF, if it does so with political sensitivity
and sound argument, could play a key role in framing this debate for
a French public by and large quite suspicious of business and
dismissive of commerce.

HOFMANN

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