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Cablegate: Sarkozy Hears Fishermen's Complaints Before Traveling To

VZCZCXRO9215
OO RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHFR #4428 3101511
ZNR UUUUU ZZH
O 061511Z NOV 07
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC IMMEDIATE 1020
INFO RHEHNSC/NSC WASHINGTON DC IMMEDIATE
RHEHAAA/WHITE HOUSE WASHDC IMMEDIATE
RUCNMEM/EU MEMBER STATES

UNCLAS PARIS 004428

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EUR/WE

E.O. 12958: N/A
TAGS: ELAB PREL EFIS FR
SUBJECT: SARKOZY HEARS FISHERMEN'S COMPLAINTS BEFORE TRAVELING TO
U.S.

1. (U) Nicholas Sarkozy traveled to Brittany to meet with fishermen
protesting the increased cost of diesel fuel just before his
departure for the United States Tuesday November 6. In a
contentious meeting-punctuated by protesters' insults and
presidential disdain and anger in response, Sarkozy proposed a
compensatory six-month suspension of employer taxes that he
estimated was worth 21 million euros. He also said that Agriculture
and Fisheries Minister Michel Barnier would work on a new mechanism
to facilitate passing cost increase to consumers, replacing a
previous subsidy invalidated by the EU in January of 2007.

2. (SBU) French fishermen do not pay either fuel tax or VAT on
diesel fuel. Because of this relatively lower cost recent increases
have hit them proportionally harder than the average French
consumer, with fuel costs consuming approximately 40% of their
revenue.

3. (SBU) Comment: Sarkozy demonstrated both strong commitment to
defend his reform agenda with an angry constituency and flexibility
in proposing some industry-specific measures to calm the fishermen a
week before major announced transportation and energy strikes.
Sarkozy hopes to avoid additional labor unrest and to prevent a
coalescence of protests that could derail his reform efforts.
Sarkozy also seeks to sidestep further politicization of the high
cost of energy, given his government's current refusal to lower high
energy taxes on both budgetary and environmental grounds. But by
putting himself yet again on the front lines, Sarkozy risks drawing
the fire of yet another narrow, but strongly motivated,
constituency. While the various groups opposed to aspects of the
Sarkozy reform program - transport workers, civil servants, teachers
-- have yet to make common cause, the more frequently the president
puts himself in the position of negotiator-in-chief, the more likely
that becomes.
PEKALA

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