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

UNCLAS SECTION 01 OF 12 PARIS 000720 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR PM/SNA, EUR/WE; OSD FOR OSD/PA&E, OASD/ISA/EUR, 
OASD/ISA/NP, OASD/ISA/AP, OASD/ISA/NESA AND OASD/ISA/BTF 
 
E.O. 12958: N/A 
TAGS: PREL MARR MCAP FR
SUBJECT: EMBASSY PARIS SUBMISSION TO THE 2005/2006 REPORT 
TO CONGRESS ON ALLIED CONTRIBUTIONS TO THE COMMON DEFENSE 
 
REF: A. STATE 223383 
 
     ¶B. PARIS 000005 
 
 
This message is sensitive but unclassified.  Not for 
Internet dissemination. 
 
Due to its length, this is the final part of a 
three part message. 
 
¶80.  (U) In support of the tsumani relief in Sout-East 
Asia, the French Gendarmerie provided serveral investigators 
to assist in the identification of victims. 
 
¶81.  (U) Other humanitarian efforts.  In 2004, during the 
annual Jeanne D'Arc training cruise 9000 vaccinations were 
given, 519 tons of humanitarian supplies were delivered. 
During a deployment of the Dupleix, 180 tons of 
humanitarian supplies were delivered. 
 
 
--------------------------------------------- ----- 
Subparagraph D.  Capacity Building:  Strengthening 
Governance in the World. 
--------------------------------------------- ----- 
 
¶82.  (U) The major part of France's efforts at capacity 
building in the world is focused on Africa.  France relies 
on its forces stationed in seven nations to conduct most of 
its capacity building operations.  These include Cameroon, 
Togo, the Central African Republic, the Gulf of Guinea, 
Haiti, and Cote d'Ivoire.  Additionally, France uses 
forward presence forces; those stationed through bilateral 
defense agreements, for capacity building operations. 
Foreign presence forces are in Gabon, Djibouti, Senegal, 
the Indian Ocean, and the Pacific Ocean.  The table on 
French Force Disposition and Exterior Operations presents 
the detailed numbers of personnel in each location and the 
additional expenditures of each operation.  In total, these 
capacity building measures cost France 650 million Euros in 
2004 (approximately USD 790 million). 
 
¶83.  (U) The RECAMP (Reinforcing the Capabilities of 
Africans to Maintain Peace) program remains France's 
flagship strategy for defense and military cooperation in 
Africa.  The goal of RECAMP is to support an autonomous 
African security capability.  It is also a multinational 
program to support the stability of Africa.  RECAMP is 
based on three pillars: cooperation, training, and support 
of African operational engagements.  To support operations, 
France provides African forces with the materials and 
equipment necessary to deploy from three French battalion- 
size RECAMP depots.  These depots are located in Dakar, 
Libreville, and Djibouti.  France has offered to make these 
depots available for USG use.  The French Military 
Cooperation Directorate has a 100 million Euro annual 
budget and manages a network of 220 French military 
personnel located at African military schools and training 
centers. 
 
¶84.  (U) In the last cycle for RECAMP IV in West Africa 
(Benin) in 2004 -2005, there were 14 African and 16 non- 
African participating states, including the United States. 
France seeks the participation of all African states in 
RECAMP and solicits participation bilaterally and through 
the African Union and sub-regional organizations.  France 
also seeks multinational participation in the form of donor 
states and an increasing role of the European Union (EU). 
The program's present orientation focuses at the strategic- 
level and seeks to prepare the African sub-regional 
organizations and eventually the African Standby Forces 
(ASF) for peacekeeping, humanitarian assistance, and 
disaster relief operations. 
 
¶85.  (U) Additional Capacity Building Examples:  During 
2005 in Chad, more than 300 French air force aviators 
conducted security and reconnaissance missions within the 
framework of the humanitarian operation Darfur. 
 
¶86.  (U) French Gendarmerie has taken the lead in the 
development of the European Gendarmerie Force.  The initial 
commander of the force in the development of the 
headquarters is a French Gendarme General and the first 
headquarters exercise was conducted in France.  The 
Gendarmerie has been consistently been asked to provide 
general and specialized training to other Gendarme forces 
or police forces throughout the world and particularly in 
the middle east and Africa.  In fact, one French military 
police detachment is deployed in support of the United 
Nations Interim Force in Lebanon (UNIFIL) 
 
¶87.  (U) In Haiti, 40 Gendarme personnel supported the 
Multinational Stabilization Force  (MINUSTAH) as part of 
the 1,000-man contingent of French personnel. 
 
88  (U) Over 150 Gendarme personnel provided international 
police support for the United Nations Mission to Cote 
D'Ivoire (UNOCI) and to support French intervention during 
operation Licorne.  This contingent helped protect and 
guard functions for diplomatic and disarmament missions of 
the Joint Tactics Group. 
 
¶89.  (U) In both 2004 and 2005 French Gendarmerie supported 
International Police Missions with detachments of officers 
and Gendarmes in the Democratic Republic of the Congo, 
Chad, and the Central Africa Republic.  In 2004, French 
Gendarmes conducted training for the establishment of a 
European Union Integrated Police Unit in Kinshasa, Kenya. 
In the years 2004 and 2005 approximately 600 French 
National Gendarmes were deployed outside France in support 
of operations or as reinforcements to diplomatic missions. 
Although the numbers fluctuate between the years, the 
approximate strengths provided reflect France's general 
willingness to contribute gendarme personnel and forces in 
support of international efforts. 
 
¶90.  (U) In the summer of 2004, the French began a joint 
fighter pilot training school in Cazeaux, France. Spain, 
Germany, Singapore, Greece, Switzerland and Poland have 
indicated interest in joining. The French also completed 
air policing agreements with Spain, Germany, Switzerland, 
and Italy allowing greater effectiveness of cross border 
air defense. 
 
--------------------------------------------- ----------- 
Subpara E:  Counterproliferation Contributions and other 
GWOT contributions 
--------------------------------------------- ----------- 
 
¶91.  (U) As a nuclear state, France endorses deterrence 
theory and holds to long-standing NATO doctrines.  It has 
consistently supported international arms control regimes 
as a means of bolstering stability and transparency.  It 
worked closely with the U.S. leading up to the 2000 
Nonproliferation Treaty review conference, and was actively 
involved with U.S. experts in preparing for the 2004 
prepcom.  Although the French remain concerned over 
cessation of U.S. efforts to achieve ratification of the 
Comprehensive Test Ban Treaty (CTBT), French officials have 
also endorsed the need for updating international strategic 
doctrine to include protections such as missile defense, as 
well as deterrence and regulatory measures. 
 
¶92.  (U) France serves effectively as permanent secretariat 
for the Missile Technology Control Regime (MTCR) and 
participates actively in the Australia Group for the 
control of chemicals, bio-agents/toxins, and technologies 
related to CBW, as well as the Nuclear Suppliers Group 
(NSG) for controlling nuclear-related, dual-use 
technologies.  France strongly supports U.S.-initiated 
Global Threat Security Initiative efforts, and pursuant to 
that initiative hosted a major conference in Bordeaux in 
June 2005 on identifying radiological sources.  It has 
worked closely with the United States on several transfer 
cases involving French companies under the Proliferation 
Security Initiative.  France has encouraged continued work 
within the UN Conference on Disarmament (CD) to help 
develop guidelines for a fissile material cutoff treaty 
regime, and supports activities of that body with respect 
to small arms and unexploded ordnance.  It coordinates 
closely with the U.S. on enforcement of the Chemical 
Weapons Convention at the OPCW in The Hague, and on 
implementation of the Biological Weapons Convention in 
Geneva. 
 
¶93.  (SBU) France accepted the U.S.-proposed G8 
architecture that would allow more effective use of the 
forum, as well as better management of ongoing G8 projects 
including those aimed at reducing stocks of weapons-grade 
plutonium in Russia.  (France also has a bilateral programs 
aimed at helping Russia destroy CW holdings.)  France has 
supported efforts to single out North Korea and Iran as 
states of particular concern on the proliferation front. 
The French support bringing North Korea before the UNSC for 
its violations of international nonproliferation 
obligations.  The French share U.S. concerns over Iran's 
pursuit of nuclear weapons; and with their British and 
German colleagues pursued EU3 negotiations to obtain 
Iranian compliance with Iran's Safeguard Agreement 
commitments.  EU3 efforts led to the signing of the Paris 
Agreement in November 2004, under which Iran suspended its 
nuclear conversion and enrichment efforts during ongoing 
negotiations on Iran's nuclear program.  Iranian resumption 
of conversion in August 2005, and research on enrichment in 
December 2005, led to suspension of Paris Agreement 
discussions.  France and its EU partners, with U.S. 
support, continue to pursue efforts to convince Iran to 
suspend its nuclear ambitions. 
 
¶94.  (U) The French military continues to maintain strong 
contacts with the U.S. and other NATO countries for 
contingency planning.  During 2004 and 2005, France 
conducted planning and exchanges with EUCOM and CENTCOM. 
French and U.S. analysts and planners share information on 
terrorism and WMD proliferation as well as political- 
military developments.  From the beginning of operations in 
Afghanistan (both OEF and ISAF), and the Lebanon crisis, 
French and U.S. planners have continued to work together to 
produce effective, timely results.  French forces 
permanently or temporarily stationed in Africa and Central 
Asia have assisted U.S. operations in the EUCOM and CENTCOM 
theater of operations. 
 
¶95.  (U) The French government also provides overflight 
clearance and landing assistance to US counter-narcotic 
operations in the SOUTHCOM theater of operations.  France 
maintains a liaison officer with the Joint Interagency Task 
Force-South, and provides access to French overseas 
territories for U.S. counter-narcotic operations. 
 
¶96.  (U) Since July 1, 2005 the French Armed Forces have an 
entirely deployable NBC defense regiment (2nd Dragoon 
regiment), which is equipped with specific tools to combat 
radiation, nuclear, biological and chemical risks.  This 
regiment's missions are to prevent and handle military or 
technological incidents as well as restore the operational 
capacities of the forces deployed. 
 
 
------------------------ 
------------------------ 
REF A PARA 13: 
PFP AND NATO ENLARGEMENT 
------------------------ 
------------------------ 
 
 
¶97.  (U) Since the inauguration of the Partnership for 
Peace (PfP) in 1994, France has supported the program and 
participated in its exercises.  France believes that PfP 
has increased awareness of NATO policies, procedures and 
standards among both aspirants and nonmembers that do not 
seek membership but that nevertheless wish to participate 
in collective security arrangements.  France believes that 
the involvement of Central Asian and Caucasus states in PfP 
has directly increased their willingness to assist in the 
war on terrorism.  France was an early supporter of the 
broad-based invitation list accepted at the Prague Summit. 
France favors continued MAP-related assistance to 
Macedonia, Albania, and Croatia, and essentially shares 
U.S. perspectives on eventual PfP membership for Bosnia- 
Herzegovina and Serbia-Montenegro.  France favors extending 
PfP-like benefits to states in the current Mediterranean 
Dialogue. 
 
 
----------------------------------- 
GENERAL DATA ON THE FRENCH MILITARY 
----------------------------------- 
 
¶98.  (U) French Force Dispositions and External Operations: 
As of December 
LOCATION/   2004 2005 TYPE 2004 
OPERATION   Per # Per # Mission 
Cost/M 
Euros 
Haiti/MINUSTAH    42   42 CB Na 
Gulf Guinea/CORYMBE  103  230 CB   6.23 
Cote d'Ivoire/LICORNE 5455 4166 CB 186.0 
Cameroon     50   49 CB   2.99 
Togo/Gabon/LICORNE  268   99 CB Na 
CAR/BOALI/FOMUC   213  217 CB   7.7 
Chad    1066 1086 CB Na 
Macedonia/ARYM    27   17 IM   4.56 
Bosnia/EUFOR/EUPM   598  476 IM  67.9 
Kosovo/KFOR/MINUK  3267 2239 IM 146.5 
Georgia/MONUG     3    3 IM Na 
Lebanon/Israel/UN   209  200 IM Na 
Palestine      0    3 IM Na 
Sinai/FMO     15   15 IM Na 
Afghan/OEF/ISAF  1270 1047 IM  99.3 
Afghan/BAHRAL     0   49 IM Na 
OEF/CJTF150 +HOA   290  681 IM Na 
BERYX       0   10 IM Na 
Ethiopia/MINUEE     1    1 IM    .1 
Sudan-Darfur/DORCA    4    9 IM Na 
Burundi/MONUC     3    1 IM Na 
DROC/MONUC     17   16 IM   2.3 
Liberia/UNMIL     2    1 IM Na 
¶W. Sahara/MINURSO    25   24 IM   1.2 
Pacific Ocean   182  176 FP Na 
Senegal   1107 1226 FP Na 
Djibouti   2873 2831 FP Na 
Gabon     648  722 FP Na 
Indian Ocean   390  466 FP Na 
French Guiana  3257 3353 SF Na 
Antilles   4201 4202 SF Na 
Reunion-Mayotte  3983 4133 SF Na 
New Caledonia  2654 2757 SF Na 
Polynesia   2592 2153 SF Na 
St Pierre/Miquelon   77   68 SF Na 
 
Total    34,947 32,798 
CB:  Capacity Building Forces 
IM:  International Mandate Forces 
FP:  Forward Presence Forces 
SF:  Sovereignty Forces 
 
 
 
Army: Major Equipment Deliveries 2004-2005 
------------------------------------------ 
 
Intelligence: 
 -18 UAV 
Command and Control: 
 -60 2nd Generation Tactical and Intelligence Systems 
Aviation: 
 -10 Tiger Helicopters 
Armored Vehicle Systems: 
 -60 LECLERC Tanks 
 -8 Tank Recovery vehicles 
 -32 AMX 10RC Armored Personnel Carrier upgraded 
 -660 VAB Wheeled Armored Personnel Vehicles 
 -130 VB2L Command and Control Vehicles 
Artillery and Counter-Fire Systems: 
 -38 canons 155mm AUF 1 TA 
 -6 radars COBRA 
 -5 systems ATLAS 
Transportation: 
 -1,000 GBC 180 Trucks 
 
 
 
Navy: Major Equipment Deliveries 2004-2005 
------------------------------------------ 
 
Intelligence: 
 -1 Intelligence collection ship 
Submarines: 
 -1 Ballistic missile submarine 
Ships: 
 -4 Minesweepers 
 -1 Ocean going Tug 
 -1 Research Vessel 
Missiles: 
 -80 Mica Air to Air 
 -40 Crotale (marine) 
 -50 Aster Ground to Air 
 -20 Scalp-EG Cruise Missile 
 -50 Torpedoes 
 
 
Air Force: Major Equipment Deliveries 2004-2005 
--------------------------------------------- --- 
 
Aircraft: 
 -10 Rafale fighter aircraft 
 -3 UAV's 
 -1 A-310 Transport 
 -7 NH-90 helicopters 
Missiles: 
 -150 Mica Air to Air 
 -50 Scalp-EG Cruise Missiles 
 -40 AS-30 Laser Missiles 
Satellite:  -1 Syracuse Military Comm 
 
FRENCH MILITARY PERSONNEL 2004-2005 
----------------------------------- 
 
TYPE  Army  Air Force  Navy 
Officer   16,500 
6,875    5,100 
Enlisted  117,500 
52,600   40,100 
Civilian   27,500 
6,500    9,600 
Total  161,500  65,975 
54,800 
 
 
 
 
--------------------------- 
MAJOR ECONOMIC DEVELOPMENTS 
--------------------------- 
 
¶99.  (U) Please note that the new French presentation of 
budgetary information (the LOLF, first mentioned in 
paragraph 29) is sufficiently complicated to compel embassy 
Paris to include more detail on this new means of reporting 
economic information (see paragraphs 111-113). 
 
¶100.  (U) France is presently the fifth largest industrial 
economy in the world, with a USD 2 trillion annual Gross 
Domestic Product (GDP), about one sixth the size of the GDP 
of the United States in 2005. France is the fifth-largest 
exporter and the fourth-largest importer in the world 
merchandise trade, and is a global leader in high 
technology, defense, agricultural products and services. 
France is the ninth-largest trading partner of the United 
States and our third largest in Europe (after Germany and 
the UK). 
 
Economic Growth 
--------------- 
 
¶101.  (U) Real GPD in France rebounded to 2.1% in 2004, 
compared to 0.9% in 2003, thanks to reviving domestic 
demand, which turned in one of the best performances in the 
EU-15.  Nonetheless, economic recovery became less robust 
under the shocks of oil price hikes and the rise in value 
of the euro against the dollar.  The government realized 
early in 2005 that achieving its 2.5% GDP growth objective 
would be hard to achieve without taking some action.  In 
February, May, and June 2005, the government announced 
measures to encourage consumption, stimulate activity of 
companies, boost exports, and tackle unemployment.  Most of 
these measures are not likely to have immediate impacts. 
The "No" vote in France's May 29, 2005 referendum on 
Europe's new constitution was widely interpreted as a sign 
of French voters' deep-rooted unease with France's economic 
and social malaise.  Public-sector unions' demonstrations 
against government plans to reduce the size of the 
government (e.g., cut jobs), as part of France's European 
commitment to reduce the budget deficit to below 3% of GDP 
in 2005, fed public fears of outsourcing, enlargement of 
the European Union, immigration, deregulation of European 
markets and further deterioration in the labor situation. 
After the referendum vote, the French government underwent 
a cabinet shake-up, and in September 2005, the government 
unveiled its plan for a "social economy", the key feature 
of which is the retention of the French social model. 
 
¶102.  (U) Despite government measures, real GDP growth 
weakened in 2005, and the government had to revise its GDP 
growth target from 2.5% to 2.0%, and later shift to a GDP 
growth target range of 1.5 to 2%.  Nonetheless, in January 
2006, the government said that it was confident 2005 GDP 
growth would fall within the 1.5-2.0% range, predicting a 
2.0-2.4% (annualized) growth in the fourth quarter. 
Economists, members of the Consensus Group of 17 banks and 
institutions, forecast GDP growth to range from 1.8% to 
2.1% in 2005.  Two thirds of them forecast GDP to increase 
at least 2% in 2006. That is the bottom of the 2.0-2.5% 
range the government has forecast for 2006. 
 
Inflation 
--------- 
 
¶103.  (U) Inflation in France remains low and under 
control, despite oil price increases.  Wage increase 
requests remained moderate in 2004 and 2005 due to the weak 
labor situation.  Consumer prices increased 1.5% in 
December 2005 on a year-over-year basis, compared with 2.1% 
in December 2004. 
 
Labor Situation 
--------------- 
 
¶104.  (U) The unemployment rate remained unchanged at 10% 
throughout 2004.  Unemployment decreased to 9.6% in 
November 2005 after peaking at 10.2% in March 2005, a 5- 
year high. It remained higher than the government objective 
of 9% for a variety of reasons, including low job creation 
in the private sector, despite a decrease in persons 
looking for work and government measures introduced in 2005 
for job creation, including government-subsidized 
contracts.  With the 2007 presidential elections in mind, 
the government has chosen to subsidize job creation, rather 
than press for economic reforms to address structural 
causes of unemployment.  In January 2006, the government 
announced the creation of another new employment program 
aimed at boosting youth employment, since the youth 
unemployment rate remained high (22.8% in November 2005). 
Prior to this announcement, private-sector economists had 
projected the unemployment rate to decrease only slightly 
in 2006 due to modest job creation in the private sector. 
 
Budget Deficit, Public Debt and the EU Stability and Growth 
Pact 
--------------------------------------------- -------------- 
 
¶105.  (U) In 2004, France broke the EU stability and growth 
pact limit with a budget deficit over 3% of GDP for the 
third straight year.  The 2004 overall budget deficit 
including central government, social security and local 
authorities exceeded 3.6% of GDP in 2004, falling from 4.2% 
in 2003 due lower growth in central government spending. 
The deficit remained above 3% of GDP mainly due to a rise 
in social security expenditures, notably health insurance. 
The government has been struggling to reduce the budget 
deficit in the face of lower-than-expected economic growth. 
Reducing the budget deficit depends on high tax receipts 
(thus on solid economic growth), finding ways to check 
social spending, particularly for health care, and sticking 
to a "zero budget growth" policy among all ministries, 
while being mindful of opposition politicians and unions' 
resistance to reforms. 
 
¶106.  (U) In January 2006, Finance Minister Thierry Breton 
said that the economy's vigor in the second half of 2005, 
combined with strict control of central government budget 
spending, made him confident that France would finally 
respect the 3%-of-GDP ceiling in 2005.  Higher than 
expected tax receipts at year-end 2005, notably due to an 
earlier collection of the corporate income tax downpayment, 
allowed the government to project a budget deficit of 2.9% 
in 2005.  Nonetheless, the overall deficit is still overly 
dependent on progress tackling the public sector health 
insurance deficit. 
 
¶107.  (U) France's public debt continued to significantly 
exceed the EU's stability and growth pact limit of 60% of 
GDP, amounting to 64.7% of GDP in 2004, and an estimated 
66.2% of GDP in 2005.  To fund its debt and repay maturing 
debt, the government will sell 125 billion euros in notes 
and bonds in 2006.  In 2005, much of the financing of the 
public debt came from payments by the state-owned company 
Electricite de France, in exchange for the government 
assuming pension liabilities.  The government will be 
considering other proposals to reduce the public debt, and 
is earmarking privatization proceeds for debt reduction. 
 
Reforms 
------- 
 
¶108.  (U) France has to pursue efforts on structural 
reforms to achieve its full economic potential and to 
improve its competitiveness.  Prime areas for reform 
include continued tax and government spending reduction, 
increased flexibility of labor markets, and further 
deregulation of goods and services sectors.  The 
government, formed after presidential and legislative 
elections in spring 2002, has undertaken reforms slowly. 
President Chirac appears determined to keep electoral 
promises, such as tax cuts.  The French benefited from five 
per cent income tax cuts in 2002, one percent in 2003, and 
another three per cent in 2004.  However, the government in 
2005 had to stop cutting taxes due to its ballooning budget 
deficit.  On the positive side, France has responded to 
competitive pressures by implementing market-oriented 
economic reforms of its pension and health insurance 
systems, simplifying administrative procedures, and 
offering a variety of investment incentives.  France is 
changing its historic tendency of centralization in favor 
of transferring more power to its regional territories, to 
free the territories' energies, to eliminate redundant 
structures, and to make productivity gains at the national 
and local levels.  In 2005, the government made labor 
regulations more flexible to facilitate lay-offs, modified 
the law to make the 35-hour workweek more flexible and 
created new hiring contracts which limit minimum lay-off 
procedures for companies of less than 20 employees. 
Negotiations between businesses and employees 
representatives begun in December 2005 might result in a 
reduction of unemployment benefits.  The government has 
indicated its intention to continue reforms:  reforming the 
tax structure, eliminating labor market rigidities, and 
scaling back the role of the state in the economy. 
Regarding privatizations, the government announced 
preliminary plans in 2002, but the subsequent global slump 
in air transportation and equity markets put a brake in 
privatizations through the sale of shares.  In 2003 and 
2004, the government reduced its stakes in large companies 
such as Air France-KLM (to 44.6 from 54.0 percent), France 
Telecom (to 42.2 from 54.5 percent), Thales (formerly 
Thomson CSF, to 31.3 from 33.3 percent), Renault (to 15.6 
from 26.0 percent), and Thomson (to 2.0 from 20.8 percent 
through TSA).  Smaller projects were carried out, such as 
the privatizations of SAPRR (Paris-Rhin-Rhone highway 
company), and of the electricity company SNET.  In 2005, 
the government sold shares in the energy sector companies 
EDF and GDF, retaining a 85.9% stake in EDF and a 79% stake 
in GDF, but postponed the privatization of the nuclear 
energy company, Areva.  After a long process in 2005, the 
sale of toll-road companies ASF, APRR and Sanef will be 
effective in early 2006.  Capital openings for employees of 
Aeroports de Paris and EDF are planned for 2006.  The 
government still has stakes in Bull and Safran (renamed 
after Sagem merged with Snecma), and in 1,280 other firms, 
and has stated its intention to continue privatization. 
 
Defense Spending - Defense budgets - 2006 Highlights 
--------------------------------------------- ------- 
 
¶109.  (U) The French central government budget process 
operates on a different cycle and with different precepts 
than the U.S. system. Budgets for the year ahead are 
adopted on or about December 30 of a given calendar year, 
and may be adjusted one or more times in the course of the 
year during which spending occurs.  The 2004 initial 
defense budget (E 41.6 billion including pensions or USD 
51.7 billion) was adjusted to include additional spending 
and cancellations.  The adjustment cancelled 471 million 
euros or USD 586 million to credit payments, and allotted 
870 million euros or USD 1,082 million to credit payments 
for military operating spending, including for external 
operations (608 million euros or USD 756 million). 
Similarly, the initial 2005 budget was modified, notably 
allotting 467 million euros (USD 581 million) to credit 
payments for external operations in 2005. 
 
¶110.  (U) The following tables trace the evolution of 
overall defense budgets from 2003 to 2006 in millions of 
euros.  Percentages reflect nominal changes, not/not 
corrected for inflation.  Post provides separate charts for 
planned and actual expenditures in order to demonstrate 
that within-year adjustments (use of support funds 
appropriations), as well as changes in appropriations and 
in the way they are allocated are the norm for France, and 
to emphasize that France increased its commitment to 
defense significantly beginning in 2003.  In 2004, defense 
spending increased 0.25% to 11.42% of the central 
government budget, and 0.5% to 2.01% of GDP. Based on 
initial government data, defense spending in 2005 accounted 
for 14.7% of the central government budget, and 2.5% of 
GDP. 
 
      Planned   Actual 
      Defense per cent.  Defense  per 
cent 
      Budgets change  Spending change 
      (INCL. pensions)  (EXCL. Pensions) 
 
 (euro millions)  (euro millions) 
 
2003   39,964 6.1  30,176  3.3 
 
 
2004   41,565 4.0  31,328  3.8 
 
2005  42,424 2.1  n.a. 
n.a. 
 
(Note:  Military pensions come under the defense budget in 
the planned budget, but are considered as civilian 
expenditures when the budget comes to execution.) 
 
---------------------------- 
Evolution of Defense Budgets 
---------------------------- 
 
           (euro millions) 
 
   CY03  CY04  CY05 
   ----  ----  ---- 
 
Title III   17,426 17,504 17,725 
(Operations) 
Credit Payments 
 
 
Title V & VI 13,644 14,898 15,198 
(Procurement 
and Debt Service) 
 
 
Total Credit 31,070 32,402 32,923 
Payments 
 
 
Title V & VI 15,300 16,769 15,315 
(Program 
authorizations) 
 
 
Pensions        9,810  9,910  10,062 
 
 
 
2006 New Presentation 
--------------------- 
 
¶111.  (U) Beginning in 2006, the government modified 
greatly its budget presentation pursuant to the August 1, 
2001 Law pertaining to financial bills ("Loi Organique de 
Loi de Finances - LOLF").  In an effort to improve 
transparency, the central government budget now shows 
spending categorized by missions and programs, no longer by 
ministry.  The 2006 CG budget includes 34 missions (nine of 
which are inter-ministerial), including the defense 
mission. 
 
¶112.  (U) The new budget presentation has modified the 
content of titles.  Former titles showed spending as 
follows:  Title I (Debt service), Title II (Public 
Authorities), Title III (Operating expenses), Title IV 
Government-backed measures and Title V and VI (Investment 
and investment subsidies).  The new Title 2 regroups wages, 
pensions and social contributions.  The new Title 3 
(operations) corresponds to the former title III excluding 
wages, pensions and social contributions, and includes a 
portion of expenditures of the former title V (research and 
prospects, and maintenance and acquisition of ammunitions). 
The new Title 5 is reduced to one fifth of its former 
scope.  The new Title 6 is totally different from the 
former title VI.  It now includes transfers to 
international organizations (NATO, the European defense 
Agency), foreign countries (Djibouti), and local 
authorities and social action organizations. 
 
   (euro millions) 
 
    CY05   CY06 
    ----   ---- 
Credit Payments 
Total    35,635  36,060 
Of which 
Staff    18,068  17,829 
Operating Expenses  6,808   7,327 
Investment   10,584  10,679 
Intervention     174     224 
 
Commitment Authorizations (1) 
Total    35,813  36,972 
Of which 
Staff    18,068  17,829 
Operating Expenses  7,352   8,211 
Investment   10,227  10,698 
Intervention     166     232 
 
(1) In the new budget architecture, commitment 
authorizations ("autorisations d'engagement") that concern 
all kinds of budget expenditures are annual.  They are not 
carried over.  Thus, they are cancelled when they are not 
used. This is the major difference with program 
authorizations, which had no duration limit.  Program 
authorizations concerned capital expenditures, excluding 
maintenance of military equipment. 
 
¶113.  (U) More importantly, the new budget presentation 
provides the defense budget with four programs: 
-the defense mission, which accounts for the bulk of the 
former defense budget; 
-the security inter-ministerial mission, which regroups 
credits for police and "gendarmerie." ("Gendarmerie" 
accounted for 15% of the former defense budget); 
-the research and higher education inter-ministerial 
mission, in which the defense ministry is participating in 
dual-use research (200 million euros); 
-the "veterans-memory and links with the nation" mission 
(300 million euros). The preparation and employment of 
forces program and the equipment of forces program together 
account for 87% of the mission's credits. 
 
   (euro millions) 
 
Planned Defense Mission, Security, Veterans, Research 
     And Higher Education 
 
2005    45,819  n.a. 
 
2006    46,828  2.2 
of which 
Defense Mission  36,061 
Security    6,669 
Veterans    3,898 
Research and 
Higher Education     200 
 
                        (euro millions) 
 
                 Planned Defense Mission Budget 
 
     CY05   CY06 
     ----   ---- 
Credit Payments: 
Total     35,635  36,060 
Of which 
Environment and prospect  1,618   1,643 
 
Preparation and employment 
of forces    21,167  20,900 
Equipment of forces  10,015  10,610 
Support of defense policy  2,836   2,908 
 
 
Commitment Authorizations 
Total     35,813  36,972 
Of which 
 
Environment and prospect  1,465   1,794 
Preparation and employment 
of forces    21,774  21,605 
Equipment of forces   9,825  10,528 
Support of defense policy  2,749   3,044 
 
 
FY 2006 Defense Budget 
And Program Highlights 
---------------------- 
 
¶114.  (U) The defense mission remains one of the top budget 
priorities in 2006.  The 2006 defense mission budget 
accounts for the third largest central government category 
of discretionary spending (E 36,060 billion) after 
Education (E 59.7 billion), and Central Government 
Financial Commitments (E 40.9 billion), equaling 11.6% of 
the central government budget.  The government plans to 
increase in 2006 defense mission spending, excluding 
pensions, by 3.4%, and defense spending including pensions 
by 2.2%.  The Minister of Defense has the authority to 
spend 47 billion euros including for the defense mission, 
security, veterans, research and education and pensions in 
¶2006.  The defense mission and security, which ensure 
protection of the French, account for 92% of credits 
payments available to the Defense Ministry. 
 
¶115.  (U) Defense Minister Michele Alliot-Marie stressed 
that the 2006 budget defense would respect the 2003-2008 
military programming law for the fourth consecutive year. 
Objectives of the law include assuring deployments of 
external operations to respect France's commitments to 
European Union and NATO, pursuing the achievement of major 
armament programs, consolidating professionalization of 
army and improving military conditions, and continuing the 
reform of the defense ministry.  Credit payments to the 
2003-2008 military programming law and to the interior 
security law ("loi d'orientation et de programmation 
relative a la securite interieure") are increased 3% to 
15,658 million euros in 2006 compared to 2005 (E 15,198 
million) versus 2% in 2005 from 14,900 million euros in 
¶2004.  Credit payments to external operations in 2006 are 
increased to 250 million euros from 100 million euros in 
¶2005. Since actual expenditures have consistently exceeded 
spending as projected in the initial central government 
budget, the initial budget represents only about 45% of the 
actual expenditures for external operations. 
 
¶116.  (U) Defense Minister Alliot-Marie has stressed that 
the year 2006 will be marked by significant deliveries (the 
launching of the satellite Syracuse III-B, and the delivery 
of 14 Rafale airplanes, missiles SCALP, and 34 Leclerc 
tanks) and that the second helicopter carrier Tonnerre will 
be operational in 2006.  2006 priorities also include a 60% 
increase in credit payments to the gendarmerie, to 200 
million euros from 120 million euros for the renewal of 
equipment, real estate, and the creation of 2,000 new jobs. 
A number of new jobs will be created to improve cryptology 
capacity, and health services. 
 
 
Part D: Grant Aid and Humanitarian Assistance 
--------------------------------------------- 
¶117.  (U) France abides by President Chirac's commitment in 
international summits, notably in Monterrey in 2002, to 
strengthen efforts in favor of Official Development 
Assistance (ODA, "Aide Publique au Developpement").  France 
reaffirmed its full support of the "Millennium Development 
Goals" to halve poverty in the world by 2015.  France also 
intends to find additional budget resources, notably by 
creating new international taxes, giving priority to Africa 
in providing aid as well as facilitating international 
trade, and promoting a global approach to development, 
notably by a controlled use of global public resources 
(water, air, biological diversity).  The government intends 
to increase ODA to 0.5% of national gross income in 2007 
and 0.7% in 2012. OECD ranks France in third place in 
absolute terms among Development Assistance Committee 
donors, after the United States (USD 18.9 billion) and 
Japan (USD 8.8 billion). 
 
¶118.  (U) Based on provisional data, ODA increased to 0.44% 
in 2005 from 0.42% in 2004 (USD 8.5 billion).  Bilateral 
aid and multilateral aid increased in 2005, totaling 5.6 
billion euros and 2.3 billion euros respectively based on 
provisional data for the first nine months of 2005, from 
4.3 billion euros and 2.3 billion euros, respectively, for 
the full year 2004. 
 
¶119.  (U) The French in recent years have given a greater 
role to debt cancellation as a means to provide aid, taking 
advantage of France's position as one of the main creditors 
of developing countries.  Debt cancellation increased to a 
high of 35.7% of ODA in the first nine months of 2005 (2.8 
billion euros) from 21.4% in full year 2004.  Regarding 
bilateral aid, the six priorities of bilateral aid in 2004 
included education, water and purification, health and 
fight against AIDS, agriculture and food safety, 
development of infrastructure in Sub-Saharan Africa, 
protection of environment and biodiversity.  Based on the 
most recent data (2004) provided by the Government, the 
African continent was the main recipient of bilateral aid 
(66%).  The top ten beneficiaries were: the Congo 
Democratic Republic (618 million euros), Senegal (258 
million euros), Madagascar (252 million euros), Cameroon 
(181 million euros), Morocco (178 million euros), the 
French territory of Mayotte (157 million euros), Nigeria 
(148 million euros), Algeria (125 million euros), Tunisia 
(104 million euros), and Serbia and Montenegro (96 million 
euros). 
 
¶120.  (U) ODA is set to increase to 0.47% of national 
income (8.2 billion euros) in 2005.  France has created an 
inter-ministerial ODA mission to help achieve its target. 
The mission regroups two programs, the "economic and 
financial aid to development" program handled by the 
finance ministry, and the "solidarity to developing 
countries" program handled by the Foreign Affairs Minister. 
The two programs contribute to the implementation of ODA 
within the Inter-ministerial Committee for the 
International Cooperation and the Development ("Comite 
Interministeriel pour la Cooperation Internationale et le 
Developpement - CICID.")  Major measures planned for 2006 
include (1) expanding the French Development Agency's 
responsibilities to new sectors including agriculture, 
health and environment, (2) increasing France's voluntary 
contribution to the United Nations' International 
Development Agency where France is the fifth largest 
contributor, and to the African Development Funds where 
France is the first largest contributor, (3) contributing 
to macro economic stabilization of foreign countries by 
increasing support to budgets, (4) enhancing the French 
contribution to the Global Fund to fight AIDS and (5) the 
increase in the French contribution to the European 
Development Fund.  The government approved a plan announced 
by President Chirac to levy a new tax on airline tickets 
sold in France, in order to raise funds for development 
programs in developing countries, notably the fight against 
AIDS.  The tax, which should go into effect in July 2006, 
will raise around 200 million euros per year by taxing 
tickets by 1 to 40 euros.  The 2006 budget set bilateral 
aid and multilateral aid at 5.2 billion euros and 2.7 
billion euros, respectively. 
 
Humanitarian Assistance 
----------------------- 
¶121.  (U) The bulk of France's humanitarian assistance 
donations (total spending excluding wages and social 
contributions) covers "Emergency Humanitarian Assistance" 
as well as aid for reconstruction and to support democracy. 
France allotted 38.2 million euros to Emergency 
Humanitarian Assistance, all of which was channeled through 
the Emergency Humanitarian Aid Fund of the Ministry of 
Foreign Affairs.  Normally, the Fund may be increased on an 
extraordinary basis to finance unexpected operations.  The 
2006 allotment to the Humanitarian Aid Fund, which has been 
lower than 10 million euros in the initial budget proposals 
in the last five years, has not been specified.  In 2004, 
the French tapped this fund to help the victims of the 
earthquake of Bam in Iran, the refugees in Darfur, the 
civil crisis and flooding in Haiti, precarious situations 
of population in Iraq, Liberia and Palestine territories, 
and invasions of locusts in several sub-Saharan African 
countries.  In 2005, the fund facilitated humanitarian 
emergency operations for the tsunami victims in South-east 
Asia, helped alleviate the food crisis in Nigeria, and 
provided humanitarian assistance in Darfur.  By August 
2005, most of the allotment to the fund (10.7 million 
euros) had been used up, for assistance to 41 countries. 
Additional expenditures through the end of 2005 were very 
limited.  The aid to the reconstruction and democracy will 
benefit from 11.6 million euros in commitment 
authorizations and 20.6 million euros in credit payments in 
¶2006. 
 
STAPLETON