VZCZCXRO7979
RR RUEHIK RUEHYG
DE RUEHFR #7534/01 3281541
ZNR UUUUU ZZH
R 241541Z NOV 06
FM AMEMBASSY PARIS
TO RUEHC/SECSTATE WASHDC 3344
INFO RUEHZG/NATO EU COLLECTIVE
RUEHMRE/AMCONSUL MARSEILLE 1449
RUEHSR/AMCONSUL STRASBOURG 0255

UNCLAS SECTION 01 OF 02 PARIS 007534 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/PPD, EUR/WE, INR, R 
 
E.O. 12958: N/A 
TAGS: PREL KPAO OPRC FR
SUBJECT:  MEDIA WRAP-UP: SYRIA AND IRAN IN MIDDLE-EAST POWER PLAY, 
STALLED FRENCH ECONOMIC GROWTH AND U.S. INVESTMENT.  NOVEMBER 17, 
 
 
PARIS 00007534  001.2 OF 002 
 
¶2006. 
 
Sensitive but unclassified.  Please protect accordingly. 
 
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SUMMARY 
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¶1. (SBU) The media speculated at great length about Syria's role in 
the assassination of Lebanese Pierre Gemayel and on its broader 
agenda in the Middle East.  By November 24, right-of-center Le 
Figaro warned that "Washington would pay dearly for Iraq when it 
turned to Tehran and Damascus to help stabilize Iraq, because by 
then Syria and Iran would be in a position to raise the stakes." 
The economic press covered France's slow economic growth during the 
past quarter and the American Chamber of Commerce's report on U.S. 
investment in France.  All media pointed to the need for France's 
industrial sector to be more productive, for France to be more 
competitive and to attract more investors, including from the U.S. 
End Summary. 
 
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SYRIA AND IRAN IN MIDDLE-EAST POWER PLAY 
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¶2. (SBU) Pierre Gemayel's assassination on Tuesday led to widespread 
speculation about Syria's "warning message" and to concerns about a 
new cycle of civilian fighting in Lebanon.  In left-wing Liberation, 
Pierre Haski editorialized on the role of "political assassinations 
as messages."  Haski claimed that the timing of the assassination 
and the pending special tribunal to investigate Hariri's 
assassination "was no coincidence."  Catholic La Croix affirmed 
that, "according to expert observers, Syria, who could end up being 
held responsible, did not want to see a special tribunal set up." 
In left-wing Liberation Haski concluded that the underlying message, 
"do not point at Syria" was not only addressed to the U.S. but also 
to France.  Haski argued that "the message targeted the U.S. because 
of Washington's recent consideration of a pullout strategy for Iraq 
that might include Syria."  Haski argued that France's presence in 
Southern Lebanon and its refusal to deal with Syria since Hariri's 
assassination "were cause for warning."  Haski questioned the 
ability of the international community to choose between "justice 
and realpolitik" and between "punishing Damascus for crimes in 
Lebanon or asking for its help in Iraq." 
 
¶3. (SBU) In right-of-center Le Figaro, George Malbrunot concluded 
that the "assassination of Pierre Gemayel, attributed to Damascus, 
was tarnishing Syria's alleged new stance."  Malbrunot also 
contended that, in the context of Iraq, "Damascus was the weaker 
link" while Iran was a stronger protagonist," although both had 
"built up their capacity for nuisance" during the Iraqi conflict. 
Malbrunot concluded that "neither was ready to squander its capital 
without getting something in return."  A day prior to Gemayel's 
assassination, Pierre Prier in right-of-center Le Figaro analyzed 
the offer made by Damascus to re-open diplomatic relations with Iraq 
as "a message to the U.S." and a "clear change of direction for 
Syria."  Prier agreed with Malbrunot that "Damascus was making an 
overture to Washington, which it perceived as being in a position of 
weakness."  Prier contended that Syria "would make further demands 
on the U.S., about the special tribunal and Iran's nuclear program." 
 But Prier concluded that "Washington was not ready to accept such 
demands." 
 
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FRANCE'S STALLED ECONOMY AND U.S. INVESTMENT 
-------------------------------------------- 
 
¶4. (SBU) On November 21 INSEE published economic indicators pointing 
to France's slow economic growth during the past quarter and 
France's lack of competitiveness for investors.  Right-of-center Le 
Figaro Economie asserted that "France was losing its competitive 
edge."  Catholic La Croix agreed, adding that "the concern lies with 
the loss of competitiveness in the industrial sector rather than 
with France's overall economic performance for the year."  The drop 
in French exports by 0.7 percent in the third quarter was 
"significant" because it was, according to Catholic La Croix, "the 
first such drop since the beginning of 2005."  Right-of-center Les 
Echos warned that "France's growth was sustained essentially through 
consumer spending" and suffered "from the counter performance of its 
exports" a situation which, in the eyes of economic expert Nicolas 
Bouzou, "was not sustainable in the long run.  France's model of 
growth, based on a loss of competitiveness and dynamic consumer 
spending cannot last," he warned.  In right-of-center La Tribune, 
the Chairman of the Economic Commission at the Medef (the French 
Employers Association) Pierre Nanterme, sounded the alarm: 
"Consumer spending grew by 21 percent, while over the same period, 
production of manufactured goods grew by a scant 1 percent, and 
imports by 41 percent."  Writing in right-of-center Les Echos, 
 
PARIS 00007534  002.2 OF 002 
 
¶2006. 
 
Nanterme concluded that "France was boosting growth outside its 
borders."  The Medef called on the government to reduce the national 
debt and called on the "presidential candidates to push towards a 
more labor-intensive France."  In Catholic La Croix, UMP 
Representative Luc Chatel echoed this stance and argued that "the 
main trigger for growth is working more." 
 
¶5. (SBU) The results of the American Chamber of Commerce (AmCham) 
annual report on France's attractiveness for American investors was 
portrayed in right-of-center La Tribune as globally positive, even 
if "France could still do better."  But American companies, 
according to right-of-center Les Echos, "harshly condemned the 
handicap of the 35-hour workweek and the lack of flexibility in 
France's labor environment."  In right-of-center La Tribune, 
Isabelle Moreau argued that "French-style economic patriotism did 
not sit well with 80 percent of the respondents" and concluded that 
American investors "did not appreciate the French government's 
interventionism in matters of mergers and acquisitions," a major 
handicap for U.S. investors.  Marie Visot, in right-of-center Le 
Figaro Economie, also argued that "French economic patriotism" was 
not appreciated by American investors, "even if previous 
Franco-American tension on the subject had significantly diminished 
during the past year."  Visot concluded that, according to the 
AmCham report, "the heads of foreign subsidiaries in France hoped 
the presidential debate would include revising the 35-hour workweek 
and the implementation of tax incentives for investors who 
distribute dividends."  Right-of-center La Tribune concluded that 
"direct American investment leads in France, ahead of German direct 
investments." 
STAPLETON