Keep Us Strong WikiLeaks logo

Currently released so far... 97115 / 251,287

Articles

Browse latest releases

Browse by creation date

Browse by origin

A B C D F G H I J K L M N O P Q R S T U V W Y Z

Browse by tag

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
ETRD EAGR ETTC EAID ECON EFIN ECIN EINV ELAB EAIR ENRG EPET EWWT ECPS EIND EMIN ELTN EC ETMIN EUC EZ ET ELECTIONS ENVR EU EUN EG EINT ER ECONOMICS ES EMS ENIV EEB EN ECE ECOSOC EK ENVIRONMENT EFIS EI EWT ENGRD ECPSN EXIM EIAD ERIN ECPC EDEV ENGY ECTRD EPA ESTH ECCT EINVECON ENGR ERTD EUR EAP EWWC ELTD EL EXIMOPIC EXTERNAL ETRDEC ESCAP ECO EGAD ELNT ECONOMIC ENV ETRN EIAR EUMEM ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID EREL ECOM ECONETRDEAGRJA ETCC ETRG ECONOMY EMED ETR ENERG EITC EFINOECD EURM EENG ERA EXPORT ENRD ECONEINVETRDEFINELABETRDKTDBPGOVOPIC EGEN EBRD EVIN ETRAD ECOWAS EFTA ECONETRDBESPAR EGOVSY EPIN EID ECONENRG EDRC ESENV ETT EB ENER ELTNSNAR ECHEVARRIA ETRC EPIT EDUC ESA EFI ENRGY ESCI EE EAIDXMXAXBXFFR EETC ECIP EIAID EIVN EBEXP ESTN EING EGOV ETRA EPETEIND ELAN ETRDGK EAIDRW ETRDEINVECINPGOVCS EPEC ENVI ELN EAG EPCS EPRT EPTED ETRB EUM EAIDS EFIC EFINECONEAIDUNGAGM EAIDAR ESF EIDN ELAM EDU EV EAIDAF ECN EDA EXBS EINTECPS ENRGTRGYETRDBEXPBTIOSZ EPREL EAC EINVEFIN ETA EAGER EINDIR ECA ECLAC ELAP EITI EUCOM ECONEFINETRDPGOVEAGRPTERKTFNKCRMEAID EARG ELDIN EINVKSCA ENNP EFINECONCS EFINTS ECCP ETC EAIRASECCASCID EINN ETRP EAIDNI EFQ ECOQKPKO EGPHUM EBUD ECONEINVEFINPGOVIZ ENERGY ELB EINDETRD EMI ECONEFIN EIB EURN ETRDEINVTINTCS EIN EFIM ETIO ELAINE EMN EATO EWTR EIPR EINVETC ETTD ETDR EIQ ECONCS EPPD ENRGIZ EISL ESPINOSA ELEC EAIG ESLCO EUREM ENTG ERD EINVECONSENVCSJA EEPET EUNCH ECINECONCS ETRO ETRDECONWTOCS ECUN EFND EPECO EAIRECONRP ERGR ETRDPGOV ECPN ENRGMO EPWR EET EAIS EAGRE EDUARDO EAGRRP EAIDPHUMPRELUG EICN ECONQH EVN EGHG ELBR EINF EAIDHO EENV ETEX ERNG ED
KMDR KPAO KPKO KJUS KCRM KGHG KFRD KWMN KDEM KTFN KHIV KGIC KIDE KSCA KNNP KHUM KIPR KSUM KISL KIRF KCOR KRCM KPAL KWBG KN KS KOMC KSEP KFLU KPWR KTIA KSEO KMPI KHLS KICC KSTH KMCA KVPR KPRM KE KU KZ KFLO KSAF KTIP KTEX KBCT KOCI KOLY KOR KAWC KACT KUNR KTDB KSTC KLIG KSKN KNN KCFE KCIP KGHA KHDP KPOW KUNC KDRL KV KPREL KCRS KPOL KRVC KRIM KGIT KWIR KT KIRC KOMO KRFD KUWAIT KG KFIN KSCI KTFIN KFTN KGOV KPRV KSAC KGIV KCRIM KPIR KSOC KBIO KW KGLB KMWN KPO KFSC KSEAO KSTCPL KSI KPRP KREC KFPC KUNH KCSA KMRS KNDP KR KICCPUR KPPAO KCSY KTBT KCIS KNEP KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG KNNB KGCC KINR KPOP KMFO KENV KNAR KVIR KDRG KDMR KFCE KNAO KDEN KGCN KICA KIMMITT KMCC KLFU KMSG KSEC KUM KCUL KMNP KSMT KCOM KOMCSG KSPR KPMI KRAD KIND KCRP KAUST KWAWC KTER KCHG KRDP KPAS KITA KTSC KPAOPREL KWGB KIRP KJUST KMIG KLAB KTFR KSEI KSTT KAPO KSTS KLSO KWNN KPOA KHSA KNPP KPAONZ KBTS KWWW KY KJRE KPAOKMDRKE KCRCM KSCS KWMNCI KESO KWUN KPLS KIIP KEDEM KPAOY KRIF KGICKS KREF KTRD KFRDSOCIRO KTAO KJU KWMNPHUMPRELKPAOZW KEN KO KNEI KEMR KKIV KEAI KWAC KRCIM KWCI KFIU KWIC KCORR KOMS KNNO KPAI KBWG KTTB KTBD KTIALG KILS KFEM KTDM KESS KNUC KPA KOMCCO KCEM KRCS KWBGSY KNPPIS KNNPMNUC KWN KERG KLTN KALM KCCP KSUMPHUM KREL KGH KLIP KTLA KAWK KWMM KVRP KVRC KAID KSLG KDEMK KX KIF KNPR KCFC KFTFN KTFM KPDD KCERS KMOC KDEMAF KMEPI KEMS KDRM KEPREL KBTR KEDU KNP KIRL KNNR KMPT KISLPINR KTPN KA KJUSTH KPIN KDEV KTDD KAKA KFRP KWNM KTSD KINL KJUSKUNR KWWMN KECF KWBC KPRO KVBL KOM KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG KEDM KFLD KLPM KRGY KNNF KICR KIFR KM KWMNCS KAWS KLAP KPAK KDDG KCGC KID KNSD KMPF KPFO KDP KCMR KRMS KNPT KNNNP KTIAPARM KDTB KNUP KPGOV KNAP KNNC KUK KSRE KREISLER KIVP KQ KTIAEUN KPALAOIS KRM KISLAO KWM KFLOA
PHUM PINR PTER PGOV PREL PREF PL PM PHSA PE PARM PINS PK PUNE PO PALESTINIAN PU PBTS PROP PTBS POL POLI PA PGOVZI POLMIL POLITICAL PARTIES POLM PD POLITICS POLICY PAS PMIL PINT PNAT PV PKO PPOL PERSONS PING PBIO PH PETR PARMS PRES PCON PETERS PRELBR PT PLAB PP PAK PDEM PKPA PSOCI PF PLO PTERM PJUS PSOE PELOSI PROPERTY PGOVPREL PARP PRL PNIR PHUMKPAL PG PREZ PGIC PBOV PAO PKK PROV PHSAK PHUMPREL PROTECTION PGOVBL PSI PRELPK PGOVENRG PUM PRELKPKO PATTY PSOC PRIVATIZATION PRELSP PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ PMIG PREC PAIGH PROG PSHA PARK PETER POG PHUS PPREL PS PTERPREL PRELPGOV POV PKPO PGOVECON POUS PGOVPRELPHUMPREFSMIGELABEAIDKCRMKWMN PWBG PMAR PREM PAR PNR PRELPGOVEAIDECONEINVBEXPSCULOIIPBTIO PARMIR PGOVGM PHUH PARTM PN PRE PTE PY POLUN PPEL PDOV PGOVSOCI PIRF PGOVPM PBST PRELEVU PGOR PBTSRU PRM PRELKPAOIZ PGVO PERL PGOC PAGR PMIN PHUMR PVIP PPD PGV PRAM PINL PKPAL PTERE PGOF PINO PHAS PODC PRHUM PHUMA PREO PPA PEPFAR PGO PRGOV PAC PRESL PORG PKFK PEPR PRELP PREFA PNG PGOVPHUMKPAO PRELECON PINOCHET PFOR PGOVLO PHUMBA PRELC PREK PHUME PHJM POLINT PGOVPZ PGOVKCRM PGOVE PHALANAGE PARTY PECON PEACE PROCESS PLN PRELSW PAHO PEDRO PRELA PASS PPAO PGPV PNUM PCUL PGGV PSA PGOVSMIGKCRMKWMNPHUMCVISKFRDCA PGIV PRFE POGOV PEL PBT PAMQ PINF PSEPC POSTS PHUMPGOV PVOV PHSAPREL PROLIFERATION PENA PRELTBIOBA PIN PRELL PGOVPTER PHAM PHYTRP PTEL PTERPGOV PHARM PROTESTS PRELAF PKBL PRELKPAO PKNP PARMP PHUML PFOV PERM PUOS PRELGOV PHUMPTER PARAGRAPH PERURENA PBTSEWWT PCI PETROL PINSO PINSCE PQL PEREZ PBS

Browse by classification

Community resources

courage is contagious

Viewing cable 03FRANKFURT10314, ECB on the Stability and Growth Pact: Results or

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Understanding cables
Every cable message consists of three parts:
  • The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
  • The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
  • The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this WikiSource article as reference.

Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #03FRANKFURT10314.
Reference ID Created Released Classification Origin
03FRANKFURT10314 2003-12-18 13:07 2011-08-24 01:00 UNCLASSIFIED Consulate Frankfurt
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 FRANKFURT 010314 
 
SIPDIS 
 
STATE FOR EUR PDAS RIES, EB, EUR/AGS, AND EUR/ERA 
STATE PASS FEDERAL RESERVE BOARD 
STATE PASS NSC 
TREASURY FOR DAS SOBEL 
TREASURY ALSO FOR ICN COX, STUART 
PARIS ALSO FOR OECD 
TREASURY FOR OCC RUTLEDGE, MCMAHON 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EUN
SUBJECT: ECB on the Stability and Growth Pact:  Results or 
Call The Bluff 
 
T-IA-F-03-0065 
 
This cable is sensitive but unclassified.  Not/not for 
Internet distribution. 
 
1.   (SBU) Summary:  The European Central Bank (ECB) was 
exceptionally, sternly and publicly critical of Ecofin's 
decision on Germany and France under the Stability and 
Growth Pact (SGP), but has been careful neither to trash the 
SGP nor the process.  Rather, their message is that the SGP 
lives and that they expect Germany, France and Ecofin to 
live up to their commitments.  In the case of the two 
countries, this means that deficits be under 3% in 2005 and, 
failing to do so, Ecofin take measures under the procedures 
previously recommended by the Commission.  Putting a bit of 
monetary muscle into the mix, the ECB has listed "fiscal 
policies" as one of the various indicators it considers when 
assessing future inflation trends, although they are quick 
to point out this has always been so.  A Council Secretariat 
expert points out that, in fact, by "suspending" the 
proceedings, Ecofin wanted to be clear that it reserved the 
possibility to re-open proceedings and still apply 
sanctions, even though the time limit for doing so is to 
expire at the end of the year.  The question remains whether 
and on what evidence the Commission, the only entity that 
can recommend re-opening the proceedings, would do so.  Once 
burned, twice shy.  End Summary. 
 
ECB: Not Dead, but Alive 
________________________ 
 
2.   (SBU) Senior ECB officials have explained that while 
the ECB was very upset with Ecofin's decision under the SGP 
on Germany and France, they don't want to give the 
impression that the SGP is dead or they want to change it. 
Rather, they want the commitments made in the Ecofin 
decision to be respected. 
 
3.   (SBU) In its December Monthly Bulletin, the ECB's 
editorial reported that the Governing Council took note of 
the commitments made by France and Germany to "correct their 
excessive deficits as rapidly as possible and at the latest 
by 2005."  The Council also noted that the Ecofin Council 
"stands ready to give notice to the two governments to take 
measures that would lead to a correction of their excessive 
deficits."  ECB President Trichet was more direct in his 
press conference after the Governing Council's December 4 
meeting:  the Governing Council "noted that the Ecofin 
Council stands ready to take a decision under Article 
104(9), on the basis of the Commission recommendation, 
should the two government fail to act in accordance with 
their own commitments."  He went on to declare that the SGP 
"remains of central importance and should be fully 
respected." 
 
Link to Monetary Policy?  All Part of the Whole Ball of Wax 
_____________________________________________ ______________ 
 
4.   (SBU) At his December press conference Trichet also 
mentioned that the outlook for price stability is 
conditional on quite a number of assumptions.  Among them he 
cited the usual, e.g. oil prices, exchange rates, and wage 
developments.  He also mentioned "fiscal measures."  This 
lead to a follow up question, on whether the discussion over 
the SGP will have a direct effect on ECB interest rate 
policy.  Trichet replied that they take in all data to make 
such an assessment and they have a "working assumption" that 
the "commitments that were made by the countries concerned 
and the commitments that were made by the qualified majority 
of the Council would be met 100%." 
 
5.   (SBU)Some market commentators have speculated that the 
ECB Governing Council might use monetary policy to "punish" 
Finance Ministers for their decision.  ECB officials are 
quick to point out that this is not the case.  Rather, 
fiscal policies are included in the comprehensive array of 
data the ECB examines in determining potential inflationary 
pressures. (Note:  The notion of such retribution is not as 
odd as it may sound; the halls of the Bundesbank still echo 
with the story of the then-Chancellor Schmidt flying to 
Frankfurt to plea for lower interest rates directly with the 
Bundesbank Council, only to have the Council raise rates 
after he left the room - as if to disabuse anyone that they 
were not truly independent.) 
 
Form and Substance:  ECB Focuses on Substance 
_____________________________________________ 
 
6.   (SBU) At the press conference one journalist attempted 
to lure Trichet into a debate of the form of Ecofin's 
decision over its substantive meaning, e.g. implications for 
the euro.  Trichet would not take the bait, musing that one 
cannot "separate the form, the procedure and the substance." 
However, the following week at the Economic and Monetary 
Affairs Committee of the European Parliament, Trichet did 
seek to clarify the "economic underpinnings" as to why the 
SGP is "very important for the function of the single 
currency area." 
 
7.   (SBU) He explained that the SGP allows him to respond 
to two criticisms, "frequently voiced from the other side of 
the Atlantic."  First, is the criticism about monetary 
policy conducted with "random behavior of fiscal policies" 
in the absence of an EU federal budget.  Second, is the 
criticism that the absence of a federal budget does not 
allow Europe to cope with asymmetric shocks, when one 
country suffers a shock not felt by another.  The SGP is the 
only means by which Europe can claim to deal with random 
fiscal policies and to admonish countries to have a close to 
balanced budget to provide room for maneuver to cope with 
shocks. 
 
8.   More generally, Trichet said that there is a limit 
beyond which increased deficits "hamper growth because you 
are creating more lack of confidence than .you can get from 
the simple neo-Keynesian effect."  According to an ECB 
official close to Trichet, this is a very personal view, not 
one necessarily blessed by the Governing Council.  Trichet 
had elaborated that point in his first major policy speech 
on November 20 in Frankfurt.  He had said that governments 
following the SGP "will reduce public spending, which is 
conducive to growth through the alleviation of unproductive 
spending and reduction of costs in the economy."  In his 
view, economic growth would be enhanced since lower deficits 
would diminish medium and long-term interest rates and 
improve households' and business confidence that taxes won't 
increase leading to higher consumption and investment. 
 
Ecofin Decision: Trigger Cocked, but Will Commission Pull 
It? 
_____________________________________________ ____________ 
 
9.   (SBU) According to an expert in the EU Council, the 
Council decision reflected the discretion afforded Ministers 
under the SGP, but was firmer than the press or the 
Commission made it out to be, in his opinion.  He shared the 
ECB's view that Ecofin had put itself on the hook to take 
action:  "The Council stands ready to take a decision under 
Article 104(9)"  should France or Germany "fail to act in 
accordance with the commitments set out in these 
Conclusions."  Note that Article 104(9) is the step 
requiring specific commitments to be fulfilled within a 
specific timeframe.  Failing that, the next step would be 
sanctions under Article 104 (11). 
 
10.  (SBU) With respect to sanctions, this Council expert 
pointed out that Ecofin's decision to hold the excessive 
deficit procedure in "abeyance" was designed to retain the 
leverage of possible sanctions.  Under Article 7 of Council 
Regulation 1467/97, the decision to impose sanctions "shall 
be taken within 10 months" of the dates from which the 
excessive deficits were reported.  For France that would be 
at the end of December - one reason the Commission rushed it 
treatment for France (reftel).  By putting the procedure 
into "abeyance" (a measure also provided for in the Council 
Regulation), the clock is stopped on the 10 months time 
limit for imposing sanctions.  In practical terms that would 
mean that failure to fulfill these commitments would still 
result in sanctions even though the original 10 months time 
period had lapsed. 
One Observation 
_______________ 
 
11.  (SBU) All this is interesting, but the open question is 
whether Ecofin would fulfill its own commitment.  To do so, 
the Commission would have to make another recommendation to 
Ecofin for action should France or Germany be straying from 
their respective consolidation paths.  Having lost this 
round, the Commission may feel shy about a second attempt - 
once bitten, twice shy.  On the other hand, if France and 
Germany are clearly off track, it would be interesting for 
the Commission to call Ecofin's bluff.  If the Commission 
had a strong case, it would be difficult for Ecofin to face 
it down again - particularly with so many other EU economic 
issues, e.g. budget, constitution, at play. 
 
12.  (U)This cable coordinated with USEU and Embassy Berlin. 
 
13.  (U)POC: James Wallar, Treasury Representative, e-mail 
wallarjg2@state.gov; tel. 49-(69)-7535-2431, fax 49-(69)- 
7535-2238 
 
Bodde