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 05PARIS8622, FRANCE REVISES 2005 CENTRAL GOVERNMENT BUDGET

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. #05PARIS8622.
Reference ID Created Released Classification Origin
05PARIS8622 2005-12-22 16:42 2011-08-24 00:00 UNCLASSIFIED Embassy Paris
This record is a partial extract of the original cable. The full text of the original cable is not available.

221642Z Dec 05
UNCLAS SECTION 01 OF 03 PARIS 008622 
 
SIPDIS 
 
PASS FEDERAL RESERVE 
PASS CEA 
STATE FOR EB and EUR/WE 
TREASURY FOR DO/IM 
TREASURY ALSO FOR DO/IMB AND DO/E WDINKELACKER 
USDOC FOR 4212/MAC/EUR/OEURA 
 
E.O. 12958: N/A 
TAGS: EFIN ECON PGOV FR
SUBJECT:  FRANCE REVISES 2005 CENTRAL GOVERNMENT BUDGET 
 
REF:  Paris 7771 
 
1. SUMMARY: The GOF revised its 2005 central government 
budget to include additional social expenditures and revised 
receipts including transfers to local authorities.  The 
revised budget includes measures dear to President Chirac: a 
tax on airline tickets to help fund development aid, and tax 
cuts on future capital gains.  The government offset 
additional expenditures, but the 2005 general government 
deficit probably will exceed 3.0% of GDP.  END SUMMARY. 
 
Government Commits Not to Increase Central Government Budget 
Deficit 
--------------------------------------------- --------- 
2.  Finance Minister Thierry Breton and Budget Minister Jean- 
Francois Cope introduced the revised 2005 central government 
(CG) budget on November 23, 2005.  The 2005 CG budget 
deficit is now set at 44.1 billion euros, an estimate the 
government believes is consistent with a 46.8 billion euro 
cash-basis deficit, which includes 2 billion euro carry- 
overs from 2004.  In fall 2004, when the Parliament passed 
the 2005 appropriations bill, the deficit was set at 44.9 
billion euros. 
 
3.  The revised 2005 budget takes into account additional 
spending (about 1 billion euros) for: 
-An increase in already-planned expenditures (490 million 
euros) [particularly government guarantees (200 million 
euros)], compensation for victims of anti-semitic acts (134 
million euros), justice fees and civil compensation (75 
million euros), and government-subsidized loans (35 million 
euros); 
-Additional social spending (300 million euros) including 
government housing programs (155 million euros), allowances 
to the handicapped (78 million euros), allowances for single 
parents (32 million euros), and medical assistance (27 
million euros); and 
-Miscellaneous spending (240 million euros), including 
compensation for the 2003 drought (50 million euros), public 
transportation (31 million euros), and official development 
assistance (27 million euros). 
 
The Government Funds French CNN 
------------------------------- 
4.  Proving that the GOF still can find a place for pork- 
barrel projects, or perhaps reflecting its cultural 
diversity priorities, the government gave the green light on 
November 30 for an international French-language TV news 
channel to start broadcasting by the end of next year.  The 
government committed to funding the channel under an 
agreement lasting until 2010.  Thirty million euros were set 
aside for this project in the 2005 CG budget. 
 
Putting a Lid on Total Spending 
------------------------------- 
5.  The government emphasized that, for the third year, the 
amount of the CG budget passed by the Parliament will be 
strictly observed.  Additional spending is mostly offset by 
900 million euro cuts in other parts of the CG budget, 
notably the public service debt (730 million euros) thanks 
to lower-than-projected interest rates.  Total cuts (6 
billion euros) offset unexpected expenditures made in 
February, April, September and November, notably emergency 
measures to prevent avian flu (1 billion euros). 
 
6.  Minister Breton also highlighted government efforts to 
control the volume of spending in 2005.  He said limiting 
exceptions to the new rule of not carrying over more than 3% 
of spending would result in a significant reduction of the 
"carry-over bubble."  He explained this would reduce the 
need to set aside significant reserves at the beginning of 
each year (7.4 billion in 2005).  The government plans to 
reduce carry-overs from 9.7 billion euros in 2005 to around 
5 billion euros in 2006, a big improvement compared with the 
14.1 billion euros carried over in 2002. 
 
Cuts in Spending Offset Lower-than-Expected Receipts 
--------------------------------------------- ------- 
7.  As part of the 6 billion euro cut in CG spending, a 3.1 
billion euro cut in CG spending was made in November to 
offset a reduction of approximately 2 billion euros in tax 
receipts.  CG income tax receipts were expected to be lower 
due to sluggish economic growth.  GDP growth is likely to be 
no higher than 1.5% in 2005, much lower than the initial 
government forecast of 2.5% (ref). 
 
8.  Government transfers to local authorities (departments) 
will total 510 million euros, including 457 million euros in 
tax on petroleum products, to pay for new local-level social 
responsibilities, notably for granting minimum wages (Revenu 
Minimum d'Insertion - RMI; and Revenu Minimum d'Activite 
RMA).  The government claims the 510 million euro transfer 
will be offset by higher receipts from the exceptional levy 
on distributed profits due to the reform of the tax credit 
(250 million euros) and the revised schedule of corporate 
tax payments (300 million euros). 
Budget Reflects Chirac's commitment to "International 
Solidarity" and . . . 
--------------------------------------------- ------ 
9.  As part of the revised 2005 CG budget, the government 
approved President Chirac's plan 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.  Although President Chirac 
has stressed that the tax would not harm the competitiveness 
of the French airline industry, Christian Blanc, center- 
right deputy and former Air France Chairman, has criticized 
the tax as "a very bad idea."  The French air travel 
industry has warned that the tax would result in a drop in 
passenger numbers of one million per year, including a 
600,000 passenger drop in domestic flights, which could 
translate into 3,000 job losses.  Jean-Cyril Spinetta, chief 
executive of Air France-KLM, said it was not the right 
approach, but it would not jeopardize the company's earnings 
targets. 
 
 . . . Increased Individual Shareholding 
---------------------------------------- 
10.  To encourage investment in stocks and thereby increase 
corporate investment, the GOF introduced measures to lower 
the capital gains tax.  Shareholders will be partially 
exempted from the 16% tax on capital gains on shares bought 
in 2006 if they hold the shares until 2012.  They will be 
fully exempted if they hold the shares for eight years, or 
until 2014.  Nonetheless, shareholders will still have to 
pay the "social contributions" due on capital gains (11% in 
2005).  CEOs of small and medium-sized companies (SMEs), who 
decide to resign and cash in their shares, would benefit 
from full exemption as soon as January 2006.  The government 
expects the sale of 50,000 to 70,000 companies each year in 
the next five years, and is proposing to extend the scheme 
of tax exemption to gains on the sales of farms and retail 
trade businesses. 
 
Tax Deductions to Improve France's "Attractiveness" . . . 
--------------------------------------------- ------------ 
11.  The revised 2005 budget also includes measures to 
improve France's attractiveness (literally) by creating a 
50% tax deduction on taxable profits for young artists, up 
to 50,000 euros per year, from the sale of works of art. 
The budget also seeks to improve the tax climate for senior 
executives who move to France by exempting transfer bonuses 
and some income from taxes.  In a special effort to boost 
exports, French citizens working more than 120 days abroad 
and who boost French exports will benefit from full 
exemption of income tax, effective January 1, 2006. 
 
. . . and to Help Sectors Affected by Oil Price Increases 
--------------------------------------------- ------------- 
12.  Companies harmed by oil price increases because they 
use trucks and buses will benefit from a reduction in 
certain taxes.  The reduction is increased if companies use 
non-polluting vehicles.  Partial repayment of tax on 
petroleum products to farmers consuming diesel fuel could be 
extended in 2005, on the basis of purchases of diesel made 
after September 1, 2005. 
 
Other Tax schemes 
----------------- 
13.  The revised 2005 budget also includes increased funding 
for anti-fraud and anti-tax evasion activities, an increase 
in the general taxes on pollution in various forms, and a 
cut in corporate income taxes by large companies. 
 
14.  Deputies examined the revised CG budget from December 1 
to December 8, and proposed 133 amendments.  The deputies 
insisted that the television ("redevance") tax surplus be 
earmarked and dedicated to investment in the audiovisual 
sector for antipiracy initiatives (among others), and not to 
the CG budget.  And it was the deputies who added the 
provisions increasing income tax credits to favor French 
expatriates promoting French exports.  Senators will start 
discussing the revised 2005 budget on December 19. 
 
Budget Deficit Likely to exceed 3% of GDP in 2005 
--------------------------------------------- ---- 
15.  In discussing the budget, Minister Breton reiterated, 
"The budget deficit will be 3% of GDP."  However, the 
general government (GG) deficit is still heavily dependent 
on the social security deficit.  (The GG budget includes 
central government, social security and local authorities). 
Based on the Social Security Commission's estimates, the 
social security deficit (including health insurance, family 
allowances, work-related accidents and pensions) may 
increase to 15.2 billion euros in 2005 from 12.2 billion in 
2004.  Despite transfers from the government, local 
authorities fear they will be unable to balance their 
budgets due to required additional social spending (similar 
to "unfunded mandates" for state governments in the U.S.). 
 
16.  Citing "internal Finance Ministry sources" on September 
30, the French newspaper Le Monde reported that the finance 
ministry privately calculated the 2005 GG deficit at 3.3- 
3.4% of GDP.  Le Monde said that current trends for 2006 
pointed to even wider deficits in the 3.5-3.6% range.  In 
its recent semi-annual outlook, the OECD and the European 
Commission both forecast a general government deficit of 
3.2% of GDP in 2005. 
 
Comment 
------- 
17.  Although Breton had indicated advance knowledge of the 
contents of a government-commissioned report released 
December 14 on the ballooning general government debt 
(septel), the final 2005 central government budget appears 
to lack any coherent strategy for addressing the debt or the 
deficit.  Although the report only called for a five-year 
plan to seriously control spending growth, there is little 
sign in this budget that the GOF feels compelled to take the 
politically sensitive decisions needed to implement such a 
plan. 
STAPLETON