

Currently released so far... 51122 / 251,287
Articles
Brazil
Sri Lanka
United Kingdom
Sweden
00. Editorial
United States
Latin America
Egypt
Jordan
Yemen
Thailand
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
2011/05/01
2011/05/02
2011/05/03
2011/05/04
2011/05/05
2011/05/06
2011/05/07
2011/05/08
2011/05/09
2011/05/10
2011/05/11
2011/05/12
2011/05/13
2011/05/14
2011/05/15
2011/05/16
2011/05/17
2011/05/18
2011/05/19
2011/05/20
2011/05/21
2011/05/22
2011/05/23
2011/05/24
2011/05/25
2011/05/26
2011/05/27
2011/05/28
2011/05/29
2011/05/30
2011/05/31
2011/06/01
2011/06/02
2011/06/03
2011/06/04
2011/06/05
2011/06/06
2011/06/07
2011/06/08
2011/06/09
2011/06/10
2011/06/11
2011/06/12
2011/06/13
2011/06/14
2011/06/15
2011/06/16
2011/06/17
2011/06/18
2011/06/19
2011/06/20
2011/06/21
2011/06/22
2011/06/23
2011/06/24
2011/06/25
2011/06/26
2011/06/27
2011/06/28
2011/06/29
2011/06/30
2011/07/01
2011/07/02
2011/07/04
2011/07/05
2011/07/06
2011/07/07
2011/07/08
2011/07/10
2011/07/11
2011/07/12
2011/07/13
2011/07/14
2011/07/15
2011/07/16
2011/07/17
2011/07/18
2011/07/19
2011/07/20
2011/07/21
2011/07/22
2011/07/23
2011/07/25
2011/07/27
2011/07/28
2011/07/29
2011/07/31
2011/08/01
2011/08/02
2011/08/03
2011/08/05
2011/08/06
2011/08/07
2011/08/08
2011/08/09
2011/08/10
2011/08/11
2011/08/12
2011/08/13
2011/08/15
2011/08/16
2011/08/17
2011/08/18
2011/08/19
2011/08/21
2011/08/22
2011/08/23
2011/08/24
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Antananarivo
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Alexandria
Consulate Adana
American Institute Taiwan, Taipei
Embasy Bonn
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Brazzaville
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangui
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Belfast
Consulate Barcelona
Embassy Cotonou
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chiang Mai
Consulate Chennai
Consulate Chengdu
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
DIR FSINFATC
Consulate Dusseldorf
Consulate Durban
Consulate Dubai
Consulate Dhahran
Embassy Guatemala
Embassy Grenada
Embassy Georgetown
Embassy Gaborone
Consulate Guayaquil
Consulate Guangzhou
Consulate Guadalajara
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Hong Kong
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kolonia
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Krakow
Consulate Kolkata
Consulate Karachi
Embassy Luxembourg
Embassy Lusaka
Embassy Luanda
Embassy London
Embassy Lome
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy Libreville
Embassy La Paz
Consulate Leipzig
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Mission Geneva
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Mogadishu
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maseru
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Merida
Consulate Melbourne
Consulate Matamoros
Consulate Marseille
Embassy Nouakchott
Embassy Nicosia
Embassy Niamey
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Nuevo Laredo
Consulate Naples
Consulate Naha
Consulate Nagoya
Embassy Pristina
Embassy Pretoria
Embassy Praia
Embassy Prague
Embassy Port Of Spain
Embassy Port Moresby
Embassy Port Louis
Embassy Port Au Prince
Embassy Podgorica
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Hillah
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Surabaya
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sapporo
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy Tirana
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
Consulate Thessaloniki
USUN New York
USMISSION USTR GENEVA
USEU Brussels
US Office Almaty
US Mission Geneva
US Mission CD Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
UN Rome
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vientiane
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
AMGT
ASEC
AEMR
AR
APECO
AU
AORC
ADANA
AJ
AF
AFIN
AMED
AS
AM
ABLD
AFFAIRS
AMB
APER
ACOA
AND
AA
AE
AADP
AID
AO
AL
AG
AORD
ADM
AINF
AINT
ASEAN
AORG
ABT
APEC
AY
ASUP
ARF
AGOA
AVIAN
ATRN
ANET
AGIT
ASECVE
ABUD
AODE
ALOW
ADB
AN
ADPM
ASPA
ARABL
AFSN
AZ
AC
AIAG
AFSI
ASCE
ASIG
ACABQ
ADIP
AFGHANISTAN
AROC
ADCO
ACOTA
ANARCHISTS
AMEDCASCKFLO
AK
ARABBL
ASCH
ANTITERRORISM
AGRICULTURE
AOCR
ARR
ASSEMBLY
AORCYM
AFPK
ACKM
AGMT
AEC
APRC
AIN
AFPREL
ASFC
ASECTH
AFSA
AINR
AOPC
AFAF
AFARI
AX
ASECAF
ASECAFIN
AT
AFZAL
APCS
AGAO
AIT
ARCH
AEMRASECCASCKFLOMARRPRELPINRAMGTJMXL
AMEX
ARM
AQ
ATFN
AMBASSADOR
AORCD
AVIATION
ARAS
AINFCY
ACBAQ
AOPR
AREP
AOIC
ASEX
ASEK
AER
AGR
AMCT
AVERY
APR
AEMRS
AFU
AMG
ATPDEA
ASECKFRDCVISKIRFPHUMSMIGEG
AORL
ACS
AMCHAMS
AECL
AUC
ACAO
BA
BR
BB
BG
BEXP
BY
BRUSSELS
BU
BD
BTIO
BK
BL
BE
BMGT
BO
BM
BX
BN
BWC
BBSR
BTT
BC
BH
BILAT
BUSH
BHUM
BT
BTC
BMENA
BOND
BAIO
BP
BF
BRPA
BURNS
BUT
BBG
BCW
BOEHNER
BOL
BASHAR
BIDEN
BFIN
BZ
BEXPC
BTIU
CPAS
CA
CASC
CS
CBW
CIDA
CO
CODEL
CI
CROS
CU
CH
CWC
CMGT
CVIS
CDG
CTR
CG
CF
CHIEF
CJAN
CBSA
CE
CY
CB
CW
CM
CHR
CD
COE
CV
COUNTER
CT
CN
CPUOS
CTERR
CVR
CVPR
CDC
COUNTRY
CLEARANCE
CONS
COM
CACS
CR
CONTROLS
CAN
CACM
COMMERCE
CAMBODIA
CFIS
COUNTERTERRORISM
CITES
CONDOLEEZZA
CZ
CTBT
CEN
CLINTON
CFED
CARC
CTM
CARICOM
CSW
CICTE
CYPRUS
CBE
CMGMT
CARSON
CWCM
CIVS
COUNTRYCLEARANCE
CENTCOM
CAPC
COPUOS
CKGR
CITEL
CQ
CITT
CIC
CARIB
CVIC
CAFTA
CVISU
CDB
CEDAW
CNC
CJUS
COMMAND
CENTER
COL
CAJC
CONSULAR
CLMT
CBC
CIA
CNARC
CIS
CEUDA
CHINA
CAC
CL
DR
DJ
DEMOCRATIC
DEMARCHE
DOMESTIC
DISENGAGEMENT
DB
DA
DHS
DAO
DCM
DAVID
DO
DEAX
DEFENSE
DEA
DTRO
DPRK
DOC
DTRA
DK
DAC
DOD
DRL
DRC
DCG
DE
DOT
DEPT
DOE
DS
DKEM
ECON
ETTC
EFIS
ETRD
EC
EMIN
EAGR
EAID
EFIN
EUN
ECIN
EG
EWWT
EINV
ENRG
ELAB
EPET
EIND
EN
EAIR
EUMEM
ECPS
ES
EI
ELTN
ET
EZ
EU
ER
EINT
ENGR
ECONOMIC
ENIV
EFTA
ETRN
EMS
EUREM
EPA
ESTH
EEB
EET
ENV
EAG
EXIM
ECTRD
ELNT
ENVIRONMENT
ECA
EAP
EINDIR
ETR
ECONOMY
ETRC
ELECTIONS
EICN
EXPORT
EARG
EGHG
EID
ETRO
EINF
EAIDHO
ECIP
EENV
EURM
EPEC
ERNG
ENERG
EIAD
EXBS
ED
EREL
ELAM
EK
EWT
ENGRD
EDEV
ECE
ENGY
EXIMOPIC
ETRDEC
ECCT
EUR
ENRGPARMOTRASENVKGHGPGOVECONTSPLEAID
EFI
ECOSOC
EXTERNAL
ESCAP
ETCC
EENG
ERA
ENRD
ECLAC
ETRAD
EBRD
ENVR
ECONENRG
ELTNSNAR
ELAP
EPIT
EDUC
EAIDXMXAXBXFFR
EETC
EIVN
EDRC
EGOV
ETRA
EAIDRW
ETRDEINVECINPGOVCS
ESA
ETRDGK
ENVI
ELN
EPRT
EPTED
ERTD
EUM
EAIDS
EFINECONEAIDUNGAGM
EDU
EV
EAIDAF
EDA
EPREL
EINVEFIN
EAGER
ETMIN
EUCOM
ECCP
EIDN
EINVKSCA
ENNP
EFINECONCS
ETC
EAIRASECCASCID
EINN
ETRP
ECONOMICS
ENERGY
EIAR
EINDETRD
ECONEFIN
EURN
ETRDEINVTINTCS
EFIM
ETIO
EATO
EIPR
EINVETC
ETTD
ETDR
EIQ
ECONCS
ENRGIZ
EAIG
ENTG
EUC
ERD
EINVECONSENVCSJA
EEPET
EUNCH
ESENV
ECINECONCS
ETRDECONWTOCS
ECUN
FR
FI
FOREIGN
FARM
FIR
FAO
FK
FARC
FAS
FJ
FREEDOM
FAC
FINANCE
FBI
FTAA
FM
FCS
FAA
FORCE
FDA
FTA
FT
FCSC
FMGT
FINR
FIN
FDIC
FOR
FOI
FO
FMLN
FISO
GM
GERARD
GT
GA
GG
GR
GTIP
GH
GZ
GE
GB
GY
GAZA
GJ
GEORGE
GOI
GCC
GMUS
GI
GLOBAL
GV
GC
GL
GOV
GKGIC
GF
GWI
GIPNC
GUTIERREZ
GTMO
GANGS
GAERC
GUILLERMO
GASPAR
HR
HA
HYMPSK
HO
HK
HUMAN
HU
HN
HHS
HURI
HUD
HUMRIT
HUMANITARIAN
HUMANR
HL
HSTC
HILLARY
HCOPIL
HADLEY
HOURANI
HI
HUM
HEBRON
HUMOR
IZ
IN
IAEA
IS
IMO
ILO
IR
IC
IT
ITU
ID
IV
IMF
IBRD
IWC
ICAO
ICRC
INF
IO
IPR
ISO
IK
ISRAELI
IQ
ICES
IDB
INFLUENZA
IRAQI
ISCON
IGAD
IRAN
ITALY
IRAQ
ICTY
ICTR
ITPGOV
ITALIAN
IQNV
IADB
INTERNAL
INMARSAT
IRDB
ILC
INCB
INRB
ICJ
ISRAEL
INR
IEA
ISPA
ICCAT
IOM
ITRD
IHO
IL
IFAD
ITRA
IDLI
ISCA
INL
INRA
INTELSAT
ISAF
ISPL
IRS
IEF
ITER
INDO
IIP
IND
IEFIN
IACI
IAHRC
INNP
IA
INTERPOL
IFIN
ISSUES
IZPREL
IRAJ
IF
ITPHUM
ITA
IP
IRPE
IDA
ISLAMISTS
ITF
INRO
IBET
IDP
IRC
KMDR
KPAO
KOMC
KNNP
KFLO
KDEM
KSUM
KIPR
KFLU
KE
KCRM
KJUS
KAWC
KZ
KSCA
KDRG
KCOR
KGHG
KPAL
KTIP
KMCA
KCRS
KPKO
KOLY
KRVC
KVPR
KG
KWBG
KTER
KS
KN
KSPR
KWMN
KV
KTFN
KFRD
KU
KSTC
KSTH
KISL
KGIC
KSEP
KFIN
KTEX
KTIA
KUNR
KCMR
KCIP
KMOC
KTDB
KBIO
KBCT
KMPI
KSAF
KACT
KFEM
KPRV
KPWR
KIRC
KCFE
KRIM
KHIV
KHLS
KVIR
KNNNP
KCEM
KLIG
KIRF
KNUP
KSAC
KNUC
KPGOV
KTDD
KIDE
KOMS
KLFU
KNNC
KMFO
KSEO
KJRE
KJUST
KMRS
KSRE
KGIT
KPIR
KPOA
KUWAIT
KIVP
KICC
KSCS
KPOL
KSEAO
KRCM
KSCI
KNAP
KGLB
KICA
KCUL
KPRM
KFSC
KQ
KPOP
KPFO
KPALAOIS
KREC
KBWG
KR
KTTB
KNAR
KCOM
KESS
KINR
KOCI
KWN
KCSY
KREL
KTBT
KFTN
KW
KRFD
KFLOA
KHDP
KNEP
KIND
KHUM
KSKN
KOMO
KDRL
KTFIN
KSOC
KPO
KGIV
KSTCPL
KSI
KPRP
KFPC
KNNB
KNDP
KICCPUR
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KDMR
KFCE
KIMMITT
KMCC
KMNP
KSEC
KOMCSG
KGCC
KRAD
KCRP
KAUST
KWAWC
KCHG
KRDP
KPAS
KTIAPARM
KPAOPREL
KWGB
KIRP
KMIG
KLAB
KSEI
KHSA
KNPP
KPAONZ
KWWW
KGHA
KY
KCRIM
KCRCM
KGCN
KPLS
KIIP
KPAOY
KTRD
KTAO
KJU
KBTS
KWAC
KFIU
KNNO
KPAI
KILS
KPA
KRCS
KWBGSY
KNPPIS
KNNPMNUC
KNPT
KERG
KLTN
KPREL
KTLA
KO
KAWK
KVRP
KAID
KX
KENV
KWCI
KNPR
KCFC
KNEI
KFTFN
KTFM
KCERS
KDEMAF
KMEPI
KEMS
KBTR
KEDU
KIRL
KNNR
KMPT
KPDD
KPIN
KDEV
KFRP
KTBD
KMSG
KWWMN
KWBC
KA
KOM
KWNM
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KRGY
KNNF
KICR
KIFR
KWMNCS
KPAK
KDDG
KCGC
KID
KNSD
KMPF
KWMM
MARR
MX
MASS
MOPS
MNUC
MCAP
MTCRE
MRCRE
MTRE
MASC
MY
MK
MG
MU
MILI
MO
MZ
MEPP
MCC
MEDIA
MOPPS
MI
MAS
MW
MP
MEPN
MV
MD
MR
MC
MCA
MT
MIL
MARITIME
MOPSGRPARM
MAAR
MOOPS
ML
MA
MN
MNUCPTEREZ
MTCR
MUNC
MPOS
MONUC
MGMT
MURRAY
MACP
MINUSTAH
MCCONNELL
MGT
MNUR
MF
MEPI
MOHAMMAD
MAR
MAPP
MNU
MFA
MTS
MLS
MEETINGS
MERCOSUR
MED
MNVC
MIK
MBM
MILITARY
MAPS
MARAD
MDC
MACEDONIA
MASSMNUC
MUCN
MQADHAFI
MPS
NZ
NATO
NI
NO
NU
NG
NL
NPT
NS
NA
NP
NASA
NSF
NEA
NANCY
NSG
NRR
NATIONAL
NMNUC
NC
NSC
NAS
NARC
NELSON
NATEU
NDP
NIH
NK
NIPP
NR
NERG
NSSP
NE
NTDB
NT
NEGROPONTE
NGO
NATOIRAQ
NAR
NZUS
NCCC
NH
NAFTA
NEW
NRG
NUIN
NOVO
NATOPREL
NV
NICHOLAS
NPA
NSFO
NW
NORAD
NPG
NOAA
OPRC
OPDC
OTRA
OECD
OVIP
OREP
ODC
OIIP
OAS
OSCE
OPIC
OMS
OFDP
OFDA
OEXC
OPCW
OIE
OSCI
OM
OPAD
ODPC
OIC
ODIP
OPPI
ORA
OCEA
OREG
OMIG
OFFICIALS
OSAC
OEXP
OPEC
OFPD
OAU
OCII
OIL
OVIPPRELUNGANU
OSHA
OPCD
OPCR
OF
OFDPQIS
OSIC
OHUM
OTR
OBSP
OGAC
OESC
OVP
ON
OES
OTAR
OCS
PREL
PGOV
PARM
PINR
PHUM
PM
PREF
PTER
PK
PINS
PBIO
PHSA
PE
PBTS
PA
PL
POL
PAK
POV
POLITICS
POLICY
PO
PRELTBIOBA
PKO
PIN
PNAT
PU
PGOVPREL
PALESTINIAN
PTERPGOV
PELOSI
PAS
PP
PTEL
PROP
PRELAF
PRHUM
PRE
PUNE
PIRF
PVOV
PROG
PERSONS
PROV
PKK
PRGOV
PH
PLAB
PDEM
PCI
PRL
PRM
PINSO
PERM
PETR
PPAO
PERL
PBS
PETERS
PRELBR
PCON
POLITICAL
PMIL
POLM
PKPA
PNUM
PLO
PTERM
PJUS
PARMP
PNIR
PHUMKPAL
PG
PREZ
PGIC
PAO
PROTECTION
PRELPK
PGOVENRG
PATTY
PSOC
PARTIES
PGOVEAIDUKNOSWGMHUCANLLHFRSPITNZ
PMIG
PAIGH
PARK
PETER
PHUS
PKPO
PGOVECON
POUS
PMAR
PWBG
PAR
PGOVGM
PHUH
PTE
PY
POLUN
PDOV
PGOVSOCI
PGOVPM
PRELEVU
PGOR
PBTSRU
PHUMA
PHUMR
PPD
PGV
PRAM
PARMS
PINL
PSI
PKPAL
PPA
PTERE
PGOF
PINO
PREO
PHAS
PAC
PRESL
PORG
PS
PGVO
PKFK
PSOE
PEPR
PINT
PRELP
PREFA
PNG
PTBS
PFOR
PGOVLO
PHUMBA
PREK
PHJM
POLINT
PGOVE
PHALANAGE
PARTY
PECON
PEACE
PROCESS
PLN
PEDRO
PF
PGPV
PCUL
PGGV
PSA
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PGIV
PHUMPREL
POGOV
PEL
PBT
PAMQ
PINF
PSEPC
POSTS
PAHO
PHUMPGOV
PGOC
PNR
RS
RP
RU
RW
RFE
RCMP
RIGHTSPOLMIL
REFORM
RO
ROW
ROBERT
REACTION
REPORT
REGION
RELATIONS
RAY
ROBERTG
RIGHTS
RM
RATIFICATION
RREL
RBI
RICE
ROOD
REL
RODHAM
RGY
RUEHZO
RELIGIOUS
RELFREE
RUEUN
RELAM
RSP
RF
REO
REGIONAL
RUPREL
RI
REMON
RPEL
RSO
SCUL
SENV
SOCI
SZ
SNAR
SO
SP
SU
SY
SI
SMIG
SYR
SA
SW
SF
SR
SYRIA
SNARM
START
SPECIALIST
SG
SNIG
SCI
SGWI
SE
SIPDIS
SANC
SELAB
SN
SETTLEMENTS
SCIENCE
SENVENV
SENS
SPCE
SPAS
SECURITY
SENC
SOCIETY
SOSI
SENVEAGREAIDTBIOECONSOCIXR
SEN
SPECI
ST
SL
SENVCASCEAIDID
SC
SECRETARY
STR
SNA
SOCIS
SADC
SEP
SK
SHUM
SYAI
SMIL
STEPHEN
SNRV
SKCA
SENSITIVE
SECI
SCUD
SCRM
SGNV
SECTOR
SAARC
SENVSXE
SWMN
STEINBERG
SOPN
SOCR
SCRS
SWE
SARS
SNARIZ
SUDAN
SENVQGR
SAN
SM
SFNV
SSA
SPCVIS
SOFA
SCULKPAOECONTU
SENVKGHG
SHI
SEVN
SH
SNARCS
SNARN
SIPRS
TBIO
TW
TRGY
TSPA
TU
TPHY
TI
TX
TH
TIP
TSPL
TNGD
TZ
TS
TC
TK
TURKEY
TERRORISM
TPSL
TINT
TRSY
TERFIN
TPP
TT
TECHNOLOGY
TE
TAGS
TRAFFICKING
TJ
TN
TO
TD
TP
TREATY
TR
TA
TIO
TECH
TF
TRAD
TNDG
TWI
TPSA
TWL
TAUSCHER
TRBY
TL
TV
THPY
TSPAM
TREL
TRT
TNAR
TFIN
TWCH
THOMMA
THOMAS
TERROR
TRY
TBID
UK
UNESCO
UNSC
UNGA
UN
US
UZ
USEU
UG
UP
UNAUS
UNMIK
USTR
UY
USUN
UNEP
UNDC
UV
UNPUOS
UNSCR
USAID
UNODC
UNRCR
UNHCR
UNDP
UNCRIME
UA
UNHRC
UNRWA
UNO
UNCND
UNCHR
USAU
UNICEF
USPS
UNOMIG
UNESCOSCULPRELPHUMKPALCUIRXFVEKV
UR
UNFICYP
UNCITRAL
UNAMA
UNVIE
USTDA
USNC
UNCSD
USCC
UNEF
UNGAPL
USSC
UNMIC
UNTAC
UNCLASSIFIED
USDA
UNCTAD
USGS
UNFPA
UNSE
USOAS
UE
UAE
UNCHS
UNDESCO
UNC
UNSCS
UKXG
UNGACG
UNHR
UNBRO
UNCHC
UNFCYP
UNIDROIT
WHTI
WIPO
WTRO
WHO
WTO
WMO
WFP
WEET
WS
WE
WA
WHA
WBG
WILLIAM
WI
WSIS
WCL
WEBZ
WZ
WW
WWBG
WMD
WWT
WMN
WWARD
WITH
WTRQ
WCO
WEU
WB
WBEG
Browse by classification
Community resources
courage is contagious
Viewing cable 03FRANKFURT6409, Stability and Growth Pact: Listerine Syndrome;
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.
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. #03FRANKFURT6409.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
03FRANKFURT6409 | 2003-08-04 13:47 | 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 08 FRANKFURT 006409
SIPDIS
LONDON FOR HADDA
TREASURY FOR OASIA
E.O. 12958: N/A
TAGS: ECON EFIN EUN
SUBJECT: Stability and Growth Pact: Listerine Syndrome;
Striving to Do Good, Good Enough? Key Word -
Flexibility
T-IA-F-03-0040
¶1. Summary: "The taste people hate, twice a day."
Wretchedly-tasking Listerine's old advertising slogan
is akin to the criticism of the EU Stability and Growth
Pact (SGP): we don't like these rules, but we need
rules at least twice a year when budget results are
issued. When Europe was growing, budgets were not
under strain. The rules were tolerable. Slow growth
has changed all that. Calls for the SGP to be
suspended or modified, however, are likely to go
unheeded. Where does that leave this debate?
¶2. One way to approach the debate would be to
distinguish between the "letter" of the SGP and its
"spirit." The letter of the Pact is popularly
distilled into one number, the reference value that
deficits exceeding 3% of GDP are "excessive." If an
excessive deficit were not corrected in the year after
which it was identified, the member state concerned
could be subject to sanctions. The spirit of the Pact
essentially is that governments should work hard to
avoid any excessive deficit and, once it occurs, work
hard to get it back under control. Economies and
budgets, being less than clock-work like in their
predictability, often incur surprises or "exceptional"
or "special circumstances." Bad things happen.
¶3. At this writing, the outlook seems rather clear
that Portugal, Germany and France will not abide by
Ecofin's recommendations to bring their budgets under
3% value (for Germany and France in 2004) or keep them
there (Portugal in 2003). Sanctions, however, are not
automatic. Instead, a question EU Finance Ministers
will collectively decide is whether the member state
concerned is failing to take necessary corrective
action. This, necessarily, is a political as well as an
economic question.
¶4. Flexibility is the word of the day in the SGP
debate. Flexibility exists in the rules. Exercising
this flexibility responsibility will be a challenge for
the European Commission and Ecofin. Being flexible by
ignoring the rules is one thing. Being flexible by
taking into account measurable efforts to get the
structural deficit under control, including through
structural reforms, would be quite another. Such
efforts could mean brighter growth and budget
performance. That, after all, is the point of the SGP.
End Summary
SGP: Storm and Drang Amounting to Very Little
¶5. The SGP is getting its share of hits in the press.
As the euro area slogs through its third year of
sluggish economic growth, government budget deficits
are rising. Goldman Sachs estimates that for the euro
area these deficits will increase from 2.2% of GDP in
2002 to 2.7% in 2003. Portugal, Germany and France
have been found to have "excessive deficits," well
above the 3% of GDP reference value of the Treaty.
Ecofin has issued all three recommendations to reduce
their deficits below 3% and keep them there. Pro-
cyclical budget policy seems counter-intuitive.
Wouldn't tightening fiscal policy risk slowing an
already crawling economy? Calls for suspending the
SGP, revising it, or abolishing it seem to be a steady
diet of some financial journalists. They are likely to
amount to nothing.
SGP Rules: The Basics, Revisited
¶6. Many economists of the euro area agree that fiscal
rules are necessary for the European Monetary Union.
The basic argument is to contain the "spillover"
effects from a country with a high deficit and growing
debt on interest rates and, consequently, on the
financing costs of other countries in the union.
Higher interest rates could put pressure on the
European Central Bank (ECB) to lower rates, potentially
conflicting with its primary objective of maintaining
price stability. A framework of rules to coordinate
and discipline 12 national fiscal policies with a
single monetary policy is designed to avoid such
spillover effects.
¶7. Even Belgian economist Paul De Grauwe, often a
critic of the EMU, admits that some rules are
necessary. Nonetheless, in his "Economics of Monetary
Union" published in 2000 he criticized the SGP as being
"unbalanced" imposing strict rules at the expense of
flexibility. He points out that during the 1991-93
recession six EU countries had government deficits of
over 3% of GDP. So why impose such a strict rule if it
is bound to be broken? To do so risks breaking the
rules and diminishing the value of the pact.
¶8. Such criticism is, at least to date, misplaced.
This is the first time the excessive deficit procedures
(EDP) have been invoked. It is difficult to know
beforehand how they will be applied, particularly
during this period of prolonged economic slowdown.
Commented a senior Finance Ministry official who
participated in the drafting of the SGP, the authors
did not foresee such a long period of stagnation.
Why 3%?
¶9. 3% of GDP reference value seems to be a bit of a
rough rule. Yet it does have its logic. If trend real
economic growth were 3% (the high side of the euro
area's growth potential), inflation were 2% (the
European Central Bank's definition of price stability)
this would imply nominal growth trend of 5% per year
(which was the average nominal growth rate for the Eu-
15 during 1991-2000). If the stock of Euro area debt
were 60% of GDP (which it was for the Euro area 11
years ago when the basic rules were being written),
then a 3% of GDP government deficit would imply no
increase in the debt relative to GDP. That is, a
steady state.
¶10. The rough rule is even a bit rougher in reality.
As of 2002 the Euro 12 have a debt stock of 69% of GDP.
Nominal growth has been trending below 4%, likely to be
closer to 3% this year. The higher debt stock and
lower growth imply a deficit of around 2.7% to avoid a
further increase in debt as a share of GDP. For
countries with higher than average debt (Italy) and
average or below average growth (German), surpluses
would be in order to reach a sustainable level. Not
doing so can put pressure on interest rates and strain
on monetary policy, as noted above. No wonder small
countries that have moved close to budget surplus
during the cyclical upswing are displeased with the
larger countries that did not (France, Germany) or who
did not bring down their overall debt levels (Italy).
France is a special case: debt level around 60% and
growth rates around average.
¶11. The 3% reference value also is attractive because
it is relatively easy to explain and as transparent as
Eurostat can make it. More sophisticated measurements
of cyclically adjusted numbers are used by the
Commission to monitor trends. These lack clarity
(assumptions could vary) and simplicity.
¶12. The rules are unlikely to change. The recent
draft Treaty establishing a Constitution for Europe
incorporated the SGP rules, without substantive change.
Similarly, in its May 2003 Concluding Statement of its
Article IV consultations on the Euro Area Policies, the
IMF mission stated that the 3% limit "is and must
remain one of the key references values of the monetary
union." "An Agenda for a Growing Europe" issued by an
Independent High-Level Study Group chaired by Belgian
economist Andre Sapir in July 2003, argued that the 3%
of GDP upper limit should be kept to "steer fiscal
discipline." Nonetheless, there is another way to
approach the issue, namely, flexibly.
Need for Flexibility
¶13. De Grauwe's view on flexibility has become the
keyword of the day. Sapir's High Level Study Group
pleas for more differentiation in applying the SGP,
taking into account a country's debt level, and for
more flexibility in the case of severe cyclical
downturns. For the latter, the High Level Study Group
recommended changing the definition of the term
"exceptional circumstances" to be defined as simply a
negative annual growth rate rather than a 2 percent
decline. This would require a change in the Treaty.
Others, such as the ECB, argue that the SGP already has
sufficient flexibility. Which is correct?
Rules of the Game: Economists As Wanna-be Lawyers
¶14. To understand the debate, familiarity with the
rules of the game is helpful. This can be a chore.
The SGP is not one tidy document, but is composed of
Treaty Articles and Protocols and Council Regulations
and Resolutions. Article 104(2) of the Treaty states
that the Commission is to monitor member states'
budgetary situation and whether they comply with the 3%
reference value unless the excess over 3% is declining
close toward 3% or is "only exceptional and temporary."
Article 2(1) of Council Regulation (EC) No 1467/97
("the Council Regulation") defines "exceptional and
temporary" as resulting from an unusual event outside
the control of the member state concerned and which has
a major impact on the financial position of the general
government or when resulting from a severe economic
downturn. A severe economic downturn is exceptional
only if there is an annual fall of real GDP of at least
2%, according to Article 2(2).
¶15. Article 2(3) refines the point by allowing the
Commission to examine "other supporting evidence" that
would suggest an exceptional circumstance, even if the
decline is less than 2%. Such evidence includes the
abruptness of the downturn or the accumulated loss of
output relative to past trends. The Resolution of the
European Council on the SGP ("the Council Resolution")
further commits member states not to invoke the
benefits of Article 2(3) unless they are in a "severe
recession," further defined as an annual fall in real
GDP of at least 0.75%.
¶16. For Portugal, Germany and France, the Commission
considered whether exceptional circumstances were at
play and, at the time it was preparing its report,
decided in the negative. Thus, it issued a report that
these countries' deficits were excessive. Ecofin
agreed and issued recommendations to each of these
countries to "bring the situation to an end." As
provided for under the Council Regulation, Ecofin gave
the Member country concerned four months to take
effective action. Article 3(4) of the Council
Regulation states that the deadline for the correction
of the excessive deficit "should be completed in the
year following its identification unless there are
special circumstances." Under the Council Resolution,
member states have committed themselves to this action.
The phrase "special circumstances" is not defined
either in the Council Regulation or Council Resolution.
¶17. What happens if the deficit is not corrected?
Article 104(9) of the Treaty states that: "If a Member
State persists in failing to put into practice the
recommendations of the Council, the Council may decide
to give notice to the Member State to take, within a
specified time-limit, measures for the deficit
reduction which is judged necessary by the Council in
order to remedy the situation." If the Member State is
not implementing the recommendations or the measures
are inadequate, Ecofin is to take action, on the basis
of a recommendation from the Commission, either under
Article 104(9), that is give a (or another) notice or
under Article 104(11), resort to sanctions. Or if the
excessive deficit has not been corrected within the
time limits specified either in the initial EDP or a
notice issued under 104(9), Ecofin can again issue
another notice under 104(9) or move to sanctions.
¶18. Sanctions can be invoked "as long as a Member
State fails to comply with a decision taken in
accordance with" 104(9). Thus, a Member State would
have to "fail to put into practice the recommendations"
of Ecofin and would have to fail to comply with
recommendations in any follow-up notice. In short, be
incorrigible.
Sanctions: Deterrent or Admission of Failure?
¶19. For the record, sanctions themselves are also a
drawn out affair. When Ecofin takes a decision under
104(11) a non-interest-bearing deposit is to be
required. This would consist of a 0.2% of GDP fixed
component and a variable component of one-tenth of the
difference between the deficit as a percentage of GDP
and the 3% reference value. The total deposit cannot
exceed 0.5% of GDP.
¶20. The deposit is converted into a fine if two years
after the deposit was required the excessive deficit
had not been corrected. A German Finance Ministry
official admitted that just how the fine would be
imposed has not been thought through. "You see, when
we drafted these provisions, they were not meant to be
used, but to serve as a deterrent. "
¶21. Article 104(11) includes other possible measures:
require the member state concerned to publish
additional information before issuing bonds and
securities or invite the European Investment Bank to
reconsider its lending policy to the Member State
concerned.
Now we turn to the application of the rules to the
"live cases" of Portugal, Germany and France.
Portugal: Brightness Before the Burn Out?
¶22. In November 2002, Ecofin decided that Portugal's
2001 deficit of 4.1% was excessive. The Council's
recommendation called for (a) putting an end to the
excessive deficit as rapidly as possible (i.e. the year
following its identification, 2002); (b) implementing
budget plans for 2002 that would bring the deficit down
to 2.8%; and (c) implementing necessary measures to
ensure the 2003 budget is below 3%.
¶23. The GOP went through hell and high water to meet
(a) and (b). In the event, the deficit came in at
2.8%. In March 2003, however, the Council did not
"abrogate" their excessive deficit decision. Rather,
they wanted to assess the sustainability of the deficit
remaining below 3%. According to Commission officials,
prospects are not good.
¶24. Portugal's economy is contracting and the deficit
may well shoot up to 5% of GDP, according to Commission
experts. UBS Warburg suggests part of the contraction
was due to budget consolidation, between 0.7% to 1.3%.
In September Eurostat will give its assessment of the
budget outlook for 2003. The Commission is likely to
make an assessment either in September or shortly after
the final 2003 budget numbers are published in March
¶2004. The Commission is likely to make a report with
recommendations to Ecofin.
¶25. How might this case be handled by the Commission
and Ecofin? Under the "letter" of the rules, the
Commission is considering whether, in fact, there are
"special circumstances" given the decline in GDP. As
noted above, the phrase "special circumstances" under
the Council Regulation regarding the correction of the
deficit (Article 3(4)) is not defined. This contrasts
with the phrase "exceptional" under Article 2(3) of the
Council Regulation when the Commission makes its
initial assessment of whether a deficit is excessive.
¶26. With regard to the "spirit" of the rules, the GOP
probably can make a good case that they have complied
as much as possible with the Ecofin recommendations.
They pushed the deficit below 3% in 2002, as
recommended, and are committed to achieve a sustainable
deficit under the 3% reference value. Ecofin noted
that the GOP is moving to improve the collection and
processing of government data, reinforce mechanisms to
coordinate budgetary policy, and implement policies to
foster growth, employment and competitiveness.
Whatever the Commission and Ecofin do on Portugal will
set a precedent for the German and French cases to
follow.
Germany: Miss America on Your Arm or Egg in Your
Face
¶27. In January 2003 Ecofin determined that Germany had
an excessive deficit. They recommended that the German
government (a) put an end to the excessive deficit as
rapidly as possible in accordance with Council
Regulation Article 3(4) (i.e. the year after the
deficit was identified, 2004); and (b) implement their
budget plans for 2003 which, on the basis of German GDP
growth projections of 1.5% in 2003, aim at reducing the
deficit in 2003 to 2.75% of GDP by adopting budgetary
measures of 1% of GDP. Ecofin "noted" the commitment
of German authorities to implement structural reforms
and to reduce the underlying budgetary deficit by more
that 0.5% of GDP per year, with the exception of 2005
due to the introduction of income tax reforms.
¶28. The German government's budget plan for 2003
achieves a budget deficit reduction of almost 1%, in
structural terms, at least on paper. This plan passed
muster in the four month review of German budget
performance in May. However, the decline in growth,
probably close to zero this year, will help push the
deficit close to 4% in 2003. Under the "letter" of the
rules, the deficit need not be corrected until 2004.
¶29. Unfortunately, 2004 doesn't look much better.
Germany has announced that it will bring forward the
income tax cut scheduled for 2005 to January 2004, and
implement income tax cuts that had been postponed from
January 2003. Combined this would amount to a revenue
loss of around 1.3% of GDP, only part of which would
be financed through reduced expenditures. Goldman
Sachs estimates that the deficit will linger around 4%.
¶30. The German Finance Ministry differs. It hopes
that income tax cuts combined with structural reforms
and structural budget consolidation through subsidy
reductions will give a boost to economic growth to
around the Finance Ministry's assumption of 2%. This
should help push the deficit toward the 3% level.
¶31. This strategy is risky, in the view of a senior
ECB official. The income tax cuts may be pocketed by
politicians without making the important structural
reforms and subsidy cuts. Finance Ministry officials
admit that there are risks. It is a package deal - no
structural reforms or subsidy cuts - then no income tax
cuts in 2004. Success would be a "great step forward."
Failure would be "catastrophic," in the words of a
senior Finance Ministry official. Miss America on your
arm or egg on your face.
¶32. Under the SGP rules, German Finance Ministry
officials say they will argue "letter" and "spirit."
Like the case of the Portuguese, they will argue that
not realizing their assumed growth projections and the
prolonged economic stagnation are "special
circumstances" that have prevented correction of the
deficit by 2004. As noted above, this phrase is
undefined. German Finance Ministry officials hope the
Commission will exercise some discretion. German
Finance Ministry officials explain that they will keep
to the commitment of an average annual reduction of its
structural deficit of 0.5%, with a pause in 2004, due
to the income tax cuts, rather than in 2005 when these
cuts were originally scheduled to be implemented.
¶33. With respect to "spirit," Ministry officials say
they will point out that the government followed
Ecofin's recommendation to stick to their 2003
reduction plan, e.g. reduction of the structural
deficit by nearly 1%. Rather than boosting confidence,
as the Commission and ECB had suggested it might,
confidence languished. The announced program of
structural reforms and bringing forward the tax cuts
has provided the sweetener to push through subsidy cuts
envisaged in the budget consolidation program. The
idea of advancing the income tax cuts, they will argue,
is to bolster confidence while keeping their
commitments to Ecofin to cut the deficit over time and
undertake structural reforms. After all, getting below
the 3% reference value depends as much on the
denominator as the numerator, that is, on growth as
much as the absolute size of the deficit.
¶34. Commission officials privately are not convinced
by the "special circumstances" arguments. In a speech
in Berlin on July 1 European Commissioner Solbes was
"quite clear": "the Commission expects that Germany
will respect the EMU policy framework. A general
government deficit above 3% of GDP in 2004, for the
third year in a row, would be incompatible with our
common budgetary rules."
¶35. At the conclusion of the Fund's Article IV
Consultation with German authorities, the Fund mission
expressed support for the strategy of packaging
structural reforms, budget consolidation through
reduced expenditures, and advancing income tax cuts.
The mission conceded, however, that advancing the
income tax cuts "will make the fiscal arithmetic for
2004 difficult," and that getting below the 3%
reference value will "be a challenge" in 2004. But
overall, the mission sensed that "the prospect for
meaningful structural change is finally in the air. If
proposed reforms are implemented and fiscal
consolidation put on firmer ground, we are optimistic
that Germany's economy can put a long period of weak
performance behind it." Testimony on behalf of
Germany.
¶36. The first indications of the budget for 2004 will
be in the budget plan to be agreed by the end of this
year in Germany. If the budget plan has a deficit of
3% for 2004, perhaps with the help of "aggressive
assumptions" on growth and revenues, the first real
evidence of actual results will appear only in
September 2004 when Eurostat publishes its preliminary
estimates. Final figures for 2004 will be available
only in March 2005. On each of these dates, the
Commission could launch a report with recommendations
to Ecofin.
France: Unique, naturalement
¶37. In June Ecofin determined that France had an
excessive deficit. They recommended that the French
authorities (a) put an end to the excessive deficit as
rapidly as possible and by "2004 at the latest;" (b)
achieve a "significantly larger improvement in the
cyclically adjusted deficit in 2003 than currently
planned," and (c) implement measures to ensure that the
cumulative improvement in 2003-2004 is enough to bring
the nominal deficit "below 3% in 2004 at the latest."
Ecofin noted the commitment of French authorities to
ensure tighter control of expenditures and to achieve
pension reform.
¶38. As reported septel, this decision was not
supported unanimously, the Dutch and the Danes
dissenting. Ecofin had issued an "early warning" to
the French in January calling for "at least 0.5
percentage point of GDP" improvement in its cyclically-
adjusted budgetary position. In March the French
government's official forecast showed only a 0.1
percentage point improvement. It seemed that the
French had not taken to heart Ecofin's earlier
recommendation.
¶39. Reiterating the call for a 0.5 percentage point
cut in June when half the budget year was over seemed
unrealistic, according to Commission experts. Thus,
the formula was agreed that there should be an average
reduction of 0.5 percentage points annually over the
two years, 2003-2004. This suggests a one percentage
point cut in 2004. Moreover, Commission experts expect
the French deficit to be close to 4% of GDP in 2003.
Thus, a percentage point reduction in the deficit would
be necessary in 2004 in any case. Commission staff
consider such a deep cut problematic. German Finance
officials consider it the maximum possible.
¶40. The next step for France will come on October 3.
Under the SGP rules, this will be the four month
deadline by which time French authorities must explain
the measures they will take to comply with Ecofin's
recommendations. This will be a time of testing of
whether France is serious about respecting the SGP, at
least on paper.
¶41. German Finance Ministry officials, while quick to
emphasize their wonderful working relationship with
France, just as quickly distinguish their position on
the SGP from France's. They assert that they are
sticking by the rules, if not the letter at least the
spirit. In their view, France is doing neither.
¶42. The IMF also has supported the French Government's
basic economic strategy, in particular "the structural
orientation of policies and the intention to resume
fiscal adjustment." In its Article IV Consultation
Concluding Statement issued in June, the IMF mission
praised the legislation of the "key and difficult
milestone" of pension reform. The Fund notes that the
2003 deficit will be more than one percentage point
higher than planned and supports the objective of
reducing the underlying general government budget
deficit by 0.5 percentage points in 2004. Such a
modest reduction would not be in line with Ecofin's
recommendation.
¶43. The Fund mission goes on to point out that the
"credibility of the government's fiscal and economic
policy strategy hinges crucially on its ability to
reduce the share of public spending in GDP." Notably,
it points out that priority structural areas identified
by the government for reform (pension, health care,
reform of the state, and decentralization) will help
reduce expenditures as a share of GDP and "illustrate
the synergies between budgetary reform and possible
increases in potential growth." Here, as in the case
of Germany and Portugal, is the connection between
fiscal discipline, structural reforms and growth. An
argument that France is operating within the "spirit"
of the SGP. Moreover, France could argue that its past
growth rates and debt position suggest that its deficit
is sustainable - at least for a while - and not putting
pressure on the euro system.
Growth and the SGP
¶44. The stated objective of the SGP is "sound
government finances as a means of strengthening the
conditions for price stability and for strong
sustainable growth conducive to employment creation."
This suggests that discretionary fiscal policies should
be avoided so as not to burden monetary policy, and
foster low interest rates that are conducive to long-
term planning and investment. For most EU countries
this means cutting expenditures to achieve a more
sustainable level of debt or to avoid increased in debt
in order to ensure its sustainability when increased
expenditures become unavoidable due to aging
populations.
¶45. In its June 2003 report on "Public Finances in the
EMU," the Commission notes that budgetary consolidation
"often acts as a catalyst for structural reforms."
Structural reforms can boost growth and growth
potential. As the Commission notes in that report,
"the effect of budgetary consolidation on output could
be reinforced, and even positive, in the short-run if
fiscal consolidation is combined with structural reform
of factor and product markets and accompanied with an
accommodating monetary stance."
¶46. So that's the deal for growth: budget
consolidation, structural reform, accommodative
monetary policy. Interest rates are at record lows.
Pressure has grown for structural reforms due to budget
pressures. It would be more than a pity to relieve
that pressure now. No wonder Dutch Finance Minister
Zalm, noted for his tough stance on deficits, has
called for fines for France and Germany if they fail to
get their finances in order next year.
¶47. How could flexibility be applied without
sacrificing the rules? One point is that when Ecofin
made its recommendations for all three countries, the
Commission's and ECB's forecast was for much more
robust growth than has occurred. Thus, the rising
deficits could be due, in part, to cyclical factors.
In November 2002 the European Commission agreed to give
importance to cyclically adjusted budget balances in
its surveillance and ensure a cyclically-adjusted
budget position of at least 0.5% of GDP and more
emphasis on the quality of public expenditures that are
conducive to growth and employment.
¶48. The IMF Mission on Euro Area policies has praised
these measures. Specifically the Fund staff liked the
notion that countries with excessive deficits make
adjustments of at least 0.5% of GDP per year in
cyclically adjusted terms and that multi-year
consolidation plans should aim at curbing expenditures.
The Fund staff admits, however, that these steps will
not ensure deficits drop immediately below 3%.
Nonetheless, they argue that those countries that
follow these guidelines of "0.5 percent high quality
multi-year adjustment" should be "considered on a
sustainable path toward compliance with the Pact."
Striving to do good should be good enough.
¶49. Maintaining a judicious balance between enforcing
the letter of the SGP while safeguarding the spirit
will be the next challenge for the Commission and
Ecofin. No one said that coordinating 12 national
budgets during a prolonged economic downturn would be
easy.
¶50. This cable coordinated with Embassies Berlin,
Lisbon, Paris, Rome, the Hague and USEU Brussels.
(U) POC: James Wallar, Treasury Representative, e-mail
wallarjg2@state.gov; tel. 49-(69)-7535-2431, fax 49-
(69)-7535-2238.
Herrman