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ECONOMIC OBJECTIVES

1. PROMOTING RUSSIAN PARTICIPATION

   France has called publicly for Russia to join the ranks of the G-7. It would thus serve as a counter-weight to the German sphere of interest developing east and south of Berlin. This move is resisted by the United States and Japan, the two most powerful economic players in the group. Since it is expected that the Russian Presidential Elections will consume much of the precious time leaders have to devote to political issues, France's personal diplomacy - embodied in Chirac - will most likely be of consequence to the Summit process

2. ENHANCED ASSISTANCE TO DEVELOPING COUNTRIES

   France is currently the most generous G7 aid donor, by aid as a % of GDP. It spent $8.4 bn or 0.55 percent of its GDP on foreign aid last year. The country has maintained an extensive network of relations with former colonies especially in sub-Saharan Africa. France will urge its partners to revitalize developmental aid. Serious financial constraints on the treasuries of the G7 members will oblige each leader to reexamine existing aid priorities. France will offer guidance as to how scarce aid-monies should be allocated. Mr. Chirac wants multilateral debt relief for developing countries discussed, but has so far failed to persuade the Germans to support I. M. F. gold sales for this purpose. France will ask the G-7 to endorse multilateral loan forgiveness schemes for the Least Developed Countries through the creation of a Special IMF fund.

3. IFI REFORM FOR EXCHANGE RATE STABILITY

   France will most likely try to follow up on the Halifax Summit commitments to reform international institutions. The I. M. F., World Bank and the newly-created World Trade Organization will be scrutinized and their role reassessed. Special emphasis will be placed on exchange rate fluctuations and ways to prevent monetary crises. With the upcoming E.M.U. talks France has a particular interest in achieving greater exchange rate stability. France wants the innovative meeting of the heads of the I. M. F., W. B., UN and W. T. O. with the P-8 to give a political impetus to reform.

4. CONDITIONALITY ON FURTHER TRADE LIBERALIZATION

   Mr. Chirac stressed that harmonious development of world trade would be vital if the West was to find a third way between the endemic job insecurity in North America and Europe's chronic level of unemployment. The French President added that public opinion in the West could accept lower wages, less extensive social security and different labour laws if this enabled developing countries to compete successfully for export markets. He warned however, that other aspects of labour markets in developing countries would not be tolerated. French President Jacques Chirac devoted a large part of his opening address at the Lille Summit to the need for a "few basic rules" to govern the greater freedom of trade ushered in by the conclusion of the seven-year Uruguay round of trade liberalization talks.

5. EMPLOYMENT

   France hosted the Lille G-7 Ministerial meeting on Employment. Given France's chronic high unemployment rate (11.9%), the issue of jobs will remain on its agenda. Lyon will be an opportunity for leaders to review the work done by their ministers at Lille and to give any new ideas some political backing. The issues of labour market rigidities (micro) and technological innovation with its impact on job retraining should be discussed. The G-7 as a Group will confirm their resolve to work against the spread of unemployment by sustaining economic activity. Unemployment resulting from industries shifting their production overseas will also be a topic.

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POLITICAL AND GLOBAL ISSUES OBJECTIVES

1. SUPPORT FOR THE BOSNIAN AND MID EAST PEACE PROCESS

   In Bosnia, France will push the G-7 to ensure that the elections scheduled for September will be held according to the timetable set forth in the Dayton Peace Accord. France is against a pause in the peace process. France will also urge the G-7 to encourage the newly-elected Israeli Government to proceed with the peace process.