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French Assembly Approves Armenian Genocide Law as Turkey Lobbies

December 23, 2011, 2:37 AM EST

By Gregory Viscusi and Emre Peker

Dec. 22 (Bloomberg) -- France’s lower house of parliament approved a bill making it a crime to deny the Armenian genocide, as Turkey warned that its booming economy means it can hurt companies such as Airbus SAS and Electricite de France SA.

The motion was backed in a voice vote and now moves to the Senate which hasn’t set a timetable to debate it.

The law would punish denial of any genocide recognized by French law with as long as a year in prison and a 45,000-euro ($59,000) fine. The measure, presented by a member of President Nicolas Sarkozy’s party, has been rewritten to remove direct references to Turkey and Armenians. The French parliament voted in 2001 to recognize the World War I massacres of Armenians as genocide. In 2006, the lower house voted to criminalize its denial, though the bill later failed in the Senate.

Turkey says the killing of Armenians in the then Ottoman Empire wasn’t genocide, and its politicians and business leaders have pressed France to drop the bill and warned of economic consequences if it doesn’t.

“Sarkozy’s preposterous steps right now are based on vote calculations and will harm France-Turkey relations,” Turkish Prime Minister Recep Tayyip Erdogan told reporters yesterday. The premier said he would announce initial sanctions if the bill passed, adding that the government has also planned a second and third wave of measures.

Even though almost all the lawmakers who spoke in the debate mentioned the wartime killings of Armenians and criticized Turkey, saying it was not facing up to its history, a member of Sarkozy’s political party insisted it wasn’t aimed at Turkey.

‘Fight Denial’

“This law is not a law against Turkey, which is a great country, and it is not a law aimed at pleasing any ethnic group,” said Renaud Muselier, a member of Sarkozy’s Union for a Popular Movement who represented the party in the debate. “It is a law that allows us to fight denial.”

After the French lower house approved the 2006 bill, Erdogan blocked Gaz de France SA’s participation in the 7.9 billion-euro Nabucco pipeline and suspended military relations. Turkey last year temporarily withdrew its ambassador from the U.S. after a House of Representatives committee approved a resolution recognizing the killings as genocide.

“The French political system is not looking at the correct situation,” Volkan Bozkir, head of the Turkish parliament’s foreign affairs committee, said on Dec. 20 after a two-day visit to Paris alongside representatives of the Turkey’s top business groups. Instead of citing the examples of 2001 and 2006, he said, “they should look at Turkey today and make the correct calculation.”

Banking Crisis

The country was in the midst of a banking crisis in 2001, while in 2006 its application to join the European Union was still progressing, Bozkir said. Now, “Turkey’s EU application is almost stopped, so Turkey’s hands aren’t tied, and Turkey’s economy is one of the strongest in the world.”

Including trade and investment, France and Turkey have a $20 billion relationship, Bozkir said. “There are opportunities to expand this cooperation in energy and airplanes,” he said. “But when a Turkish businessman has a choice between an unfriendly country and a friendly country, there is a negative psychology that can affect his choice.”

Bozkir cited Turk Hava Yollari AO or Turkish Airlines as an “expanding company.” The state-controlled carrier is adding routes and planes and placed an order in March for 13 Airbus SAS jets. It has an option to buy another 10 for 2013 delivery. The Toulouse-based manufacturer has also held talks with low-cost Turkish carriers Atlasjet and Pegasus Airlines.

Top 10

Christopher Buckley, Airbus’s vice president for Europe, Asia and the Pacific region, said in an April interview that Turkey is in the top 10 of “strategically important markets” and may spend $50 billion on planes by 2029.

Electricite de France SA is lobbying to build a nuclear plant on Turkey’s northern Black Sea coast, Istanbul-based Aksam newspaper reported in August. Turkey has also held talks with Japanese and Korean companies.

“France is about to commit a political sin,” Turkish Energy Minister Taner Yildiz said yesterday. “In the energy industry, the recently maturing France-Turkey relations may not be able to withstand this.”

Turkey’s economy grew an annual 8.2 percent in the third quarter, a pace only exceeded by China among the Group of 20 major economies.

Renault, BNP Paribas

French carmakers including Renault SA control a fifth of Turkey’s market and French banks including BNP Paribas SA have assets in the country exceeding $20 billion. French direct investment in Turkey between 2002 and 2010 was $4.8 billion, the Turkish embassy in Paris says.

Foreign Minister Ahmet Davutoglu summoned more than 20 local executives last week from French companies including Credit Agricole SA and Groupama SA to lobby against the bill.

The Turkish government says mass killings of Armenians took place as part of clashes in which thousands of Turks and Armenians died after Armenian groups sided with the invading Russian army. Armenians say 1.5 million ethnic Armenians were killed from 1915 to 1923 in a deliberate campaign of genocide.

About 20 countries including Greece, Canada and Russia, Turkey’s second-biggest trading partner behind Germany, recognize the events as genocide.

Bernard Accoyer, the president of the National Assembly, has opposed the bill on the grounds that parliament shouldn’t legislate about history. Defense Minister Gerard Longuet, in an interview today with France2 television, said parliament was independent from the government, but added that “lawmakers don’t make the best historians.”

--Editors: Ben Holland, Louis Meixler, Eddie Buckle.

To contact the reporter on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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