EUROPEAN COMMISSION Brussels, 23.6.2021 SWD(2021) 173 final COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of France Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for France {COM(2021) 351 final}



Table of contents 1. Executive summary 2. Recovery and resilience challenges: scene-setter 2.1. Macroeconomic outlook and developments since the 2020 country report 2.2. Challenges related to sustainable growth, cohesion, resilience and policies for the next generation 2.3. Challenges related to the green and digital transition Green dimension Digital dimension 3. Objectives, structure and governance of the plan 3.1. Overall strategy of the plan 3.2. Implementation aspects of the plan 4. Summary of the assessment of the plan 4.1. Comprehensive and adequately balanced response to the economic and social situation 4.2. Link with country-specific recommendations and the European Semester 4.3. Growth potential, job creation, economic, institutional and social resilience, European Pillar of Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence 4.4. The principle of ‘do no significant harm’ 4.5. Green transition 4.6. Digital transition

4.7. Lasting impact of the plan 4.8. Milestones, targets, monitoring and implementation 4.9. Costing 4.10. Controls and audit 4.11. Coherence 5. Annex 5.1. Climate tracking and digital tagging table



1.Executive summary France was one of the Member States most severely hit by the COVID-19 crisis. GDP fell by 8.1% in 2020 and is expected in the Plan to grow by 5% in 2021 and by 4% in 2022. The impact of the fall in activity on the labour market has been largely mitigated by important policy support measures. After falling by 0.9 p.p. in 2020, total employment is expected to increase by 0.4 p.p. in 2021 in the Plan. The general government deficit reached 9.2% of GDP in 2020 mainly due to the sharp contraction in economic activity and to the discretionary policy measures taken in response to the COVID-19 crisis, amounting to 3.3% of GDP. The deficit is planned to decrease to 9.0% in 2021 and 5.3% of GDP in 2022, mainly due to the unwinding of temporary emergency and support measures and the expected economic recovery. In this context, the financial contribution allocated to France under to Recovery and Resilience Facility is EUR 39 368 318 474 in non-repayable financial support, corresponding to 1.6% of GDP (2019). France did not request any loans. France’s recovery and resilience plan pursues the general objective of the Facility to promote the Union’s economic, social and territorial cohesion and focuses on three key priorities: the green transition, competitiveness, and social and territorial cohesion. The Plan is structured along nine components, which are meant to tackle the structural challenges facing the French economy, exacerbated by the COVID-19 crisis. The Plan includes large-scale investments and reforms addressing the ecological transition, continuing efforts to bring businesses, administration, and the health system into the digital age, ensuring that workers’ skills are in line with business needs, promoting innovation, fostering labour market integration and improving the framework for public finances and efficiency of public spending. The recovery and resilience plan fits into the larger EUR 100 billion recovery strategy at national level “France Relance”. France’s Plan is expected to contribute to effectively addressing all or a significant subset of challenges identified in the country-specific recommendations or in other relevant documents officially adopted by the Commission under the European Semester. These challenges relate notably to the sustainability of public finances, the resilience of the health system, improving labour market integration and skills, supporting employment, investing in the green and digital transitions as well as research and innovation. The Plan also helps address the imbalances identified in macroeconomic imbalances procedure (high public indebtedness and low competitiveness), as well as the Draft Council Recommendation on economic policy in the euro area (especially supporting recovery, sustainable growth, and strengthening institutions). France’s recovery and resilience plan covers in a comprehensive manner the six pillars structuring the scope of application of the Recovery and Resilience Facility, with an appropriate overall balance between pillars. The green and digital pillars are well covered by the Plan, respecting the minimum allocations set in the Regulation. The Plan prioritises competitiveness, cohesion, and employment as axes for recovery, which contribute to the “smart, sustainable, and inclusive growth”, “social and territorial cohesion” and “policies for the next generation” pillars. Finally, the pillar on resilience is also well addressed, notably by strengthening the resilience of the healthcare system and of businesses through competitiveness-enhancing measures. A large share of the investments put forward by the French recovery and resilience plan are directly devoted to fostering growth potential and strengthening economic, social and territorial resilience. The support to research, innovation and technology should strengthen potential growth in the medium term and economic resilience to shocks, while offering new employment opportunities. Dedicated reforms presented in the Plan should reinforce the long-term sustainability of public finances, as soon as economic conditions allow. The Plan also includes many measures aimed at addressing social and employment challenges, identified in previous country reports, country specific recommendations and monitored through the Social Scoreboard. Measures to modernise health and long-term care infrastructure across the territory have a potential to improve access to care also in relatively underserved areas. All these measures are likely to have an impact on strengthening social cohesion, health and social protection system, including through policies for youth and by reducing social vulnerabilities. The green transition is a key priority of France’s recovery and resilience plan, with four components dedicated to environmental and climate action. The proposed actions are in line with the strategic orientations set by the European Green Deal, and highlight both the environmental and economic benefits of the green transition to foster recovery and resilience. The plan addresses many challenges France is facing as regards the green transition. A significant part of the investments proposed in the plan focus on the climate and energy transition and aim to contribute to France’s 2030 targets and to its transition to climate neutrality by 2050. The plan also contains actions to accelerate the transition towards a circular economy as well as dedicated measures to support biodiversity protection and restoration. At 46.0%, the plan exceeds largely the 37% target of funds dedicated to the green transition with the main contributions coming from investments in the energy renovation of public buildings, support to the railway sector, and support to the development of the hydrogen sector. No measure in the plan is expected to ‘do no significant harm’ to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852. France’s recovery and resilience plan is expected to contribute to the digital transition of the country with a broad and cross-cutting approach. Investments in digital areas target the public administration, improving e-identity, businesses, in particular SMEs, the health and cultural sector, as well as education and training institutions. Investments are also planned to strengthen key digital capacities, such as cybersecurity, cloud, quantum and 5G and to boost their use in the private and public sector. A number of measures seek to improve digital education and skills and digital inclusion. Overall, these investments have the potential to increase productivity growth in the long term. The roll-out of next generation access networks, in particular optic fibre on the national territory should bridge the gap in terms of connectivity, especially in rural areas and the outermost regions. At 21.3%, the plan dedicates more than 20% of its total allocation to the digital transition. The three most important investments contributing to reaching this target are the digitalisation of the health system, support to innovation in key digital technologies and the digitalisation of the State and territories. The implementation of investments and reforms planned by France in its recovery and resilience plan is expected to have a lasting impact and to bring structural change in a number of areas leading to a significantly positive impact on the economic, social and institutional resilience of the country. In particular, measures aimed at bolstering the skills of the labour force, the digital transition and the innovation system are expected to have a positive impact on long-term productivity and labour force employability. The implementation and monitoring process of the French recovery and resilience plan is ensured at the highest level of the French Government by the Monitoring National Committee, attached to and chaired by the Prime Minister. It is assessed as adequate to ensure effective monitoring and implementation of the plan, including the envisaged timetable, milestones and targets, and the related indicators. The number of milestones and targets as well as their overall quality are deemed satisfactory. Milestones and targets tracking the implementation of reforms are clear and realistic. The performance of investments will be mainly captured by the achievement of targets monitored by each public entity in charge of implementing the measures, although some milestones are also foreseen, usually for the earlier stages of implementation.

The justification provided by France on the amount of the estimated total costs of the recovery and resilience plan is to a medium extent reasonable, plausible, in line with the principle of cost-efficiency and is commensurate to the expected national economic and social impact. France provided sufficient information and evidence that the amount of the cost of the reforms and investments to be financed under the Facility is not covered by existing or planned Union financing. The fact that sometimes the methodology used is not sufficiently well explained and the link between the justification and the cost itself is not fully clear precludes a rating of addressing this assessment criterion to a high extent. France’s recovery and resilience plan describes in an appropriate way the arrangements to prevent, detect and correct corruption, fraud and conflicts of interest when using the funds provided under the Facility. The audit and control systems, coordinated by the Interministerial Commission for the Coordination of Controls, are assessed as adequate. Finally, France’s recovery and resilience plan presents strong coherence both internally and with other policies at national and European levels. The nine components build a coherent package of investments and reforms, supporting the objectives to stimulate the recovery of the economy, to contribute to the twin transition and to increase France’s resilience to meet the challenges of the twenty-first century on the path of sustainable and inclusive growth. Table 1 details the assessment criteria ratings developed in this Staff Working Document that led to the approval of the French recovery and resilience plan under the Recovery and Resilience Facility Regulation. Table 1. Summary of the French recovery and resilience plan assessment for the 11 criteria set by the Recovery and Resilience Facility regulation. (1)

Balanced Response (2)

CSRs (3)

Growth, jobs… (4)

DNSH (5)

Green target (6)

Digital target (7)

Lasting impact (8)

Milestones and Targets (9)

Costing (10)

Control Systems (11)

Coherence A A A A A A A A B A A



2.Recovery and resilience challenges: scene-setter 2.1.Macroeconomic outlook and developments since the 2020 country report The plan assumes that the fall in economic activity in 2020 will be followed by a gradual recovery, with a return to pre-crisis levels in 2022. GDP fell by 8.1% in 2020, with a sharp decrease in all the components of domestic demand and a negative contribution of net exports. According to the macroeconomic scenario in the plan, the rebound in 2021 is expected to be gradual, with GDP growing by 5% in 2021 and by 4% in 2022, catching up with and slightly exceeding pre-crisis levels in all domestic demand components. The rebound projected in the plan for 2021 is expected to be driven by domestic demand, with a negative contribution of net exports to growth. In 2022, net exports’ contribution to growth is projected to be slightly positive. Inflation is expected to remain low: slightly above 1% in 2021 and somewhat below that level in 2022. According to the Commission 2021 spring forecast, French GDP growth will reach 5.7% in 2021 and 4.2% in 2022. Compared to the scenario in the plan, the Commission forecast projects a higher contribution of net exports to growth in both 2021 and 2022. Inflation is projected at 1.4% in 2021, before falling to 1.1% in 2022. The macroeconomic and fiscal outlook continue to be affected by high uncertainty related to the COVID-19 pandemic and its economic consequences. The negative impact on the labour market was largely mitigated by important policy support measures. After falling by 0.9% in 2020, the plan projects total employment to increase by 0.4% in 2021, broadly in line with the Commission 2021 spring forecast, thereby remaining below the level of 2019. According to the Commission forecast, the unemployment rate is set to increase to 9.1% in 2021, before declining to 8.7% in 2022, still slightly above its 2019 level. While the resilience of the labour market is helping to curtail negative social consequences of the crisis, falling employment will increase poverty for some groups, as well as inequality. Overall, France performs relatively well in terms of social conditions, ranking better than the average of the European Union for most of the indicators. The gender employment gap continues to decline and the share of early leavers from education and training decreased from 8.2% to 8.0% in 2020. The pre-existing social safety net and the emergency policy measures taken to support businesses and short-time work schemes during the COVID-19 crisis, cushioned about 84% of the shock in household incomes in 2020, with more than half of the effect due to the monetary compensation schemes. However, other indicators have recently deteriorated, such as the share of people at risk of poverty or social exclusion, which has increased from 17.0% to 17.9% between 2017 and 2019, contrary to the decreasing trend in the EU (from 22.4% to 20.9%). While the youth employment rate had been improving prior to the outbreak of the COVID-19 crisis, access to the labour market is still more difficult for specific groups, particularly for low-skilled people with a migrant background and in the outermost regions. After reaching 9.2% of GDP in 2020, according to the plan the general government deficit is planned to gradually narrow to 3.2% of GDP in 2026. The sizeable deficit increase in 2020 is mainly due to the sharp contraction in economic activity and to the discretionary policy measures taken in response to the COVID-19 crisis, amounting to 3.3% of GDP. According to the macroeconomic scenario in the plan, France’s general government deficit is planned to decrease from 9.0% in 2021 to 5.3% of GDP in 2022, mainly due to the unwinding of temporary emergency and support measures and the expected economic recovery. Thereafter the general government deficit is projected to gradually diminish to 3.2% by 2026, mainly thanks to the expected economic recovery. The debt-to-GDP ratio rose sharply to 115.7% of GDP in 2020 due to the combined effect of shrinking GDP and fiscal stimulus, and it is set to rise further, to almost 118% in 2021, remaining above that level in 2026. The crisis risks worsening some structural weaknesses of the French economy. France was experiencing macroeconomic imbalances before the outbreak of the COVID-19 crisis, related in particular to the high level of public debt and weak competitiveness dynamics in a context of low productivity growth. The crisis had a negative impact on these imbalances, especially on public debt. Moreover, private indebtedness also rose sharply, compounding the risks stemming from high public debt. Despite positive recent developments, the COVID-19 shock has brought about a temporary deterioration in competitiveness, with an increase in unit labour costs and a large drop of exports in crucial sectors, such as tourism and aeronautics. The COVID-19 impact on cost competitiveness is expected to be partially reversed in the coming years, but longer-lasting consequences of the crisis represent a negative risk. The medium-term impact of the crisis on productivity is uncertain. This crisis has encouraged the use of new technologies, which may contribute positively to productivity trends, but it has also increased the need to reallocate resources across economic sectors and companies. Moreover, the surge in corporate debt may affect investment decisions in the future negatively. The high general government debt-to-GDP ratio poses significant fiscal sustainability risks for France. According to the Commission Debt Sustainability Monitor 2020, France faces high sustainability risks in the short and medium term, mainly due to the high debt (debt requirement), while the contribution of the projected increase in age-related expenditure is limited. Financial market conditions for sovereign borrowing remain favourable, with low spreads and stable credit ratings. The average maturity of total outstanding debt is high at 8.2 years in 2020, and gross financing needs are expected to decrease from 26.5% of GDP in 2020 to 25.2% of GDP in 2021 and 23.5% of GDP in 2022. The Recovery and Resilience Facility is expected to be a mitigating factor to the identified debt sustainability risks, as it should support growth potential through investments and reforms. The macroeconomic scenario presented in the plan relies on plausible macroeconomic assumptions, and is slightly more prudent than the Commission’s forecast. The Commission 2021 spring forecast anticipates a slightly higher growth rate in 2021 and 2022 than expected in the plan, with a somewhat different growth composition. This leads to a level of activity almost one percentage point above the scenario underlying the plan in 2022. However, these differences remain limited given the range of uncertainty regarding this forecast exercise. For the general government deficit and debt, the Commission forecasts broadly similar developments to the recovery and resilience plan until 2022. Years beyond 2022 are currently not covered by the Commission forecast. Table 2. Comparison of macroeconomic developments and forecast

2019 2020 2021 2022 2023 2024 2025 2026 COM COM RRP COM RRP COM RRP RRP RRP RRP RRP Real GDP (% change) 1.5 -8.1 -8.2 5.7 5.0 4.2 4.0 2.3 1.6 1.4 1.4 Employment (% change) 1.1 -1.1 -0.9 0.3 0.4 1.2 1.0 0.2 0.1 0.2 0.2 Unemployment rate (%) 8.4 8.0 n.a. 9.1 n.a. 8.7 n.a. n.a. n.a. n.a. n.a. HICP inflation (% change) 1.3 0.5 0.5 1.4 1.1 1.1 0.8 1.2 1.5 1.8 1.8 General government balance (% of GDP) -3.1 -9.2 -9.2 -8.5 -9.0 -4.7 -5.3 -4.4 -3.9 -3.5 -3.2 Gross debt ratio (% of GDP) 97.6 115.7 115.7 117.4 117.8 116.4 116.3 117.2 118.0 118.3 118.2 COM: Commission 2021 Spring Forecast. RRP: Stability Programme 2021. 2.2.Challenges related to sustainable growth, cohesion, resilience and policies for the next generation The COVID-19 crisis and related restriction measures have had a considerable impact on French firms’ activities. According to the Banque de France, activity levels for industry and services during the worst of the pandemic decreased by more than 30% compared to the levels expected in absence of the crisis. Industries in sectors such as transport, clothing and metallurgy were particularly strongly affected, with estimated capacity utilisation rates in April 2020 of less than 40%. In services, the food service industry as well as other sectors related to tourism such as accommodation were the most strongly hit, with decreases in activity of around 80%. Thanks to the crisis support measures, bankruptcies in 2020 decreased by 39%, while they remained flat in Q1 2021 compared to the previous three-month period. However, the slowdown in firm birth rates which occurred in the first part of 2020 (March to May) is likely to have an incidence on the potential of future high-growth enterprises with some persistent effect on aggregate employment in France. Reinforcing competitiveness and productivity growth are key to ensuring sustainable growth of the French economy. Cost-competitiveness improved in recent years in France thanks to moderate growth in unit labour costs compared to most other euro area and EU countries. Private investment was high and export market shares remained broadly stable, although competitiveness losses accumulated over the first decade of the 2000s had not yet been regained. In fact, after some gains since 2013, export market shares declined in 2019. Productivity growth significantly slowed down during the last decade and remained weak in general due to, among others, structural change towards more services, weak business dynamism in services, skills gap and technology adoption and diffusion gaps,. The positive trend in competitiveness halted with the outbreak of the COVID-19 pandemic, which led to a sharp increase in unit labour costs and a large drop of exports in crucial sectors. While reforms in recent years aimed to improve the business environment and competitiveness, a number of regulatory restrictions in services remain to be addressed. The level of such restrictions remains higher in France than in other EU countries, particularly in business services, regulated professions and retail. Those restrictions act as entry barriers and have led to low competition, high profit margins and prices, harming the competitiveness of the whole economy. The performance of the research and innovation ecosystem has significant margin for improvement. French R&D intensity remains below the 3% GDP target for 2020 and the level of R&D investment from the business sector is lagging behind other Member States. Innovation has been a decisive factor in mitigating the negative effects of the COVID crisis on businesses: in 2020, innovative companies’ income dropped by half compared to that of non-innovative companies. Regional disparities remain very important in terms of R&D expenditure and innovation performance. With R&D expenditure of 4.75 % of GDP in 2015, Midi-Pyrénées is the only region that exceeds the 3% target. Outermost regions are at the low end of the scale. The performance of France in research and innovation is still hampered by the complexity of the research and innovation ecosystem and low levels of efficiency of public support schemes. Firms’ automation and dissemination of technologies remain insufficient. There is scope to promote private investment in R&D and closer cooperation between public and private actors. The French labour market is experiencing skill mismatches and significant labour shortages in some sectors. These include the ICT, health care, engineering and construction sectors. This calls for continuous investments in up and re-skilling, together with bolder measures to accompany the necessary transformations linked to the green and digital transitions (see Section 2.3). The French government is rolling out a number of measures aimed at improving access to training and guidance for the unemployed, and tackling skills mismatches. The COVID-19 crisis has reversed the positive labour market developments observed in recent years. After decreasing from 10.0% to 8.5% between 2016 and 2019, the unemployment rate dropped by 0.5 percentage points to 8.0% in 2020. Long-term unemployment fell from 4.6% in 2016 to 3.4% in 2019 and declined further, by 0.5 percentage points, in 2020. Although employment was to a large extent protected by the widely used temporary short-time work scheme, sectors such as tourism, restaurants, entertainment and home care services were more strongly affected. Despite the relatively contained effect on unemployment, the measured labour market slack (halo) has increased significantly. In 2021, unemployment is projected to increase to 9.1% of the labour force, according to the Commission 2021 spring forecast. Despite the improvement foreseen in 2022, the unemployment rate is set to remain above its 2019 level. The COVID-19 crisis is aggravating the existing structural weaknesses in the integration of vulnerable groups. Low-skilled, young people, people with a migrant background (especially women), and persons with disabilities had high unemployment rates and their situation further deteriorated in 2020. The unemployment rate of non-EU born workers stood at 15.6% in Q3 of 2020, nearly double the rate of EU-born workers (8.2%). The effect of the COVID-19 crisis also increased the segmentation of the labour market: workers on temporary contracts, especially interim contracts, as well as the self-employed have been among the most affected by the crisis. Moreover, vulnerable groups are likely to be more exposed to the increasing risk of poverty and social exclusion. The 2019 Country Report highlighted the large economic disparity between outermost regions and metropolitan France. The 2020 Country-specific recommendations called for targeted actions towards these regions to address the risk of growing disparities in the context of the pandemic. These regions should benefit from specific support and access to EU programmes and funds in line with Article 349 TFEU. High and rising public and private debt present challenges to fiscal sustainability and financial stability. Public expenditure rose to 62.7% of GDP in 2020, up from 55.6% in 2019 and still the highest in the EU. The persistence of the high level of public expenditures in France raises concerns in terms of utility and efficiency, justifying a comprehensive approach to enhance its efficiency and contain its dynamics in a context of high public debt. Private debt has steadily increased since 2000 for both households and non-financial corporations, reaching 153% of GDP in 2019. The COVID-19 crisis has led to a surge in private indebtedness to 175% of GDP, mainly due to the contraction in economic activity. The public guarantee scheme set up by the state played an important role in the crisis to support lending, especially to SMEs. Both household and non-financial corporation debt is now in excess of prudential thresholds. The banking sector’s solvency has remained relatively solid but profitability has dropped. The pension system remains complex. More than 40 different pension schemes co-exist in France. These schemes apply to different groups of workers and functions according to different sets of rules. The Government engaged into a reform to progressively unify the rules of these schemes, with a view to simplifying the functioning of the pension system notably to improve its transparency, fairness and efficiency. The reform was put on hold by the COVID-19 crisis. The COVID-19 crisis has highlighted shortcomings of the traditionally well-performing French health system. The first wave of the COVID-19 pandemic highlighted difficulties to ensure adequate numbers of health workers, critical supplies and personal protective equipment. The management of the health crisis (notably concerning the supply of masks, respirators, intensive care beds, tests, vaccination) also revealed problems in terms of coordination, e.g. between healthcare providers at territorial level and between private and public actors. Challenges are aggravated by persisting regional disparities, with insufficient availability of certain health services in underserved regions, in particular the outermost regions. In the digitalisation of health services France has traditionally lagged behind other Member States, although the take-up of e-health, in particular the use of electronic medical records (EMRs) and telemedicine, has increased in recent years. France is facing challenges in improving educational outcomes for vulnerable groups, such as those from lower socio-economic or migrant backgrounds. Educational outcomes are strongly impacted by the socio-economic background of students, and early school leaving rates show significant regional disparities, with particularly high rates in the outermost regions (21.3% in 2018 versus 8.9% in mainland France). Distance teaching has highlighted the need for a high-performing digitalised education system, built upon effective teacher training and equal access to quality digital education and its learning environment. It is estimated that 6% of pupils in primary education and 10% in secondary education experienced difficulties following classes during lockdowns. 2.3.Challenges related to the green and digital transition Green dimension

The recovery and resilience plan should contribute to the green transition and at least 37% of the financial allocation needs to contribute to climate objectives. The measures in the plan shall contribute to achieving the 2050 climate neutrality objective, and the 2030 energy and climate targets, taking into account Member States’ national energy and climate plans. They should also contribute to meeting environmental targets for waste, water, pollution control, sustainable mobility, biodiversity protection and restoration, marine and water resources, and support the transition to sustainable food systems as well as to a circular economy as appropriate, while ensuring that nobody is left behind. Climate and energy policies In sectors not covered by the EU Emissions Trading System (ETS), France will most likely reach its 2020 greenhouse gas (GHG) emissions reduction target, while risking to fall short of its 2030 target, in the absence of additional measures. France’s National Energy and Climate Plan (NECP), which was notified to the Commission on 17 April 2020, sets out a national target of a 37% greenhouse gas emissions reduction in those sectors by 2030 compared to 2005. With existing measures, the Commission estimates that France would fall short of this 2030 target by 11 percentage points. This is mostly due to the transport, building and agriculture sectors which together account for 64% of the country’s greenhouse gas emissions. Compliance with the 2030 target in sectors not covered by the Emissions Trading System could however be possible, should France comply with the carbon budgets included in the national low-carbon strategy (Stratégie Nationale Bas Carbone, SNBC, revised in March 2020), and take relevant additional measures to implement the scenario to achieve France’s objective of climate neutrality by 2050. Greenhouse gas emissions in the transport sector (roughly a third of all emissions) should drop by 28% compared to their 2015 level by 2030 to accommodate the climate neutrality scenario. However, transport is the only sector where greenhouse gas emissions have increased over the last 30 years. Meeting climate targets in transport will require in particular accelerating the electrification of vehicles and road infrastructure, and expanding the use of alternative fuels, including advanced biofuels and low-carbon and renewable hydrogen. There will also be a need to accelerate the modal shift towards cleaner transportation modes in freight and passenger transport, through ensuring their promotion. The current pace of renewable energy deployment is not enough to meet France’s 2020 and 2030 targets. France is set to miss its 2020 renewables target of a share of renewable energy sources in final energy consumption of 23%, likely by at least 5 percentage points. The share of renewables in the energy mix increased from 9.6% in 2005 to 17.2% in 2019 and France’s proposed objective for 2030 is to reach 33%. However, challenges remain to bridge the 2020 gap and to achieve the 2030 target. Challenges include simplifying the regulatory framework to implement large-scale energy projects – costs to access the grids are high and the lead time for licensing and permitting, including for grid connections, is long. The deployment of enabling energy infrastructure such as charging stations for electric vehicles, upgrades to transmission and distribution systems, heat pumps and district heating, and cooling networks based on renewable energy and waste heat, is progressing slowly. France is falling short of its energy efficiency targets for 2020 and faces the major challenges of decarbonising and increasing the energy performance of the building sector. France’s energy consumption levels remain above the expected levels under the Energy Efficiency Directive for 2020 (see table 3 below). In its National Energy and Climate Plan, France envisages a 20% reduction of its energy consumption by 2030 compared to 2012 levels, which is considered in line with the EU’s 2030 targets. The decarbonisation and upgrade of the energy performance of the building stock (which represents 45% of final energy consumption and 25% of greenhouse gas emissions) represent major challenges. According to its National Energy and Climate Plan, France will need to invest annually an additional EUR 15 to 25 billion until 2030 into the renovation of buildings. The electricity grid is relatively well-connected to neighbouring countries, but challenges remain to further enhance connections and develop new infrastructure. According to the National Energy and Climate Plan, France targets a 16.5% interconnected capacity by 2030, up from the 2019 level of 11.4%, and above the EU recommendation of 15%. Given the planned reduction of the share of nuclear in the energy mix and with a view to integrating the rising share of renewable energy into the electricity system by 2030, enhanced and more flexible grid connections will be necessary in the country and across borders, in particular with the Iberian Peninsula. In addition to the charging infrastructure for electrical vehicles, the transition of industry and heavy-duty transport will require new infrastructure to produce and distribute new energy carriers such as hydrogen. France needs EUR 45 to 85 billion of additional investments per year to be on a trajectory towards carbon neutrality, according to the estimate in the National Energy and Climate Plan for the period of 2019 to 2032. This includes around EUR 15-25 billion for the energy efficiency of buildings, EUR 20-50 billion for clean transport and EUR 10 billion for renewable energy and electricity grids. Environmental policies While the legal framework is in place to transition to a circular economy, France has not yet implemented all necessary steps, especially as regards waste management. France has put in place an ambitious national circular economy roadmap, a National Pact on Plastic packaging, and legislation to tackle waste and promote the circular economy (with pioneering provisions regarding planned obsolescence, durability for products including a Reparability Index, extending producers’ responsibility, and new prohibitions on single-use plastics and destruction of unsold food and non-food products). Nevertheless, many provisions remain to be implemented, and their enforcement may prove challenging. Some efforts are necessary to meet the new recycling targets. The municipal waste recycling rate of 44% is below the 2025 target of 55%. Investments needed to reach the EU recycling targets for municipal and packaging waste are estimated at EUR 4.6 billion. The negative effects of climate change are increasingly felt. There have been increased floods of river basins (Loire, Rhône) and coastal areas (Atlantic regions), and increased cyclone risks in outermost regions, highlighting the importance of investments to promote climate change adaptation, risk prevention and disaster resilience. Despite progress in increasing nature protection, there is still considerable room for improvement, notably on implementing conservation measures effectively and better integrating nature protection into other policies. This would in turn help build resilience to threats such as climate change, food insecurity or disease outbreak. In France, only 28% of the species of community interest and 22% of the habitat types of community interest are in a favourable conservation status. France assessed the total costs of conservation and management of the Natura 2000 network for 2021-2027 at EUR 4.6 billion. France does not meet all air quality standards, especially in its largest agglomerations. France is facing high levels of particulate matter (PM10) and nitrogen dioxide (NO2) and needs to take action to reduce the exceedance of limit values in line with Directive 2008/50/EC, as requested by the EU Court of Justice regarding emissions of nitrogen dioxide, by reducing the main sources of emissions from transport, energy production and heat generation. Specific tax measures such as tax reductions or exemptions largely contribute to the attractiveness of fossil fuels. As pointed out by the Institute for Climate Economics report on the draft budget 2020, most of the unfavourable spending takes the form of tax spending (EUR 16 billion out of 17). Four tax measures alone imply that 25% of national greenhouse gas emissions are little or not taxed: (i) exemptions of excise duties on kerosene, (ii) reduced excise rates for heavy-load vehicles, (iii) reduced tax rates for non-road diesel, and (iv) reduced tax rates for road diesel compared to gasoline. The government recently announced a gradual phase out of reduced rates for non-road diesel, to be finalised by 2022. France also announced the removal of the ‘malus’ ceiling applied to new privately-used vehicles (currently the penalty for vehicles exceeding 172g CO2/km is limited to EUR 12 500), to strengthen the market signal towards cleaner vehicles. France is among the Member States willing to open a debate at EU level on the taxation of kerosene for planes and marine fuel for boats. The table below gives an overview of France’s objectives, targets and contributions under Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action. Table 3. France’s objective, targets and contributions under the Governance of the Energy Union and Climate Action. National targets and contributions Latest available data 2020 2030 Assessment of 2030 ambition level Binding target for greenhouse gas emissions compared to 2005 under the Effort Sharing Regulation (%) -14% -14% -37% As in the Effort Sharing Regulation National target/contribution for renewable energy: Share of energy from renewable sources in gross final consumption of energy (%) 17.2% 23% 33% Adequate (33% is the result of the Renewable Energy Sources formula in the Regulation (EU) 2018/1999) National contribution for energy efficiency: Primary energy consumption (Mtoe) 239.5 219 202.2 Modest Final energy consumption (Mtoe) 148.9 131.4 120.9 Sufficient Level of electricity interconnectivity (%) 16.5% N.A. Source: Assessment of the final national energy and climate plan of France, SWD (2020) 909 final. Digital dimension

The recovery and resilience plan should contribute to the digital transition and at least 20% of the financial allocation needs to contribute to digital objectives. The measures in the plan should, inter alia, contribute to the digital transformation of the economic and social sectors (including public administration, public services, and the justice and health systems). The objective of the measures in the plan should be to improve not only the competitiveness, but also the resilience, agility and security of companies and public actors, all while ensuring inclusiveness. France ranks 15th in the European Commission’s Digital Economy and Society Index (DESI) for 2020. It is improving its performance in digital, in line with the EU average; the gap with the EU’s top performers however remains. France ranks 18th in connectivity, and fast broadband (next generation access) network coverage in rural areas and in the outermost regions remains low. This is despite significant progress in very-high capacity network roll-out and in fixed broadband uptake. France is notably deploying fibre-to-the-home through its France Très Haut Débit plan (THD), backed by EUR 3.3 billion of public investment. In early 2020, France announced a new target with the objective of reaching 100% fibre-to-the-home coverage by 2025. Fast broadband (next generation access) coverage reached 69% in 2020, improving by 7 p.p., but still remaining well below the EU average of 87%. While digital connectivity is significantly improving, fixed very-high capacity network coverage in rural areas stands at 18.4% of all households, which is below the EU average of 27.8%. France achieved significant progress in 4G coverage as a result of the “new deal for mobile” of 2018. 4G coverage reached 99.8% in populated areas in France. France has a 5G readiness 2020 DESI index above EU average, resulting from the completion of the 700MHz band and the 3.4 - 3.8 GHz auctions. France is in the phase of 5G deployment, including 5G corridors, nation-wide and cross-border. France ranks 17th in the human capital 2020 DESI index, with the share of people with “above basic digital skills” remaining low and below the EU average. In recent years, France introduced the national Investment Plan in skills 2018-2022 (“Plan d’investissement dans les compétences”). However, France continues to show a low level of digital skills of the population. In 2019, 43% of the population between 16 and 74 years old lacked basic digital skills (against the EU average of 42%), including about 26% with no digital skills. Low digital skills were also identified as a country-specific weakness to explain France's low productivity growth. This hinders the development of a digital economy and society (e.g. home schooling, e-learning, e-commerce, e-health, etc.) and has led to exclusion during the COVID-19 pandemic. The educational offer of advanced digital technologies by French universities is on average slightly above the EU: the proportion of masters’ programs teaching artificial intelligence, high-performance computing and data science is 4.1%, 1.5% and 5.9% respectively for France (against 3.9%, 1.2% and 4.6% respectively in the EU). However it remains very far from the frontrunners in this area (US and UK), which have on average 10 times the number of courses in these areas compared to France and offer the same amount of courses as the whole EU27. Despite large improvements in the integration of digital technology by businesses, firms still have a comparatively low uptake of information and communication technologies. The 2019 National Productivity Board report pointed out the low uptake of information and communication technologies in firms and the low degree of automation and digitalisation as country-specific factors explaining weak productivity growth. Despite progress accomplished over the past years, the percentage of companies having high levels of digital intensity in France (13.4% in 2020) remains below the EU average (15.4%). The share of companies employing ICT specialists is also lower in France (18%) than it is in the EU (19.3%). In the EU landscape of artificial intelligence (AI), France hosts 14.8% of all EU economic agents (firms, research and government institutions), and 15.1% of all EU artificial intelligence firms. The number of artificial intelligence firms per EUR billion of GDP reaches 0.71, against 0.84 for the EU (JRC AI TES Dataset 2020). Furthermore, a much higher percentage of growing French companies (36-38%) view digital security, regulation and lack of skills as significant barriers to their digitalisation, which compares to EU averages of between 17-21%. France performs above the EU average in digital public services, ranking 12th. This is thanks to continuous progress in public administrations’ digital modernisation and by improving the provision of digital public services for business. Over the past years, France has made significant improvements in the domain of digital public services, reflected in a better performance in DESI for digital public services and in digital post and electronic documents. However, France scores below the EU average on cross-border electronic identity (eID) services according to the 2020 eGovernment Benchmark report. Only 8% of people living or coming from abroad can use electronic identity to access and use online services provided by public authorities such as obtaining a permit for moving or contesting a fine. Only 23% of foreign businesses can use electronic identity for cross-border services such as requesting a refund of value-added tax. Concerning e-health, France could benefit from stronger digital services helping prevention and preparedness. The COVID-19 crisis has highlighted shortcomings in the health system’s preparedness to address pandemic outbreaks and digital services should help in making better use of e-health in such cases. In the justice system, digitalisation could help reduce the average time needed to resolve civil cases, which is currently long (over 400 days in 2019). Concerning digital-related investment in R&D, France benefits from an attractive and resilient network of start-ups. The French tech start-up ecosystem attracted record investments in recent years, notably EUR 5.4 billion in investment in 2020, despite the COVID-19 crisis. Among numerous initiatives, French Tech plays a major role in building a framework for start-ups to scale up. The landmark ‘DeepTech Generation Plan’ (Plan Génération Deeptech) was launched in 2019, with EUR 1.3 billion in funding over 5 years (2019-2023) to support disruptive innovation. France is committed to strengthening the EU’s capacities related to advanced digital technologies. France is a pioneer in cloud computing, hosting the major European cloud provider, in microprocessors and is committed to increasing the use of digital applications for public administrations both at central and local level. It is active in the Euro-HPC Joint Undertaking and has a national strategy on quantum. France has also a cybersecurity strategy to boost the offer of cybersecurity products and services and encourage the uptake of innovative solutions by the economy and the public administration. France is also revising its Artificial Intelligence strategy, first launched in 2018, encouraging the development of human-centric solutions and tools for artificial intelligence uptake by businesses. France is therefore in a strong position to reinforce its industrial capacities in advanced technologies such as next-generation cloud, microelectronics, 5G or cybersecurity. On the greening of the digital sector, the French government has put in place proactive policies and measures to support the growth of the digital clean tech sector. Innovative start-ups and SMEs play a critical role in developing and adopting clean digital technologies. The global French start-up ecosystem is made up of more than 18 000 start-ups, over 370 000 employees, 240 incubators, and 50 accelerators. The French government published a roadmap to make the tech sector greener in February 2021. The aim of this national strategy is to improve knowledge of the various impacts of digital technology on the environment, to control them and to put the potential of digital innovation at the service of the ecological transition. It focuses both on analysing the impact of digitalisation on the environment and also on how to use digital solutions to boost the green transition. The roadmap includes a number of existing and new measures, such as the establishment of an environmental barometer for digital actors or the support for artificial intelligence projects for ecology. As a leader in the digital domain, France has the potential to contribute significantly to cross-border and multi-country projects. Due to the size of its economy and central position, France’s investments in digital capacities could strongly orient other Member State’s joint investments, potentially on cloud and data infrastructure, microelectronics, and 5G corridors. Graph 1. Relative performance of France compared to EU average for the five DESI 2020 dimensions Note: EU aggregate corresponds to EU28, based on 2020 DESI report.



Box 1: Progress towards the Sustainable Development Goals The objectives of the Sustainable Development Goals (SDGs) are integrated in the European Semester since the 2020 cycle. This provides a strong commitment towards sustainability in coordination of economic and employment policies in the EU. In that respect, this section outlines France’s performance with respect to Sustainable Development Goals with particular relevance for the four dimensions underpinning the recovery and resilience plans (green transition, fairness, digital transition and productivity, and macroeconomic stability), indicating possible areas where investments and reforms in line with the objectives of the Facility could further accelerate the progress on the Sustainable Development Goals.

Green transition France performs well in the green transition goals by, for instance, recording low greenhouse gas emissions per capita (7th lowest in the EU) and per unit of GDP (2nd lowest in the EU), with a strong decreasing trend in the past years. The circular economy (SDG 12) is also well developed with the third highest circularity rate in the EU. On biodiversity (SDG 15), France took actions to limit the artificial conversion of soil, which had been increasing consistently since 2006. The share of renewable energy in gross final consumption (17.2% in 2019) is however below objectives (23% by 2020) and the EU average (19.7%). Fairness France performs better than the EU average in nearly all the indicators related to inequalities for SDG 1 - No poverty (e.g. 9th lowest rate of people at risk of poverty), SDG 5 - Gender equality (e.g. first in the EU for women in senior management), and SDG 10 - Reduced inequalities (e.g. income inequalities well below EU average). However, the employment rate of recent graduates does not follow the positive EU evolution in recent years. Regional inequalities between the mainland and its outermost regions persist, in particular with Mayotte, the region in the EU with the lowest GDP per capita. Digital transition and productivity On SDG indicators related to R&D (e.g. R&D expenditure, R&D personnel, employment in knowledge-intensive manufacturing and services) France performs slightly above the EU average. In respect to quality education (SDG 4), France ranks 9th in the EU with 49.4% (2020) of people aged 30-34 graduated from tertiary education. Macroeconomic stability The high rate of long-term unemployment hampers the performances of France in SDG 8 - Decent Work and Economic Growth. Investment, as share of GDP, is however high (23.6% in 2019). France has been making progress in SDG 16 - Peace and justice while still recording a high rate of perceived violence (4th in the EU). 3.Objectives, structure and governance of the plan 3.1.Overall strategy of the plan The investments and reforms planned under the French recovery and resilience plan are part of a broader recovery plan called “France Relance”, adopted by the French Parliament under the 2021 budget bill, and currently being deployed. The Recovery and Resilience Facility should provide about 40% of the funding for the EUR 100 billion investments planned under “France Relance”. France submitted a plan with estimated costs amounting to EUR 40 950 000 000 while its maximum financial contribution is EUR 39 368 318 474, calculated in accordance with Article 11 and stated in Annex IV to the Recovery and Resilience Facility Regulation (including the horizontal support line). The estimated total cost of the Plan corresponds to 104% of the maximum financial contribution. France’s recovery and resilience plan focuses on three key priorities: the green transition, competitiveness, and social and territorial cohesion. The plan is structured along nine components, which are meant to tackle the structural challenges facing the French economy, exacerbated by the COVID-19 crisis. The plan includes large-scale investments and reforms addressing the ecological transition, continuing efforts to bring businesses and administration into the digital age, ensuring that workers’ skills are in line with business needs, promoting innovation, continuing to reduce unemployment and improving the efficiency of public spending. The nine components are organised as follows: ·Component 1: Renovation of buildings. It includes investments on energy efficiency in public buildings (at EUR 3.8 billion, one of the biggest measures of the plan), private residential buildings, social housing and SMEs; and reforms of housing policy and environmental rules for the construction of new buildings. This component aims to increase the rate and depth of building renovation, and to contribute to the green transition of the building sector. ·Component 2: Biodiversity, circular economy, agriculture and forestry. It includes measures for fighting the artificial conversion of natural soil, mitigating seismic risk in outermost regions, improving drinkable water supply and sewage networks, preserving biodiversity and protected areas, decarbonising industrial production processes, developing the circular economy, accelerating the agricultural transition and restoring forests. It also features the Climate and Resilience law as a key reform. ·Component 3: Green infrastructures and mobility. It includes investments to foster the development of sustainable transport, therefore aiming at reducing the carbon and environmental footprint of transport. The measures, covering a large spectrum over different transport modes, concern a support plan for the rail sector (the biggest measure of the plan at EUR 4.4 billion), developing projects for public transport in urban areas (tram, buses, metro, rail), support to the deployment of electric vehicle charging points, improvements of the inland waterways infrastructure, greening projects in ports, development of road infrastructure reserved for public/shared transportation, and support schemes for the purchase of zero- or low-emission vehicles. It also includes support for improving the resilience of energy infrastructures at distribution level in rural areas. ·Component 4: Green energy and technologies. It aims to foster innovation policies in key green technologies, also having in mind their economic potential. It includes a broad scheme to finance innovative projects in priority green areas (renewable or low-carbon hydrogen, industry decarbonisation, sustainable agricultural systems, recycling, innovative buildings, mobility, biosourced products) and specific measures to develop value chains for decarbonised hydrogen and to support the green transition of the aeronautics sector. ·Component 5: Business support. It includes an investment (financial instruments) to strengthen SMEs’ equity and a reform aimed at simplifying the regulatory environment. It also includes a reform to ensure that companies benefiting from public support respect other criteria, such as the social and environmental dimensions that are essential for the recovery.

·Component 6: Technological sovereignty. It includes measures to support employment in R&D and to finance innovative projects in strategic digital technologies (e.g. cybersecurity, quantum technologies, cloud, education technology, 5G and the cultural and creative sectors) and in space technologies. It also includes a reform to improve sustainable funding for public research, to enhance the attractiveness of scientific careers, and to increase knowledge transfers between public research and businesses. ·Component 7: Digitalisation of the State, territories, businesses and support to the cultural sector. It includes several detailed measures to digitalise the functioning of schools and the State, including the Ministry of Interior, and to accelerate investment in cybersecurity. Fostering digitalisation of SMEs is done through boosting existing support mechanisms such as “France Num” complemented by investment support in the adoption of new technologies in the framework of the industries of the future scheme. The component also aims at supporting (1) cultural heritage to renovate historic monuments, make them more sustainable and promote local tourism eco-systems; (2) artistic education and creation as well as (3) the resilience of strategic cultural sectors mostly affected by the current crisis. Moreover, this component includes reforms aimed at strengthening the public governance framework and enhancing the quality of public spending. ·Component 8: Employment, Youth, Disability, Professional training. It includes a variety of measures relating to employment, supporting youth, persons with disabilities, financing trainings and skills development - from secondary and tertiary education to lifelong learning and professional training (including digital skills). ·Component 9: R&D, health, territories. It brings together public investment in various areas (healthcare, research, territorial cohesion and connectivity). Investment projects presented under the research section cover a very broad scope from early childhood education to higher education and research. Table 4: The nine components of the French recovery and resilience plan and associated costs Component Costs (EUR million) I: Renovation of buildings 5 825 II: Biodiversity, circular economy, agriculture and forestry 2 086 III: Green infrastructures and mobility 7 030 IV: Green energy and technologies 5 295 V: Business support 250 VI: Technological sovereignty 3 215 VII: Digitalisation of the State, territories, businesses and support to the cultural sector 2 101 VIII: Employment, Youth, Disability, Professional training 7 478 IX: R&D, health, territories 7 671 Total 40 950 3.2.Implementation aspects of the plan In terms of consistency with the national energy and climate plan (NECP) presented by France in 2020, the recovery and resilience plan partly translates the orientation taken in the NECP in components 1, 2, 3 and 4 and responds to several Commission recommendations. In particular, the plan puts a strong focus on energy efficiency and clean mobility. It also targets further diversification of the French energy mix by supporting innovation in hydrogen. France is expected to participate in planned Important Projects of Common European interest (IPCEI) in cooperation with other Member States to promote hydrogen technology. As regards cohesion policy, several components of the French plan are priorities for REACT-EU and will remain for the 2021-2027 cohesion policy as well. The Partnership Agreement for the period 2021-2027, for the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+) and the European Maritime and Fisheries Fund (EMFF) is expected to ensure complementarity and synergy with the Facility. The various French authorities in charge of cohesion policy will avoid double funding of the same costs of projects and ensure complementarity between the different sources of EU funding. The national and regional managing authorities, in charge of preparing the programmes 2021-2027 and, for some of them, the just transition plans, will ensure complementarity with the Recovery and Resilience Facility. The partnership agreement, the 21-27 programmes including for some of them the just transition plans are expected to be officially submitted to the Commission during the second part of 2021. The French recovery and resilience plan contains key measures addressing agricultural transition, biodiversity, climate change and disparities in rural areas (in components 2, 3 and 9) which will complement those included in the current Rural Development Programmes supported under the European Agricultural Fund for Rural Development (EAFRD). The strategic Common Agricultural Policy (CAP) Plan for the 2023-2027 programming period is expected to be submitted officially before 31 December 2021, depending on the adoption of CAP reform by the Council and the European Parliament: French authorities will ensure avoidance of double funding and synergies between CAP funds and the Facility. Several measures of component 8 of the French recovery and resilience plan are consistent with the Council recommendation of 30 October 2020, 'A Bridge to Jobs – Reinforcing the Youth Guarantee'. The package of measures “#1 jeune #1 solution”, several of which are featured in component 8, contributes to these objectives. The plan also includes measures to support employment and training for young people. As an additional measure to complement the effect of the recovery and resilience plan, France is also working towards developing a Universal Guarantee for Youth to respond to the respective Council’s recommendation. France’s recovery and resilience plan contains some measures that are expected to effectively address the country’s challenges in the area of gender equality and equal opportunities for all. These include reforms and investments supporting education (from early childhood), vocational training and access to employment of youth, including for children and youth from disadvantaged background. These also include specific measures to promote recruitment of workers with disabilities, including in the public service. The plan also draws the lessons from the crisis with reforms and investments supporting older persons, be they dependent or not, to improve their quality of life and care. As regards gender equality, the key measures relate to the transformation of the public service with quantitative objectives for women in management positions and to pay transparency obligations for companies. Moreover, the measure setting out how companies benefitting from recovery and resilience plan funds should contribute to economic, social, and environmental transformations includes the obligation for companies to publish an index measuring progress in the area of gender equality. The French recovery and resilience plan is broadly consistent with the challenges and priorities identified in the most recent Draft Council Recommendation on economic policy in the euro area (EAR). The plan contributes to EAR 1, ensuring a policy stance which supports the recovery, as it implements measures contributing to the resilience of the health and social security system, in particular by strengthening the healthcare and socio-medical sectors (component 9 R&D, health, territories), as well as social measures supporting employment (component 8 Employment, Youth, Disability, Professional training). Actions focused on the qualification of the labour force (Component 8) help to mitigate the social and labour impact of the crisis. The quality of the country’s public financial management should, among others, be strengthened by the digitalisation of the public administration and fiscal structural reforms (Component 7 Digitalisation of the State, territories, businesses and support to the cultural sector). Concerning EAR 2 to further improve convergence, resilience and sustainable and inclusive growth, components 1 to 4 promote the climate transition. Components 6 to 9 include investments to promote the digital transformation. Component 7 should support educational and pedagogical innovation through digitalisation and modernisation. Measures to strengthen vocational education and training and reskilling and upskilling (component 8) should enhance productivity, employment and labour market integration. The plan addresses EAR 3 on strengthening national institutional frameworks, mostly through component 5 – Business support. This component aims at simplifying the regulatory environment for companies and reduce administrative burdens. Digitalisation measures in component 9 are expected to boost the digital transition of the national health system. On EAR 4 on ensuring macro-financial stability, reforms and investment, component 5 includes financial instruments to strengthen SMEs’ equity and component 7 addresses the quality of public finance. In addition, component 5 includes a reform to ensure that companies benefiting from public support respect other criteria, such as the social and environmental dimensions that are essential for the recovery. Some elements of the French recovery and resilience plan should contribute to EAR 5 on completing the Economic and Monetary Union and strengthening the international role of the euro. Generally, measures in components 5 should have a positive impact on the business environment and the removal of bottlenecks to investment. Component 7 includes reforms that will introduce a multiannual expenditure rule that should ensure consistency between the annual budget bills and the multi-year objectives, and that introduce an annual assessment of measures taken, enhancing the quality of public spending. These measure contribute to the resilience of the Economic and Monetary Union as a whole. The French recovery and resilience plan has been prepared by the Ministry of Economy, Finance and Recovery, in coordination with the Ministries responsible for policy areas developed in each component. The “France Relance” plan, which includes the investments part of the recovery and resilience plan, has been subject to several consultations. The consultation process, driven by the Ministry of Economy, targeted associations representing employers and unions, professional associations and companies for the measures related to businesses and employment; economists and institutions for the cohesion and balance of the plan; and non-governmental organisations and think tanks for the measures related to climate change. Regional and local authorities were involved in the preparation of the plan, to ensure coherence with cohesion funds and raise the needs of territories, closer to the economic and social realities on the ground. The Economic, Social and Environmental Council was also consulted several times. A National Monitoring Committee on the Recovery Plan, chaired by the Prime Minister and composed of representatives of local and regional authorities, heads of public institutions, economists, members of Parliament, senators, members of the European Parliament and social partners, is responsible for ensuring that the timetable for undertaking the measures is properly implemented and maintained. A second meeting of the Committee on 8 February 2021 provided an initial review of the implementation of “France Relance” six months after its adoption. To ensure ownership by the relevant actors, it is crucial to involve all local authorities and stakeholders concerned, including social partners, throughout the implementation of the investments and reforms included in the plan.

To ensure swift implementation of the plan, a General Secretariat for the recovery and resilience plan has been set up under the dual authority of the Prime Minister and the Minister of Economy, Finance and Recovery. It will monitor the implementation of the recovery plan, measure by measure, in close contact with the prefects of regions and the officials of each ministry. The implementation of the recovery and resilience plan is also monitored in particular by the Directorate-General for the Treasury, the Budget Directorate, the Directorate-General for Public Finance and the Social Security Directorate. At local level, the prefects of regions and departments are responsible for ensuring the application of the recovery and resilience plan. Regional monitoring committees including State services, representatives of local authorities and social partners are in charge of monitoring progress on projects in the regions, identifying and resolving possible bottlenecks. Information on the progress of each measure in the plan must be submitted on a monthly basis to the Secretariat-General responsible for the recovery and resilience plan. As regards the reforms presented in the plan, their effectiveness is monitored specifically by each ministry concerned. Attached to each Minister, an adviser is specifically responsible for monitoring and implementing reforms. Inter-ministerial coordination is carried out by the General Secretariat for European Affairs (SGAE), which will collect and centralise, together with the Ministry of the Economy, Finance and Recovery supporting documents demonstrating the achievement of the milestones related to the reforms included in the plan. The achievement of the targets included in the plan will be monitored regularly and centrally by the Secretariat-General responsible for the recovery and resilience plan on the basis of the information collected from the relevant ministries. Inter-service technical meetings will be organised at least twice a year by the General Secretariat for European Affairs (SGAE) to identify any risks in achieving targets and milestones and decide on corrective measures to address the risks identified. The French government has prepared a national communication strategy on the recovery and resilience plan to ensure the visibility of its benefits to citizens. First, a specific logo has been created and will be attributed to all projects financed by the “France Relance” plan, including the projects part of the plan. A specific logo “Financed by the European Union –NextGenerationEU" will be used for projects financed with the support of the Recovery and Resilience Facility, in compliance with article 34 of the Regulation establishing the Recovery and Resilience Facility. Second, the recovery and resilience plan is published on the Ministry of the Economy, Finance and Recovery’s website. A scoreboard allows the deployment of the plan to be followed. Third, a communication plan will also be dedicated to the French Parliament, local authorities and unions. The plan contains a security self-assessment for investments in digital capacities and connectivity for three measures: the ultrafast broadband plan, the digitalisation of the State and Territories, and mobility and teleworking in the Ministry of Interior. Technical and strategic measures of the EU 5G toolbox are also relevant for the measures in the fourth ‘Programme d’Investissements d’Avenir’ related to 5G, where calls for projects or calls for interest are still take place. Strategic measures mentioned in the security self-assessment would need to be closely monitored during the implementation of the plan. State aid and competition rules fully apply to the measures funded by the Recovery and Resilience Facility. Union funds channelled through the authorities of Member States, like the Recovery and Resilience Facility funds, become State resources and can constitute State aid if all the other criteria of Article 107(1) TFEU are met. When this is the case and State aid is present, these measures must be notified and approved by the Commission before Member States can grant the aid, unless those measures are covered by an existing aid scheme or comply with the applicable conditions of a block exemption regulation, in particular the General Block Exemption Regulation (GBER) declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 TFEU. When State aid is present and it requires notification, it is the duty of the Member State to notify State aid measures to the Commission before granting them, in compliance with Article 108(3) TFEU. In this respect, the State aid analysis carried out by France in the recovery and resilience plan cannot be deemed a State aid notification. In as far as France considers that a specific measure contained in the recovery and resilience plan entails de minimis aid or aid exempted from the notification requirement, it is the responsibility of France to ensure full compliance with the applicable rules. Irrespective of whether they comply with the EU’s State aid regime, measures taken under this framework should be compatible with the EU’s international obligations, in particular under World Trade Organization rules.

4.Summary of the assessment of the plan 4.1.Comprehensive and adequately balanced response to the economic and social situation The French recovery and resilience plan features 70 investments and 22 reforms, for a total of EUR 40.95 billion (the maximum financial contribution for France is EUR 39.4 billion). These are a subset of the national plan “France Relance” and are spread out over nine components that each have a particular focus (see Section 3.1). France’ recovery and resilience plan covers in a comprehensive manner the six pillars structuring the scope of application of the Facility (Article 3): (i) green transition, (ii) digital transformation, (iii) smart, sustainable and inclusive growth, (iv) social and territorial cohesion, (v) health and economic, social and institutional resilience, and (vi) policies for the next generation. The coverage of the French plan’s components toward the six pillars is summarised in Table 5. All pillars are covered by at least one component, while a component may contribute to several pillars. Table 5. Coverage of the six pillars of the Facility by the French recovery and resilience plan components. Pillars: Green transition Digital transformation Smart, sustainable and inclusive growth Social and territorial cohesion Health, and economic, social and institutional resilience Policies for the next generation Component 1 – Building renovation ● ○ ○ Component 2 – Biodiversity, circular economy, agriculture and forestry ● ○ Component 3 – Green infrastructures and mobility ● ○ ○ Component 4 – Green energy and technologies ● ○ Component 5 – Business support ● ○ Component 6 – Technological sovereignty ● ● ○ Component 7 – Digitalisation of the State, territories, businesses and support to the cultural sector ○ ● ○ ○ ● ○ Component 8 – Employment, Youth, Disability, Professional training ○ ○ ● ○ ● Component 9 – R&D, health, territories ○ ● ○ ● ● ○ Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” the component partially contributes to the pillar The range of actions of the plan corresponds to the one of the Facility with an appropriate overall balance between pillars. Allocations to the green and digital transitions exceed the requirements of the recovery and resilience facility Regulation (respectively 37% and 20%), and the plan therefore contributes to these pillars significantly. The French plan (as well as “France Relance”) also prioritises competitiveness and cohesion as axes for the recovery. The former can be associated to the “smart, sustainable, and inclusive growth” pillar while the latter corresponds to the “social and territorial cohesion” and “policies for the next generation” pillars. Finally, the pillar on resilience is also well addressed, notably by strengthening the resilience of the healthcare system and of businesses through competitiveness-enhancing measures. Green transition France’s plan focuses significantly on supporting the green transition, with four components (1 to 4) dedicated to this pillar, representing a total of EUR 20.2 billion. In particular, EUR 5.8 billion of costs are estimated for the renovation of buildings; EUR 2.1 billion to biodiversity, circular economy, agriculture and forestry; EUR 7.0 billion to green infrastructures and mobility; and EUR 5.3 billion to green energy and technologies. The French authorities estimate that these investments would contribute to directly reducing 60 million tonnes of CO2 over the next 40 years. The construction and use of buildings represent 25% of all greenhouse gas emissions in France, and the investments in the renovation of buildings are expected to yield significant energy savings and reductions in greenhouse gas emissions. The flagship investment under the component 1 on building renovation is the renovation of public buildings (EUR 3.8 billion), which is targeted to result in average energy savings and reductions in greenhouse gas emissions of more than 30% compared to the situation prior to the renovation. Investments under the component also include the renovation of social housing, private housing, and buildings owned or operated by SMEs and micro enterprises. Under component 2 on biodiversity, circular economy, agriculture and forestry, the plan foresees measures that combat the artificial conversion of natural soils; support the circular economy; mitigate seismic risks in the outermost regions and secure drinking water and wastewater networks; decarbonise industry; accelerate the agricultural transition; and restore forests. A “Climate and Resilience law” with the objective to contribute to the greenhouse gas emissions reduction target for 2030 and resulting from consultations with citizens is also part of this component. The purpose of component 3 on green infrastructures and mobility is to foster the development of modes of transport alternative to road and to accelerate the transition of the road transport sector to cleaner vehicles. According to the plan, carbon emissions from the transport sector represented 38% of all greenhouse gas emissions in France in 2017. 96% of these emissions come from road transport, and should be reduced by investing in cleaner vehicles and alternative modes of transport. The plan provides notably for a very significant investment to support SNCF Réseau (EUR 4.05 billion), the railway infrastructure manager in France, to modernise the railway network. Further investments aim to improve public transport in urban and rural areas. The component also features investments to foster the development of charging points for electric vehicles, to improve the infrastructure of inland waterways, to support projects aimed at greening ports, to support the development of road infrastructure reserved for public or shared transportation, and to support schemes for the transition to clean road vehicles. It also includes support for improving the resilience of energy infrastructures at distribution level in rural areas.

Component 4 on green energy and technologies provides for investments in developing innovative technologies for the green transition. It includes a specific focus on decarbonised hydrogen (EUR 1.9 billion), e.g. supporting research in and industrialisation of electrolysis and fuel cells. It also includes investments in the aeronautics sector (EUR 1.7 billion) to support R&D projects towards the development of a wide range of zero-emission aircraft technologies and solutions, and to support projects aimed at greening, modernising and digitalising production processes. Investments will also contribute (EUR 1.7 billion) to the French ‘Programme d’Investissements d’Avenir’, which will support research and innovation projects relating to hydrogen, decarbonisation of industry, sustainable agricultural systems, recycling and reincorporation of recycled materials, innovative buildings, mobility, and bio-based products and biofuels (see also section 4.5 for a detailed assessment of the green components). In addition, component 7 investment supporting artistic education (EUR 113 million) will also contribute to increasing the energy efficiency of art schools and libraries. Some measures of component 9 on R&D, health, territories contribute to the green transition by focusing on the renovation of buildings in the medical sector and of residential care homes for the elderly. Digital transformation The development of key digital technologies is supported by the Investment Programme for the Future (‘Programme d’Investissements d’Avenir’) in component 6 (EUR 1.8 billion) and includes, among others, cybersecurity, quantum computing and cloud computing. Measures to support the digitalisation of education and cultural and creative sectors will also be supported. In quantum computing, the objective is to have a complete prototype of a first-generation general quantum computer by 2024, master quantum technologies (including accelerators, simulators and quantum computers, business software for quantum computing, sensors, communication systems) and to have a complete industrial production chain for Silicon 28, in particular to enable the possible production of qubits. In cloud computing, France aims to create competitive cloud solutions in technological segments (infrastructure, platforms and software), with the purpose of supporting France and Europe’s autonomy over this strategic technology. The expected impacts are the development of a supply of trusted cloud services aimed at reducing the carbon footprint and the construction of a data-driven economy. See also section 4.6 for a detailed assessment of the digital components. Under component 7, the plan includes investments for the digitalisation of several sectors. Investments include EUR 1 billion for the digitalisation of the State and territories. (including equipment for the digitalisation of schools and higher education institutions, digital identity cards, digitalisation of the administrative services) and EUR 385 million for SMEs and mid-caps (support for the creation of a website, digitalisation of management process and adoption of new technologies). The recovery and resilience plan also includes investments in digital skills, as part of the measures targeting general skills development. These measures, included in component 8, will support financing training courses for workers (e.g. for employees in short-time work schemes (EUR 800 million) as well as topping up individual learning accounts for digital training courses (EUR 25 million), distance learning opportunities for the unemployed (EUR 160 million)) and investing in digital platforms to develop distance learning courses, including immersive modules based on virtual reality (EUR 304 million). Moreover, hiring subsidies for apprenticeships (EUR 2.3 billion) shall increase the digital skills of youth, as the apprenticeship programmes have the purpose of preparing employees for future challenges, in many cases with a focus on digital skills. Dedicated resources will therefore be devoted to reskilling and upskilling in digital areas and to digital inclusion. The ultrafast broadband plan (‘France Très Haut Débit’) will be boosted by an additional EUR 240 million to improve connectivity in particular in rural areas. The ultrafast broadband plan invests in infrastructures with the aim of accelerating the rollout of next generation access internet, including based on optic fibre, across the territory of France. The government’s overarching goal is to generalise next generation access, in particular optic fibre, by 2025. Component 9 includes EUR 2 billion for the health system (national infrastructure, digital medical records, interoperability, secure exchange of data, training of health professionals). Investments in the digitalisation of the State and of the territories should increase the performance of the public administration through technological upgrades and contribute to more inclusiveness. Smart, sustainable and inclusive growth Several measures spread across different components aim to strengthen France’s competitiveness and productivity, as well as to improve research, development and innovation. Component 2 includes EUR 300 million of support to industrial decarbonisation, an important competitiveness factor for industry in the medium term. Component 4 includes innovation support of EUR 1.7 billion for aeronautics, a flagship sector for France, with support for the development of clean airplanes using hydrogen or biofuels, and the set-up of a fund that will invest in industrial research and the modernisation of the aeronautics industry. It also contains a EUR 1.4 billion investment in R&D to support the development of key green technologies for aircraft decarbonisation. (See previous sub-section on the green transition). SMEs’ competitiveness and capacity to invest in the long term are supported in component 5 (“business support”). It contains a EUR 250 million investment under which Bpifrance will set up a fund to invest in regional investment funds that will, in turn, take equity positions in SMEs alongside private investors. Component 5 also includes the ASAP law reform (acceleration and simplification of public action). The ASAP law serves to facilitate access to the administration and to reduce administrative and regulatory burdens for firms and citizens (see Section 4.3). Component 6 includes EUR 3.2 billion worth of measures that support key digital technologies and R&D, and thereby also contribute clearly to productivity and competitiveness of French companies. The amount is made up of the strands of the investment programme for the future dedicated to key digital technologies (EUR 1.8 billion, described under the previous sub-section) and innovative businesses (EUR 750 million), support to the space sector of EUR 365 million, and a scheme to preserve R&D employment of EUR 300 million. The EUR 750 million for the Investment Programme for the Future included in this total has a strong focus on start-ups and SMEs. It seeks to finance feasibility studies and industrial research, to commercialise research and to help young researchers start companies. The EUR 300 million investment in R&D seeks to preserve employment and improve cooperation between public and private research by promoting mutually beneficial exchange programmes. The support to the space sector includes support for R&D (EUR 170 million) and is expected to allow the provision of high-speed internet coverage by satellite to the most remote areas (“zones blanches”), which is critical for improving productivity. The reform of the multiannual research law included in this component aims at promoting and facilitating R&D&I (see Section 4.3). Components 7 and 9 include funds for supporting the digitalisation of SMEs and increasing the budget of the national research agency to improve the success rate of calls for projects (EUR 385 million and EUR 428 million respectively). Component 8 includes investments and reforms which have the potential to foster economic growth in an inclusive manner. Students are notably supported through the creation of additional places in higher education (EUR 256 million) and workers through access to training, in line with pre-identified skills needs, increasing their mobility on the labour market (EUR 1.7 billion). This component also aims at fostering the labour market integration of unemployed through guidance and access to training. Component 9 further includes estimated costs of EUR 750 million to strengthen the ecosystems of education, research, valorisation and innovation. This is done by supporting the transition of universities towards a more active role in the innovation process and more generally in the economy. The ambition is to have universities fit for purpose in training the next generation of citizens, active in the society and the economy, and at the centre of innovation ecosystems (linking with local businesses, start-ups, public authorities, and civil society). This dimension will include funding to support the transformation of universities (see next sub-section). Social and territorial cohesion Component 1 contributes to improving social cohesion by reducing energy poverty and by supporting investments in the renovation of social housing (EUR 0.5 billion). Important reforms and investments to strengthen territorial cohesion are also included in component 7. Territorial cohesion is boosted by the 4D law (differentiate, deconcentrate, decentralise, reduce complexity – “decompléxifier”) and the draft constitutional law on the “right to differentiation”, both of which partially allows for transfer of powers from the State to local communities (further discussed in Section 4.3). Investments related to cultural heritage (EUR 280 million), artistic education (EUR 113 million) and supporting and modernising strategic cultural sectors most affected by the current crisis (EUR 309.5 million) also improve territorial cohesion as they should benefit local stakeholders and provide targeted support to local territories. In addition, the cross-cutting reform of public service, through revised recruitment procedures and reinforcement of the equal treatment and opportunity principle, is expected to further contribute to the social cohesion.

Component 8 is dedicated to social and territorial cohesion through investments earmarked to fostering worker mobility on the labour market through access to training, in line with current and future skills needs, as well as to supporting the labour market integration of the youth and persons with disabilities. It contains investments targeting youth employment (EUR 4.5 billion), professional training (EUR 1.7 billion) and the employment of persons with disabilities (EUR 58 million). Besides the apprenticeship programmes and the training of employees in short-time work schemes (see sub-section on digital transformation), flagship investments include EUR 800 million of subsidies for companies hiring young people under 26 years old, amounting to up to EUR 4000 per person hired and with an expected impact on 660 000 young people in total. The resources of ‘France Compétences’ are topped-up by EUR 750 million, which will be used mainly to support apprenticeship and professionalisation programmes. Inequalities in the education system are targeted through renovation and creation of further places in boarding schools for excellence (EUR 50 million), as well as mentoring programmes by university students to help disadvantaged youth expand their horizons and define their professional ambitions (EUR 10 million). Component 9 foresees investments in health (EUR 6 billion), research and education (EUR 1.2 billion) and support to local territories (EUR 500 million) that serve to further strengthen social and territorial cohesion. Flagship measures include a EUR 2.5 billion investment in the health system, where a generally high indebtedness is weighing on health institutions’ ability to invest. Part of the investment is allocated specifically at the regional level, by regional health agencies (ARS). The investments support the modernisation of the health system, e.g. by allowing for the renovation of buildings, and serve to improve the resilience and quality of care, e.g. by supporting the integration of hospital and outpatient care or by ensuring the availability of proper equipment. EUR 1.5 billion is invested in the renovation of residential care homes for the elderly (EHPAD), e.g. to improve the private facilities available to residents and to create spaces for accommodating residents with cognitive difficulties (such as sensory stimulation rooms). EUR 750 million under component 9 is allocated to supporting the transformation of higher education institutions and research in the education system. It finances the transformation strategy of higher education institutions to reach excellence and international standards and of school education through innovation and new forms of organisation and management. It provides financing for alternative funding mechanisms, laboratories, equipment, research programmes, and strengthening technological transfer in line with the research programming law (further described in Section 4.3). These measures, together with a EUR 428 million increase in the budget of the national research agency (ANR), should increase the attractiveness of the research profession and lead to higher employment of researchers. Health, and economic, social and institutional resilience Several measures contribute significantly to increasing economic resilience. Under components 5 and 6, such measures include strengthening the equity of SMEs, investing in innovative companies and key digital technologies, and the ASAP law reform (see sub-section on smart, sustainable and inclusive growth). Under component 7, a reform of the public finance governance framework aims to reinforce budgetary commitments and to stabilise and reduce public debt when economic conditions allow. The reform will introduce a multiannual expenditure rule that should ensure consistency between the annual budget bills and the multi-year objectives, and will extend the responsibilities of the French High Council of Public Finances (Haut Conseil des Finances Publiques). Moreover, component 7 also embeds a reform aimed at enhancing the quality of public spending and introducing an annual assessment of the measures taken, also in compliance with the expenditure trajectory of the public finance programming law. The contribution of these reforms to debt reduction in the medium to long term will depend on the degree of ambition of the expenditure rule and of the evaluation of spending, whose parameters are to be defined in the implementation phase. If implemented successfully, these reforms should provide the larger fiscal space needed to enhance France’s capacity to counter possible negative shocks. Regarding social resilience and the social protection system, several measures in component 8 and 9 are expected to contribute to the implementation of the principles of the European Pillar of Social Rights and the Porto declaration adopted on 7 May 2021, translating into improvements of the indicators of the Social Scoreboard accompanying the Pillar (see Section 4.3). Measures under component 8 oriented towards employability and enhancing skills (EUR 7.2 billion in total) are expected to contribute to strengthening social resilience. The main measures are discussed in the sub-section on social and territorial cohesion. As part of these measures, France is suggesting to pursue a number of policies in line with the Commission Recommendation on Effective Active Support to Employment (EASE). While emergency short-time work schemes helped France to preserve jobs during the pandemic, the Effective Active Support to Employment policies proposed by France are expected to have a positive impact in the longer run, translating into a more inclusive recovery. The resilience, effectiveness and accessibility of the health and long-term care sectors should be strengthened by the investments and reforms contained in component 9, with EUR 6 billion dedicated to these sectors. The amount is made up of the EUR 4 billion dedicated to medical establishments described in the previous sub-section and the investment in the digitalisation of the sector (EUR 2 billion) described in the sub-section on the digital transformation. It also contains also contains EUR 2.9 million for suicide prevention. The reforms in the health sector should increase the resilience, effectiveness and accessibility of the system, notably through the national strategy of reform of the healthcare system aimed in particular at upgrading the careers of health personnel, rebalancing the supply of health care in the country and organising local care. Finally, institutional changes are taking place with the transformation of the public service reform along with the modernisation and digitalisation of public services, as well as the digitalisation of central and local administrations, schools and health institutions. Policies for the next generation The sixth pillar is also duly addressed by measures and investments proposed mainly in component 8. Youth employment is one of the priorities of the plan, with a large number of measures amounting to EUR 4.5 billion intended to facilitate young people’s integration into the labour market (notably through hiring subsidies for apprenticeships and professionalisation contracts and recruitment of young people under 26 years old) and to provide training towards future-oriented sectors and to help those who are far from the labour market by offering reinforced and personalised support. Further details are provided in the sub-section “Social and territorial cohesion”. Other measures in component 8 aim to address inequalities in education, albeit in a more limited manner given the smaller scale of the measures. Measures supporting youth in initial education include the creation of additional places in the vocational and tertiary education system (EUR 256 million), investments in renovating and creating additional boarding school places (EUR 50 million), the prevention of early school leaving and academic guidance (EUR 83.5 million). In order to help alleviate the financial constraints on higher education students, the plan includes an increase in State-guaranteed student loans (a targeted increase in loans supported to EUR 580 million, expected to translate into loans for 100 000 students, at a cost of EUR 32 million). Measures in components 6, 7 and 9 aim to improve educational outcomes and digital skills of young people and contribute to the transformation of the education and training systems. Investments are planned to strengthen the digital skills of young people through key digital capacities in education (component 6) and digital equipment to education institutions (component 7). Research projects will reinforce school education through innovation and new forms of organisation and management, and support the transformation strategy of higher education institutions to reach excellence and international standards (component 9) (see also human capital). Conclusion Overall, the measures proposed in the plan pursue the general objective of the Facility by promoting the Union’s economic, social and territorial cohesion, structured in the six pillars of Article 3 of the RRF Regulation. Significant investments in key green technologies, sustainable transport, building renovation and more address the green transition. Investments in key digital technologies, R&D and the digitalisation of the administration, education and SMEs, among others, contribute to the digital transformation. The full implementation of the Plan would contribute to a decisive impulse towards more sustainable and inclusive growth, including by raising France’s potential growth in the medium term, by strengthening economic resilience and by reinforcing public finances. Social and territorial cohesion as well as health and social resilience are addressed through investments in education, training, employment and health services, with several of the employment measures targeting youth specifically. Taking into consideration all reforms and investments envisaged by France, its recovery and resilience plan is expected to represent to a large extent a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all six pillars referred to in Article 3 of the Recovery and Resilience Facility Regulation, taking the specific challenges and the financial allocation of France into account. This would warrant a rating of A under the assessment criterion 2.1 in Annex V to the Recovery and Resilience Facility Regulation. 4.2.Link with country-specific recommendations and the Europea