Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of France
Date: 2022-05-23
Institutions: European Commission, Secretariat-General
Subjects: France, economic policy, economic recovery, economic reform, energy policy, fiscal policy, labour shortage, pension scheme, stability pact, stability programme

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   EUROPEAN COMMISSION  Brussels, 23.5.2022  COM(2022) 612 final  Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of France {SWD(2022) 612 final} - {SWD(2022) 640 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2022 National Reform Programme of France 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 121(2) and 148(4) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances1, and in particular Article 6(1) thereof,  

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

Having regard to the opinion of the Economic and Financial Committee, 

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

(2) 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council2,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021.  The  Recovery  and  Resilience  Facility  provides  financial  support  for  the 
implementation of reforms and investment, entailing a fiscal impulse financed by the 
Union.  It  contributes  to  the  economic  recovery  and  to  the  implementation  of 
sustainable and growth-enhancing reforms and investment, in particular to promote the 
green and digital transition, while strengthening the resilience and potential growth of 
the Member States’ economies. It also helps strengthen sustainable public finances and 
boost growth and job creation in the medium and long term. The maximum financial 
contribution  per  Member  State  under  the  Recovery  and  Resilience  Facility  [was] 
updated on [XX] June 2022, in line with Article 11(2) of Regulation (EU) 2021/241.  

On  24  November  2021,  the  Commission  adopted  the  Annual  Sustainable  Growth 
Survey,  marking  the  start  of  the  2022  European  Semester  for  economic  policy 
coordination.  It  took  due  account  of  the  reaffirmed  joint  commitment  of  the  Porto 
Social Summit of May 2021 to further implement the European Pillar of Social Rights, 
proclaimed  by  the  European  Parliament,  the  Council  and  the  Commission  on  17 
November  2017.  The  European  Council  endorsed  the  priorities  of  the  2022  Annual 
Sustainable Growth Survey on 25 March 2022. On 24 November 2021, on the basis of 
Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted  the  Alert  Mechanism 

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OJ L 306, 23.11.2011, p. 25. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 

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(3) 

(4) 

(5) 

Report,  in  which  it  identified  France  as  one  of  the  Member  States  for  which  an  in-
depth  review3  would  be  needed.  On  the  same  date,  the  Commission  also  adopted  a 
recommendation  for  a  Council  recommendation  on  the  economic  policy  of  the  euro 
area, which was adopted on 5 April 2022 by the Council, as well as the proposal for 
the 2022 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  was 
adopted by the Council on 14 March 2022. 

Russia’s  invasion  of  Ukraine,  in  the  wake  of  the  global  pandemic,  has  significantly 
altered the geopolitical and economic context. The impact of the invasion on Member 
States’ economies has been felt for example through higher energy and food prices and 
weaker  growth  prospects.  The  higher  energy  prices  weigh  particularly  on  the  most 
vulnerable  households,  notably  those  experiencing  or  at  risk  of  energy  poverty.  The 
EU is also seeing an unprecedented inflow of people fleeing Ukraine. In this context, 
on 4 March 2022, the Temporary Protection Directive was triggered4 for the first time, 
granting displaced persons from Ukraine the right to legally stay in the EU, as well as 
access  to  education  and  training,  labour  market,  healthcare,  housing  and  social 
welfare. 

Taking  account  of  the  rapidly  changing  economic  and  geopolitical  situation,  the 
European Semester resumes its broad economic and employment policy coordination 
in 2022, while evolving in line with the implementation requirements of the Recovery 
and  Resilience  Facility,  as  outlined  in  the  2022  Annual  Sustainable  Growth  Survey. 
The  implementation  of  the  adopted  recovery  and  resilience  plans  is  essential  for  the 
delivery of the policy priorities under the European Semester, as the plans address all 
or a significant subset of the relevant country-specific recommendations issued in the 
2019  and  2020  Semester  cycles.  The  2019  and  2020  country-specific 
recommendations  remain  equally  relevant  also  for  recovery  and  resilience  plans 
revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation 
(EU) 2021/241, in addition to any country-specific recommendations issued up to the 
date of submission of the modified plan.  
The General Escape Clause has been active since March 20205. In its Communication 
of  3  March  20216,  the  Commission  set  out  its  view  that  the  decision  on  the 
deactivation or continued application of the general escape clause should be taken as 
an overall assessment of the state of the economy, with the level of economic activity 
in the EU or euro area compared to pre-crisis levels (end-2019) as a key quantitative 
criterion. Heightened uncertainty and strong downside risks to  the economic outlook 
in  the  context  of  war  in  Europe,  unprecedented  energy  price  hikes  and  continued 
supply  chain  disturbances  warrant  the  extension  of  the  general  escape  clause  of  the 
Stability and Growth Pact through 2023. 

(6) 

Following the approach in the Council opinion of 18 June 2021 on the 2021 Stability 
Programme,  the  fiscal  stance  is  currently  best  measured  as  the  change  in  primary 

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Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 
on the prevention and correction of macroeconomic imbalances (OJ L 306, 23.11.2011, p. 25). 
Council Implementing Decision (EU) 2022/382 of 4 March 2022 establishing the existence of a mass 
influx of displaced persons from Ukraine within the meaning of Article 5 of Directive 2001/55/EC, and 
having the effect of introducing temporary protection, OJ L 71, 4.3.2022, p. 1. 
Communication from the Commission to the Council on the activation of the general escape clause of 
the Stability and Growth Pact, Brussels, 20.3.2020, COM(2020) 123 final. 
Communication  from  the  Commission  to  the  Council  on  one  year  since  the  outbreak  of  COVID-19: 
fiscal policy response, Brussels, 3.3.2021, COM(2021) 105 final. 

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(7) 

expenditure  (net  of  discretionary  revenue  measures),  excluding  COVID-19  crisis-
related  temporary  emergency  measures  but  including  expenditure  financed  by  non-
repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds,  relative  to  medium-term  potential  growth7.  Going  beyond  the  overall  fiscal 
stance, in order to assess whether national fiscal policy is prudent and its composition 
is conducive to a sustainable recovery consistent with the green and digital transitions, 
attention  is  also  paid  to  the  evolution  of  nationally-financed8  primary  current 
expenditure  (net  of  discretionary  revenue  measures  and  excluding  COVID-19  crisis-
related temporary emergency measures) and investment. 

On  2  March  2022,  the  Commission  adopted  a  Communication  providing  broad 
guidance  for  fiscal  policy  in  2023,  aiming  at  supporting  the  preparation  of  Member 
States’  Stability  and  Convergence  Programmes  and  thereby  strengthening  policy 
coordination9.  The  Commission  noted  that,  based  on  the  macroeconomic  outlook  of 
the  2022  winter  forecast,  transitioning  from  an  aggregate  supportive  fiscal  stance  in 
2020-2022  to  a  broadly  neutral  aggregate  fiscal  stance  would  appear  appropriate  in 
2023,  while  standing  ready  to  react  to  the  evolving  economic  situation.  The 
Commission announced that the fiscal recommendations for 2023 should continue to 
differentiate  across  Member  States  and  take  into  account  possible  cross-country 
spillovers. The Commission invited the Member States to reflect the guidance in their 
Stability  and  Convergence  Programmes.  The  Commission  committed  to  closely 
monitor  the  economic  developments  and  adjust  its  policy  guidance  as  needed  and  at 
the latest in its Semester spring package of late May 2022. 

(8)  With  respect  to  the  fiscal  guidance  provided  on  2  March  2022,  the  fiscal 
recommendations  for  2023  take  into  account  the  worsened  economic  outlook,  the 
heightened uncertainty and further downside risks, and the higher inflation compared 
to the winter forecast. Against these considerations, the fiscal response has to expand 
public investment for the green and digital transition and energy security, and sustain 
the purchasing power of the most vulnerable households so as to cushion the impact of 
the energy price hike and help limit inflationary pressures from second round effects 
via targeted and temporary measures; fiscal policy has to remain agile so as to adjust 
to the rapidly evolving circumstances, and be differentiated across countries depending 
on their fiscal and economic situation, including as regards the exposure to the crisis 
and the inflow of displaced persons from Ukraine. 

(9) 

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On  28  April  2021,  France  submitted  its  national  recovery  and  resilience  plan  to  the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 13 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for France10. The release of instalments is conditional on 
a decision by the Commission,  taken in  accordance with  Article 24(5)  of  Regulation 

The  estimates  on  the  fiscal  stance  and  its  components  in  this  recommendation  are  Commission 
estimates  based  on  the  assumptions  underlying  the  Commission  2022  spring  forecast.  The 
Commission’s estimates of medium-term potential growth do not include the positive impact of reforms 
that are part of the Recovery and Resilience Plan and that can boost potential growth.  
Not financed by grants from the Recovery and Resilience Facility and other EU funds. 
Communication  from  the  Commission  to  the  Council:  Fiscal  policy  guidance  for  2023,  Brussels, 
2.3.2022, COM(2022) 85 final. 
Council Implementing Decision of 6 July 2021 on the approval of the assessment of the  recovery and 
resilience plan for France (ST 10162/2021; ST 10162/2021 ADD 1).  

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(EU)  2021/241,  that  France  has  satisfactorily  fulfilled  the  relevant  milestones  and 
targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory  fulfilment 
presupposes  that  the  achievement  of  preceding  milestones  and  targets  has  not  been 
reversed. 

(10)  On  4  May  2022,  France  submitted  its  2022  National  Reform  Programme.  It  did  not 
submit  its  Stability  Programme.  In  accordance  with  Article  27  of  Regulation  (EU) 
2021/241,  the  2022  National  Reform  Programme  also  reflects  France’s  bi-annual 
reporting on the progress made in achieving its recovery and resilience plan.   
(11)  The Commission published the 2022 country report for  France11 on 23 May 2022.  It 
assessed  France’s  progress 
country-specific 
recommendations adopted by the Council in 2019, 2020 and 2021, and  took stock of 
France’s implementation of the recovery and resilience plan, building on the Recovery 
and Resilience Scoreboard. Based on this analysis, the country report identified gaps 
with respect to those challenges that are not addressed or only partially addressed by 
the  recovery  and  resilience  plan,  as  well  as  new  and  emerging  challenges,  including 
those emerging from Russia’s invasion of Ukraine. It also assessed France's progress 
on  implementing  the  European  Pillar  of  Social  Rights  and  on  achieving  the  EU 
headline  targets  on  employment,  skills  and  poverty  reduction,  as  well  as  progress  in 
achieving the UN’s Sustainable Development Goals. 

addressing 

relevant 

the 

in 

(12)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No  1176/2011  for  France  and  published  its  results  on  23  May  202212.  The 
Commission  concluded  that  France  is  experiencing  macroeconomic  imbalances.  In 
particular,  vulnerabilities  relate  to  high  government  debt  and  weak  competitiveness, 
which have cross-border relevance, in a context of low productivity growth. 

(13)  On  23  May  2022,  the  Commission  issued  a  report  under  Article  126(3)  TFEU.  This 
report discussed the budgetary situation of France, as its general government deficit in 
2021 exceeded the 3% of GDP Treaty reference value, while its  general  government 
debt  exceeded  the  60%  of  GDP  Treaty  reference  value  and  did  not  respect  the  debt 
reduction benchmark. The report concluded that the deficit and debt criteria were not 
fulfilled.  In  line  with  the  Communication  of  2  March  2022,  the  Commission 
considered, within its assessment of all relevant factors, that compliance with the debt 
reduction benchmark would imply a too demanding frontloaded fiscal effort that risks 
to jeopardise growth. Therefore, in the view of the Commission, compliance with the 
debt  reduction  benchmark  is  not  warranted  under  the  current  exceptional  economic 
conditions.  As  announced,  the  Commission  did  not  propose  to  open  new  excessive 
deficit  procedures  in  spring  2022  and  it  will  reassess  the  relevance  of  proposing  to 
open excessive deficit procedures in autumn 2022.   

the economy  and  support 

(14)  On  20  July  2020,  the  Council  recommended  France  to  take  in  2020  and  2021  all 
necessary measures, in  line with  the general  escape clause, to  effectively  address  the 
the  ensuing  recovery.  It  also  
pandemic,  sustain 
recommended  France  to  pursue,  when  economic  conditions  allow,  fiscal  policies 
aimed  at  achieving  prudent  medium-term  fiscal  positions  and  ensuring  debt 
sustainability,  while  enhancing  investment.  In  2021,  based  on  data  validated  by 
Eurostat, France’s general government deficit fell from 8.9% of GDP in 2020 to 6.5% 
in  2021.  The  fiscal  policy  response  by  France  supported  the  economic  recovery  in 
2021,  while  temporary  emergency  support  measures  declined  from  3.3%  of  GDP  in 

11 
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SWD(2022) 612. 
SWD(2022) 632. 

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2020 to 2.6% in 2021. The measures taken by France in 2021 have been in line with 
the Council Recommendation of 20 July 2020. The discretionary budgetary measures 
adopted by the government in 2020 and 2021 were  mostly temporary or matched by 
offsetting measures. At the same time, some of the discretionary measures adopted by 
the  government  over  the  period  2020  to  2021  were  not  temporary  or  matched  by 
offsetting measures, mainly consisting of a permanent reduction in taxes on production 
as  of  2021  and  the  increase  of  civil  servant  wages,  mainly  in  the  healthcare  system. 
Based  on  data  validated  by  Eurostat,  general  government  debt  stood  at  112.9  %  of 
GDP in 2021. 

(15)  Based on policy measures known at the cut-off date of the forecast, the Commission 
2022 spring forecast projects a government deficit for 2022 and 2023 of 4.6% of GDP 
and  3.2%  respectively.  The  Commission  2022  spring  forecast  projects  a  general 
government debt-to-GDP ratio of 111.2% in 2022 and 109.1% in 2023. Based on the 
Commission’s analysis, debt sustainability risks appear high over the medium term. 

(16) 

Based  on  the  Commission  spring  2022  forecast,  the  medium-term  (10-year  average) 
potential output growth is estimated at 1.0%. However, this estimate does not include 
the  impact  of  the  reforms  that  are  part  of  the  Recovery  and  Resilience  Plan  and  can 
boost France’s potential growth. 

In 2022, the government phased out the majority of measures taken in response to the 
COVID-19 crisis, such that the temporary emergency support measures  are projected 
to  decline  from  2.6%  of  GDP  in  2021  to  0.4%  in  2022.  The  government  deficit  is 
impacted  by  the  measures  adopted  to  counter  the  economic  and  social  impact  of  the 
increase in energy prices, which in the Commission spring 2022 forecast are estimated 
at 0.7% of GDP in 2022 and are expected to be phased out in 2023.13 These measures 
mainly consist of social transfers to poorer households, cuts to indirect taxes on energy 
consumption, price caps  on retail and wholesale prices, subsidies to energy-intensive 
enterprises.  These  measures  have  been  announced  as  temporary.  However,  in  case 
energy  prices  remain  elevated  also  in  2023,  some  of  these  measures  could  be 
continued. Some of these measures are not targeted, notably the general price cap on 
electricity  and  gas  prices  as  well  as  an  outright  subsidised  discount  on  fuels.  The 
government  deficit  is  also  impacted  by  the  costs  to  offer  temporary  protection  to 
displaced  persons  from  Ukraine,  which  in  the  Commission  2022  spring  forecast  are 
projected at 0.1% of GDP in 2022 and 0.1% in 2023.14 

(17)  On  18  June  2021,  the  Council  recommended  that  in  2022  France15  should  use  the 
Recovery  and  Resilience  Facility  to  finance  additional  investment  in  support  of  the 
recovery  while  pursuing  a  prudent  fiscal  policy.  Moreover,  it  should  preserve 
nationally-financed  investment.  It  also  recommended  France  to  pursue,  when 
economic  conditions  allow,  a  fiscal  policy  aimed  at  achieving  prudent  medium-term 

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The figures represent the level of annual budgetary costs of those measures taken since autumn 2021, 
including current revenue and expenditure as well as – where relevant – capital expenditure measures. 
The total number of displaced persons from Ukraine to the EU is assumed to gradually reach 6 million 
by  the  end  of  2022,  and  their  geographical  distribution  is  estimated  based  on  the  size  of  the  existing 
diaspora, the relative population of the receiving Member State, and the actual distribution of displaced 
persons from Ukraine across the EU as of March 2022. For budgetary costs per person, estimates are 
based on the Euromod microsimulation model of the Commission’s Joint Research Centre, taking into 
account both cash transfers people may be eligible for as well as in-kind benefits such as education and 
healthcare. 
Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Stability 
Programme of France, OJ C 304, 29.7.2021, p. 43. 

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(18) 

(19) 

fiscal positions and ensuring fiscal sustainability in the medium term, and at the same 
time, to enhance investment to boost growth potential. 

In 2022, based on the Commission’s 2022 spring forecast, the fiscal stance is projected 
to be supportive at -1.7% of GDP.16 France plans to provide continued support to the 
recovery by making use of the Recovery and Resilience Facility to finance additional 
investment  as  recommended  by  the  Council.  The  positive  contribution  to  economic 
activity of expenditure financed by Recovery and Resilience Facility grants and other 
EU funds is projected to decrease by 0.2 percentage points of GDP compared to 2021. 
This  decrease  in  2022  is  due  to  the  frontloaded  financial  support  from  the  Recovery 
and Resilience Facility in 2021. Nationally-financed investment is projected to provide 
a  neutral  contribution  to  the  fiscal  stance  in  2022.17  Therefore,  France  plans  to 
preserve nationally financed investment, as recommended by the Council. At the same 
time,  the  growth  in  nationally-financed  primary  current  expenditure  (net  of  new 
revenue measures) in 2022 is projected to provide an expansionary contribution of 1.6 
percentage  points  to  the  overall  fiscal  stance.  This  significant  expansionary 
contribution  includes  the  additional  impact  of  the  measures  to  address  the  economic 
and social impact of the increase in energy prices (0.5% of GDP) as well as the costs 
to offer temporary protection to displaced persons from Ukraine (0.1% of GDP). Other 
current  expenditure  measures  include  those  put  forward  in  the  resilience  plan  to 
address the economic consequences of the conflict in Ukraine, such as direct subsidies 
to  ad  hoc  sectors    (0.1%  of  GDP),  and  the  increase  of  civil  servant  wages  (0.1%  of 
GDP).  On  the  revenue  side,  the  cut  in  the  corporate  income  tax  rate  (0.1%  of  GDP) 
and  of  the  housing  taxes  (0.1%  of  GDP)  are  also  projected  to  contribute  to  the 
expansionary  fiscal  stance.  The  higher  increase  in  consumer  prices  compared  to  the 
GDP  deflator  is  projected  to  affect  the  expansionary  contribution  of  nationally 
financed  primary  current  expenditure  in  2022  by  increasing  public  consumption  and 
social  benefits.  Based  on  the  Commission’s  forecast,  these  measures  and  drivers  of 
higher expenditure are not fully matched by offsetting measures.     

In  2023,  the  fiscal  stance  is  projected  in  the  Commission  2022  spring  forecast  at 
+0.9%  of  GDP  on  a  no-policy  change  assumption.18  France  is  projected  to  continue 
using  the  grants  from  the  Recovery  and  Resilience  Facility  in  2023  to  finance 
additional  investment  in  support  of  the  recovery.  The  positive  contribution  to 
economic activity of expenditure financed by Recovery and Resilience Facility grants 
and  other  EU  funds  is  projected  to  decrease  by  0.1  percentage  points  of  GDP 
compared to 2022, reflecting the frontloaded financial support from the Recovery and 
Resilience  Facility  in  2021  and  2022.  Nationally-financed  investment  is  projected  to 
provide  a  neutral  contribution  to  the  fiscal  stance  in  2023.19  At  the  same  time,  the 
growth  in  nationally-financed  primary  current  expenditure  (net  of  new  revenue 
measures)  in  2023  is  projected  to  provide  a  contractionary  contribution  of  0.7 
percentage  points  to  the  overall  fiscal  stance.  This  includes  the  impact  from  the 

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19 

A negative (positive) sign of the indicator corresponds to an excess (shortfall) of primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.2 percentage points of GDP. 
A negative (positive) sign of the indicator corresponds to an excess (shortfall) of  primary expenditure 
growth  compared  with  medium-term  economic  growth,  indicating  an  expansionary  (contractionary) 
fiscal policy. 
Other  nationally-financed  capital  expenditure  is  projected  to  provide  a  contractionary  contribution  of 
0.1 percentage points of GDP. 

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phasing  out  of  the  measures  addressing  the  increased  energy  prices  (0.7%  of  GDP). 
Therefore,  the  contractionary  contribution  of  nationally-financed  current  expenditure 
relies  on  the  phasing  out  of  the  measures  to  address  the  impact  of  the  increase  in 
energy prices as currently planned. 

(20)  The  current  pension  system  in  France  is  complex,  consisting  of  more  than  40  co-
existing schemes. These schemes  apply to  different  groups of workers  and functions 
according to different sets of rules. Based on Eurostat data, at 14.6% of GDP in 2019, 
public pension expenditure in France was the third highest in the EU. The high cost is 
related  to  a  relatively  high  replacement  ratio  (i.e.  pension  compared  to  final  annual 
wages),  life  expectancy,  a  relatively  early  effective  retirement  age  (around  62  years) 
and an elevated number of pension beneficiaries out of the total population. According 
to both the Commission 2021 Ageing report and  the latest annual report by France’s 
Pensions  Advisory  Council  (Conseil  d’orientation  des  retraites),  after  some  decline 
projected  until  2024,  pension  expenditures  are  projected  to  increase  moderately 
between  2025  and  around  2030,  by  about  0.2  percentage  points  of  GDP.  High  total 
public expenditure, with pension expenditure being one of the main items, contributes 
to the accumulation of public debt despite a heavy tax burden, leading France to face 
high  fiscal  sustainability  risks  over  the  medium  term.  Over  the  longer  term,  pension 
expenditure would start declining steadily until 2070, mainly due to the indexation of 
pension benefits to inflation, which offsets the effect of the increase in the dependency 
ratio due to ageing. The simplification of the pension system, by unifying the different 
regimes,  would  help  improve  its  transparency  and  fairness,  while  entailing  positive 
effects on labour mobility and the efficiency of labour allocation, and could underpin 
fiscal  sustainability.  In  2018,  the  French  government  initiated  a  reform  process  with 
the  objective  of  unifying  the  rules  of  the  multiple  pension  regimes.  The  reform  was 
halted with the outbreak of the COVID-19 pandemic. In presenting the objectives of 
the French recovery and resilience plan, the government confirmed its commitment to 
pursue an ambitious reform of the pension system, aiming to improve its fairness and 
sustainability. 

(21) 

In  accordance  with  Article 19(3), point (b) of Regulation  (EU) 2021/241  and Annex 
V, criterion 2.2, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments  to be implemented by 2026. These help address 
all  or  a  significant  subset  of  the  economic  and  social  challenges  outlined  in  the 
country-specific recommendations addressed to France by the Council in the European 
Semester  in  2019  and  2020,  in  addition  to  any  country-specific  recommendations 
issued up to the date of adoption of a plan. The implementation of the French plan is 
well  underway.  France’s  first  payment  request  was  positively  assessed  by  the 
Commission,  taking  into  account  the  opinion  of  the  Economic  and  Financial 
Committee, leading to a disbursement of EUR 7.4 billion in financial support (net of 
pre-financing) on 4 March 2022. The related 38 milestones and targets cover reforms 
in the areas of public finance, the labour market, health and long-term care. Investment 
has been made in energy efficiency of buildings (public, private, and social housing), 
sustainable  transport  (purchasing  clean  vehicles),  decarbonising  industry,  youth 
employment  and  education.  Several  research  strategies  in  key  green  and  digital 
technologies were validated and calls for projects will be launched in 2022 and 2023.  

(22)  The  implementation  of  the  recovery  and  resilience  plan  of  France  is  expected  to 
contribute  to  making  further  progress  on  the  green  and  digital  transition.  Measures 
supporting  the  climate  objectives  in  France  account  for  46.0%  of  the  plan’s  total 
allocation (with major investment in energy renovation of buildings), while measures 

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supporting digital objectives account for 21.3% of the plan’s total allocation. The fully 
fledged  implementation  of  the  recovery  and  resilience  plan,  in  line  with  the  relevant 
milestones  and  targets,  will  help  France  swiftly  recover  from  the  fallout  of  the 
COVID-19  crisis,  while  strengthening  its  resilience.  The  systematic  involvement  of 
social  partners  and  other  relevant  stakeholders  remains  important  for  the  successful 
implementation  of  the  recovery  and  resilience  plan,  as  well  as  other  economic  and 
employment policies going beyond the plan, to ensure broad ownership of the overall 
policy agenda. 

(23)  France submitted its cohesion policy programming documents20 on 17 December 2021 
for the Partnership Agreement and most of the programmes before 17 March 2022. In 
line with Regulation (EU) 2021/1060 of the European Parliament and of the Council 
of  24  June  2021,  France  shall  take  into  account  the  relevant  country-specific 
recommendations in the programming of the 2021-2027 cohesion policy funds. This is 
a prerequisite for improving the effectiveness and maximising the added value of the 
financial  support  to  be  received  from  cohesion  policy  funds,  while  promoting  the 
coordination,  complementarity  and  coherence  between  these  funds  and  other  Union 
instruments and funds. The successful implementation of the Recovery and Resilience 
Facility and cohesion policy programmes also depends on the removal of bottlenecks 
to  investment  to  support  the  green  and  digital  transition  and  balanced  territorial 
development. 

(24)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan, France faces  a number of additional challenges related to  the shortage of skills 
and  the  deployment  of  renewable  energy.  Enhancing  the  skills  of  workers  would 
contribute to increasing labour productivity and consequently to improving the overall 
competitiveness of the French economy.  

(25)  Labour shortages  are on the rise and employers report the lack of skilled workers as 
the main barrier to recruitment in more than 50% of cases, notably for jobs requiring 
technical  skills,  such  as  those  needed  for  the  green  and  digital  transition  (industry, 
construction).  Current  investment  in  the  up-skilling  and  re-skilling  of  workers  takes 
time to pay off and its effectiveness is undermined by the low level of basic skills of 
more than one fifth of 15-year-old pupils, who then tend to benefit less from training 
later on in life. Low performance in mathematics  (with French pupils scoring lowest 
among  the  22  participating  EU  countries  in  Trends  in  International  Results  in 
Mathematics and Science (TIMSS) 2019) and science is of specific concern, given the 
shortages of technical skills. In addition, evaluations indicate that the low skilled tend 
to benefit less from training that leads to a qualification. 

(26)  Despite good outcomes  overall, high socio-economic and  regional inequalities in  the 
French education system impact the level of basic skills. According to PISA, France is 
one  of  the  EU  Member  States  where  socio-economic  background  most  influences 
pupils’  performance.  Indicators  show  that  35.3%  of  disadvantaged  15-year-olds  and 
44.5% of first-generation migrant pupils do not have sufficient basic skills in reading, 
compared  to  20.9%  on  average.  To  address  this  issue,  in  2017  France  introduced  a 
pilot reform consisting of ‘halving class sizes’ in early years of education for students 

20 

Regulation  (EU)  2021/1060  of  the  European  Parliament  and  of  the  Council  of  24  June  2021  laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund 
Plus,  the  Cohesion  Fund,  the  Just  Transition  Fund  and  the  European  Maritime,  Fisheries  and 
Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the 
Internal  Security  Fund  and  the  Instrument  for  Financial  Support  for  Border  Management  and  Visa 
Policy. OJ L 231, 30.6.2021, p. 159. 

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in  priority  areas,  to  enable  pupils  to  benefit  from  more  personalised  support  in  an 
atmosphere conducive to learning. In 2021, the French Court of Auditors highlighted 
shortcomings  in  the  school  system,  especially  impacting  the  learning  outcomes  of 
disadvantaged  pupils,  and  called  for  greater  autonomy  and  evaluation  of  schools. 
Lower  rates  of  participation  in  continuous  training  by  teachers  and  high  student-to-
teacher ratios  may  exacerbate socio-economic inequalities.  Science teachers working 
in disadvantaged areas tend to have lower levels of certification to a larger extent than 
in  other  EU  countries.  The  2018  reform  of  vocational  education  and  training  and 
significant incentives for employers boosted the number of apprentices, with a positive 
impact on employment rates for graduates. 

(27) 

In  response  to  the  mandate  by  the  EU  Heads  of  State  or  Government  set  out  in  the 
Versailles Declaration, the REPowerEU plan aims to phase out the European Union’s 
dependence on fossil fuel imports from Russia as soon as possible. For this purpose, 
the most suitable projects, investments and reforms at national, regional and EU level 
are being identified in dialogue with the Member States. These measures aim to reduce 
overall reliance on fossil fuels and shift fossil fuel imports away from Russia.  

(28)  According to 2020 data, France’s import dependency on Russian oil, gas and coal is 
9%, 17% and 34% respectively, below the EU 27 average21. France has a more limited 
exposure to Russian fossil fuels than the EU average in large part because the French 
energy  mix  relies  chiefly  on  nuclear  energy  (40.6%  of  its  gross  inland  energy 
consumption).  The  weight  of  fossil  fuels  in  the  energy  mix  is  lower  than  the  EU  27 
average:  oil,  gas  and  solid  fossil  fuels  (including  coal)  represent  28.6%,  15.4%  and 
2.3% of gross inland energy consumption respectively in  France. In addition, France 
has  4  LNG  terminals,  allowing  for  a  more  diversified  source  of  gas  imports. 
Nevertheless,  the  current  geopolitical  situation  and  high  energy  prices  are  increasing 
the urgency for France to further step up its efforts to meet renewable  energy targets 
laid  down  in  its  National  Energy  and  Climate  Plan.  Renewable  energy  represented 
19.1% of France’s gross final  energy consumption in  2020, below  the target  of 23% 
set in its national energy and climate plan. Further increases in ambition for reducing 
greenhouse  gas  emissions  and  increasing  renewables  and  energy  efficiency  will  be 
needed  for  France  to  be  in  line  with  the  ‘Fit  for  55’  objectives.  The  rapid 
decarbonisation  of  industrial  processes  and  building  heating  can  be  helped  by 
increased  public  support  for  technologies  such  as  small-  and  large-scale  heat  pumps 
and geothermal energy, including support for district heating networks, as well as the 
faster  deployment  of  sustainable  anaerobic  digestion  (‘méthanisation’)  and  other 
technologies  linked  to  the  sustainable  production  of  sustainable  biogases  such  as 
biomethane.  Such  investment  would  also  help  reduce  dependence  on  natural  gas 
imports  from  Russia.  An  accelerated  phase-out  of  remaining  fossil  fuel  subsidies 
would  improve  the  competitiveness  of  renewable  energy  compared  to  fossil  fuel 
alternatives. Investment in renewable energy, both utility-scaled and decentralised, can 
also  strengthen  macroeconomic  resilience  and  competitiveness  by  increasing  energy 
security and innovation in the energy sector.  

(29)  The  deployment  of  utility-scale  renewable  energy  projects  in  France,  in  particular 
onshore  and  offshore  wind  farms  and  solar  photovoltaic  projects,  suffers  from 
restrictive  regulation  and  high  administrative  and  permitting  barriers.  Under-
investment in the electricity grid at national level has also led to a scarcity of access 

21 

Eurostat (2020), share of Russian imports over total imports of natural gas, crude oil and hard coal. For 
the  EU  27  average,  the  total  imports  are  based  on  extra-EU  27  imports.  For  France,  total  imports 
include intra-EU trade. Crude oil does not include refined oil products. 

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points,  increasing  grid  connection  costs  and  delays  in  grid  connection  that  can 
currently last up to several months. Onshore wind farms are not permitted to be built 
within  5-30  km  of  surrounding  meteorological,  military  and  civil  aviation  radars, 
leading to some 45% of new projects struggling to find suitable locations. Procedures 
should be improved to avoid safety-related military obstructions at a very late stage of 
a  project’s  development.  An  approval  process  involving  national,  regional  and  local 
administrations  means  that  frequent  requests  for  updating  urban  planning  documents 
must  be  reflected 
lower-level  documents  as  well,  generating  additional 
administrative burdens. The permitting process could be accelerated by allocating to it 
more human and financial  resources  in  central administrations  at  regional  levels  (i.e. 
for  decentralised  State  services)  as  well  as  competent  authorities  and  grid  operators, 
closer  involvement  of  regional  and  local  administrations  in  spatial  planning,  and 
swifter  application  of  tendering  procedures.  Reinforcing  mechanisms  for  public 
participation  and  decentralisation  would  reduce  third-party  complaints,  a  source  of 
major  delays  in  commissioning  new  projects.  A  stable  regulatory  framework  at 
national  level  would  provide  more  investor  certainty,  particularly  for  longer-term 
planning. 

in 

(30)  Boosting  energy  efficiency  and  reducing  energy  consumption  will  help  reduce 
emissions and reliance on fossil fuels. In France, the construction and use of buildings 
represents  25%  of  all  greenhouse  gas  emissions.  The  recovery  and  resilience  plan 
dedicates  a  full  component  to  energy  renovation  for  buildings,  helping  tackle 
associated  challenges with  a broad, cross-cutting  approach. Measures cover all types 
of buildings, with a priority for public buildings, but also significant action to renovate 
the private building stock and social housing, and to increase the energy efficiency of 
small  businesses.  In  the  context  of  its  new  national  resilience  plan,  France  is 
reinforcing  the  support  mechanisms  for  renewable  heating  in  buildings,  e.g.  by 
increasing  the  “heat  fund”  by  EUR  150  million  and  the  subsidy  for  installing 
renewables-based  heating  by  EUR  1000.  The  French  National  Low-Carbon  Strategy 
(Stratégie Nationale Bas Carbone) defines an ambitious trajectory to reduce emissions 
from  buildings  and  achieve  complete  decarbonisation  of  the  energy  consumed  in 
buildings  by  2050.  The  current  scheme  ‘Ma  Prime  Renov’,  targeted  at  households, 
mainly  subsidises  single  renovation  actions.  To  encourage  more  significant  energy-
efficiency  gains,  the  policy  framework  could  be  improved  to  incentivise  deep 
renovation and help France further increase the energy efficiency of its building stock. 
The  climate  and  resilience  law  adopted  in  August  2021  aims  to  reduce  energy 
consumption  in  many  ways,  e.g.  by  providing  bonuses  for  electric  bicycles  and 
creating low-emission zones in metropolitan areas. 

(31)  Further  support  for  cross-border  electricity  interconnectors  (under  development  or 
planned)  remains  of  crucial  importance  for  the  integration  of  large  shares  of 
renewables.  Frontloading  investment  in  energy  infrastructure,  both  domestic  and 
cross-border, will help reduce dependence on fossil fuel and in particular Russian gas. 
New  infrastructure  and  network  investments  are  recommended  to  be  future-proof 
where  possible,  in  order  to  facilitate  their  long-term  sustainability  through  future 
repurposing  for  sustainable  fuels.  Interconnections  are  crucial  for  an  efficient 
functioning  of  the  internal  energy  market  by  pooling  resources  to  achieve  overall 
security of supply. 

(32)  While  the  acceleration  of  the  transition  towards  climate  neutrality  and  away  from 
fossil  fuels  will  create  significant  restructuring  costs  in  several  sectors,  France  can 
make  use  of  the  Just  Transition  Mechanism  in  the  context  of  cohesion  policy  to 

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alleviate the socio-economic impact  of the transition  in  the most  affected  regions.  In 
addition,  France  can  make  use  of  the  European  Social  Fund  Plus  to  improve 
employment opportunities and strengthen social cohesion. 

(33)  The  Council  has  examined  France’s  fiscal  policies,  taking  into  account  the 
Commission’s  Spring  2022  Economic  Forecast,  and  its  assessment  is  reflected  in 
particular in recommendation (1) below. 

(34) 

(35) 

In view of the close interlinkages between the economies of euro area Member States 
and  their  collective  contribution  to  the  functioning  of  the  Economic  and  Monetary 
Union,  the  Council  recommended  that  the  euro  area  Member  States  take  action, 
including 
the 
recommendation on the economic policy of the euro area. For France, this is reflected 
in all four recommendations below. 

resilience  plans, 

recovery  and 

implement 

through 

their 

to 

In the light of the Commission’s in-depth review and this assessment, the Council has 
examined the 2022 National Reform Programme. Its recommendations under Article 6 
of  Regulation  (EU)  No  1176/2011  are  reflected  in  recommendations  (1),  (2)  and  (3) 
below. Recommendations (1), (2) and (3) also contribute to the implementation of the 
Recommendation for the euro area, in particular the first, second and fourth euro area 
recommendations.  Fiscal  policies  referred  to  in  recommendation  (1)  help  inter  alia 
address  imbalances  linked  to  high  government  debt.  Policies  referred  to  in 
recommendation  (2)  help  inter  alia  reduce  government  indebtedness  and  improve 
competitiveness,  as  the  full  implementation  of  the  recovery  and  resilience  plan  will 
support growth while strengthening the resilience of the economy. Policies referred to 
in recommendation (3) help inter alia address imbalances linked to competitiveness.  

HEREBY RECOMMENDS that France take action in 2022 and 2023 to:  

1. 

2. 

3. 

In  2023,  ensure  prudent  fiscal  policy,  in  particular  by  limiting  the  growth  of 
nationally-financed current expenditure below medium-term potential output growth, 
taking  into  account  continued  temporary  and  targeted  support  to  households  and 
firms  most  vulnerable  to  energy  price  hikes  and  to  people  fleeing  Ukraine.  Stand 
ready to adjust current spending to the evolving situation. Expand public investment 
for the green and digital transition and for energy security, including by making use 
of the RRF, RePowerEU and other EU funds. For the period beyond 2023, pursue a 
fiscal policy aimed at achieving prudent medium-term fiscal positions and ensuring 
credible  and  gradual  debt  reduction  and  fiscal  sustainability  in  the  medium  term 
through  gradual  consolidation,  investment  and reforms.  Reform  the pension system 
to  progressively  unify  the  rules  of  the  different  pension  regimes  to  enhance  its 
fairness while underpinning its sustainability.  

Proceed with the implementation of its recovery and resilience plan, in line with the 
milestones  and  targets  included  in  the  Council  Implementing  Decision  of  13  July 
2021.  Swiftly  finalise  the  negotiations  with  the  Commission  of  the  2021-2027 
cohesion  policy  programming  documents  with  a  view 
their 
implementation. 

to  starting 

Address the shortage of skills by raising the level of basic skills, providing additional 
work-based  learning  options  and  improving  the  learning  outcomes  of  all  students, 
notably  by  adapting  resources  and  methods  to  the  needs  of  disadvantaged  students 
and  schools  and  by  improving  the  working  conditions  and  continuous  training  of 
teachers. 

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4. 

Reduce  overall  reliance  on  fossil  fuels.  Accelerate  the  deployment  of  utility-scale 
and  decentralised  renewable  energies  through  increased  public  investment  and  by 
facilitating  private 
including  by  further  streamlining  permitting 
procedures  and  ensuring  adequate  staffing  of  authorising  administrations.  Improve 
the policy framework to incentivise the deep renovation of buildings. Expand energy 
interconnection capacity. 

investment, 

Done at Brussels, 

For the Council 
The President 

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