COMMISSION STAFF WORKING DOCUMENT 2022 Country Report – France Accompanying the document 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

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 23.5.2022  SWD(2022) 612 final  COMMISSION STAFF WORKING DOCUMENT 2022 Country Report – France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the 2022 National Reform Programme of France {COM(2022) 612 final} - {SWD(2022) 640 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

The French economy bounced back 
thanks to an effective crisis 
response… 

France’s  economy  was  experiencing  a 
significant  upturn  before  the  COVID-19 
crisis.  After  several  years  of  moderate 
growth,  GDP  accelerated  in  2017-2019  and 
grew by more than 2% on an annual average, 
thus  reaching  the  euro  area  average.  The 
labour  market  situation  had  improved  rapidly, 
with  the  unemployment  rate  falling  from 
10.1% in 2016 to 8.4% in 2019.   

The  COVID-19  crisis  abruptly  interrupted 
this dynamic, causing GDP to fall by 7.9% 
in 2020. The impact was especially severe for 
high contact services, notably tourism, but also 
for  transport  and  construction.  While  all 
demand  components  declined,  exports  were 
the  most  affected,  due  in  particular  to  the 
magnitude  of  the  shock  to  the  flagship 
aeronautics industry. 

However,  large  public  support  schemes 
significantly  cushioned  the  shock  to  the 
private sector, and activity bounced back 
strongly  in  2021.  Real  GDP  growth  reached 
7%  in  2021  and  economic  activity  surpassed 
its pre-crisis level already in the fourth quarter 
of  2021,  exceeding  the  level  of  the  end  of 
2019  by  1%.  Apart  from  external  trade,  all 
demand  components  returned  to  pre-crisis 
levels.  

Graph 1.1: GDP growth and unemployment rate 
for France and the euro area 

Left axis: GDP growth (100=2019) 
Right axis: Unemployment rate (%) 
(f)=forecast 
Source: European Commission 

Several  factors  are  still  weighing  on 
growth, but are not expected to stop the 
sustained  economic  recovery.  France  is 
facing  supply  constraints  in  industry  and  high 
inflation  but  the  relatively  small  share  of  its 
industry  in  total  GDP  and  the  regulated  retail 
energy  prices  should  help  limit  the  impact  of 
these negative factors. Activity is thus forecast 
to increase by 3.1% and by 1.8% in 2022 and 
2023  respectively.  In  particular,  foreign  trade 
is set to recover as a result of the rebound in 
tourism and aeronautical deliveries.  

Labour  market  developments  are  also 
positive,  leading  to  higher  employment. 
Employment  surpassed  its  pre-crisis  level  in 
the  second  half  of  2021.  The  partial 
employment  scheme  helped  mitigate  the 
impact  of  the  crisis.  Job  creation  is  set  to 
continue  as  the  economy  grows,  although 
much  more  slowly.  The  situation  of  young 
people  on  the  labour  market  is  improving,  as 
the  rate  of  young  people  not  in  education, 
employment or training (NEET) was lower than 
its pre-crisis level in Q4-2021. 

2 

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%10.0%86.088.090.092.094.096.098.0100.0102.0104.0106.020172018201920202021(f)2022(f)2023(f)Unemployment rate FranceUnemployment rate Euro areaGDP Euro areaGDP France 
  
 
Labour  shortages  and  skill  mismatches 
remain important issues. Labour shortages, 
already  high  before  the  crisis,  are  on  the  rise 
again  as  the  recovery  takes  hold.  Employers 
are  reporting  the  lack  of  adequately  trained 
workers  as  one  of  the  main  barriers  to 
recruitment, 
industry, 
construction,  information  and  communication, 
energy,  water  and  waste,  education  and 
health (1).  

particular 

in 

in 

… but the COVID-19 crisis 
impacted trade and counter-
measures further deteriorated 
public finances 

Despite  the  overall  economic  recovery, 
exports  remain  subdued.  Competitiveness 
showed  signs  of  improvement  before  the 
COVID-19  crisis,  notably  because  of  fiscal 
measures  to  reduce  labour  costs  (e.g.  tax 
credit  for  competitiveness  and  employment, 
’CICE’).  But  exports  declined  more 
than 
Europe's  average,  partly  due  to  unfavourable 
sectoral  exposure  to  the  COVID-19  crisis, 
including  for  aviation  and,  to  a  lesser  extent, 
tourism.  

Public debt increased significantly due to 
the need to introduce support schemes to 
contain  the  effects  of  the  COVID-19 
pandemic.  Before  the  pandemic,  public  debt 
in  France  was  already  high  (97.4%  of  GDP  in 
2019),  due  to  prolonged  high  structural 
deficits  and  a 
lack  of  sufficient  fiscal 
consolidation in previous years. The sharp fall 
in  economic  activity  following  the  pandemic 
In 
in 
led  to  a  decrease 
combination  with 
fiscal 
the 
measures  deployed  by  the  government,  it 
pushed  the  general  government  deficit  to 
8.9% of GDP, while public debt rose by almost 
20 percentage points (pps), to 114.6% of GDP 
in 2020. Fiscal emergency measures, however, 

tax  revenues. 
significant 

(1)  Source: Enquête Acemo March 2022 Direction de 
l’animation de la recherche, des études et des 
statistiques (Dares), European Commission and Eurostat 
(consumer and business surveys and indicators on job 
vacancies)  

proved to be very effective to help buffer the 
impact  of  the  crisis.  These  measures  were 
mainly  aimed  at  sustaining  employment  and 
income  via  partial  unemployment 
wage 
to  businesses, 
subsidies 
schemes  and 
especially small and medium-sized enterprises 
(SMEs),  and  independent  workers  under  a 
dedicated fund.  

Graph 1.2: Export market shares since 2004 

(1) 2004 = 100, (f) = forecast 
Source: European Commission 

Despite improvements in 2021 and in the 
short term, general government debt will 
remain  high  in  the  medium  term.  The 
sound  economic  rebound  in  2021  and  the 
dynamism  of  tax  revenues  resulted  in  the 
general  government  balance 
improving  to 
6.5%  of  GDP  in  2021,  and  public  debt  falling 
to  112.9%  of  GDP.  However,  at  59.2%  in 
2021,  the  public  expenditure-to-GDP  ratio  is 
the  highest  in  the  EU.  Medium  projections  by 
the Commission show that public debt is set to 
remain  around  110%  of  GDP  by  2030. 
According  to  the  Commission’s  methodology, 
these  projections  confirm  that  the  country 
faces  high  fiscal  sustainability  challenges  in 
the medium term, mainly due to the projected 
high  structural  deficits  and  the  high  level  of 
public debt.  

The coexistence of high public and private 
debt  is  a  source  of  vulnerability.  The 
existing  upward  trend  in  private  debt  was 
accentuated  by  the  crisis.  Private  debt  was 
above  174%  of  GDP  in  2020,  with  both 
household  and  non-financial  corporation  debt 
exceeding  their  prudential  thresholds.  While 

3 

606570758085909510010504050607080910111213141516171819202122(f)23(f)FRDEESIT 
                                                 
  
on  titanium  from  Russia),  the  automotive 
sector (palladium) and the aluminium industry 
(alumina). Indirect negative impacts could also 
stem  from  spill-overs  from the  EU  economies 
and deteriorated confidence. 

the 

support 

industrial 

On  16  March  2022,  the  government 
presented  a  resilience  plan  to  mitigate 
in  France  of 
the  economic  effects 
Russia’s invasion of Ukraine. The plan aims 
to 
sectors  and 
businesses most exposed to supply disruptions 
and  increases  in  energy  prices,  as  well  as 
sectors  and  businesses  particularly  impacted 
by trade restrictions to Russia. Beyond several 
measures with no direct budgetary impact, the 
includes  direct  subsidies  to  energy-
plan 
intensive  enterprises  for  about  EUR 3 billion, 
depending on price assumptions, to cover part 
of  the  extra  spending  on  electricity  and  gas. 
Other  specific  measures  undertaken  or 
planned  concern  sectors  such  as  agriculture, 
fishery,  construction,  transport  and  exporting 
companies. The plan also includes a temporary 
rebate  on  fuel  prices  at  petrol  stations 
benefitting  all  households, 
in  addition  to 
businesses 
in  general.  These  measures 
complement those already adopted in autumn 
2021  to  counter  the  impact  of  high  energy 
price  inflation,  such  as  the  cap  on  gas  and 
electricity  prices  until  the  end  of  2022  and 
energy  cheques  handed  out  to  low  income 
households. In total, measures to mitigate the 
impact of soaring energy prices are estimated 
at around EUR 26 billion.  

A recovery committed to 
competitive sustainability  

and  making 
but 

its 
implementation 

France  is  committed  to  fighting  climate 
economy 
change 
sustainable, 
is 
lagging  behind.  France  has  developed 
governance  structures  and  legislative  tools  to 
steer its  green  transition such  as the  national 
low  carbon  strategy  and  the  multiannual 
energy  programme.  It  aims  to  achieve  carbon 
neutrality  by  2050,  in  line  with  the  EU’s 

there is no visible risk of a wave of corporate 
bankruptcies,  high  private  debt  represents  a 
source  of  vulnerability.  The  financial  sector 
remains  resilient  and  financing  conditions 
continue to be favourable. Overall, the banking 
sector’s  solvency  has  remained  sound  over 
2021 (see Annex 16), but risks stemming from 
high  public  debt  are  compounded  by  high 
private  leverage  since  they  limit  the  ability  to 
respond to possible negative shocks.  

Macroeconomic  imbalances  are  occurring 
against  the  background  of  a  slow 
productivity  growth  trend.  Over  2012-
2019, the average annual  growth of the total 
factor  productivity  stood  at  0.4%,  against 
the  euro  area.  Safeguarding 
0.6% 
investment  in  R&D  expenditure  to  reverse  a 
decline in labour productivity following COVID-
19 restrictions imposed in 2020 and 2021 will 
be  key  to  improving  competitiveness  and 
sustainability of private and public debts.  

in 

France has limited exposure to the 
fallout of the Russian invasion of 
Ukraine 

France’s  imports  of  fossil  fuels  from 
Russia are limited. With a sizeable share of 
nuclear  energy,  the  French  energy  mix  is  less 
reliant  on  fossil  fuels  than  other  EU  Member 
States.  Most  of  its  gas  imports  come  from 
Norway,  Russia  and  Algeria,  where  Russia 
represented  17%  of  all  gas 
in 
2020 (2). 

imports 

some 

despite 

is  also 

relatively  protected 
France 
against a shock to non-energy trade with 
Russia, 
sectoral 
vulnerabilities.  The  French  value  added 
embodied in total exports to Russia represents 
only  0.3%  of  GDP.  However,  some  industrial 
sectors could be significantly impacted in case 
of supply disruptions of key components from 
Russia  and  to  a  lesser  extent  Ukraine.  It  is  in 
particular  the  case  of  aeronautics  (dependent 

(2)  Eurostat (2020), share of Russian imports over total 
imports of natural gas. Total imports include intra-EU 
trade. 

4 

 
                                                 
is 

relatively  high  but 
Productivity 
productivity  growth  is  low.  The  National 
Productivity Board has highlighted productivity 
challenges such as a comparatively low-skilled 
workforce,  low  uptake  of  information  and 
communication  technologies  and  suboptimal 
innovation  performances.  Stagnating  R&D 
investment  from  the  business  sector  coupled 
with low efficiency of public support schemes, 
continue  to  hamper  the  performance  of  the 
French  research  and  innovation  system  (see 
Annex 9).  The  regulatory  environment  in  the 
restrictiveness  of 
the 
retail  sector  and 
professional  services  weigh  on  competition, 
with  negative  consequences  for  prices  and 
productivity.  

the 

UN’s 

Overall,  France  performs  very  well  in 
achieving 
Sustainable 
Development  Goals.  The  country  made 
progress  towards  a  majority  of  the  goals  (11 
out of 16) with a better performance than the 
EU  average  in  social  and  climate  goals  (see 
Annex 1). However, a deviation from the goals 
and  lower  performance  than  the  EU  average 
can  be  observed  in  particular  for  SDG 11 -
 Sustainable  cities  and  communities  and 
Although 
inequalities. 
SDG 10 - Reduced 
France  outperforms  the  EU  on 
inequality 
indicators, the depth of poverty worsened and 
severe  material  and 
social  deprivation 
increased recently. 

commitments (3).  The  climate  and  resilience 
law,  partly  based  on  proposals  by  citizens, 
provides  for  measures  for  climate  adaptation 
and  to  reduce  emissions  by  2030.  However, 
France  is  not  on  track  to  meet  its  2030 
renewable  energy  objective,  with  the  share  of 
renewable  energy  sources 
in  gross  final 
energy  consumption  almost  4 pps  below 
target  in  2020.  Nor  is  it  on  track  to  meet  its 
2030  target  for  greenhouse  gases  emissions 
reductions  in  sectors  not  covered  by  the  EU 
Emissions  Trading  System  (ETS) (4),  such  as 
transport, buildings or agriculture.  

France  is  engaged  in  robust  long-term 
investment  strategies.  The 
investment 
share  of  GDP  reached  23%  in  2020,  11th  in 
the  EU  and  above  Germany,  Spain,  and  Italy. 
The  post-pandemic  recovery  is  supported  by 
the ‘France Relance’ plan of EUR 100 billion (of 
which EUR 40 billion is funded by the Recovery 
and  Resilience  Facility)  and  a 
long-term 
investment  strategy, 
‘France  2030’,  worth 
EUR 34 billion, including EUR 4 billion in equity.  

France  leads  in  expenditures  on  social 
policies even if some inequalities persist, 
as evidenced under the European Pillar of 
Social Rights. France is second in the EU for 
expenditure  on  social  protection  and  first  for 
public  spending  on  healthcare.  Nevertheless, 
France  still  faces  socio-economic  inequalities 
in  the  education  system.  The  COVID-19  crisis 
exacerbated 
some 
vulnerable  groups  in  finding  work  (see  Annex 
12). The pension system is relatively expensive 
and remains complex (more than 40 different 
regimes) raising questions on its fairness (see 
‘Further priorities ahead’).  

difficulties 

the 

of 

Regional  disparities  have  increased  in 
France  over  the  last  decade.  In  terms  of 
GDP  per  head,  20  out  of  27  regions  are 
drifting  away  from  the  EU  average.  Major 
disparities  between  metropolitan  France  and 
outermost regions persist, especially in poverty 
and health (see Annex 15). 

(3)  The strategy would have to be updated to reflect the Fit 

for 55 package if it is adopted.  

(4)  European Commission, Speeding up European climate 
action towards a green, fair and prosperous future (EU 
Climate Action Progress Report), 2021.  

5 

 
                                                 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 
THE RECOVERY AND RESILIENCE PLAN IS UNDERWAY 

transitions, 

The  French  recovery  and  resilience  plan 
(RRP)  aims  to  accelerate  the  green  and 
digital 
increase  growth 
potential,  and  strengthen  cohesion.   The 
plan  consists  of  22 
reforms  and  70 
that  will  be  supported  by 
investments 
EUR 39.4  billion  in  grants  (1.6%  of  GDP). The 
first  payment  request  submitted  in  November 
2021  led  to  the  disbursement  of  EUR 7.4 
billion (see Annex 2).    

to 

aims 

reduce 

France’s  RRP  unlocked  large  investments 
for  the  energy  renovation  of  buildings 
over  2020-2021.  The  French  plan  contains 
major  investments  (EUR 5.8  billion)  in  the 
renovation of buildings aiming to achieve 30% 
of  energy  savings  on  average.  These 
investments  will  be  supported  by  major 
reforms  such  as  the  climate  and  resilience 
Law,  which 
energy 
consumption  in  many  ways  (e.g.  by  providing 
for  bonuses  for  electric  bicycles  and  creating 
low-emission  zones  in  metropolitan  areas), 
and  the  revision  of  the  thermal  regulation  of 
new  buildings.  The  achievements  in  2021 
show  France's  ambition  to  move  forward 
rapidly  in  this  area,  by  deploying  the  subsidy 
mechanism  for  the  renovation  of  private 
housing (‘MaPrimeRenov’), with a special focus 
on  low-income  households,  and  by  selecting 
mature  projects  for  the  renovation  of  public 
buildings  and  social  housing. Over  the  next  2 
years,  the  RRP  will  continue  to  support  the 
thermal 
renovation  of  buildings.  Despite 
France  lagging  behind  on  renewable  energy, 
the RRP did not include investments dedicated 
to  increasing  renewable  electricity  capacity. 
However,  the  RRP  includes  investments  in 
renewable  energy  in  heating  systems,  with 
renovations  supported  by  the  MaPrimeRenov’ 
scheme  frequently  including  the  roll-out  of 
heat  pumps  and  biomass  boilers,  and  partial 
and  indirect  support  for  renewable  energy 
the 
through 
decarbonisation of industry and the production 
of  renewable  hydrogen,  including  a  planned 

supporting 

measures 

Important  Project  of  Common  European 
Interest. 

implemented 

The RRP provides for major investment in 
sustainable  transport.  One  of  the  largest 
measures  will  finance  the  reconstruction  and 
modernisation  of  the  railway  network.  The 
projects  already 
in  2021 
indicated  that  the  plan  will  accelerate  the 
modal  shift  towards  cleaner  transportation 
modes in freight and passenger transport, and 
such  investments  will  be  scaled  up  in  2022 
and  2023.  The  electrification  of  vehicles  and 
infrastructure  was  accelerated  with 
road 
financial  support  for  the  purchase  of  clean 
vehicles and the construction of new charging 
stations  on  motorways.  In  the  coming  years, 
this  will  be  complemented  by  investments  to 
increase  clean  mobility  in  urban  areas.  The 
French  plan  will  also  support  the  greening  of 
the  aeronautics  sector.  Overall,  the  RRP 
dedicates 46.0% of its allocation to the green 
transition.  

in 

invests 

The  RRP  will  also  support  the  digital 
transition.  Digitalisation  of  health 
is  a 
priority,  including  support  for  digital  medical 
records,  interoperability,  secure  exchange  of 
data, and training of health professionals. The 
French  plan 
research  and 
deployment of key digital technologies such as 
quantum,  cloud  and  cybersecurity,  including 
via  the  participation  in  multi-country  projects. 
Measures to support the digital skills of pupils 
and the workforce and the digitalisation of the 
public  administration  are  also 
included. 
Furthermore,  the  high-speed  broadband  plan 
will  be  accelerated  to  reach  100%  fibre-to-
the-home  coverage  by  2025.  The  RRP 
dedicates 21.3% of its allocation to the digital 
transition in total.  

6 

 
 
 
Reforms  of  public  finances  management 
and  quality  of  public  expenditure  were 
delivered 
includes 
in  2021.  The  RRP 
measures  to  support  the  consolidation  of 
public  finances  in  the medium  and  long  term. 
The  most  important  reform  is  the  entry  into 
force  as  of  2022  of  an  organic  law  on  the 
modernisation of public finances management. 

into  expenditure 

savings  and 
translate 
efficiency  gains.  The  publication  of  a  green 
budget  should  also  provide  transparency  on 
the environmental impact of the State budget. 

A  significant  share  of  the  plan  supports 
measures  relating  to  employment,  skills, 
and  young  people,  contributing  to  the 

Box 1: 

Key deliverables under the recovery and resilience plan in 2022-2023 

  Continuation of building renovation 

  Promulgation of the Climate and Resilience law 

 

Investments in railway infrastructure 

  Launch of calls for projects for R&D in the green transition 

  Renewable hydrogen production and kick off of the Important Project of Common European 

Interest 

  Selection of R&D projects on low carbon aircraft 

  Stregthening  of  public  employment  services  and  continued  support  to  employment  and 

training of young people 

  1 700 000 additional buildings connected to fibre 

is 

This 

decisions. 

the  adoption  of 

the  extension  of 

The  law  introduces  a  multiannual  expenditure 
rule applicable to total public spending, aimed 
at strengthening the multiannual dimension of 
further 
budgetary 
strengthened  by 
the 
prerogatives  of  the  national  fiscal  council 
(High Council of Public Finances) to assess the 
consistency  of  the  main  annual  fiscal  targets 
with  such  new  multiannual  expenditure 
objectives,  and  to  assess  the  plausibility  of 
revenue  and  expenditure  forecasts  in  the 
annual  budgetary  laws.  The  reform  also  calls 
the  multiannual 
for 
programming law by the first quarter of 2023, 
where the multiannual expenditure targets will 
be  set  out.  Its  ultimate  contribution  to  public 
debt  reduction  will  crucially  depend  on  the 
stringency  of  such  multiannual  expenditure 
targets  and  future  compliance  with  them. 
Preliminary steps were also taken to pave the 
way for the evaluation of public spending that 
will be carried out after the crisis, with the aim 
of  identifying  the  most  efficient  expenditures 
favouring growth, social inclusion and the twin 
transition.  As  of  2023,  financial  laws  should 
consistently  factor  in  the  results  of  these 
public  expenditure  evaluations  so  that  they 

find 

jobs.  Support 

implementation of the European Pillar of 
Social Rights. A number of measures aim to 
upskill and re-skill workers with a special focus 
on digital skills. Hiring subsidies for employers 
recruiting  people  with  disabilities,  young 
people under 26 and those on apprenticeships 
and work-study contracts are expected to help 
these  groups 
for 
apprenticeships  boosted  the  number  of  new 
contracts  by  37%  in  2021;  the  measure  has 
been  extended  until  June  2022.  The  French 
plan  supports  a  significant  share  of  the  ‘1 
young  person,  1  solution’  programme  with 
EUR 4.6  billion,  which  has  already  proven  to 
have a significant short-term impact on young 
people. 
Its  efficiency,  however,  could  be 
improved (5)  and  its  effects  still  need  to  be 
consolidated in the medium term, according to 
‘France 
the 
first  evaluation 
Relance’ (6). While  the  plan 
includes  some 
education  measures  (aimed  at  preventing 

report  of 

(5)  Cours des Comptes, ‘Le plan #1jeune1solution en 

faveur de l’emploi des jeunes’, Rapport public annuel, 
2022 

(6)  France Stratégie, Comité d’évaluation du plan France 

Relance – Premier rapport, 2021  

7 

 
                                                 
 
early  school  leaving  and  creating  places  in 
higher  education  and  vocational  education), 
there  is  scope  for  additional  measures  to 
further  address  the  marked  inequalities  and 
lack of inclusiveness in the education system. 

teaching,  research,  promotion  and  innovation 
ecosystems. 

rules 

to  work  and  discourage 

The  unemployment  benefit  reform  was 
implemented in 2021. It aims to strengthen 
the 
incentives 
excessive  use  of  short-term  contracts.  The 
reform  sets  stricter  eligibility 
for 
unemployment  benefits  and  changes  the 
calculating  method  for  the  daily  reference 
wage  used 
to  determine  unemployment 
benefits.  A  disincentive  to  the  use  of  very 
short-term  contracts  by  employers  (bonus-
the 
malus, 
contribution  of  the  employer)  will  start  to 
apply  to  employers  in  September  2022,  after 
an observation period. 

decreasing 

increasing 

or 

long-term 

Investments  and  reforms  in  health  care 
and 
care  will  also  be 
supported.  With  the  support  of  the  Facility, 
the government increased public investment in 
health  infrastructure  and  in  the  digitalisation 
of  the  health  sector.  Healthcare  investments 
under  the  plan  amount  to  almost  EUR 4.5 
billion.  In  addition,  the  plan  includes  EUR 1.5 
billion  investments  targeting  long-term  care. 
Two reforms included in the plan have already 
been implemented in 2021: (i) a law reforming 
hospital governance, which will allow for more 
flexibility  in  the  organisation  of  hospitals  and 
(ii)  a law on social  debt and autonomy,  which 
supports  the  independence  of  the  elderly  and 
people with disabilities. 

In 
allocated 

investment  and  employment 

Mobilising  investment  in  research  and 
innovation is a major priority of the RRP. 
The  plan  contains  several  measures  aimed  at 
boosting 
in 
innovation. 
particular 
research  and 
the 
is 
to 
EUR 4.25 billion 
Investments 
the  Future  programme 
(‘Programme  d’Investissement  d’Avenir‘).  In 
2021,  13  strategies  were  validated  for 
research and innovation in the green transition 
and  in  key  digital  technologies.  They  will  lead 
to the publication of calls for projects in 2022 
and  2023.  Calls  for  projects  were  already 
launched  in  2021  concerning  support  for 

for 

8 

 
FURTHER PRIORITIES AHEAD 
FURTHER PRIORITIES AHEAD 

Beyond  the  challenges  addressed  by  the 
RRP,  as  outlined  above,  France  faces 
additional  challenges  not  sufficiently 
covered in the plan. High public deficits and 
debt  pose  high  sustainability  risks  in  the 
medium  term.  The  complexity  of  the  pension 
system  is  casting  doubt  on  its  fairness  and 
impacts 
labour  mobility.  Significant  socio-
economic  inequalities  persist  in  the  education 
system  and  undermine  the  effectiveness  of 
investments  in  skills.  In  the  green  transition, 
the deployment of renewable energies is slow 
resulting  in  France  missing  its  Europe  2020 
target.  In  addition,  further  support  to  key 
energy  interconnectors  (in  development  or 
planned)  with  some  neighbouring  Member 
States  could  significantly  contribute  to  the 
resilience  of  Europe’s  energy  systems.  The 
competition  in  the  service  sector  could  be 
increased  with  potential  beneficial  effects  on 
the  competitiveness  of  French  businesses. 
Addressing  these  challenges  will  also  help  to 
make  further  progress  in  achieving  the  SDGs 
related  to  macroeconomic  stability,  fairness, 
and environmental sustainability. 

Ensuring the sustainability of 
public finances  

due  to  the  projected  decline  in  age-related 
expenditure over this horizon (7). 

A  thorough  assessment  of  the  efficiency 
of  public  expenditure  and  a  progressive 
reduction  thereof  are  key  to  mitigating 
public  debt  sustainability  challenges.  The 
high 
raises 
level  of  public  expenditure 
efficiency concerns and requires a high overall 
tax  burden (8),  which  can  weigh  on  economic 
efficiency  and  raise  acceptability  concerns. 
This  justifies  the  need  for  the  control  and 
quality  assessment  of  public  spending  which, 
under  strengthened  medium-term  planning, 
should  build  on  the  outcome  of  systematic 
spending  reviews  in  order  to  identify  priority 
areas for intervention. Reviewing the efficiency 
and effectiveness of public policies should aim 
to  strengthen  France’s  growth  potential  by 
to  growth-
channelling  public 
innovation, 
enhancing 
industry  and  knowledge  and  should  boost  the 
green  and  digital  transitions  together  with 
social  and  economic  resilience.  In  this  regard, 
as  suggested  by  the  Court  of  Auditors,  five 
strategic  areas  show  significant  room  for 
savings  and  efficiency  improvement,  namely 
healthcare spending, employment policy, social 
benefits,  social  housing  and  the  pension 
system. 

investment 

resources 

in  R&D, 

France’s high public deficit and debt pose 
high  sustainability  challenges  over  the 
medium  term. 
In  2019,  France’s  public 
expenditure  was  the  highest  in  the  EU,  well 
above  the  EU  average  of  46.9%  of  GDP.  This 
gap  narrowed  somewhat  in  2021.  Public  debt 
rose  by  almost  20 pps  during  the  COVID-19 
crisis and is projected to remain around 110% 
over 
debt 
sustainability challenges are assessed as high 
over  the  medium  term,  whereas  in  the  long 
term  they  are  considered  as  medium,  mainly 

the  medium 

term. Public 

Reducing the complexity of the 
pension system and making it 
fairer 

The  French  pension  system  is  complex 
and  costly  when  compared  with  other 
advanced  economies.  The  current  pension 

(7)  See Annex 20. 

(8)  The tax burden in France, at 47.5% of GDP in 2020, is 
the second highest in the EU after Denmark (47.6% of 
GDP), well above the EU average of 41.3% of GDP. 

9 

 
 
                                                 
 
in 

rules 

and  mandatory 
apply 
that 

system  is  a  pay-as-you-go  one,  consisting  of 
more  than  40  different  schemes  including 
complementary 
basic 
schemes (9) 
different 
to 
professional sectors and occupational statuses 
and  follow  different 
terms  of 
financing,  benefits  paid  and  management.  At 
14.6%  of  GDP  in  2019  according  to  Eurostat, 
public  pension  expenditure  was  the  third 
highest  in  the  EU  and  well  above  the  EU 
average of 11.9%. The system is characterised 
by  a  relatively  low  effective  retirement  age 
(around 62 years) compared to the EU average 
of  63.8  years,  and  life  expectancy  at  the  age 
of retirement is the highest in the EU. 

The  French  pension  system  is  relatively 
generous.  The  replacement  ratio (10)  with  a 
40-year  career  at  average  wage,  was  0.65  in 
2019 (similar for men and women), compared 
to 0.57 in the EU, while the benefit ratio (11), at 
40.8% in 2019, is in line with the EU average 
(unweighted average of 42% in 2019).  

(9)  All workers are affiliated, according to their profession, 

to both a basic scheme and a mandatory 
complementary scheme. They can belong to several 
basic schemes during their career from which they 
receive several pensions on retirement. Over their 
career, more than 60% of workers are affiliated to 3 or 
more schemes (see GIP union Retraite, Annuaire droits à 
l’information, 2017). 

(10)  The indicator is defined as the ratio of the median 

individual gross pensions of the 65-74 age category 
relative to the median individual gross earnings of the 
50-59 age category, excluding other social benefits. 

(11)  The benefit ratio is defined as the average pension as a 

share of the economy-wide average wage. 

10 

Graph 3.1: Government expenditure on 
pensions (%GDP) 

Source: European Commission 

around  2030.  However, 

Public pension expenditure is projected to 
increase  further  in  this  decade  but  to 
decline in the long term. Both the European 
Commission  (Ageing  Report  2021)  and  the 
(Conseil 
French  pension  advisory  council 
d’Orientation  des  Retraites)  project  public 
pension  expenditure  to  increase  moderately 
until 
pension 
expenditure  would  enter  a  clear  downward 
trend from the early 2030’s until 2070, which 
would  more 
the  projected 
than  offset 
increases  in  long-term  care  and  healthcare 
expenditure.  This  projected  long-term  decline 
in  pension  expenditure  as  a  share  of  GDP  is 
mainly  due  to  the  indexation  of  pension 
benefits  only  to  inflation,  which  offsets  the 
effect of the increase in the dependency ratio 
due to ageing.   

The  complexity  of  the  current  pension 
system is an obstacle for labour mobility 
and  raises  questions  about  its  fairness. 
The  reason  for  the  complexity  is  the  high 
number  of different  schemes, leading  to  risks 
of  inefficiencies  and  to  an  overall  lack  of 
transparency  about  management  costs.  The 
calculation  of  contributions  and  pensions 
follows  different  rules  across  schemes,  which 
entails considerable equity concerns. The same 
amount  of  contribution  does  not  ensure  the 
same  pension.  This  is  also  due  to  the  wide 
range of scheme-specific benefits not linked to 
contributions  and  to  the  financing  of  most 
schemes  through  general  taxation.  Moreover, 

7.08.09.010.011.012.013.014.015.016.02001200220032004200520062007200820092010201120122013201420152016201720182019EU-27France 
                                                 
  
the  differences  between  the  many  schemes 
hamper workers’ mobility and a more efficient 
allocation  of  the  labour  force (12). Following 
the  outbreak  of  the  pandemic  in  2020,  the 
government  put  on  hold  its  pension  reform 
proposal,  aimed  at  unifying  the  different 
schemes.  

Accelerating the deployment of 
renewable energy and improving 
interconnections 

Greenhouse  gas  emissions  are  steadily 
decreasing. Since 2018, total emissions have 
fallen,  with  figures  for  2019  and  2020 
representing  the  lowest  levels  recorded  since 
these  emissions  must 
1990.  However, 
continue  to  fall  significantly  if  France  is  to 
meet  the  nationally-set  emissions  ceilings  for 
2019-2023.  

The  current  geopolitical  context  calls  for 
a  European  security  of  supply  and  a 
reduced dependence on fossil fuels. France 
has  relatively  limited  exposure  to  imports  of 
fossil fuels from Russia compared to other EU 
Member States as the French energy mix relies 
chiefly  on  nuclear  energy  (40.6%  of  its  gross 
inland  consumption  in  2020).  In  addition, 
France  has  4  liquefied  natural  gas  (LNG) 
terminals,  allowing  for  a  more  diversified 
source  of  gas  imports.  France’s  energy  mix  is 
also  characterised  by  (i)  very  low  dependency 
on  coal 
inland 
consumption  against  11%  EU  average);  (ii) 
average dependency on oil (29% against 33% 
EU  average);  and  (iii)  lower-than-average  gas 
dependency (15% against 25% EU average).  

(around  2%  of  gross 

fossil 

fuel 
Dependence  on  Russian 
imports  is  also  limited  compared  to  the 
EU.  Most  French  gas  imports  come  from 
Norway, 
Russia 
and 
represented 17% of all gas imports in 2020. In 
2020,  France  imported  29.4 bcm  of  natural 
gas  by  pipeline  (of  which  14%  from  Russia) 

Algeria. 

Russia 

and  17 bcm  by  LNG  (of  which  21%  from 
Russia).  The  LNG  potential  in  France  is  the 
second largest in the EU, with 113.9 mcm/day 
send-out  capacity.  Most  of  the  capacity  is 
currently  used.  France  imported  9%  of  its 
crude oil from Russia in 2020, and 17% of its 
refined  oil  products.  About  34%  of  its  coal 
imports in 2020 came from Russia (13). 

France  could  help  reduce  dependence  on 
Russian  gas  by  frontloading  future-proof 
investments in domestic and cross-border 
energy  infrastructures.  This  would  help 
increase security of supply of gas at EU level. 
Stronger  interconnections  capacity  would  also 
foster  the  single  energy  market  and  increase 
its resilience.  

for 

support 

Further 
energy 
interconnectors  remains  crucial.  Cross-
border  interconnectors  (under  development  or 
planned),  will  foster  the  integration  of  large 
shares  of  renewables,  strengthening  grid 
promoting  market 
infrastructure 
integration  in  the  region.  Interconnections  are 
the  cornerstones  of  an  efficient 
internal 
electricity  market  and  are  key  to  increasing 
overall  energy  security  in  the  Union  and 
reducing the EU’s dependence on fossil fuels. 

and 

France  is  not  on  track  to  meet  its  2030 
emissions  reduction  target  for  non-ETS 
sectors  such  as  agriculture,  transport  or 
buildings.  The  French  RRP  makes  substantial 
efforts  in  the  fields  of  thermal  renovation  of 
buildings  and  sustainable  mobility.  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.  Moreover,  to  no 
longer  use  fuel  oil  for  heating  and  domestic 
hot water by 2030, the installation of oil-fired 
boilers  will  be  prohibited  from  1 July  2022  in 
all new and existing buildings. While financing 
under  the  rural  development  policy  and  other 
instruments  developed  in  a  previous  national 
investment  plan  pre-existed,  investments  in 

(12)  Jean-Paul Delevoye, Haut-Commissaire à la réforme 
des retraites, Pour un système universel de retraite, 
2019 

(13)  Eurostat (2020), share of Russian imports over total 
imports of natural gas, crude oil and hard coal. Total 
imports include intra-EU trade.  

11 

 
                                                 
                                                 
in  accordance  with 

the  agricultural  sector  under  the  RRP  were 
limited  despite  an  increased  prevalence  of 
emissions (14).  The  more  widespread  use  of 
anaerobic  digestion 
(‘méthanisation’)  and 
other technologies linked to the conversion of 
agricultural  waste  into  energy  could  reduce 
emissions 
from  agriculture  and  produce 
sustainable biomethane and other sustainable 
biogases  to  decarbonise  industrial  processes 
and  the  heating  of  buildings.  This  should  be 
done 
sustainability 
requirements  to  avoid  negative  impacts  on 
biodiversity,  competition  for  soil,  or  other 
harms 
the  climate  and  environment. 
Additional  and  cost-effective  public  support, 
such  as 
in  district  heating 
networks at the territorial level, would support 
the  deployment  of  sustainable  biogases  and 
accelerate the adoption of these technologies. 
Solar  and  wind  production  on  farmland  and 
agroforestry  are  also  promising  avenues  for 
climate mitigation in the agricultural sector. 

investments 

to 

Energy  efficiency  can  also  help  reduce 
emissions  and  the  dependence  on  fossil 
fuels.  The  efforts  on  building  renovation 
included  in  the  RRP  could  be  deepened.  For 
instance,  a  majority  of  projects  benefitting 
under  ‘Ma  Prime  Rénov’  have  focussed  on 
single  measures, 
shallow 
renovations.  Deep  renovation  of  buildings 
should  be  encouraged  to  reduce  energy 
consumption sizeably. 

leading 

to 

land  access  and  reducing 
Increasing 
regulatory  and  administrative  barriers 
would  support 
the  development  of 
renewables.  Onshore  wind  farms  cannot  be 
radius  of  5-30 km  from 
built  within  a 
surrounding  meteorological,  military  and  civil 
aviation radars. This results in around 45% of 
new  projects  struggling 
to  find  suitable 
locations.  Despite  the  enhancement  of  public 
debates  on  offshore  projects,  the  maritime 
planning  exercise to  identify  suitable  sites  for 
offshore wind projects should be strengthened. 
improved  to  avoid 
Procedures  should  be 
obstructions at a very late stage of a project’s 
development. A more decentralised framework 
for  approving 
renewable  energy  projects 
offering a one-stop-shop to project developers 
can reduce administrative burdens involved in 
local 
dealing  with  national,  regional  and 
the 
for 
administrations.  More 
competent  administrations  and  authorities 
tendering  and  permit 
would  speed  up 
application 
remain 
which 
burdensome for project developers.  

procedures, 

resources 

support 

in  energy 
investment 
Higher  public 
infrastructure 
the 
could 
integration  of  renewables.  Upgrading  the 
electricity  grids  could  reduce  delays  in  grid 
connection  which  at  the  moment  can  last 
for 
several  months. 
support 
the 
geothermal  energy  could  accelerate 
production of renewable heat.  

Increased 

The  current  pace  of  renewable  energy 
deployment  is  not  sufficient  to  meet 
France’s 2020 and 2030 targets. The share 
of  renewable  energy  sources  in  gross  final 
energy  consumption  reached  19.1%  in  2020, 
below  its  target  of  23%.  France’s  proposed 
objective  for  2030  is  to  reach  33%.  Urgent 
corrective  measures  are  required  to  get  back 
on this trajectory, especially as this target will 
need to be  revised upwards to be  in line with 
the ‘Fit for 55’ objectives.  

(14)  Between 2003 and 2019, while total agricultural 
emissions decreased by 5.3%, the share of the 
agricultural sector’s emissions of France’s total has 
steadily increased, from around 16% to around 20%. 
Source: EU greenhouse gas inventory 1990-2019, 
European Environment Agency and Eurostat. 

Public  acceptance  of  and  third-party 
complaints  regarding  wind  and  solar 
power  on  the  ground  are  critical  issues. 
They  are  responsible  for  major  delays  in 
commissioning  new  projects.  Spatial  planning 
for  renewables  should  be  prepared  in  closer 
coordination  and  dialogue  with  the  regions  in 
order to solve land use conflicts, and increase 
local  acceptance.  France  has  recently  put  in 
place  a  number  of  solutions,  notably  to 
shorten  the  treatment  of  legal  actions,  and 
created a ‘local bonus’ awarded to support the 
financing  of  a  renewables  projects when local 
authorities  and  natural  persons  become 
shareholders. 
participatory 
Robust 
mechanisms  are  essential  to  increase  public 
ownership of the energy transition.  

12 

 
                                                 
in 

the 

and 

would 

improve 

rates  of 

of 
stimulate 

Accelerating  the  phase-out  of  fossil  fuel 
subsidies 
the 
renewable 
competitiveness 
alternatives 
private 
investment.  Certain  sectors  are  subject  to 
reductions 
the  energy 
consumption  tax  calculated  in  proportion  to 
CO2  emissions.  In  its  national  energy  and 
climate  plan,  France  identified  EUR 4.8  billion 
of  annual  tax  expenditures  on  fossil  fuels  in 
2018,  consisting  mainly  of  reduced  rates  for 
road  freight  transport,  non-road  diesel,  heavy 
fuel  oil,  natural  gas  and  agricultural  liquefied 
petroleum  gas.  Since  then,  the  country  has 
implemented measures to normalise tax rates 
notably  for  road  freight  transport  and  non-
road diesel, but other tax expenditures remain. 
Moreover,  the  true  figure  for  these  tax 
expenditures  may  be  significantly  higher (15), 
and  they  have  externalities  other  than  carbon 
emissions  as  they  also  contribute  to  air 
pollution and traffic congestion.  

Tackle inequalities in the 
education system and in access to 
employment 

leaving, 

to  early  school 

High  socio-economic  inequalities  in  the 
education  system  impact  the  level  of 
basic  skills.  Despite  good  performance  with 
regard 
tertiary 
education  and  adult  participation  in  learning, 
the impact of socio-economic inequalities and 
migrant  background  on  educational  outcomes 
is  significant  (see  Annexes  12  and  13). 
According to the 2018 PISA report, 20% of 15-
year-olds  in  France  lacked  basic  skills  in 
reading,  mathematics  or  science  and  over  a 
third  of  15-year-olds  with  disadvantaged 
backgrounds  lacked  basic  skills  in  reading 
(35.3%).  According  to  the  2019  Trends  in 
International  Mathematics  and  Science  Study, 
French pupils in the 4th grade had the lowest 

lower 

scoring 

significantly 

in  maths  across 

the  22 
performance 
participating  EU  countries  with  disadvantaged 
pupils 
than 
advantaged ones. According to PISA 2015 (16), 
science  teachers  working  in  disadvantaged 
areas tend to have lower levels of certification 
to  a  larger  extent  than  in  other  EU  countries 
(see  Annex  13).  In  2017,  France  introduced  a 
pilot  reform  consisting  of  ‘halving  class  sizes’ 
in  early  years  of  education  for  students  in 
priority areas, to enable pupils to benefit from 
more  personalised  support  in  an  atmosphere 
conducive  to  learning  (see  Annex  13).  The 
French  Court  of  Auditors (17)  highlighted 
shortcomings of the school  system, especially 
impacting 
of 
learning 
disadvantaged  pupils,  and  called  for  greater 
autonomy 
schools. 
Participation  in  continuous  training  is  low 
despite  the  high  level  of  need  declared  by 
teachers. According to TALIS 2018 (18), 50% of 
lower  secondary  education  teachers  in  France 
participated in professional development in the 
form  of  courses  or  seminars  attended  in 
person, against an OECD average of 76%. The 
2018  reform  and  significant  incentives  for 
employers boosted the number of apprentices, 
with a positive impact on the employment rate 
of graduates. However, this effort needs to be 
consolidated  in  the  longer  term,  in  terms  of 
both  financing  and  attractiveness  for  all  (see 
Annex 13). 

evaluation 

outcomes 

and 

the 

of 

Despite  recent  improvements,  vulnerable 
groups  continue  to  face  barriers  to 
employment  and  training.  Workers  that 
were  already  facing  significant  labour  market 
challenges  before  the  crisis  were  particularly 
affected by the economic consequences of the 
pandemic (see Annex 12). The low-skilled were 
overly 
the  sectors  most 
in 
affected  by  the  sanitary  restrictions.  Despite 
the  broad  coverage  of  the  short  time  work 
scheme,  their  employment  rate  dropped  to 
52.3% in the fourth quarter of 2021 compared 
to 53.7% in the fourth quarter of 2019. On the 
other  hand,  the  employment  gap  between 

represented 

(15)  The Commission has estimated that France granted 
fossil fuel subsidies of EUR 11 billion in 2018. 
(European Commission, Directorate-General for Energy, 
Badouard, T., Altman, M., Energy subsidies : energy 
costs, taxes and the impact of government 
interventions on investments : final report, Publications 
Office, 2020) 

(16)  PISA 2015 results Volume 2 Table II.2.9 

(17)  Cour des Comptes, Une école plus efficacement 

organisée au services des élèves, 2021 

(18)  TALIS - The OECD Teaching and Learning International 

Survey (2018) 

13 

 
                                                 
                                                 
regions 

non-EU born residents and their peers born in 
France  has  decreased  compared  to  its  pre-
crisis level (from 15.3 pps in the fourth quarter 
of  2019  to  14.2 pps  in  the  fourth  quarter  of 
2021).  The  employment  gap  of  people  with 
disabilities  rose  by  3.9 pps  to  22.8% 
in 
2020. The  labour  market  situation  of  young 
people  remains  a  matter  of  concern  in  the 
(around  40%  youth 
outermost 
unemployment),  also  considering  the  high 
NEET  rate  (24.8%  vs.  11.4%  for  the  overall 
French  population  in  2020).  Nevertheless,  the 
employment  rate  of  young  people  in  the 
overall  population 
(15-24-years-olds)  has 
increased, from 29.9% in the fourth quarter of 
2019 to 33.8% in the fourth quarter of 2021. 
Recent  evaluations  point  also  to  the  lack  of 
support  and  guidance  given  to  minimum 
income beneficiaries. (19) 

the 

green 

transition 

Labour shortages are on the rise as skills 
abound (20). 
Recruitment 
shortages 
difficulties  are  greatest 
jobs  requiring 
in 
technical skills, notably in sectors that are key 
for 
(industry, 
construction) (21).  This  calls for evaluating and 
labour  market 
improving  the  quality  and 
re-skilling 
of  upskilling  and 
relevance 
measures,  such  as  the  skills  investment  plan, 
the revamped individual learning account, and 
the ‘1 young person, 1 solution’ plan (22), while 
ensuring  complementarity  with  efforts  to 
modernise  the  training  offer  in the  context  of 
France  2030.  Evaluations  also  point  to  the 
specific  challenges  of  the  low-qualified,  who 
could benefit from strengthened guidance and 
better  access 
to 
qualification. The insufficient performance and 
labour  market 
initial 
the 
education 
effectiveness  of  investments  in  upskilling  and 
re-skilling. Poor working conditions and lack of 

relevance  of 
system  also  undermine 

trainings 

leading 

the 

to 

(19)  Cour des Comptes, Le revenu de solidarité active, 2022  

(20)  Dares identifies two main causes of recruitment 
difficulties: skills mismatches and poor working 
conditions. Dares, Quelle relation entre difficultés de 
recrutement et taux de chômage ?, 2021   

(21)  Occupations most affected by skills mismatches in: 

Dares, Les tensions sur le marché du travail en 2020, 
2021 

(22)  Cour des Comptes, ‘Le plan #1jeune1solution en faveur 
de l’emploi des jeunes’, Rapport public annuel 2022, 
2022 

including 

attractiveness  of  jobs  also  explain  difficulties 
in  recruiting  and  retaining  workers  in  some 
sectors.  Youth-targeted  measures  have  been 
implemented, 
the  set-up  of  a 
revamped  youth  guarantee  instrument:  since 
March 2022, young people under 26 or under 
30  with  disabilities,  facing  difficulties  to 
access  the  labour  market,  can  benefit  from 
reinforced  employment  support  during  a 
maximum of 12 months, with an allowance to 
secure them during this period.  

outcomes 

low-skilled  and 

labour  market 

of 
Poor 
vulnerable  groups  translate  to  higher 
exposure  to  poverty.  Despite  a  stabilisation 
of  the  at-risk  of  poverty  rate 
in  2020, 
INSEE (23) reports an 11% increase in the food 
aid  distributed,  and  a  deterioration  of  the 
income  situation  of  the  poorest  among  the 
poor.  Vulnerable  groups,  including  non-EU-
intensity 
born, 
households  with  children  face  much  higher 
risks of poverty than the overall population, to 
a  larger  extent  than  in  other  EU  countries. 
Rising  energy  prices  may  aggravate  the 
increase  of  housing  cost  overburden  and 
constrained  expenditures,  while  access  to 
affordable  and  social  housing  is  insufficient. 
Tackling all these challenges is key for France 
to contribute to reaching the 2030 EU headline 
targets  on  employment,  skills  and  poverty 
reduction. 

low  work 

Improve the business environment 
to increase competitiveness 

regulatory 

restrictiveness 

of 
The 
professional  services  remains  high  in 
France.  According  to  a  Commission  report, 
regulatory restrictiveness is higher than the EU 
advisers, 
average 
architects,  real  estate  agents  and  patent 
agents (24).  Within 
the 

France,  among 

accountants/tax 

for 

(23)  INSEE, Aide alimentaire : une hausse prononcée des 

volumes distribués par les associations en 2020, press 
release, 2021 

(24)  For example, legal persons that are not architectural 

firms may not hold more than 25% of the share capital 
and voting rights of architectural firms, and the majority 
of the members of the board of directors, including the 
chairman, must be architects. Accountants may 

14 

 
                                                 
                                                 
the  OECD  average (28).  Reducing  or  removing 
restrictions  in  the  retail  sector,  in  particular 
opening up sales of non-prescription medicines 
to  a  wider  variety  of  retailers,  would  improve 
accessibility and could reduce prices.  

of 

limit 

sources 

financing 

professions  analysed  by  the  Commission, 
accountants/tax  advisers  and  lawyers  are  the 
most  regulated (25).  Excessive  regulation  can 
undermine  the  efficient  operation  of  services 
markets  and  delay  innovations  such  as  the 
digital  automation  of  repetitive  tasks.  It  can 
also 
and 
management skills as well as raise barriers to 
entry  and  reduce  competition.  Engineering, 
architectural,  legal  and  accounting  services 
together  account  for  3.8%  of  GDP  in  France. 
Loosening regulatory restrictions in these four 
services  (mainly  in  architectural,  legal  and 
accounting  services)  would  boost  GDP  by 
0.15%  within  2  years,  driven  by  increased 
productivity,  lower  prices  and  higher  final 
consumption (26).   

France’s  regulatory  environment  in  the 
retail  sector  is  weighing  on  competition. 
Reforms  adopted  since  2018  have  made  the 
regulatory  environment  of 
retail  more 
restrictive  by  introducing  new  rules  on  the 
opening  of  large  shops  and  limiting  retailers’ 
ability  to  offer  promotions (27).  The  regulatory 
framework relating to the sale of medicines in 
particular is significantly more restrictive than 

cooperate only with a limited number of other 
professions, with other forms of joint exercise being 
banned. Real estate agents need to hold a professional 
card to carry out their activities, which can be obtained, 
among other means, through a specialised two-year 
post-secondary education or a general higher education 
diploma of at least three years.  

Some reforms have been adopted to reduce the 
restrictiveness of regulated professions. For example, 
the law for growth, activity and equality of economic 
chances adopted in 2015 (Law 2015-990) provided for 
an increase in the number of notaries and created more 
competition in that profession.  

(25)  Staff Working Document (EC) 2021/185 final 

accompanying the Communication from the 
Commission on taking stock of and updating the reform 
recommendations for regulation in professional services 
of 2017 

(26)  European Commission, The impact of regulatory 

environment on digital automation in professional 
services, 2021  

(27)  PACTE (Plan d'Action pour la Croissance et la 

Transformation des Entreprises), ELAN (Evolution du 
logement, de l’aménagement et du numérique) and 
EGalim (Etats généraux d’alimentation Etats généraux 
d’alimentation) laws.  

(28)  OECD product market regulation (PMR) indicators, 2018. 
See: https://www.oecd.org/economy/reform/indicators-
of-product-market-regulation/.  

15 

 
                                                                        
 
                                                 
KEY FINDINGS 
KEY FINDINGS 

France’s  recovery  and  resilience  plan 
includes measures to address a series of 
its structural challenges through: 

  improving  the  business  environment  to 

increase competitiveness. 

  large  investments  in  the  green  transition 
transports, 

(building 
industry decarbonisation, hydrogen, etc); 

renovation, 

clean 

  supporting  the  recovery  of  the 
market, focusing on young people; 

labour 

  initiating reforms on public finances; 

  the 

of 

digitalisation 

administration, 
education  (including  better  digital  skills), 
the  health  system  and  the  deployment  of 
fibre; 

  orienting 
transition. 

research 

towards 

the 

twin 

Beyond  the  reforms  and  investments  in 
the RRP, France would benefit from: 

  ensuring  an  effective  control  of  current 
primary  expenditure  so  as  to  put  public 
debt on a sustained downward trend; 

  reducing  the  complexity  of  the  pension 
system  while  enhancing  its  fairness  and 
ensuring 
the  sustainability  of  public 
finances; 

  accelerating  the  deployment  of  renewable 
energies 
investment, 
including  by  simplifying  permit  procedures 
for renewable energy projects;  

supporting 

and 

  improving  energy  efficiency  by  promoting 

deep renovation of buildings; 

  developing  energy  interconnections  with 

neighbouring countries; 

  improving 

outcomes 
learning 
addressing inequalities in education; 

and 

16 

 
 
 
 
ANNEXES 

 
 
 
LIST OF ANNEXES 

Cross-cutting progress indicators 

Annex 1: Sustainable Development Goals 

Annex 2: Recovery and Resilience Plan - implementation 

Annex 3: Other EU instruments for recovery and growth 

Annex 4: Progress in the implementation of country-specific recommandations 

Environmental sustainability 

Annex 5: Green Deal 

Annex 6: Employment and social impact of the green transition 

Productivity 

Annex 7: Ressource efficiency and productivity 

Annex 8: Digital transition 

Annex 9: Innovation 

Annex 10: Industry and single market 

Annex 11: Public administration 

Fairness 

Annex 12: Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

Annex 13: Education and skills 

Annex 14: Health and health systems 

Annex 15: Economic and social performance at regional level 

Macroeconomic stability 

Annex 16: Key financial sector developments 

Annex 17: Macroeconomic Imbalance Procedure assessment matrix 

Annex 18: Taxation 

Annex 19: Key economic and financial indicators 

Annex 20: Debt sustainability analysis 

LIST OF TABLES 

Table A2.1: 
Table A4.1: 
Table A5.1: 
Table A7.1: 
Table A8.1: 

Key elements of the French RRP 
Summary table on 2019, 2020 and 2021 CSRs 
Indicators underpinning progress in the European Green Deal from a macroeconomic prospective 
Selected resource efficiency indicators 
Key Digital Economy and Society Index indicators 

19 

21 

21 

23 

25 

28 

31 

31 

34 

36 

36 

38 

40 

42 

45 

47 

47 

49 

51 

53 

56 

56 

58 

60 

62 

63 

23 
29 
33 
37 
39 

 
 
 
Table A9.1: 
Table A10.1: 
Table A11.1: 
Table A12.1: 
Table A13.1: 
Table A14.1: 
Table A15.1: 
Table A16.1: 
Table A17.1: 
Table A18.1: 
Table A19.1: 
Table A20.1: 
Table A20.2: 

Key research, development and innovation indicators 
Key Single Market and Industry Indicators 
Public administration indicators - France 
Social Scoreboard for France 
EU-level targets and other contextual indicators under the European Education Area strategic framework 
Key health indicators 
Selected indicators at regional level 
Financial soundness indicators 
Assessment of Macroeconomic Imbalances matrix 
Taxation indicators 
Key economic and financial indicators 
Debt sustainability for France 
Heat map of fiscal sustainability risks for France 

LIST OF GRAPHS 

Graph A1.1: 

Progress towards SDGs in France in the last five years 

Graph A2.1: 

Share of RRF funds contributing to each policy pillar 

Graph A2.2: 

Total grants disbursed under the RRF 

Graph A2.3: 

Fulfilment status of milestones and targets 

Graph A3.1: 

2014-2020 European Structural and Investment Funds - total budget by fund (EUR billion, % of total) 

Graph A3.2: 

Cohesion policy contribution to the SDGs (EUR billion) 

Graph A4.1: 

France’s progress on the 2019-2020 CSRs (2022 European Semester cycle) 

Graph A5.1: 

Taxation and government expenditure on environmental protection 

Graph A5.2: 

Share in energy mix 

Graph A5.3: 

Biodiversity 

Graph A5.4: 

Share of zero emissions vehicles (% of new registrations) 

Graph A6.1: 

Fair green transition challenges 

Graph A6.2: 

Energy poverty by income decile 

Graph A7.1: 

Employment and value added in the circular economy sectors 

Graph A11.1: 

Scope Index of Independent Fiscal Institutions (SIFI) and Medium-Term Budgetary Framework (MTBF) indices 

Graph A13.1: 

French pupils' mathematics achievement 

Graph A14.1: 

Life expectancy at birth, years 

Graph A14.2: 

Projected increase in public expenditure on health care over 2019-2070 (AWG reference scenario) 

Graph A15.1: 

Labour productivity, EU-27, France NUTS 2 regions, 2000-2019 

Graph A15.2: 

Territories most affected by climate transition in France 

Graph A16.1: 

Credit growth for non-financial corporations and households 

Graph A16.2: 

House price and mortgage growth 

Graph A18.1: 

Tax wedge indicators 

41 
43 
46 
47 
50 
52 
55 
56 
59 
60 
62 
63 
64 

22 

23 

24 

24 

25 

26 

28 

31 

31 

32 

32 

34 

35 

36 

45 

49 

51 

51 

53 

54 

56 

57 

61 

20 

 
 
 
 
CROSS-CUTTING PROGRESS INDICATORS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 
ANNEX 1: SUSTAINABLE DEVELOPMENT GOALS 

of 

four 

dimensions 

This Annex assesses France’s progress on the 
Sustainable Development Goals (SDGs) along 
the 
competitive 
sustainability.  The  17  SDGs  and  their  related 
indicators  provide  a  policy  framework  under  the 
UN’s  2030  Agenda  for  Sustainable  Development. 
The  aim  is  to  end  all  forms  of  poverty,  fight 
inequalities  and  tackle  climate  change  while 
ensuring that no one is left behind. The EU and its 
Member  States  are  committed  to  this  historic 
global  framework  agreement  and  to  playing  an 
active  role  in  maximising  progress  on  the  SDGs. 
The graph below is based on the EU SDG indicator 
set  developed  to  monitor  progress  on  SDGs  in  an 
EU context. 

SDG 

relating 

While  France  performs  very  well  or  well  on 
most 
to 
indicators 
environmental  sustainability  (SDGs  2,  6,  7, 
12,  13  and  15)  and  is  improving  on  others 
(SDG  9),  it  still  needs  to  catch  up  in  some 
respects  (SDG  11).  France  has  progressed  well 
towards  SDG  7  on  affordable  and  clean  energy, 
having decreased greenhouse gas emissions from 
energy  consumption  by  20.3%  in  2019  compared 
to 2000 levels. Increasing the share of buses and 
trains  in  total  passenger  transport  would  help 
address ‘Sustainable cities and communities’ (SDG 
11).  While  in  2014  France  was  noticeably  above 
average  (a  share  of  total inland  passenger-km  of 
18.4%  compared  to  an  EU  average  of  16.8%),  in 
2020  France  was  only  slightly  above  average, 
leaving room for improvement. Measures on green 
in 
infrastructure  and 
component  3  of  the  recovery  and  resilience  plan 
aim to further increase performance. 

sustainable  mobility 

France  performs  very  well  or  well  on  some 
SDG  indicators  relating  to  fairness  (SDGs  1, 
2, 4 and 5) and is improving on a few (SGD 3 
and  8),  but  it  needs  to  catch  up  on  others 
(SDG  10).  France  outperforms  the  EU  average in 
most  indicators  relating  to  zero  hunger,  quality 
education (29)  and gender equality (SDGs 2, 4 and 
5).  However,  the  housing  costs  rose  recently 
between 2018 and 2020 and should be monitored, 
especially in the context of rising energy costs. The 
tackle 
RRP 

includes  measures 

further 

to 

(29)  Despite these positive results, France remains one of the EU 
countries where the impact of students’ socio-economic and 
migrant background on their educational outcomes is the 
strongest.  

21 

renovation of buildings in component 1, notably by 
investing  in  energy  efficiency  of  public  buildings, 
private  residential  buildings,  social  housing,  and 
small  and  medium  sized  enterprises.  The 
measures  also  include  reforms  on  housing  policy. 
Although France outperforms the EU in relation to 
inequality indicators, the gap  between the income 
of the poorest and the poverty line increased from 
15.7% in 2015 to 21.5% in 2020. The urban-rural 
gap  also  increased  sharply.  Access  to  social  and 
affordable housing in some areas is a challenge, in 
particular for the poorest households. 

France  performs  very  well  on  one  SDG 
indicator relating to productivity (SDG 4) and 
is  improving  on  others  (SDGs  8  and  9).  In 
France,  participation  in  early  childhood  education 
is  particularly  high.  The  country  was  able  to 
increase the participation rate for children from 3 
years  old  to  the  starting  age  of  compulsory 
primary education from 99.3% in 2014 to 100% in 
2019.  Adult  participation  in  learning  decreased 
from 18.6% of people aged  25 and over in 2015 
to  13.0%  in  2020,  although  it  continues  to  be 
higher  than  average  in  the  EU,  where  it  also 
declined,  from  10.1%  in  2015  to  9.2%  in  2020, 
possibly  due  to  the  impact  of  the  pandemic. 
France’s performance in at least basic digital skills 
is  above the  EU  average (62%  compared  to  54% 
in  2021).  A 
in 
large  share  of 
components  7  and  8  of  the  RRP  focuses  on 
increasing  digital  infrastructure  and  equipment  to 
improve digital skills at all levels of the education 
system.  

investments 

is 

France 
indicators 
improving  on  SDG 
relating  to  macroeconomic  stability  and 
institutional  quality  (SGD  8  and  16).  France 
has  further  improved  on  the  quality  of  its  justice 
institutions, including trust in institutions (SDG 16). 
The  percentage  of  the  population  in  France  with 
confidence  in  the  EU  Parliament  increased  from 
34% in 2016 to 38% in 2021 (EU: 50% in 2021). 
France  has  also  continued  to  see  progress  on 
indicators  relating  to  ‘Decent  work  and  economic 
growth’  (SDG  8).  The  percentage  of  young  people 
neither in employment nor in education or training 
decreased  from  14.7%  in  2015  to  14%  in  2020, 
with  more  efforts  required  to  reach  the  EU 
average  (13.7%  in  2020).  For  this  reason,  France 
has committed to investments in component 8 of 
the  RRP  to  support the  employment  of  the  young 
people.  

 
 
                                                 
 
 
Graph A1.1: Progress towards SDGs in France in the last five years 

(1) For detailed datasets on the various SDGs, see the annual ESTAT report ‘Sustainable development in the European Union’, 
https://ec.europa.eu/eurostat/web/products-statistical-books/-/KS-03-21-096; Extensive country specific data on the short-term 
progress of Member States can be found here: Key findings - Sustainable development indicators - Eurostat (europa.eu). 
Source: Eurostat, latest update of 28 April 2022. Data mainly refer to 2015-2020 and 2016-2021. 

22 

 
 
ANNEX 2: RECOVERY AND RESILIENCE PLAN - IMPLEMENTATION 
ANNEX 2: RECOVERY AND RESILIENCE PLAN - IMPLEMENTATION 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the  centrepiece  of  the  EU’s  efforts  to 
support  its  recovery  from  the  COVID-19 
pandemic,  fast  forward  the  twin  transition 
and  strengthen  resilience  against  future 
shocks.  France  submitted  its  recovery  and 
resilience  plan  (RRP)  on  28 April  2021.  The 
Commission’s  positive  assessment  on  23 June 
2021  and  Council’s  approval  on  13 July  2021 
paved  the  way  for  disbursing  EUR 39.4  billion  in 
grants in several annual instalments under the RRF 
over 
financing 
agreement  and  operational  arrangement  were 
signed on 1  August 2021 and 25 November 2021 
respectively.  The  key  elements  of  the  French  RRP 
are set out in the Table A2.1. 

the  period  2021-2026.  The 

The 

Commission 

in  pre-financing 

Implementation  of  the  French  plan  is  well 
disbursed 
underway. 
EUR 5.1 billion  to  France 
in 
September  2021,  equivalent  to  13%  of  the 
financial allocation, to support the implementation 
of  crucial  investments  and  reforms.  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. 

Table A2.1: Key elements of the French RRP 

(1) See Pfeiffer P., Varga J. and in 't Veld J. ’Quantifying 
spillovers of NGEU investment’, European Economy Discussion 
Papers, No. 144, 2021 and Afman et al. , ’An overview of the 
economics of the Recovery and Resilience Facility’, Quarterly 
report on the euro area (QREA), 2021, Vol. 20, No. 3 pp. 7-16 

Source: European Commission 2022 

The  related  38  milestones  and  targets  cover 
reforms in  the  areas  of  public  finance, the  labour 
market,  health  and 
long-term  care,  while 
investments  have  been  made  in  the  energy 
efficiency  of  buildings,  sustainable  transport, 
decarbonisation  of  industry,  youth  employment 
and  education.  Satisfactory  fulfilment  of  the 
milestones  and  targets  contributes  to  addressing 
the 
recommendations 
given to  France  in  2019  and  2020  (see  Annex 4). 
Overall,  France  reports  timely  implementation  of 
the milestones and targets due by the end of Q1-
2022, which however does not prejudge the timing 
the  submission  of  subsequent  payment 
of 

related  country-specific 

Graph A2.1: Share of RRF funds contributing to each policy pillar 

(1) Each measure contributes towards two policy areas of the six pillars, therefore the total contribution to all pillars displayed on 
this chart amounts to 200% of the estimated cost of the French RRP. The bottom part represents the amount of the primary 
pillar, the top part the amount of the secondary pillar 
Source: Recovery and Resilience Scoreboard 

23 

Total allocation EUR 39.4 billion in grants (1.6% of 2019 GDP)Investments and Reforms 70 investments and 22 reforms Total number of Milestones and Targets175Estimated macroeconomic impact (1) Raise GDP by 1% by 2024 (0.4% in spillover effects)Pre-financing disbursed EUR 5.1 billion (August 2021) First instalment EUR 7.4 billion (March 2022)0%10%20%30%40%50%60%Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic,social andinstitutionalresiliencePolicies for thenext generation 
 
 
   
 
 
 
 
     
requests  nor  of  the  formal  assessment  of  the 
fulfilment of the relevant milestones and targets.  

France’s progress in implementing its plan is 
published  on  the  Recovery  and  Resilience 
Scoreboard.  The  Scoreboard  also  gives  a  clear 
overview  of  the  progress  made  in  implementing 
the  RRF  as  a  whole.  The  graphs  below  show  the 
current state of play of the milestones and targets 
met,  as  completed  by  France  and  subsequently 
assessed  as  satisfactorily 
the 
Commission. 

fulfilled  by 

Graph A2.2: Total grants disbursed under the RRF 

(1) This graph displays the amount of grants disbursed so far 
under the RRF. Grants are non-repayable financial 
contributions. The total amount of grants given to each 
Member State is determined by an allocation key and total 
estimated cost of the respective recovery and resilience plan. 
Source: Recovery and Resilience Scoreboard 

Graph A2.3: Fulfilment status of milestones and 
targets 

This graph displays the share of satisfactorily fulfilled 
milestones and targets. A milestone or target is met once a 
Member State has provided evidence to the Commission that 
it has completed the milestone or target and the Commission 
has assessed it positively in an implementing decision. 
Source: Recovery and Resilience Scoreboard 

24 

€ 12.52billionSatisfactorily fulfilledNot fulfilled 
     
 
  
 
 
 
 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 
ANNEX 3: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The EU’s budget of more than EUR 1.2 trillion 
for  2021-2027  is  the  investment  lever  to 
help  implement  EU  priorities.  Underpinned  by 
an  additional  amount  of  about  EUR 800  billion 
largest 
through  NextGenerationEU  and 
instrument, the Recovery and Resilience Facility, it 
represents  significant  firepower  to  support  the 
recovery and sustainable growth. 

its 

Graph A3.1: 2014-2020 European Structural and 
Investment Funds - total budget by fund (EUR 
billion, % of total) 

funds 

support 

partnership 

agreements 

In  2021-2027,  EU  cohesion  policy  funds (30) 
will 
development 
long-term 
objectives  in  France  by  investing  EUR 17.88 
billion (31), including EUR 1.0 billion from the Just 
Transition  Fund  to  alleviate  the  socio-economic 
impacts  of  the  green  transition  in  the  most 
vulnerable  regions.  The  2021-2027  cohesion 
and 
policy 
programmes  to  take into account  the  2019-2020 
country-specific recommendations and investment 
guidance  provided  as  part  of  the  European 
and 
Semester, 
complementarities  with  other  EU  funding. 
In 
addition,  France  will benefit  from  EUR 45.7 billion 
support  for  the  2023-2027  period  from  the 
Common Agricultural Policy, which supports social, 
environmental,  and  economic  sustainability  and 
innovation 
rural  areas, 
contributing  to  the  European  Green  Deal,  and 
ensuring long-term food security. 

in  agriculture  and 

synergies 

ensuring 

In  2014-2020,  the  European  Structural  and 
Investment Funds (ESIF) for France are set to 
invest  EUR 35.04  billion (32)  from  the  EU 
budget.  The  total  investment  including  national 
financing 
EUR 55.32 billion, 
representing around 0.34% of GDP for 2014-2020 
and 8.88% of public investment (33). 

amounts 

to 

(30)  European Regional Development Fund (ERDF), European 

Social Fund+ (ESF+), Cohesion Fund (CF), Just Transition Fund 
(JTF), Interreg. 

(31) Current prices, source: Cohesion Open Data  

(32)  ESIF includes cohesion policy funds (ERDF, ESF+, CF, Interreg) 
and European Agricultural Fund for Rural Development 
(EAFRD) and European Maritime and Fisheries Fund (EMFF). 
According to the ‘N+3 rule’, the funds committed for the 
years 2014-2020 must be spent by 2023 at latest (by 2025 
for EAFRD). Data source: Cohesion Open data, cut-off date 
31.12.2021 for ERDF, ESF+, CF, Interreg; cut-off date 
31.12.2020 for EAFRD and EMFF. 

(1) The data for the EAFRD and REACT-EU refer to the period 
2014-2022 
Source: European Commission 

and 

employment 

By  31 December  2021,  104%  of  the  total  was 
allocated  to  specific  projects  and  64%  was 
reported  as  spent,  leaving  EUR 19.80  billion  to  be 
spent by the end of 2023 (34) (by the end of 2025 
for  EAFRD).  Among  the  11  objectives  at  EU  level, 
the most relevant ones for cohesion policy funding 
in France are fostering crisis repair and resilience, 
low carbon economy, research and innovation and 
and 
quality 
sustainable 
educational and vocational training (EUR 30 billion 
in EU funding). By the end of 2020, cohesion policy 
investments supported 78 641 businesses, helped 
decrease  CO2  emissions  by  418 215  teq  and 
new 
full-time 
financed 
researchers. 
policy 
addition, 
investments  supported  more  than  4.8  million 
participants in trainings, of which 4.1 million were 
unemployed or inactive. Among those participants, 
more  than  500 000  gained  a  qualification,  and 
more than 850 000 moved to employment. Among 
in  a  Youth 
the  young  people  participating 
Guarantee project, more than 240 000 received an 
offer  of  employment  or  education  upon  leaving 
the  scheme  and  more  than  210 000  were  in 
employment 6 months later. 

equivalent 
cohesion 

1524 
In 

Cohesion  policy  funds  already  substantially 
contribute  to  the  Sustainable  Development 
Goals  (SDGs)  objectives.  In  France,  cohesion 
policy funds support 11 of the 17 SDGs with up to 
96%  of  the  expenditure  contributing  to  the 
attainment of the goals.  

(33)  Public investment is gross fixed capital formation plus 

(34)  Including REACT-EU. ESIF data on 

capital transfers, general government. 

https://cohesiondata.ec.europa.eu/countries/FR 

25 

22.9942%0.771%19.9136%10.5219%1.142%EAFRDEMFFERDFESFYEI 
 
                                                 
  
                                                 
 
Graph A3.2: Cohesion policy contribution to the SDGs (EUR billion) 

Source: European Commission 

Under  the  ESIF,  the  agricultural  rural 
development fund (EAFRD) extended France’s 
2014-2020  Rural  Development  Programmes 
until  2022  by  making  available  a  further 
EUR 3 241  million  for  2021  and  2022.  These 
funds  will  be  used  primarily  to  restore,  preserve 
and  enhance  ecosystems  related  to  agriculture 
and forestry (60%) and enhance farm viability and 
competitiveness  of  all  types  of  agriculture  (20%). 
By the end of 2020, the Rural development policy 
in  50 000  agricultural 
supported 
holdings  and  30 000  young 
risk 
management  for  85%  of  the  French  farms,  800 
basic  services  projects  in  rural  areas,  improving 
biodiversity  on  3  million ha  of  agricultural  land 
and  organic  farming  activities  on  2  million ha.  At 
the  same  time,  EUR 300  million  were  invested  in 
energy  efficiency  and  renewable  energy,  EUR 40 
million  in  rural  economy  actions,  and  EUR 18 
million in forestry infrastructure. 

investments 

farmers, 

In  2021,  REACT-EU  instrument  (Recovery 
Assistance  for  Cohesion  and  the  Territories 
of Europe) under NextGenerationEU provided 
EUR 3.1  billion  of  additional  funding  to  the 
2014-2020  cohesion  policy  allocations  for 
France  to  ensure  a  balanced  recovery,  boost 
convergence  and  provide  vital  support  for  regions 
following the coronavirus outbreak.  

REACT-EU  provided  support  in  France  to 
strengthen  the  working  capital  for  SMEs, 
strengthen  the  healthcare  system,  help 
digitalise 
training 
structures,  and  contribute  to  the  transition 
towards  a  green  economy.  REACT-EU  also 

educational 

and 

provided  EUR 617.4  million  for  the  national 
European Social  Fund (ESF) in France for 2021 to 
support  measures  for  social  inclusion  and  access 
to  the  labour  market  of  those  most  affected  by 
the  health  crisis,  in  particular  inactive  people, 
young people and long-term jobseekers. 

The  EURI  under  NextGenerationEU  provided 
EUR 867  million  of  additional  funding  to 
France’s  2014-2022  Rural  development 
programmes  to  support  the  recovery  in  the 
aftermath of the COVID-19 crisis. These funds 
targeted  ecosystems  related  to  agriculture  and 
viability  and 
forestry  as  well  as 
competitiveness. 

farm 

The  Coronavirus  Response 
Investment 
Initiative (35) provided the first EU emergency 
support  for  France  to  address  the  COVID-19 
pandemic.  It  introduced  extraordinary  flexibility 
enabling  France  to  re-allocate  resources  for 
immediate  public  health  needs  (177  million)  and 
support  for  enterprises  (96  million).  For  instance, 
France  shifted  resources  to  purchase  protective 
equipment  and  healthcare  equipment  and  to 
support working capital for SMEs. France was also 
able  to  benefit  from  the  temporary  100%  EU 
financing  of  measures  in  cohesion  policy,  with 
approximately  EUR 136  million  in  2021  effected 
through 100% co-financing. 

(35)  Re-allocating ESIF resources according to Regulation (EU) 

2020/460 of the European Parliament and of the Council of 
30 March 2020, and Regulation (EU) 2020/558 of the 
European Parliament and of the Council of 23 April 2020. 

26 

0.210.250.340.470.560.932.863.034.016.117.97048SDG 11 Sustainable cities and communitiesSDG 12 Responsible consumption and productionSDG 6 Clean water and sanitationSDG 13 Climate actionSDG 3 Good health and well beingSDG 15 Life on landSDG 7 Affordable and clean energySDG 4 Quality educationSDG 1 No povertySDG 9 Industry, innovation, infrastructureSDG 8 Decent work and economic growth 
                                                 
  
via 

the 

provides 

Technical 

Commission 

including  for 

The 
tailor-made 
Support 
expertise 
Instrument to help France design and implement 
growth-enhancing 
the 
reforms, 
implementation of its RRP. Since 2017, France has 
received  assistance  through  29  technical  support 
projects.  Projects  delivered  in  2021  aimed  for 
example  to  support  the  implementation  of  the  5-
‘Housing  First’  and  combat 
year  plan  on 
homelessness 
the 
(2018-2022)  or 
availability  of  ‘off-patent’  (generic)  antibiotics.  In 
2022,  new  projects  will  start  to  support,  among 
others,  the  overall  RRP  monitoring,  audit  and 
control frameworks.  

improve 

France  also  benefits 
from  other  EU 
programmes,  such  as  the  Connecting  Europe 
Facility,  which  allocated  EU 
funding  of 
EUR 2 billion  to  specific  projects  on  strategic 
transport  networks,  and  Horizon  2020,  which 
allocated EU funding of EUR 7.34 billion. 

27 

 
 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
ANNEX 4: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMANDATIONS 
RECOMMANDATIONS 

Graph A4.1: France’s progress on the 2019-2020 
CSRs (2022 European Semester cycle) 

The  Commission  assessed  the  2019-2021 
country-specific  recommendations  (CSRs) (36) 
addressed  to  France  in  the  context  of  the 
European  Semester.  The  assessment  takes  into 
account  the  policy  action  taken  by  France  to 
date (37),  as  well  as  the  commitments  in  the 
Recovery  and  Resilience  Plan  (RRP) (38).  At  this 
early  stage  of  the  RRP  implementation,  overall 
84%  of  the  CSRs  focusing  on  structural  issues  in 
2019  and  2020  have  recorded  at  least  ‘some 
progress’,  while  16%  recorded  ‘limited’  or  ‘no 
in 
progress’.  Considerable  additional  progress 
addressing structural CSRs is expected in the years 
to  come  with  the  further  implementation  of  the 
RRP.  

Source: European Commission 

(36)  2021 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32021H0729%2810%29&qi
d=1627675454457  

2020 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32020H0826%2810%29&qi
d=1526385017799  

2019 CSRs: https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A32019H0905%2810%29&qi
d=1526385017799  

(37)  Incl. policy action reported in the National Reform 

Programme, as well as in the RRF reporting (bi-annual 
reporting on the progress with implementation of milestones 
and targets and resulting from the payment request 
assessment). 

(38)  Member States were asked to effectively address all or a 

significant subset of the relevant country-specific 
recommendations issued by the Council in 2019 and 2020 in 
their RRPs. The CSR assessment presented here takes into 
account the degree of implementation of the measures 
included in the RRP and of those done outside of the RRP at 
the time of assessment.  Measures foreseen in the annex of 
the adopted Council Implementing Decision on the approval 
of the assessment of the RRP which are not yet adopted nor 
implemented but considered as credibly announced, in line 
with the CSR assessment methodology, warrant ‘limited 
progress’. Once implemented, these measures can lead to 
‘some/substantial progress’ or ‘full implementation’, 
depending on their relevance. 

28 

No Progress8%Limited Progress8%Some Progress32%Substantial Progress44%Full Implementation8% 
 
 
                                                 
  
 
 
Table A4.1: Summary table on 2019, 2020 and 2021 CSRs 

(Continued on the next page) 

29 

FranceAssessment in May 2022*RRP coverage of CSRs until 2026**2019 CSR1No ProgressEnsure that the nominal growth rate of net primary expenditure does not exceed 1,2 % in 2020, corresponding to an annual structural adjustment of 0,6 % of GDP.Not relevant anymoreNot applicableUsewindfallsgainstoacceleratethereductionofthegeneralgovernment debt ratio. Not relevant anymoreNot applicableAchieve expenditure savings and efficiency gains across all sub-sectors of the government, including by fully specifying and monitoring the implementation of the concrete measures needed in the context of Public Action 2022. No ProgressRelevant RRP measures being planned as of 2022 and 2023Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimes,withtheviewtoenhancetheirfairnessand sustainability.No Progress2019 CSR 2Some ProgressFoster labour market integration for all job seekers, ensure equal opportunities with a particular focus on vulnerable groups including people with a migrant backgroundSome ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022and address skills shortages and mismatches.Some ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 20222019 CSR 3Some ProgressFocus investment-related economic policy on research and innovation (while improving the efficiency of public support schemes, including knowledge transfer schemes), Some ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022 and 2023renewable energy, energy efficiency and interconnections with the rest of the Union, Some ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022and on digital infrastructure, taking into account territorial disparities.Substantial ProgressRelevant RRP measures being planned as of 20222019 CSR4Substantial ProgressContinue to simplify the tax system, in particular by limiting the use of tax expenditures, further removing inefficient taxes and reducing taxes on production. Substantial ProgressReduce regulatory restrictions, in particular in the services sector,Limited Progressand fully implement the measures to foster the growth of firms.Full Implementation2020 CSR1Substantial ProgressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability,whileenhancinginvestment.Not relevant anymoreNot applicableStrengthentheresilienceofthehealthsystembyensuringadequatesuppliesofcriticalmedicalproductsandabalanceddistributionofhealth workers, and by investing in e-Health.Substantial ProgressRelevant RRP measures being planned as of 2022, 2023 and 20242020 CSR2Substantial ProgressMitigate the employment and social impact of the crisis,Substantial ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022 including by promoting skills Substantial ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022and active support for all jobseekers.Some ProgressRelevant RRP measures being planned as of 20222020 CSR 3Substantial Progress 
 
 
  
 
Table (continued) 

* See footnote (38)  
** Measures indicated as “being implemented as of 2021” are only those included in the first RRF payment request submitted by 
France and positively assessed by the European Commission.  

Source: European Commission 

30 

 Front-load mature public investment projectsSubstantial ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022and promote private investment to foster the economic recovery.Substantial ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022 and 2023Focusinvestmentonthegreenanddigitaltransition,inparticularonsustainable transport,Substantial ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022clean and efficient production and use of energy,Some ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2022energy (infrastructures)Some ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 2023and digital infrastructuresSubstantial ProgressRelevant RRP measures being planned as of 2022as well as research and innovation.Substantial ProgressRelevant RRP measures being implemented as of 2021Relevant RRP measures being planned as of 20222020 CSR 4Some ProgressContinue to improve the regulatory environment,Limited Progressreduce administrative burdens for firmsSome ProgressRelevant RRP measures being planned as of 2022and simplify the tax system.Substantial Progress2021 CSR1Some ProgressIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudent fiscal policy. Preserve nationally financed investment.Full ImplementationNot applicableWheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Some ProgressNot applicableAt the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Some ProgressNot applicableGiveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Some ProgressNot applicable 
 
 
 
  
 
 
ENVIRONMENTAL SUSTAINABILITY 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 5: GREEN DEAL 
ANNEX 5: GREEN DEAL 

intends 

The  European  Green  Deal 
to 
transform the  EU  into a  fair and prosperous 
society,  with  a  modern,  resource-efficient 
and competitive economy where there are no 
net  emissions  of  greenhouse  gases  in  2050 
and  where  economic  growth  is  decoupled 
from resource use. This annex offers a snapshot 
of  the  most  significant  and  economically  relevant 
developments  in  France  in  the  respective  building 
blocks  of 
is 
complemented by Annex 6 on the employment and 
social impact of the green transition and Annex 7 
for circular economy aspects of the Green Deal. 

the  European  Green  Deal. 

It 

Greenhouse  gas  emissions  keep  decreasing 
but  further  efforts  will  be  needed  to  match 
the  increased  ambition  of  the  European 
Green  Deal  and  the  2050  climate  neutrality 
target  set  at  national  and  EU  level.  Total 
greenhouse  gas  emissions  in  France  have  been 
decreasing over time and in 2020 they were 27% 
lower  than  in  1990.  However,  among  the  three 
largest emitting sectors (transport, energy use and 
agriculture),  emissions  linked  to  energy  use  are 
decreasing  the  fastest,  while  emissions  from 
agriculture  are  decreasing  at  a  slower  pace.  GHG 
emissions are decreasing faster in sectors covered 
by  the  EU  Emissions  Trading  System  (ETS)  (-46% 
in  2020  compared  to  2005)  than  in  the  non-ETS 
sectors  (buildings,  road  and  domestic  maritime 
transport,  agriculture,  waste  and  small  industries) 
where  emissions  decreased  by  -22%  in the  same 
period. 
France 
non-ETS 
overachieved  its  2020  GHG  emissions  reduction 
target. France is putting in place additional climate 
mitigation  and  adaptation  measures  but  these  do 
not  appear  to  be  sufficient  to  reach  the  current 
2030  target  (-37%)  nor  the  proposed  target  (-
48%) under the ‘Fit for 55’ package for sectors not 
covered by the ETS. The integrated national energy 
and  climate  plan  (NECP),  complemented  by  the 
2021  Climate  and  Resilience  law,  develops  the 
approach  for  mitigating  GHG  emissions  and 
adapting to a changing climate. In its recovery and 
resilience  plan  (RRP)  France  allocates  46%  of  the 
plan  to  climate  objectives  and  outlines  crucial 
investments to further the green transition. 

sectors, 

the 

In 

France’s revenues  from  environmental taxes 
(in  terms  of  percentage  of  GDP  as  well  as 
share  of  total  taxation)  are  broadly  stable 
over  time,  with  some  upward  tendencies.  Up 

revenues  from  energy 
increases,  while 

taxation 
until  2019, 
recorded  slight 
they  were 
counteracted  by  slightly  decreasing  taxes  on 
pollution, resources and transport.  

Graph A5.1: Taxation and government expenditure 
on environmental protection 

Source: Eurostat 

inland  energy  consumption 

France’s  energy  mix  is  characterised  by  the 
high  share of  nuclear.  It  accounted  for  41%  of 
gross 
in  2020, 
followed by imported oil (29%), natural gas (15%) 
and renewables (13%, of which 4% solid biomass). 
France consumes very little coal (only 2% of gross 
inland  energy  consumption).  France  aims  to 
increase the share of renewable energy to 33% of 
gross  final  energy  consumption  by  2030,  but 
getting  on  this  trajectory  will  require  urgent 
corrective  measures,  especially  as  the  target  will 
need to be revised upwards to be in line with the 
‘Fit for 55’ objectives. 

Graph A5.2: Share in energy mix 

(1) The energy mix is based on gross inland consumption, and 
excludes heat and electricity. The share of renewables 
includes biofuels and non-renewable waste. 
Source: Eurostat 

On biodiversity and ecosystem health, France 
presents  a  mixed  picture.  With  8.7%  of  its 
utilised agricultural  area under organic farming in 
2020,  France  stands  close  to  the  EU  average. 

31 

0.01.02.03.04.05.06.0Environmental taxes (%of GDP)Environmental taxes (%of total taxation)Government expenditureon environmentalprotection (% of totalexpenditure)FR (2020)EU27 (2020)020406080100200520102015201820192020FRSolid fossil fuels, peat and oil shaleOilGasNuclearRenewables 
 
 
   
  
 
 
Forests  still  have  an  unfavourable  conservation 
status.  More  than  75%  of  assessments  reveal  a 
bad to poor status. Degradation has been noted in 
the area of soil that is sealed or artificialised. Over 
recent years, there has been a reduction in change 
of  use  of  soils  and  land  take.  The  climate  and 
resilience  law  of  August  2021  has  a  goal  of  zero 
net  land  take  for  2050  through  safeguards  in 
spatial  planning  and  city  planning  documents.  For 
law  sets  an 
the  2021-2031  period, 
intermediate  objective  of  halving  the  rate  of 
consumption  of  natural,  agricultural  and  forest 
areas  compared  to  the  ten  years  preceding  the 
promulgation of the law. Despite progress with the 
new designation of large areas by 2020, the latest 
assessment of the Sites of Community Importance 
(part  of  the  Natura  2000  network)  shows  that 
there  are 
in  designations  for 
cetaceans  and  reefs  at  sea,  and  for  21  habitats 
and species on land (e.g. cork oak, for one crayfish, 
one butterfly, one fish) and bats.  

insufficiencies 

the 

In terms of air pollution, air quality in France 
continues  to  be  a  cause  of  concern  with  well 
over  30 000  premature  deaths  attributable  to  air 
pollution  in  2019.  Air  quality  limit  values  for 
nitrogen  dioxide  (NO2)  and  particulate  matter 
(PM10)  were  consistently  exceeded  over  2015-
2019.  For  2020,  despite  a  general  reduction  in 
economic  activity  following  the  COVID  crisis, 
above-limit  values  were  reported  for  nitrogen 
dioxide (NO2) and for sulphur dioxide (SO2) in some 
zones.  The  situation  on  nitrate  concentrations  in 
surface  water  is  quite  good  and  is  stable,  and 
some improvement was recorded in the reduction 
of eutrophication of surface water. 

Graph A5.3: Biodiversity 

(1) For terrestrial protected areas data for 2018, and data for 
the EU average (2016, 2017) is lacking. 
Source: European Environment Agency (terrestrial protected 
areas) and Eurostat (organic farming) 

As  regards  reducing  CO2  emissions  from 
transport,  France  is  performing  relatively 
vehicle 
well. 

zero-emission 

particular, 

In 

registrations  are  growing  fast  in  France.  The 
electrification  of  the  railway  network  is  close  to 
the EU average. 

Graph A5.4: Share of zero emissions vehicles (% of 
new registrations) 

(1) Zero emission vehicles (passenger cars) include battery 
and fuel cell electric vehicles (BEV, FCEV). 
Source: European Alternative Fuels Observatory 

32 

0510152025302016201720192020FRTerrestrial protected areas (% total area)Area under organic farming (% total utilised agricultural area)EU27 (terrestrial)EU27 (organic)0.02.04.06.08.010.0201620172018201920202021% of new registrationsFREU27 
   
   
 
Table A5.1: Indicators underpinning progress in the European Green Deal from a macroeconomic 
prospective 

(1) The 2030 non-ETS GHG target is based on the Effort Sharing Regulation. The FF55 targets are based on the COM proposal to 
increase EU's climate ambition by 2030. Renewables and Energy Efficiency targets and national contributions under the 
Governance Regulation (Regulation (EU) 2018/1999). (2) Distance to target is the gap between Member States’ 2030 target under 
the Effort Sharing Regulation and projected emissions, with existing measures (WEM) and with additional measures (WAM) 
respectively, as a percentage of 2005 base year emissions. (3) Percentage of total revenues from taxes and social contributions 
(excluding imputed social contributions). Revenues from the ETS are included in environmental tax revenues (in 2017 they 
amounted to 1.5% of total environmental tax revenues at the EU level). (4) Covers expenditure on gross fixed capital formation to 
be used for the production of environmental protection services (i.e. abatement and prevention of pollution) covering all sectors, 
i.e. government, industry and specialised providers. (5) The climate protection gap indicator is part of the European adaptation 
strategy (February 2021), and is defined as the share of non-insured economic losses caused by climate-related disasters. 
(6) Sulphur oxides (SO2 equivalent), Ammonia, Particulates < 10µm, Nitrogen oxides in total economy (divided by GDP). 
(7) Transportation and storage (NACE Section H). (8) Zero emission vehicles include battery electric vehicles (BEV) and fuel cell 
electric vehicles (FCEV). (9) European Commission Report (2019) 'Benchmarking smart metering deployment in the EU-28'. 
(10) European Commission (2021). Each year the DESI is re-calculated for all countries for previous years to reflect any possible 
change in the choice of indicators and corrections to the underlying data. Country scores and rankings may thus differ compared 
with previous publications. 
Source: Eurostat, European Commission, EEA, EAFO 

33 

TargetTarget2005201920202030WEMWAM2030WEMWAMNon-ETS GHG emission reduction target (1)MTCO2 eq; %; pp (2)401.1-16%-22%-37%-7-7-48%-17-17200520162017201820192020Share of energy from renewable sources in gross final consumption of energy (1)%9%15%16%16%17%19%33%Energy efficiency: primary energy consumption (1)Mtoe261.0240.0239.3238.7235.2208.4202.2Energy efficiency: final energy consumption (1)Mtoe160.1150.3149.3146.8145.4130.1120.9201520162017201820192020201820192020Environmental taxes (% of GDP)% of GDP2.22.22.32.42.32.22.42.42.2Environmental taxes (% of total taxation)% of taxation (3)4.74.95.05.15.14.86.05.95.6Government expenditure on environmental protection% of total exp.1.771.671.651.731.801.701.661.701.61Investment in environmental protection% of GDP (4) 0.430.420.430.44--0.420.380.41Fossil fuel subsidiesEUR2020bn8.328.378.8911.0711.54-56.8755.70-Climate protection gap (5)score 1-4Net GHG emissions1990 = 100848487848273797669GHG emissions intensity of the economykg/EUR'100.220.220.220.210.200.200.320.310.30Energy intensity of the economykgoe/EUR'100.120.120.120.110.110.110.120.110.11Final energy consumption (FEC)2015=100100.0101.3100.698.998.087.7103.5102.994.6FEC in residential building sector2015=100100.0104.8103.099.699.397.0101.9101.3101.3FEC in services building sector2015=100100.0100.6102.1100.298.391.3102.4100.194.4Smog-precursor emission intensity (to GDP) (4)tonne/EUR'10 (6)0.630.600.570.540.51-0.990.93-Years of life lost caused due to air pollution by PM2.5per 100.000 inh.624543578659544-863762-Years of life lost due to air pollution by NO2per 100.000 inh.16912213011991-12099-Nitrate in ground watermg NO3/litre18.218.118.019.918.2-21.720.7-Terrestrial protected areas% of total-17.522.0-26.926.9-25.725.7Marine protected areas% of total-15.0--37.7--10.7-Organic farming% of total utilised agricultural area4.55.36.07.07.78.78.08.59.100-0606-1212-18Net land takeper 10,000 km213.011.05.0201520162017201820192020201820192020GHG emissions intensity of transport (to GVA) (7)kg/EUR'100.600.570.560.570.550.530.890.870.83Share of zero emission vehicles (8)% in new registrations0.91.11.21.41.96.71.01.95.4887911188812Share of electrified railways%55.556.857.158.258.5-55.656.0-29.329.930.130.130.8-28.928.8-YearFREUShare of smart meters in total metering points (9) - electricity% of total201822.235.8Share of smart meters in total metering points (9) - gas% of total20187.513.1ICT used for environmental sustainability (10)%202154.665.9DigitalFiscal and financialindicators0.5 out of 4 (decrease from historical level of 1.3). This is a low risk category (4 being a high risk).ClimateEnergyPollutionBiodiversity2000-20062006-20122012-201814.915.07.7MobilityNumber of plug-in electric vehicles per charging pointCongestion (average number of hours spent in road congestion per year by a representative commuting driver)Progress to policy targetsNational contribution to 2030 EU targetFRANCEEU'Fit for 55'DistanceDistance 
 
 
   
 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 
ANNEX 6: EMPLOYMENT AND SOCIAL IMPACT OF THE GREEN TRANSITION 

The  green  transition  not  only  encompasses 
environmental 
to 
improvements 
sustainability, but also includes a significant 
social  dimension.  While  measures  here  include 
the  opportunity  for  sustainable  growth  and  job 
creation,  it  must  also  be  ensured  that  no  one  is 
left  behind  and  all groups  in  society  benefit  from 
the  transition.  France  benefits  from  a  relatively 
large  share  of  its  economy  contributing  to  the 
green 
recent 
promising  policy  measures;  at  the  same  time, 
energy-intensive  sectors  are  sizeable  and  lower-
income groups are likely to face challenges.  

transition,  positive 

trends  and 

Graph A6.1: Fair green transition challenges 

Source: Eurostat, World Inequality Database 

linked 

France’s  recovery  and  resilience  plan  (RRP) 
puts  a  significant  focus  on  the  green 
transition and its fairness. It covers the energy 
renovation  of  public  and  private  buildings, 
including  social  housing,  investments  in  green 
infrastructures  and  sustainable  mobility,  and  in 
research  and  development 
to  green 
technologies. The Climate and Resilience law gives 
responsibility  to  skills  operators  (who  are  the  key 
players  in  access  to  training  for  workers)  to 
analyse  and  identify  skills  needs  relating  to  the 
green  transition.  In  synergy  with  the  RRP,  the 
European  Social 
the 
development of green skills in France, and the Just 
Transition  Fund  (EUR 1.03  billion,  current  prices) 
will  help  mitigate  the  social 
impact  of  the 
transition  in  the  most  impacted  French  regions. 
The  integrated  national  energy  and  climate  plan 
(NECP)  of  March  2020  analyses  the  impacts  on 
energy  poverty  and  skills,  although  it  could  be 
developed  further  in  this  regard.  The  report 
to  support  households 
describes  measures 
experiencing  energy  poverty  and  to  invest  in  the 
upskilling  and  re-skilling  of  the  population,  but  it 

Fund+  will 

support 

does  not  include  a  quantitative  objective  for  the 
reduction of energy poverty. 

to 

The  economy  has  slightly  reduced  its carbon 
footprint.  While  key  energy-intensive  sectors 
remain  sizeable,  the  green  economy  is  relatively 
large  and  provides  a  strong  potential  for  quality 
job  creation.  The  greenhouse  gas  emissions 
intensity of the French economy decreased slightly 
between 2015 and 2020 (in terms of gross value 
added)  and  stands  30%  below  the  EU  average, 
with  the  average  carbon  footprint  per  worker  at 
tonnes  of  greenhouse  gas  emissions 
10.65 
(against 13.61 in the EU) (see Graph A6.1). Several 
declining  sectors  have  been  identified  essentially 
labour  shortage  and  supply  chain 
due 
INSEE (39),  such  as 
to 
difficulties  according 
manufacturing,  construction  and  food  related 
services (40).  France's  energy-intensive 
industry 
(EII),  including  energy,  chemicals  and  steel (41), 
provides  jobs  for  almost  1  million  workers,  for 
whom  upskilling  and  re-skilling  is  particularly 
important  (see  Annex  15).  The  environmental 
goods and services sector already provides jobs to 
the  employed 
a 
large  share  of 
population  (2.1%  versus  2.2%  in  the  EU) (42),  and 
wind and solar energy potential as well as energy 
efficiency 
further 
opportunities for green jobs (43).  

improvements 

relatively 

offer 

As  for  the  social  dimension  of  the  green 
transition,  ensuring  access  to  essential 
transport  and  energy  services  remains  a 
challenge  for  France,  but  to  a  lesser  extent 
than in other EU countries. A relatively low and 
stable  share  of  the  rural  population  is  at  risk  of 
poverty (10.1% vs 18.7% in the EU) (44). While still 

(39)  Institut National de la statistique et des études 

économiques, Economic Outlook , 2022. 
https://www.insee.fr/en/statistiques/6050487 

(40)  SWD(2021) 275 final. 

(41)  European Commission, European Semester: Overview of 

Investment Guidance on the Just Transition Fund 2021-2027 
per Member State (Annex D). 

(42)  There is currently no common EU-wide definition of green 
jobs. The environmental goods and services sector (EGSS) 
accounts only report on an economic sector that generates 
environmental products, i.e. goods and services produced for 
environmental protection or resource management. 

(43)  Asikainen, T., Bitat, A., Bol, E., Czako, V., Marmier, A., Muench, 
S., Murauskaite-Bull, I., Scapolo, F. and Stoermer, E., The 
future of jobs is green, EUR 30867 EN, Publications Office of 
the European Union, Luxembourg, 2021 

(44)  As a proxy for potential transport challenges in the context of 

the green transition (see COM(2021) 568 final). 

34 

0.000.200.400.600.801.00GHG tonnes per Euroof gross added value(MS/EU)GHG tonnes perworker (MS/EU)Employment share inenergy-intensiveindustries (MS/EU)Share of population inrural areas at risk ofpoverty (MS/EU)Energy poverty(MS/EU)Carbon inequality(MS/EU)FranceEU 2020France 2015 
 
  
                                                 
 
below the EU average (at 8.2%), the share of the 
population unable to heat their homes sufficiently 
increased  from  5.6%  in  2015  to  6.5%  in  2020. 
Lower-income  groups  are  affected  the  most  (see 
Graph A6.2). Consumption patterns vary across the 
population: the average carbon footprint of the top 
10% of emitters is about 5 times higher than that 
of the bottom 50% of the population (5.3 times in 
the  EU).  The  RRP provides support  measures  for 
the renovation of private houses (with a bonus for 
the  poorest  and  middle-income  households) and 
social housing to improve energy savings.  

Graph A6.2: Energy poverty by income decile 

Source: Eurostat 

Tax  systems  are  key  to  ensuring  a  fair 
transition  towards  climate  neutrality (45). 
France’s  revenues  from  total  environmental  taxes 
increased  slightly  from  2.16%  of  GDP  in  2015  to 
2.31%  in  2019,  but  declined  to  2.18%  in  2020 
(against  2.24%  in  the  EU).  In  parallel,  the  labour 
tax  wedge  for  low-income  earners (46)  decreased 
significantly  from  31.4%  to  21.7%  from  2015  to 
2019  and  to  20.1% in  2021,  compared  to  31.9% 
in the EU (see Annex 18). Redistributive measures 
accompanying  environmental  taxation  can  have 
the potential to foster progressivity and to have a 
positive  impact  on  the  disposable  income  of 
households in the lowest segments of the income 
distribution (47). 

(45)  COM(2021) 801 final. 

(46)  Tax wedge for a single earner at 50% of the national 
average wage (Tax and benefits database, European 
Commission/OECD). 

(47)  SWD(2021) 641 final PART 3/3, on distributional effects of 

energy taxation revision, based on the European Commission 
Joint Research Centre GEM-E3 and Euromod models. 

35 

0%5%10%15%20%25%12345678910Unable to keep home adequately warm (per income decile)Income decileFranceEuropean Union 
  
 
                                                 
PRODUCTIVITY 
PRODUCTIVITY 
ANNEX 7: RESSOURCE EFFICIENCY AND PRODUCTIVITY 
ANNEX 7: RESSOURCE EFFICIENCY AND PRODUCTIVITY 

while 

minimising 

The  efficient  use  of  resources  is  key  to 
ensuring  competitiveness  and open strategic 
autonomy, 
the 
environmental  impact.  The  green  transition 
presents  a  major  opportunity  for  European 
industry  by  creating  markets  for  clean 
technologies  and  products.  It  will  have  an 
impact  across  the  entire  value  chains  in  sectors 
such  as  energy  and  transport,  construction  and 
renovation,  food  and  electronics,  helping  create 
jobs  across 
local  and  well-paid 
sustainable, 
Europe. 

France  has  made  some  progress  in  circular 
(secondary)  material  usage.  The  circular 
material  use  rate  has  increased  since  2016  and 
showed  fast  improvement  when  compared  to  the 
EU  average.  The  French  recovery  and  resilience 
plan includes investments and reforms supporting 
recycling, 
repair  and  better  waste 
management,  with  notably  the  publication  of 
decrees  to  implement  the  law  on  the  circular 
economy  (e.g.  the  extension  of  the  producer 
responsibility scheme). 

reuse, 

Resource productivity in France has remained 
well  above  the  EU  average  since  2010  and 
has  shown  an  upward  trend  since  2017. 
Resource  productivity  expresses  how  efficiently 
the  economy  uses  material  resources  to  produce 
wealth 
resource 
productivity can help to minimise negative impacts 

Improving 

(Table 

A7.1). 

on  the  environment  and  reduce  dependency  on 
volatile 
raw  material  markets.  The  variable 
‘Material  Intensity’  shows  how  many  additional 
kilograms  of  material  consumption  would  be 
associated with an increase in GDP, at the current 
resource productivity rates. France performs better 
than the EU average. 

France’s  economic  growth 
is  not  yet 
decoupled from the generation of waste. After 
trend,  municipal  waste 
seeing  a  downward 
generation  per  capita  has  started  to  increase  in 
recent  years.  The  recent  increase  shown  from 
2016  can  be  attributed  to  an  increase  in  the 
population  and  in  household  expenditures.  France 
has made some progress since 2015 on increasing 
its recycling rate to 42.2% and diverting municipal 
waste from landfilling. 

A successful transition to a circular economy 
requires  social  and  technological  innovation 
as  the  full  potential  of  circular  economy  can  only 
be  reached  when  implemented  across  all  value 
chains.  Therefore,  eco-innovation  is  an  important 
enabling  factor  for  the  circular  economy.  Product 
design  approaches  and  new  business  models  can 
help  to  produce  systemic  circularity  innovations, 
creating new business opportunities. France ranked 
7th  among  EU  countries  in  the  Eco-Innovation 
Scoreboard of 2021, with a total score of 127 out 
of a maximum of 200, and it performs as an eco-
innovation  leader.  France  performs  above  the  EU 
average  for  eco-innovation  inputs,  activities  and 

Graph A7.1: Employment and value added in the circular economy sectors 

Source: European Commission 

36 

1.54%1.52%1.63%0.00%0.97%0.87%0.97%0.94%1.72%1.73%1.75%1.71%0.94%0.94%0.96%0.97%0.0%0.2%0.4%0.6%0.8%1.0%1.2%1.4%1.6%1.8%2.0%2015201620172018Persons employed in the circular economy, FR (% of total employment)Value added at factor cost, FR (% of GDP )Persons employed in the circular economy, EU27 (% of total employment)Value added at factor cost, EU27 (% of GDP ) 
 
 
 
 
  
Table A7.1: Selected resource efficiency indicators 

Source: Eurostat 

resource  efficiency  outcomes,  and  below  the  EU 
average  for  eco-innovation  outputs  and  socio-
economic outcomes. 

37 

SUB-POLICY AREA201520162017201820192020EU27 CircularityResource Productivity (Purchasing power standard (PPS) per kilogram)2.62.72.62.82.93.02.2Material Intensity (kg/EUR)0.40.40.40.40.30.30.4Circular Material Use Rate (%)18.719.418.819.720.022.212.8Material footprint (Tones/capita)12.812.614.013.913.7-14.6Waste Waste generation (kg/capita, total waste)-4836-5116--5234Landfilling (% of total waste treated)-27.3-26.8--38.5Recycling rate (% of municipal waste)40.742.944.145.143.942.247.8Hazardous waste (% of municipal waste)-3.4-3.5--4.3CompetitivenessGross value added in environmental goods and services sector (% of GDP)1.71.71.81.91.8-2.3Private investment in circular economy (% of GDP)0.1-----0.1Key indicators - France 
  
 
  
 
between  now  and  2022.  This 
includes  an 
additional allocation to ‘France Num’ and a plan to 
help  retailers  digitalise  their  operations.  In  2020, 
22%  of  enterprises  used  big  data  against  an  EU 
average  of  14%,  and  45%  used  electronic 
information  sharing.  But  the  share  of  small  and 
medium-sized  enterprises  (SMEs)  with  at  least 
basic  digital  intensity  levels  is  below  the  EU 
average.  In  particular,  only  12%  of  French  SMEs 
are selling online, against an EU average of 18%. 
Public  investments  –  including  RRF  funds  –  are 
earmarked for the acceleration of the deployment 
of  fibre  to  achieve  coverage  in  rural  and  remote 
areas by 2025. 

France performs relatively well in the digital 
public  service  dimension,  in  particular  for 
open data. France’s performance for digital public 
services  for  citizens  is  slightly  below  the  EU 
average,  while  its  score  for  open  data  almost 
reaches  the  maximum.  However,  France  is  not 
performing well in the number of pre-filled forms, 
as  the  score  is  significantly  lower  than  the  EU 
average (47 and 64 respectively). 

ANNEX 8: DIGITAL TRANSITION 
ANNEX 8: DIGITAL TRANSITION 

integration  of  digital 

The Digital Economy and Society Index (DESI) 
monitors EU Member States’ digital progress. 
The  areas  of  human  capital,  digital  connectivity, 
the 
technologies  by 
businesses  and  digital  public  services  reflect  the 
Digital  Decade’s  four  cardinal  points (48).  This 
Annex  describes  France’s  DESI  performance.  The 
French RRP will  contribute to the digital  transition 
for  21%  of  France’s  total  allocation  under  the 
RRF (49).  The  RRP  measures  are  complemented  by 
national  ones  as  part  of  the  France  Relance  plan 
and  France  2030.  Significant 
resources  are 
devoted  to  supporting  the  digitalisation  of  the 
health  sector,  improving  the  sharing  of  medical 
records and setting up a digital health platform, as 
well  as  developing  and  deploying  key  digital 
technologies  such  as  cybersecurity,  quantum  and 
cloud. 

France is in line with the EU average in terms 
of digital skills, but it is still far from the EU 
frontrunners.  It  ranks  above  the  EU  average  for 
basic  digital  skills  and  at  EU  average  for  ICT 
specialists.  However,  severe  skills  shortages 
(engineers  and 
persist 
technicians in ICT), with an estimated demand for 
170 000  to  212 000  jobs  in  digital  areas  in 
2022 (50). 

for  specific  profiles 

to  2021, 

France  has  improved  its  performance  in 
terms  of  connectivity,  but  the  urban-rural 
divide persists. Fixed very high capacity network 
(VHCN)  coverage  increased  strongly  by  10 pps 
from  2020 
reaching  63%.  Fast 
broadband  networks  (NGA)  coverage  grew  by 
5 pps  over  the  same  period  to  reach  74%. 
However,  both  values  are  still  below  the  EU 
average  and  the  coverage  in  rural  areas  remains 
low,  with  a  coverage  of  fibre  to  the  premises  at 
28.8% against an EU average of 33.8%. 

Overall,  French  enterprises  have  increased 
their  use  of  digital  technologies  in  business 
operations, but SMEs are lagging behind. The 
RRP  has  earmarked  EUR 385  million  to  help 
strategies 
finance 

digitalisation 

companies’ 

(48) 2030 Digital Compass: the European Way for the Digital 

Decade Communication, COM (2021) 118 final 

(49) The share of financial allocation contributing to digital 

objectives has been calculated using Annex VII of the RRF 
Regulation. 

(50) France Stratégie, Les métiers en 2022 – résultats et 

enseignements, 2014 

38 

 
 
                                                 
 
Table A8.1: Key Digital Economy and Society Index indicators 

(*) The 5G coverage indicator does not measure users’ experience, which may be affected by a variety of factors such as the type 
of device used, environmental conditions, number of concurrent users and network capacity. 5G coverage refers to the percentage 
of populated areas as reported by operators and national regulatory authorities. 
Source: European Commission 

39 

EUEU top-performanceHuman capitalDESI 2020DESI 2021DESI 2022DESI 2022DESI 2022At least basic digital skillsNANA62%54%79%% individuals202120212021ICT specialists4.2%4.5%4.5%4.5%8.0%% individuals in employment aged 15-7420192020202120212021Female ICT specialists20%20%21%19%28%% ICT specialists20192020202120212021ConnectivityFixed Very High Capacity Network (VHCN) coverage44%53%63%70%100%% households201920202021202120215G coverage (*)NA0%74%66%99.7%% populated areas2020202120212021Integration of digital technologySMEs with at least a basic level of digital intensityNANA47%55%86%% SMEs202120212021Big data16%22%22%14%31%% enterprises20182020202020202020CloudNANA25%34%69%% enterprises202120212021Artificial IntelligenceNANA7%8%24%% enterprises202120212021Digital public servicesDigital public services for citizensNANA6975100Score (0 to 100)202120212021Digital public services for businessesNANA8082100Score (0 to 100)202120212021France 
 
 
 
  
 
incentive scheme in the EU, France’s business 
R&D  intensity  is  stagnating.  So  far  the  large 
amount  of  public  support  seems  to  have  had  a 
limited  impact  on  innovation  output,  as  reflected 
for  example  by  France’s  patenting  activity,  which 
has slightly declined over the last decade, and on 
fostering  employment  in  fast-growing  enterprises 
in  the  most  innovative  sectors.  The  extensive 
evaluation  process  of  the  Crédit  Impôt  Recherche 
conducted  by  the  National  Commission  for  the 
Evaluation of Innovation Policies (CNEPI) led to the 
conclusion  that,  while  the  scheme  had  positive 
effects  for  SMEs  (both  in  terms  of  R&D  activity 
and  economic  performance),  it  did  not  have  a 
significant effect on larger firms.  

ANNEX 9: INNOVATION 
ANNEX 9: INNOVATION 

This  Annex  provides  a  general  overview  of 
the  performance  of  France’s  research  and 
innovation system. France is a strong innovation 
performer  according 
the  2021  European 
to 
Innovation  Scoreboard (51)  but  still  has  to  reduce 
its  gap  with  the  EU  innovation  leaders.  Total 
research and development (R&D) intensity reached 
2.35%  in  2020,  still  below  the  target  of  3% 
initially  set  for  2020  and  with  no  clear  upward 
trend.  

the 

Over  the  last  decade,  France  has  not  been 
able  to  raise  the  performance  of  its  public 
research  system  and  the  low  degree  of 
science-business  cooperation 
remains  a 
challenge. Between 2009 and 2019, there was a 
slight  but  steady  decline  in  public  R&D  intensity 
(0.71%  in  2019  compared  to  0.82%  in  2009), 
which  appears  to  have  been  accompanied  by  a 
small  decrease  in  scientific  performance.  Notably, 
the  share  of  the  country’s  scientific  publications 
among 
top  10%  most  cited  scientific 
publications  worldwide  has  been  on  a  slightly 
declining  trend  since  2013  (9.0%  in  2018,  below 
the  EU  average  of  9.9%,  compared  to  10.3%  in 
2013).  Moreover,  the  share  of  public-private  co-
publications  has  not  significantly  increased  over 
the  last  decade  and  France  continues  to  score 
below the EU average for public R&D financed by 
businesses,  which 
low 
propensity of businesses to cooperate and contract 
with  public  research  labs.  To  tackle  these  key 
challenges,  France  has  introduced  in  its  recovery 
and  resilience  plan  a  wide-ranging  reform,  the 
multiannual programming law on research (2021-
increasing  public 
2030),  aimed  at  gradually 
research  and 
funding  and 
promoting  science-business  linkages.  The  plan 
contains  several  other  measures  aimed  at 
boosting  investment  and  employment  in  research 
and  innovation.  In  particular,  EUR 4.25  billion  is 
investments  for  the  future 
allocated  to  the 
programme 
d’Investissement 
d’Avenir‘)  to  invest  in  key  green  and  digital 
technologies  and 
research  and 
in 
innovation ecosystems.  

(‘Programme 

reflects  a 

innovation 

relatively 

teaching, 

(R&I) 

Despite  a  very  high  level  of  public  support 
for  business  innovation  (the  highest  in  the 
EU),  including  the  most  generous  R&D  tax 

(51)  2021 European Innovation Scoreboard, Country profile: 

France 
https://ec.europa.eu/docsroom/documents/45914/attachment
s/1/translations/en/renditions/native 

40 

 
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
Table A9.1: Key research, development and innovation indicators 

Source: European Commission 

41 

R&D Intensity (GERD as % of GDP)2.182.232.22.192.350.82.32Public expenditure on R&D as % of GDP0.780.750.720.710.76-0.30.78Business enterprise expenditure on R&D (BERD) as % of GDP1.381.441.441.441.561.31.53Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 10.19.79::-1.49.9PCT patent applications per billion GDP (in PPS)44.23.7:: -0,73.5Public-private scientific co-publications as % of total publications8.39.39.89.79.10.89.05Public expenditure on R&D financed by business enterprise (national) as % of GDP0.034:0.0340.032:-0.70.054New graduates in science & engineering per thousand pop. aged 25-34:20.921.922.6:1.716.3Total public sector support for BERD as % of GDP0.421:0.4060.408:-0.30.196R&D tax incentives: foregone revenues as % of GDP0.2740.2820.2870.284:0.40.1Share of environment-related patents in total patent applications filed under PCT (%) 14.6 14.313.5 : :  -1.0 12.8Venture Capital (market statistics) as % of 0.030.030.050.070.0810.10.054Employment in fast-growing enterprises in 50% most innovative sectors5.14.14.24.1:-2.35.5Finance for innovation and Economic renewalEU averageCompound annual growth 2010-20Key indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation France20102015201820192020 
 
 
 
 
 
 
 
  
 
ANNEX 10: INDUSTRY AND SINGLE MARKET 
ANNEX 10: INDUSTRY AND SINGLE MARKET 

prosperity,  well-being 

Productivity  growth  is  a  critical  driver  of 
and 
economic 
convergence over the long run. A major source 
of  productivity  for  the  EU  economy  is  a  well-
functioning single market, where fair and effective 
competition  and  a  business  friendly  environment 
are  ensured, 
in  which  small  and  medium 
enterprises  (SMEs)  can  operate  and  innovate 
without  difficulty.  Businesses  and  industry  rely 
heavily  on  robust  supply  chains  and  are  facing 
bottlenecks that bear a negative impact on firms’ 
productivity 
levels,  employment,  turnover  and 
entry/exit  rates.  This  may  impact  the  Member 
States’  capacity  to  deliver  on  Europe’s  green  and 
digital transformation. 

France’s  labour  productivity  is  high  (see 
Annex 19), but it is growing more slowly than 
the  EU  average.  Several  weaknesses  of  the 
French  economy  harm  productivity  growth,  in 
particular  the  insufficient  digitalisation  of  French 
SMEs  (see  Annex  8),  skills  shortages  and  skills 
mismatches  (see  Annex  13)  and  a  stagnating 
business  R&D  intensity  in  the  past  years  (see 
Annex  9).  The  decline  in  economic  activity  and 
labour productivity due to the COVID-19 crisis and 
the  restrictions  imposed  in  2020  and  2021  is 
expected  to  be  temporary,  provided  the  main 
growth  drivers,  such  as  R&D  expenditure,  are 
safeguarded (52).  The  French 
recovery  and 
resilience  plan  (RRP)  includes  large  investments 
and some reforms supporting the development of 
skills,  innovation  and  digitalisation,  which  will 
boost  productivity.  France  is  a  leading  country  in 
terms 
intensity 
(investment over value added). This is particularly 
true  for 
the  manufacturing  sector  and  for 
information  and  communication  services.  The 
combination  of  high 
investment 
intensity  and  slow  productivity  growth  suggests 
that  there  is  potential  to  increase  the  productive 
efficiency  of  investments  into  intangible  assets, 
such as software and R&D, in France (53). 

investment 

intangible 

intangible 

of 

The business environment could be improved 
in  certain  areas.  To  reduce  regulatory  barriers 
and  administrative  burden,  France  has  adopted 
several reforms, including in its RRP. Nevertheless, 
some weaknesses remain. For instance, France has 

(52)  National Productivity Board, Les effets de la crise Covid-19 

sur la productivité et la compétitivité, 2021  

(53)  European Commission, JRC Country Factsheet on 

Productivity – France, internal communication, 2022. 

42 

insolvency 

procedures. (54) 

lengthy 
Permit 
application  procedures  are  often  long  and  may 
hamper  investment.  While  public  procurement  is 
very important for SMEs, they are less likely to be 
chosen  as  a  contractor  in  France  than  in  other 
Member  States (55).  Access  to  loans  is  easier  in 
France  than  in  the  rest  of  the  EU,  and  access  to 
equity  capital,  if  more  difficult,  has  significantly 
improved.  The  number  of  venture  capital  deals 
very  slightly  decreased  in  2021  compared  to 
2018-2020,  though  the  amount  per  deal  has 
increased by roughly 50% (56). 

Barriers  to  competition  in  services  harm 
France’s  integration  into  the  single  market. 
Several  professions 
(accountants/tax  advisers, 
architects,  real  estate  agents  and  patent  agents) 
face  higher  regulatory  restrictions  than  the  EU 
average (57). In retail, France had the highest level 
of  operations  restrictions  in  the  EU  in  2018  while 
being  around  the  EU  average  for  establishment 
restrictions (58).  Since  then,  France  has  adopted 
new  laws  that  have  added  restrictions  on  retail’s 
operations  and  establishment (59).  Regulatory 
barriers  in  services  in  France  have  led  to  low 
competition  and  high  profit  margins  and  prices, 
harming 
the  whole 
economy. The RRP does not address these barriers.  

the  competitiveness  of 

The  French  economy  has  been  affected  by 
global supply chain disruptions, although to a 
slightly  lower  extent  than  other  EU  Member 
States.  According  to  a  survey  carried  out  by  the 
European  Commission,  23%  of  firms  were  facing 
material  shortages in 2021, slightly  below the EU 
average  (26%)  but  a  sharp  increase  compared  to 
2017  (+7 pps).  The  supply  chain  disruptions  have 
particularly  affected  some  industries  like  the 
automotive industry. 

(54)  OECD, Les études économiques de l’OCDE – France, 2021. 

(55)  In 2020, 42% of contractors were SMEs in France, against 

63% in the EU. 

(56)  Amaral-Garcia, S., Compano, R., Domnick, C., Fako, P., Gavigan 
J and Testa, G., High Growth Enterprises Demographics & 
Finance with a focus on venture capital: Factsheet – France, 
European Commission, Joint Research Centre, JRC128693, 
2022. 

(57)  2021 updated Commission’s restrictiveness indicator for 

regulated professions 

(58)  2018 Commission’s retail restrictiveness indicator 

(59)  PACTE (Plan d'Action pour la Croissance et la Transformation 

des Entreprises), ELAN (Evolution du logement, de 
l’aménagement et du numérique) and EGalim (Etats 
généraux d’alimentation Etats généraux d’alimentation) laws. 

 
 
                                                 
                                                 
 
Table A10.1: Key Single Market and Industry Indicators 

(Continued on the next page) 

43 

POLICY AREAINDICATOR NAMEDESCRIPTION20212020201920182017Growth ratesEU27 average*Value added by source (domestic)VA that depends on domestic intermediate inputs, % [source: OECD (TiVA), 2018]64.8362.6%Value added by source (EU)VA imported from the rest of the EU, % [source: OECD (TiVA), 2018]22.7419.7%Value added by source (extra-EU)% VA imported from the rest of the world, % [source: OECD (TiVA), 2018]12.417.6%Cost competitivenessProducer energy price (industry)Index (2015=100) [source: Eurostat, sts_inppd_a]122.695.2102.8101.794.829.3%127.3Material Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]159581136%26%Labour Shortage using survey dataAverage (across sectors) of firms facing constraints, % [source: ECFIN CBS]1915343025-24%14%Sectoral producer pricesAverage (across sectors), 2021 compared to 2020 and 2019, index [source:Eurostat]2.4%5.4%Concentration in selected raw materialsImport concentration a basket of critical raw materials, index [source: COMEXT]0.140.150.130.120.138%17%Installed renewables electricity capacity Share of renewable electricity to total capacity, % [source:Eurostat, nrg_inf_epc]69.3064.6059.1058.8018%47.8%Net Private investmentsChange in private capital stock, net of depreciation, % GDP [source: Ameco]1.63.944.2-61.9%2.6%Net Public investmentsChange in public capital stock, net of depreciation, % GDP [source: Ameco]1.81.10.2-0.6-400%0.4%HEADLINE INDICATORSRESILIENCEInvestment dynamicsEconomic structureShortages/supply chain disruptionsStrategic dependencies 
 
 
 
  
 
Table (continued) 

Source: See above in the table the respective source for each indicator in the column “description” 

44 

Single Market integrationIntra-EU tradeRatio of Intra-EU trade to Extra-EU trade, index [source: Ameco]3.052.742.842.652.4524%1.59Professional services restrictivenessRegulatory restrictiveness indicatorRestrictiveness of access to and exercise of regulated professions (professions with above median restrictiveness, out of the 7 professions analysed in SWD (2021)185 [source: SWD (2021)185; SWD(2016)436 final])6   60%3.37Professional qualifications recognitionRecognition decisions w/o compensationProfessionals qualified in another EU MS applying to host MS, % over total decisions taken by host MS [source: Regulated professions database]5745%Transposition - overall5 sub-indicators, sum of scores [source: Single Market Scoreboard]Below averageAbove averageAbove averageBelow averageInfringements - overall4 sub-indicators, sum of scores [source: Single Market Scoreboard]AboveOn averageOn averageOn averageInvestment protectionConfidence in investment protectionCompanies confident that their investment is protected by the law and courts of MS if something goes wrong, % of all firms surveyed [source: Flash Eurobarometer 504]4956%BankruptciesIndex (2015=100) [source: Eurostat, sts_rb_a]n.a.n.a.n.a.n.a.n.a.n.a.70.1Business registrationsIndex (2015=100) [source: Eurostat, sts_rb_a]110.4151.2140.6125-11.7%105.6Late paymentsShare of SMEs experiencing late payments in past 6 months, % [source: SAFE]4850.750.2n.a.n.a.-4%45%EIF Access to finance index - LoanComposite: SME external financing over last 6 months, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.650.710.540.28130.6%0.56EIF Access to finance index - EquityComposite: VC/GDP, IPO/GDP, SMEs using equity, index from 0 to 1 (the higher the better) [source: EIF SME Access to Finance Index]0.060.090.080.0519.4%0.18% of rejected or refused loansSMEs whose bank loans’ applications were refused or rejected, % [source: SAFE]2.79.96.350n.a.12.4%SME contractorsContractors which are SMEs, % of total [source: Single Market Scoreboard]51514748486.3%63%SME bidsBids from SMEs, % of total [source: Single Market Scoreboard]4141375053-23%70.8%Public procurement SINGLE MARKETBUSINESS ENVIRONMENT - SMEsCompliance - cooperation EC and MSBusiness demographyAccess to finance 
 
 
 
 
  
 
ANNEX 11: PUBLIC ADMINISTRATION 
ANNEX 11: PUBLIC ADMINISTRATION 

capacity 

administrative 

Good 
enables 
economic  prosperity,  social  progress  and 
fairness. Public administrations at all government 
levels deliver crisis response, ensure the provision 
of  public  services  and  contribute  to  building 
resilience  for  the  sustainable  development  of  the 
EU economy.  

Overall,  public  administration  in  France  is 
among  the  more  effective  in  the  EU (60).  Its 
strong  coordination  capacity  and  its  systemic  use 
of  evidence-based  instruments  helps  to  improve 
the  quality  of  public  policies.  The  share  of  e-
government users in France is well beyond the EU 
average  (87.0%  vs  70.8%).  France’s  performance 
in  public  procurement  is  also  satisfactory (61). 
Perception-based  surveys  find,  however,  that 
regulatory  obstacles  and  administrative  burden 
are  one  of  the  three  areas  that  pose  the  biggest 
problems  for  their  business  (69%  versus  an  EU 
average of 55%) (62). 

The French recovery and resilience plan aims 
to  further  modernise  the  public  sector.  It 
includes measures for green budgeting and for the 
acceleration  and  simplification  of  administrative 
procedures. Planned reforms aim to strengthen the 
decentralisation  and  transfer  of  competences  to 
the local authorities, with the aim of ensuring that 
each territory is able to provide responses tailored 
to its specific features, using appropriate tools and 
resources.  

reforms  of 

Gender equality for civil servants is an issue, 
particularly  among  senior  civil  servants. 
the  public  service 
Cross-cutting 
(including  the  senior  civil  service)  under  the 
recovery  and  resilience  plan  are  expected  to 
contribute  to  stronger  social  cohesion,  through 
the 
revised 
reinforcement 
and 
of 
opportunities, including gender equality.  

and 
treatment 

recruitment 

procedures 

equal 

Graph A11.1: Scope Index of Independent Fiscal 
Institutions (SIFI) and Medium-Term Budgetary 
Framework (MTBF) indices 

Source: European Commission, data from 2020 

justice  system  faces  resources  and 
The 
time 
efficiency  challenges.  The  estimated 
needed  to  resolve  civil  and  commercial  cases  has 
been  increasing  significantly  over  recent  years  at 
all  levels,  in  particular  at  first  and  last  instances. 
The  quality  of  the  justice  system  is  good  overall, 
although digital tools are only used in some courts. 
As  regards  judicial  independence,  no  systemic 
deficiencies have been reported. (63)  

Selected 
indicators  point  to  room  for 
improvement  in  France’s  fiscal  framework. 
The  scope  of  activities  of  its  independent  fiscal 
institution is narrower than that of the average EU 
country  (this  observation  was  made  before  the 
entry  into  force  of  the  public  finance  governance 
measures  included  in  the  RRP).  While  France 
records  slightly  above  average  results  on  the 
Commission´s Medium-term budgetary framework 
(MTBF) index, there is room for improvement in the 
level  of  detail  of  the  medium  term  plans  (Graph 
A11.1). 

(60)  Worldwide Governance Indicators, 2020.  

(61)  European Commission: Single market scoreboard- public 

procurement.  

(62)  Flash Eurobarometer 486, France, February-April 2020 

(63)  For more detailed analysis of the performance of the justice 
system in France, see the 2022 EU Justice Scoreboard 
(forthcoming) and the country chapter for France of the 
Commission’s 2022 Rule of Law Report (forthcoming). 

45 

00.050.10.150.20.250.3Coverage (MTBF)CoherenceInvolvement ofparliamentInvolvement of IFILevel of detailCompliance with fiscalrules (SIFI)Macro and fiscalforecastingSustainabilityassessmentPromotion of fiscaltransparencyNormativeassessmentsFREU27 averageSIFIMTBF 
 
                                                 
  
 
 
 
 
                                                 
 
Table A11.1: Public administration indicators - France 

(1) High values stand for good performance barring indicators # 7 and 8. 
(2) Measures the user centricity (including for cross-border services) and transparency of digital public services as well as the 
existence of key enablers for the provision of those services. 
(3) Break in the series in 2021. 
(4) Defined as the absolute value of the difference between the share of men and women in senior civil service positions.  
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Fiscal Governance 
Database (# 4, 9, 10); Labour Force Survey, Eurostat (# 5, 6, 8), European Institute for Gender Equality (# 7), Single Market 
Scoreboard public procurement composite indicator (# 11); OECD Indicators of Regulatory Policy and Governance (# 12).  

46 

FR20172018201920202021EU27177.079.082.0na87.070.82nananana69.770.93nananana97.581.1446.446.446.446.4na56.8539.740.041.142.245.155.3625.024.726.216.114.718.6737.040.442.838.637.821.8822.721.923.522.123.221.390.730.730.730.73na0.72100.91.01.01.0na1.5113.03.33.06.7na-0.7121.88nana1.89na1.7Index of regulatory policy and governance practices in the areas of stakeholder engagement, Regulatory Impact Assessment (RIA) and ex post evaluation of legislation Educational attainment level, adult learning, gender parity and ageingOpen government and independent fiscal institutionsParticipation rate of public administration employees in adult learning (3)Gender parity in senior civil service positions (4)Share of public sector workers between 55 and 74 years (3)E-government Public Financial Management Evidence-based policy makingIndicator (1)Medium term budgetary framework indexStrength of fiscal rules indexPublic procurement composite indicatorShare of individuals who used internet within the last year to interact with public authorities (%)2021 e-government benchmark´s overall score (2) 2021 open data maturity indexScope Index of Fiscal InstitutionsShare of public administration employees with tertiary education, levels 5-8  (3) 
 
  
 
FAIRNESS 
FAIRNESS 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
ANNEX 12: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

Table A12.1: Social Scoreboard for France 

The European Pillar of Social Rights provides 
for  upward  convergence 
the  compass 
towards better working and living conditions 
in the EU. The implementation of its 20 principles 
on  equal  opportunities  and  access  to  the  labour 
market,  fair  working  conditions,  social  protection 
and inclusion, supported by the 2030 EU headline 
targets  on  employment,  skills  and  poverty 
reduction, will strengthen the EU’s drive towards a 
digital,  green  and  fair  transition.  This  Annex 
provides  an  overview  of  France’s  progress  in 
achieving  the  goals  under  the  European  Pillar  of 
Social Rights.  

While labour market conditions have recently 
been  improving,  vulnerable  groups  continue 
to  face  difficulties  in  their  integration  into 
the labour market. Overall, France is performing 
well on the indicators of the social scoreboard. The 
employment rate of the overall population (20-64 
years)  returned  to  its  pre-crisis  level,  close  to  the 
EU  average  (in  Q4-2021,  73.6%  vs  74%  at  EU 
level),  and  the  gender  employment  gap  in  2020 
(6.2%)  is  below  the  EU  average  (10.8%).  Despite 
significant 
these 
challenges  remain  for  some  vulnerable  groups. 
The employment rate of the low skilled has not yet 
returned to its pre-crisis level (52.3% in Q4-2021 
vs  53.7%  in  Q4-2019)  and  the  employment  gap 
remains high for people with disabilities (22.8 pps 
in 2020) and people with a migrant background, in 
particular non-EU-born (20.2 pps in 2020).  

developments, 

positive 

to 

and 

upskilling 

Rising  job  vacancies  in  a  context  of  skills 
shortages  underline  the  need  for  targeted 
active  labour  market  policies,  reinforced 
re-skilling 
access 
opportunities  and  a  better  alignment  of  the 
initial  education  system  with  labour  market 
needs. The policy measures already implemented 
to address existing skills mismatches, such as the 
revamped  individual  learning  account  and  the 
skills 
sufficient. 
Employers report the lack of skilled workers as the 
main barrier to recruitment   

investment  plan,  are  not 

(1) Update of 29 April 2022. Members States are classified on 
the Social Scoreboard according to a statistical methodology 
agreed with the EMCO and SPC Committees. It looks jointly at 
levels and changes of the indicators in comparison with the 
respective EU averages and classifies Member States in seven 
categories. For methodological details, please consult the 
Joint Employment Report 2022. Due to changes in the 
definition of the individuals' level of digital skills in 2021, 
exceptionally only levels are used in the assessment of this 
indicator; NEET: neither in employment nor in education and 
training; GDHI: gross disposable household income. 
Source: European Commission 

Tackling  these  challenges  is  key  for  France  to 
contribute to reaching the 2030 EU headline target 
on  employment.  The  recovery  and  resilience  plan 
(RRP) includes a range of measures such as hiring 
subsidies  for  employers  recruiting  people  with 
disabilities  and  young  people  under  26,  and  for 
apprenticeships  and  work-study  contracts.  In  the 
period 2021-2027, the European Social Fund Plus 
(ESF+) will strongly support employment and skills, 
through  access 
training  courses,  career 
transitions, and promotion of lifelong learning. 

to 

Despite  a  relatively  good  performance  with 
regard  to  early  school 
leaving,  tertiary 
education and adult participation in learning, 
its 
France  has  strong 

inequalities 

in 

47 

7.862.012.86.24.573.27.92.3106.518.922.646.922.85.957.22.6Critical situationTo watchWeak but improvingGood but to monitorOn averageLong term unemployment(% population aged 15-74) (2021)GDHI per capita growth (2008=100) (2020)Best performersImpact of social transfers (other than pensions) on poverty reduction (% reduction of AROP) (2020)Children aged less than 3 years in formal childcare (% of under 3-years-olds) (2020)Self-reported unmet need for medical care (% of population 16+) (2020)Housing cost overburden (% of population) (2020)Social Scoreboard for FRANCEEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24) (2021)Youth NEET(% of total population aged 15-29) (2021)Gender employment gap (percentage points) (2021)Income quintile ratio (S80/S20) (2020)Individuals' level of digital skills (% of population 16-74) (2021)Dynamic labour markets and fair working conditionsSocial protection and inclusionAt risk of poverty or social exclusion for children (in %) (2020)Disability employment gap (ratio) (2020)Better than averageAt risk of poverty or social exclusion (in %) (2020)Employment rate(% population aged 20-64) (2021)Unemployment rate(% population aged 15-74) (2021) 
 
 
 
  
 
 
 
housing cost overburden, access to affordable and 
social  housing  is  lacking.  While  the  at-risk-of-
poverty  rate  is  expected  to  remain  stable  for  the 
overall  population,  some  indicators  at  national 
level,  such  as  the  number  of  applications  to 
minimum  income  or  the  number  of  food  aid 
beneficiaries,  point  at  a  further  deterioration  of 
the situation of people already exposed to poverty 
during 
these 
the  COVID-19  crisis.  Tackling 
challenges  is  key  for  France  to  help  reach  the 
2030 EU headline target on poverty reduction. The 
national RRP targets vulnerable groups (other than 
young  people)  specifically  only  to  a  very  limited 
extent.  Under  the  ESF+,  investments  are  planned 
for  social  inclusion,  such  as  on  reducing  material 
deprivation and improving access to healthcare. 

in 

the 

teachers 

education 

inequalities  on  outcomes 

education system. The impact of socio-economic 
inequalities  on  educational  outcomes  in  France  is 
significant,  with  basic  skills  particularly  lacking 
among  vulnerable  groups.  According  to  the  2018 
PISA  report,  around  one  fifth  of  15-year-olds 
lacked  basic  skills  in  reading,  mathematics  or 
science,  even  though  these  shares  are  slightly 
below  the  EU  average.  France  is  the  third  worst 
performer  in  the  EU  in  terms  of  the  impact  of 
socio-economic 
in 
sciences.  These  inequalities  are  confirmed  by  the 
results  of  studies  conducted  annually  by  the 
French authorities. The lack of access to adequate 
training  for 
issue. 
teachers  exacerbates 
According  to  TALIS  2018,  only  50%  of  lower 
secondary 
France 
participated  in  professional  development  in  the 
form  of  courses  or  seminars  attended  in  person 
(vs. 75.6% on average in the OECD). Compared to 
the  OECD  average,  French  teachers  have  one  of 
the  highest  student/teacher  ratios.  The  French 
early school leaving rate is below the EU average 
(7.8% versus 9.7% in 2020) with, however, strong 
regional  and  social  disparities  (see  Annex  13). 
Equal access to education services for people with 
disabilities 
remains  a  challenge,  calling  for 
inclusion  measures  also  in  the  context  of  a 
broader  deinstitutionalisation  process.  Access  to 
training  for  the  low  skilled  remains  comparatively 
lower (4.6% for ISCED 0-2 vs 14.9% for ISCED 3-
8)  although  it  is  higher  than  the  EU  average  and 
the impact of the adult learning measures already 
adopted  should  be  monitored.  Improving  learning 
outcomes  and  equity  in  education  and  access  to 
lifelong  learning  remains  key  for  France,  also  to 
contribute  to  reaching  the  2030  EU  headline 
targets on skills and employment. 

The  situation  of  vulnerable  groups  on  the 
into  a  higher 
labour  market  translates 
exposure  to  poverty  risks,  fuelled  by  the 
COVID-19  crisis.  France  performs  relatively  well 
with  regard  to  the 
indicators  of  the  Social 
Scoreboard,  with  notably  a  positive  impact  of 
social  transfers  on  poverty  reduction.  However, 
some  vulnerable  groups,  including  non-EU  born, 
low skilled, and low-work intensity households with 
dependent children, are significantly more exposed 
to  poverty  than  the  overall  population.  In  2020, 
the  at-risk  of  poverty  or  social  exclusion  (AROPE) 
gap between people born in France and outside of 
the EU is of 24.1 pps in France vs 21.3 pps at EU 
level.  Their  employment  gap  in  Q4-2021  is  of 
14.2 pps  in  France  versus  9.8 pps  at  EU  level. 
Against  the  background  of  a  growing  level  of 

48 

 
ANNEX 13: EDUCATION AND SKILLS 
ANNEX 13: EDUCATION AND SKILLS 

This  Annex  outlines  the  main  challenges  for 
France’s  education  and  training  system  in 
light of the EU-level targets of the European 
Education  Area  strategic  framework  and 
other  contextual  indicators,  based  on  the 
analysis  from  the  2021  Education  and 
Training  Monitor.  The  French  education  system, 
despite  overall  good  outcomes,  faces  persisting 
socioeconomic and territorial inequalities affecting 
the level of basic skills. The vocational training of 
teachers remains an issue. 

learning  attitudes,  enjoyed  more  personalised 
support and a better class climate. However, about 
70% of disadvantaged children are not enrolled in 
disadvantaged  schools  ‘éducation  prioritaire’ (67). 
The  French  recovery  and  resilience  plan  includes 
measures  to  address  these  inequalities,  but  they 
remain  limited  in  scope  and  budget  allocation. 
Raising  the  level  of  basic skills  for  all  will  remain 
key, but in particular for the disadvantaged groups. 

Graph A13.1: French pupils' mathematics 
achievement 

in 

status 

reading 

students. 

socioeconomic 

The  link  between  socio-economic  status  and 
performance  remained  among  the  strongest 
in  the  EU.  France  ranks  fourth  in  the  EU  on  how 
strongly 
predicts 
performance in reading, as shown by PISA. 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%  of  all 
15-year-old 
Inequalities  are  also 
reflected  in  a  large  rural-urban  divide,  where  the 
differences 
performance  were 
equivalent to 2 years of schooling (64). According to 
the 2019 Trends in International Mathematics and 
Science Study, French pupils in the 4th grade had 
the  lowest  performance  in  maths  across  the  22 
participating  EU  countries;  with  less  advantaged 
pupils  scoring  significantly  lower.  Standardised 
national  tests in  secondary  education  confirm the 
significant  performance  differences  according  to 
schools’  socio-economic  profiles  in  2020  and 
2021, even though some of the pandemic-related 
learning losses seem to have been offset (65). The 
French  Court  of  Auditors  has  questioned  the 
efficiency  of  public  spending  on  education  as 
deteriorated, 
educational 
whereas  spending  has 
recent 
decades (66).  In  2017,  France  introduced  a  pilot 
reform  consisting  of  ‘halving  class  sizes’  in  early 
years of education for students in priority areas, to 
enable  pupils  to  benefit  from  more  personalised 
support  in  an  atmosphere  conducive  to  learning. 
Halving  the  classes provided  positive  results,  with 
better outcomes for mathematics than for French, 
and  better  results  in  the  first  grade  than  in  the 
second  grade.  Pupils  also  showed  more  positive 

has 
increased 

performance 

in 

(64)  PISA 2018, Table III.A5.4 

(65)  Direction de l’évaluation, de la prospective et de la 

performance (DEPP), 2022, Note d’Information n°22-04 
Évaluations de début de sixième en 2021 

(1) EU averages based on availability of data: 22 Member 
States for advantaged and average pupils, 9 Member States 
for disadvantaged pupils.  
Source: Trends in International Mathematics and Science 
Study 2019 

tend 

than 

their 

Teacher  education  and  career  development 
continue  to  face  challenges.  Teachers 
in 
to  have  fewer 
disadvantaged  schools 
qualifications 
in 
counterparts 
advantaged  schools.  For  science  teachers,  this 
certification gap was the second widest in the EU, 
with  only 62.7%  of science  teachers in  schools in 
the  bottom  socio-economic  profile  quarter  being 
certified,  against  93.3%  in  the  top  quarter  (PISA 
2015).  However,  the  qualification  gap  is  less 
pronounced,  with  81.2%  of  teachers  in  the  lower 
quarter  holding  a  university  degree  and  majoring 

(66)  Cour des Comptes, “Une école plus efficacement organisée 
au service des élèves. Les Enjeux Structurels de la France”, 
Décembre 2021 

(67)  Direction de l’évaluation, de la prospective et de la 

performance (DEPP), 2022, Note d’Information n°18-02 
L’éducation prioritaire 

49 

200250300350400450500550600DisadvantagedpupilsAverage pupilsAdvantaged pupilsMaths mean scoreFranceEU average (1) 
 
                                                 
  
                                                 
 
Table A13.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

(1) The 2018 EU average on PISA reading performance does not include Spain; p = provisional, u = low reliability; Data is not yet 
available for the remaining EU-level targets under the European Education Area strategic framework, covering underachievement 
in digital skills, exposure of vocational education and training (VET) graduates to work based learning and participation of adults 
in learning. 
Source: Eurostat (UOE, LFS); OECD (PISA) 

in science, versus 89.8% in the top quarter, an 8.5 
point  gap  which  is  well  within  the  OECD  average 
(8.4).  Lower  secondary  education  teachers  have 
reported  a  high  level  of  need  for  professional 
development  for  teaching  students  with  special 
needs  and 
in  a  multicultural  or 
multilingual  setting.  The  action  plan  ‘Grenelle  de 
l’éducation‘  contains  measures  to  address  these 
challenges.  

teaching 

in 

education 

graduates 

The  labour  market  relevance  of  education 
and training still requires  improvements.  The 
lack of skilled workers is one of the main barriers 
to  recruitment  in  France.  In  2019,  the  share  of 
science, 
tertiary 
technology,  engineering  and  mathematics  (STEM) 
was  at  the  level  of  the  EU  average  (25.8%  vs 
26.1%)  as  was  the  share  of  ICT  graduates  in  the 
total  number  of  graduates  (3.6%  of  graduates vs 
3.9%  in  the  EU).  The  share  of  upper  secondary 
students  enrolled 
in  vocational  and  general 
programmes was below the EU average (39.3% vs 
48.4%).  The  number  of  apprentices  has  increased 
in  recent  years,  including  thanks  to  the  hiring 
subsidies  funded  by  the  recovery  and  resilience 
plan.  Improving  the  attractiveness  and  labour 

market  relevance of the vocational  education and 
training  (VET)  system  and  improving  STEM  and 
digital skills of learners is key to reducing the skills 
mismatch. 

Early  school  leaving  rates  are  good  overall 
but  hide  strong  social  disparities.  As  in  most 
other EU countries, rates for boys are higher than 
for girls. Among young people with a disability, the 
rate  was  even  higher,  at  19.7% (68).  Equal  access 
to education for people with disabilities remains a 
challenge  and  should  be  addressed  through  a 
deinstitutionalisation process. Extending the age of 
compulsory  education  and  training  from  3-18 
years is one of the measures to curb early leaving 
and  reduce  inequalities  and  its  effectiveness  still 
needs to be evaluated.  

(68)  European Semester 2020-2021 country fiche on disability 

equality (p36) 

50 

96%100.0%91.9%100.0%2019, p92.8%2019Reading< 15%21.5% 20.4%20.9%201822.5%2018Mathematics< 15%23.5% 22.2%21.3%201822.9%2018Science< 15%22.1% 21.1%20.5%201822.3%2018< 9 %9.2%11.0%7.8%9.7%Men10.0%12.5%9.6%11.4%Women8.4%9.4%6.1% 7.9%Cities8.7%9.6%6.8% 8.7%Rural areas7.7%12.2%8.3%10.0%Native8.7%10.0%7.5%8.5%EU-born16.3%u20.7%12.8%u21.4%Non EU-born16.4%23.4%12.2% 21.6%45%44.8%36.5%50.3%41.2%Men40.6%31.2%46.0%35.7%Women48.8%41.8%54.2%46.8%Cities52.4%46.2%59.0%51.4%Rural areas36.2%26.9%36.8%29.6%Native45.7%37.7%50.7%42.1%EU-born41.3%32.7%45.1%40.7%Non EU-born38.1%27.0%47.5%34.7%27.1% 38.3%29.5%201938.9%201920152021IndicatorTargetFranceEU27FranceEU27Participation in early childhood education (age 3+)Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)TotalBy genderBy degree of urbanisationBy country of birthTertiary educational attainment (age 25-34)TotalBy genderBy degree of urbanisationBy country of birthShare of school teachers (ISCED 1-3) who are 50 years or over 
                                                 
 
  
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

Especially  relevant  in  light  of  the  ongoing 
COVID-19 pandemic, resilient healthcare is a 
prerequisite  for  a  sustainable  economy  and 
society.  This  Annex  provides  a  snapshot  of  the 
healthcare sector in France. 

Life  expectancy  in  France  is  higher  than  in 
the  EU  as  a whole, but  fell  in  2020 by more 
than 8 months due to COVID-19. As of 17 April 
2022,  2.35  cumulative  COVID-19  deaths  per 
1 000 
reported  and  412 
confirmed  cumulative  COVID-19  cases  per  1 000 
inhabitants.  France  fares  comparatively  well  in 
avoiding  deaths  from  treatable  causes,  also 
reflected in low cancer mortality. 

inhabitants  were 

Graph A14.1: Life expectancy at birth, years 

teamwork  and  task-shifting  between  doctors  and 
other health professionals. 

Through  its  recovery  and  resilience  plan, 
France plans to invest EUR 4.5 billion (11.4 % 
of  the  total  RRP)  to  strengthen  its  health  system 
through  the  construction  and  refurbishment  of 
facilities  and  the  further  digitalisation  of  health 
services. In addition, investments in long-term care 
in  nursing  homes  (EUR  1.5  billion)  are  also 
expected  to 
improve  the  delivery  of  health 
services. 

Graph A14.2: Projected increase in public 
expenditure on health care over 2019-2070 (AWG 
reference scenario) 

Source: European Commission/EPC (2021)  

Source: Eurostat database 

Health  spending  relative  to  GDP  in  France 
was  well  above the  EU  average  in  2019.  The 
public share of health expenditure is high and the 
French  health  system  provides  good  access  to 
care,  with  low  out-of-pocket  payments.  Public 
expenditure  on  health  is  projected  to  increase  by 
1.1 pps of GDP by 2070 (compared to 0.9 pps for 
the EU) (69). 

France  continues  to  focus  on  increasing 
access  to  health  services.  Low  numbers  of 
general  practitioners  practising  in  underserved 
areas (‘medical deserts‘) have been a concern over 
the  past  decade.  The  creation  of  territorial 
communities of health professionals is expected to 
help  improve  access  to  care,  notably  by  fostering 

(69)  The 2021 Ageing Report: Economic and Budgetary 

Projections for the EU Member States (2019-2070), 
European Commission (ECFIN) and Ageing Working Group 
(EPC) 

51 

80.580.980.981.81.380.482.482.782.782.883.082.3201520162017201820192020EUFrance6.68.40.91.10246810EUFrance% of GDP20192070increase 
 
  
                                                 
  
 
 
Table A14.1: Key health indicators 

(1) Notes: Doctors' density data refer to practising doctors in all countries except FI, EL, PT (licensed to practice) and SK 
(professionally active). Nurses' density data refer to practising nurses in all countries (imputation from year 2014 for FI) except IE, 
FR, PT, SK (professionally active) and EL (nurses working in hospitals only). More information: https://ec.europa.eu/health/state-
health-eu/country-health-profiles_en 
Source: Data sources: Eurostat Database; except: * Eurostat Database and OECD, ** ECDC.  

52 

20162017201820192020EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)62.562.192.1 (2017)Cancer mortality per 100 000 population243.5238.9252.5 (2017)Current expenditure on health, % GDP 11.511.311.211.19.9 (2019)Public share of health expenditure, % of current health expenditure83.083.283.583.779.5 (2018)Spending on prevention, % of current health expenditure 1.91.91.91.92.8 (2018)Acute care beds per 100 000 population314.8309.0304.1300.3387.4 (2019)Doctors per 1 000 population *3.13.13.13.23.8 (2018)Nurses per 1 000 population *10.210.510.811.18.2 (2018)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day **23.923.023.623.318.714.5 (2020) 
 
  
 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 
ANNEX 15: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

is  an 

The  regional  dimension 
important 
factor  when  assessing  economic  and  social 
developments  in  Member  States.  Taking  into 
account  this  dimension  enables  a  well-calibrated 
and targeted policy response that fosters cohesion 
and  ensures  sustainable  and  resilient  economic 
development across all regions.  

Regional disparities have increased in France 
during  the  last  decade.  GDP  per  head  has  lost 
ground relative to the EU average in most  French 
NUTS 2 regions. Out of 27 regions, 20 are drifting 
away  from  the  EU  average  in  terms  of  GDP  per 
head,  which  dropped  from  a  level  already  below 
the EU average in 2010. Only two regions have a 
GDP above the EU average: Île-de-France at 177% 
of  the  EU  average  and  Rhône-Alpes  at  109%.  At 
the other end of the spectrum, Limousin is at 73% 
of the EU average in metropolitan France while the 
French outermost regions have generally low GDP 
such  as  Mayotte  at  32%,  the  EU’s  lowest  GDP. 
Growth  in  GDP  per  head  (average  annual  % 
change  over  2010-2019)  in  France  (0.94%)  is 
below  the  EU  average  (1.39%).  The  regional 
disparity of this indicator is also very high, varying 
from  1.40% 
in 
Limousin. 

in  Midi-Pyrénées  to  -0.08% 

In general, labour productivity is much lower 
in the less developed regions of the country. 
In  2019,  productivity  in  Île-de-France  was  1.6 
times as high as in Languedoc-Roussillon, Brittany, 
1.7 times as high as in Limousin and twice as high 
as in Mayotte (Graph A15.1). Largely, disparities in 
terms  of  GDP  per  head  are  linked  to  wide 
variations in labour productivity. 

The  regional  competitiveness  index  is  also 
very  different  across  the  regions.  In  2019, 
most  of  the  metropolitan  regions  were  below  the 
national  level  (67%),  with  only  four  regions  (ÎIe-
de-France, Rhône-Alpes, Alsace and Midi-Pyrénées) 
above  it.  Here  again  the  outermost  regions  are 
very low in this ranking, even below 6% for French 
Guiana  and  Mayotte.  Innovation  and  technology-
related  activities  are  concentrated  in  a  limited 
number  of  regions.  R&D  expenditure  corresponds 
to  around  4.8%  of  GDP in  Midi-Pyrénées, 2.9%  in 
Île-de-France and 2.8% in Rhône-Alpes, but to only 
0.3%  in  Corsica.  Most  of  the  outermost  regions 
have a level of R&D expenditure below 1% of GDP. 

Graph A15.1: Labour productivity, EU-27, France 
NUTS 2 regions, 2000-2019 

(1) Unit: real GVA in MM EUR (2015 prices) by employment in 
thousands of persons 
Source: European Commission 

(8% 

in  overcrowded  accommodation 

Deep  disparities  persist  between  continental 
France and its outermost regions where basic 
needs  are  concerned.  For  example  in  Mayotte, 
one third of households have no access to running 
water,  whereas  53%  of  people  in  French  Guiana 
in 
live 
mainland France). There is widespread poverty: for 
example, the poverty rate in Guadeloupe (34%) is 
more  than  the  double  of  mainland  France  (14%); 
in Réunion’s rural communities, 1 in 2 people lives 
below the poverty threshold. All outermost regions 
have infant  mortality  rates  that  are  either  double 
or  triple  the  EU  average  and  they  have  few 
medical doctors (in Mayotte as few as one fifth of 
the EU average). There are also significant regional 
differences in terms of access to social housing, as 
there  are  variations  in  demand  as  well  as  in  the 
extent  to  which  cities  and  regions  achieve  the 
goals  set  by  the  law  in  terms  of  social  housing 
construction.  Access  to  affordable  and  social 
housing, especially for the poorest households, is a 
concern in particular in the outermost regions. 

regional  disparities 

There  are  also 
in 
greenhouse  gas  emissions.  The  presence  of  a 
large city in the region (Île-de-France, Rhône-Alpes, 
Provence-Alpes-Côte  d’Azur)  or  of  significant 
residual  industrial  activities  (Nord-Pas  de  Calais, 
Lorraine)  partly  explains  these  disparities.  The 
territories  with 
the  highest  greenhouse  gas 
emission  intensities  from  industrial  installations 
and  with  higher  employment  in  the  industries 
concerned  are  the  most  affected  by  the  climate 

53 

 
 
 
 
transition.  The  regions  proposed  to  benefit  from 
the Just Transition Fund are shown in Graph A15.2.  

Graph A15.2: Territories most affected by climate 
transition in France 

Source: European Commission 

The  uptake  of  ICT  technologies  also  shows 
wide regional variations. While close to 80% of 
the  population  used  internet  for  interaction  with 
public  authorities  in  the  last  12  months in  Île-de-
France,  Pays  de 
la  Loire,  Aquitaine,  Poitou-
Charentes and Rhône-Alpes, this share is less than 
70% in 10 regions, bottoming at 54% in Corse and 
45% in French Guiana. 

in 

All  regions  in  France  were  affected  by  the 
social-economic  consequences  of  the  COVID 
pandemic,  but  there  are 
large  regional 
variations. For instance, while the unemployment 
significantly 
Champagne-Ardenne 
rate 
decreased during the last 5 years, it increased by 
2.6 pps from 2019 to 2020. In other regions, like 
Franche-Comté, it decreased by almost 2.7 pps. It 
continued  to  drop  in  the  outermost  regions,  by 
between  2.3  pps  in  Mayotte  and  3.9  pps  in 
Réunion. 

France, 

The unemployment rate is generally higher in 
French regions than the EU average of 7.1% 
in  2020. 
the 
In  metropolitan 
unemployment rate is the highest in Champagne-
Ardenne at almost 12%, but it peaks in outermost 
regions,  at  more  than  17%  in  Guadeloupe  and 
Réunion and at 28% in Mayotte. It is the lowest in 
Franche-Comté,  Midi-Pyrénées  and  Auvergne  at 
around  6%.  The  employment  rate  remains  very 
low  in  the  outermost  regions  where  it  ranges 
between  62%  in  Martinique  and  40%  in  Mayotte. 
The  employment  situation  in  French  regions  was 
particularly  affected  by  sanitary  measures  taken 
at the heart of the crisis in 2020. However, these 
employment  rates  do  not  reflect  the  marked 
differences  observed  between  vulnerable  groups 
and  the  overall  population.  Such  groups  are  over-
represented in outermost regions. 

54 

 
 
 
 
Table A15.1: Selected indicators at regional level 

(1) French Guiana Life expectancy reference year: 2017 
France (country level) R&D expenditure reference year: 2017 
Source: Eurostat 

55 

NUTS 2 RegionGDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP growthGDP per head growthR&D expenditureR&D expenditure in the business enterprise sectorEmployment in high-technology sectorsEmployment in knowledge-intensive servicesInternet use: interaction with public authoritiesRegional Competitiveness IndexCO2 emissions from fossil fuels  per headInnovation performanceEU27=100, 2019EU27=100, 2018Avg % change on preceding year, 2010-2019Avg % change on preceding year, 2010-2019Avg % change on preceding year, 2010-2019% of GDP, 2013% of GDP, 2013% of total employment, 2020% of total employment, 2020% of individuals in the last 12 months, 2019Range 0-100, 2019tCO2 equivalent, 2018RIS regional performance groupEuropean Union1001001.001.571.392.191.54.540.015657.37.2France1061150.761.360.942.211.44.547.747567.0Ile-de-France1771540.911.741.302.902.08.555.587891.13.3Centre - Val de Loire861020.810.790.581.631.23.943.106863.56.0Bourgogne871010.790.620.630.990.72.944.987757.55.8Franche-Comté80970.180.08-0.072.722.33.843.107358.95.0Basse-Normandie 81940.370.480.411.270.82.841.556555.95.5Haute-Normandie 881080.820.670.461.431.23.143.207162.07.6Nord-Pas de Calais861030.660.980.830.910.42.648.246959.67.6Picardie761050.720.480.321.411.22.246.587659.25.7Alsace991080.621.030.731.710.94.339.257269.25.1Champagne-Ardenne881030.680.410.440.760.51.242.346251.96.3Lorraine761000.370.020.051.250.52.642.677260.712.2Pays de la Loire951000.591.520.831.450.93.741.7978Moderate innovator +Bretagne90990.641.390.881.450.94.043.9674Strong innovatorAquitaine951010.591.630.901.601.02.847.018064.24.6Limousin73940.21-0.13-0.081.000.648.637456.37.2Poitou-Charentes86990.941.300.960.930.51.745.498055.55.3Languedoc-Roussillon80990.371.220.402.390.73.852.177456.44.6Midi-Pyrénées1001051.082.071.404.753.46.151.137668.14.8Auvergne88971.101.150.952.241.71.841.376959.86.5Rhône-Alpes1091110.771.761.002.771.84.643.988073.54.5Provence-Alpes-Côte d’Azur991070.601.330.952.381.24.650.9774Strong innovator -Corse86990.091.500.512.381.250.3854Emerging innovatorGuadeloupe641090.781.491.642.247.956528.58.8Martinique 70960.450.671.2848.936837.76.7Guyane48103-0.212.08-0.3057.21455.63.0La Réunion 6796-0.122.061.461.951.386032.93.4Mayotte32782.056.043.4251.825.80.1 
 
  
 
MACROECONOMIC STABILITY 
MACROECONOMIC STABILITY 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 
ANNEX 16: KEY FINANCIAL SECTOR DEVELOPMENTS 

the  pandemic, 

This  Annex  provides  an  overview  of  key 
developments  in  France’s  financial  sector. 
Despite 
the  banking  sector’s 
solvency  has  remained  quite  solid.  With  an 
annualised  return-on-equity  of  7.3%  in  Q3  2021 
(vs  7.1% in  the  EU),  its  profitability  has improved 
since  2019  and  especially  2020.  The  capital 
adequacy  ratio  has  slowly  increased  over  the 
years  to  reach  19.3%  in  Q3  2021  (same level  as 
the EU average) and the non-performing loan ratio 
reached  a  new  all-time  low  at  2.0%  (vs  2.1%  in 
the  EU).  These  good  results  may  be  partly  due  to 
temporary  support  measures  by  the  ECB  and  the 
French  government,  such  as  the  sizeable  public 
guarantee  scheme.  Banks  have  ample  liquidity, 
both from ECB operations and depositors. Funding 
from  the  ECB  reached  a  record  high  of  5.6%  of 
banks’ total liabilities in December 2021 (vs 7.2% 
in  the  euro  area),  much  higher  than  during  the 
financial  and  sovereign  crisis  of  2008  and  2012. 
Thanks  to  the  strong  increase  in  customers’ 
deposits,  the  loan-to-deposit  ratio  fell  further  to 
89.8% in December 2021 (vs 86.5% in the EU). 

The  residential  real  estate  market  exhibits 
medium vulnerabilities that are mitigated by 
appropriate  and  sufficient  macroprudential 
policy  measures.  The  European  Systemic  Risk 
Board 
key 
vulnerabilities:  high  household  debt,  high  housing 
lending  growth,  loose  lending  standards  (albeit 

(2022)  has 

identified 

several 

improved since  

Graph A16.1: Credit growth for non-financial 
corporations and households 

(1) Loans adjusted for sales and securitisation (y-o-y change) 
Source: European Central Bank 

2019), signs of house price overvaluation in some 
large  cities.  Since  2017,  households 
lending 
growth  has  been  strong  and  reached  5.4%  in 
December  2021  (vs  4.2%  in  the  euro  area).  The 
current  policy  mix  is considered  to be  appropriate 
and  sufficient  and  has  been  instrumental  in 
mitigating  risks.  The  introduction  of  debt-service-
to-income  (DSTI)  and  maturity  limits  in  January 
2021 led to a significant decrease in the share of 
new  mortgages  with  risky  characteristics.  On  14 

Table A16.1: Financial soundness indicators 

(1) Last data: Q3 2021 
Source: ECB, Eurostat, Refinitiv 

56 

-4-202468101214Total privateNFCHH%20172018201920202021Total assets of the banking sector (% of GDP)368.0372.8382.4455.6446.8Share (total assets) of the five largest bank (%)45.447.748.749.2-Share (total assets) of domestic credit institutions (%)195.295.395.295.896.2Financial soundness indicators:1- non-performing loans (% of total loans)3.12.72.52.22.0- capital adequacy ratio (%)17.818.018.619.519.3- return on equity (%)6.46.56.04.17.3NFC credit growth (year-on-year % change)6.66.45.612.24.3HH credit growth (year-on-year % change)6.05.66.44.95.4Cost-to-income ratio (%)171.674.172.370.464.9Loan-to-deposit ratio (%)1105.1109.1107.395.489.8Central bank liquidity as % of liabilities2.31.91.65.15.4Private sector debt (% of GDP)145.0148.3152.5173.7-Long-term interest rate spread versus Bund (basis points)49.238.838.336.338.0Market funding ratio (%)59.058.157.856.2-Green bond issuance (bn EUR)42.97.227.526.041.3 
 
 
  
 
 
 
 
  
 
September  2021,  the  High  Council  for  Financial 
Stability  converted  the  recommendation  into  a 
legally  binding  measure.  Given  that  the  internal 
ratings-based risk weights for mortgage exposures 
are  among  the  lowest  in  the  EU,  increasing  these 
risk weights should be envisaged if the associated 
vulnerabilities were to increase further, along with 
rebuilding  the  countercyclical  capital  buffer  or 
replacing it with a sectoral systemic risk buffer. 

Graph A16.2: House price and mortgage growth 

Source: Eurostat, European Central Bank 

57 

 
 
ANNEX 17: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX 
ANNEX 17: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX 

competitiveness  challenges  in  the  medium  term. 
Several  macroprudential  measures  address  the 
growing  vulnerabilities  of  household  balance 
sheets  and  the  residential  real  estate  market.  A 
reform  of  public  finances  management  entered 
into  force  in  2022,  and  an  evaluation  of  public 
spending is planned, to identify the most efficient 
expenditures favouring growth, social inclusion and 
the  ecological  and  digital  transition.  The  pension 
reform, aimed at unifying the currently existing 42 
different regimes, was put on hold. Despite recent 
announcements  of  a  pension  reform,  neither 
details, nor timeline has been provided.   

For  those  reasons,  and  more  generally  on  the 
basis  of  the  elements  of  the  in-depth  review 
undertaken  for  France  under  Regulation  (EU)  No 
1176/2011  on  the  prevention  and  correction  of 
macroeconomic imbalances as summarised in the 
Staff  Working  Document  (SWD  (2022)632  final), 
its 
the  Commission  has  considered 
Communication  “European  Semester  –  2022 
Spring  Package”  (COM(2022)600  final)  that 
France 
experience 
macroeconomic imbalances. 

continues 

to 

in 

The  Macroeconomic 
Imbalance  Procedure 
matrix presents the main elements of the in-
depth  review  undertaken  for  France 
in 
accordance  with  Article  5  of  Regulation  (EU)  No 
1176/2011  on  the  prevention  and  correction  of 
macroeconomic imbalances, as summarized in the 
Staff  Working  Document 
(2022)632 
final). (70)      For  Member  States  selected  in  the 
it  presents, 
2022  Alert  Mechanism  Report 
separately  for  each  source  of  imbalance  and 
adjustment issue, the main findings regarding the 
gravity  and 
identified 
challenges, as well as policy response and gaps. 

the  evolution  of  the 

(SWD 

France’s  economy  is  facing  vulnerabilities 
relating  to  high  public  debt,  as  well  as 
competitiveness  challenges  related  to  low 
productivity  growth.  The  outbreak  of 
the 
pandemic brought about a sizeable increase in the 
already  high  general  government  debt,  but  with 
the  return  to  growth  in  2021,  government  debt 
edged  down.  Household  and  non-financial 
corporation debt are high and exceeding prudential 
thresholds,  although  risks  relating  to  increased 
corporate indebtedness are mitigated by the build-
up of liquidity buffers. Exports market shares had 
been  subject  to  fluctuations  during  the  pandemic 
amid lockdowns  and  supply  chain  disruptions,  but 
are likely to recover in real terms.  

Going forward, vulnerabilities are forecast to 
reduce  somewhat  in  the  coming  years.  The 
public indebtedness is forecast to keep falling over 
the forecast horizon. Private debt is set to remain 
high,  fuelled  by  dynamic  credit  flows.  The  recent 
rise  in  unit  labour  costs  –  which  is  driven  by  the 
pandemic effect - is forecast to largely reverse in 
the  coming  years,  and  cost  competitiveness,  as 
well as productivity, are set to benefit from recent 
and upcoming reforms.  

Recent  policy  measures  are  dampening  the 
risks  associated  with  competitiveness  and 
indebtedness.  The  substitution  of  a  cut  in  social 
contributions  for  a  tax  credit,  the  adoption  of  the 
Responsibility Pact, a EUR 10 billion cut in taxes on 
labour  market 
production  and  changes 
legislation  are  expected  to  give  a  boost  to 
structural 
productivity 

address 

and 

the 

to 

(70)  European Commission (2022), COMMISSION STAFF 

WORKING DOCUMENT In-Depth Review for France in 
accordance with Article 5 of Regulation (EU) No 1176/2011 
on the prevention and correction of macroeconomic 
imbalances. 

58 

 
 
                                                 
 
Table A17.1: Assessment of Macroeconomic Imbalances matrix 

Source: European Commission 

59 

Gravity of the challengeEvolution and prospectsPolicy responseCompetitivenessLow productivity growth continues to be a challenge for the competitiveness of the French economy. Labour hoarding during the COVID-19 crisis briefly amplified this trend, by contributing to a sharp increase of unit labour costs in 2020. More recently, unit labour costs have grown more moderately than in other euro area and EU countries as wage developments remain contained. The current account balance, had been slightly negative for several years before the crisis, and had worsened to -2.6% of GDP in 2020. Along with important asset price effects, this contributed to deteriorate the net international investment position towards -34% of GDP in 2021, which is considerably below what fundamentals would suggest for the French economy.Both cost and non-cost competitiveness are expected to improve over the medium term, when the effects of the recent policy actions will fully materialise. However, there are export sectors facing downward risks linked to a possible long-term impact of the COVID-19 crisis, the developments of the war in Ukraine and environmental policies (e.g. aircraft and tourism industry). In the medium term, labour productivity growth is expected to remain subdued, which still represents some risks to achieving a durable improvement in cost competitiveness. Demand for French exports is forecast to recover by 2023, assuming above mentioned downside risks subside. Along with a limited terms-of-trade impact from commodity prices, this is forecast to help stabilizing external balances. The ‘France Relance’ plan aims at fostering France’s competitiveness by encouraging the digitalization of the economy, the entry of the youth into the labour market and by diminishing taxes on production by EUR 10 billion. It also entails a specific support plan for the aviation sector. A range of measures had been taken before the pandemic to address the weak competitiveness, such as an additional a reduction of employers' social contributions for employees earning below 1.6 times the minimum wage. Several measures address the issue of sluggish productivity. The PACTE Law, adopted in May 2019, aims at fostering firms’ growth by reforming firm-size thresholds, improving the restructuring procedure and encouraging target-based compensation.Action has been taken to make the labour market more efficient by improving social dialogue and strengthening collective bargaining within firms. The unemployment benefit reform, implemented in October 2021, aims at reducing excessive reliance on temporary jobs in some sectors, and changed the eligibility criteria and compensation rules to make them more conducive to employment.Public debtGeneral government debt rose sharply, to 114.6% of GDP in 2020 as a result of the COVID-19 crisis. Despite its decline to almost 113% in 2021 due to the strong economic rebound, public debt remains very high. This constitutes a vulnerability for the economy as it reduces the fiscal space available to respond to future shocks and weighs on growth prospects, by crowding out productive public expenditure and requiring a high tax burden. Refinancing risks have been mitigated by the lengthening of the average debt maturity. The investor base remains diverse, both by type and geographically. The government sector is a significant contributor to France's negative total Net International Investment Position (NIIP). Risks stemming from the high public debt are compounded by the high private debt. After rising sharply by 21 pps. to 174% of GDP in 2020, private indebtedness remained stable in 2021 in spite of the strong economic rebound. Fundamentals-based and prudential benchmarks point to significant deleveraging needs for households and non-financial corporations. The government deficit ratio declined by 2.4 pps. to 6.5% in 2021, mainly due to the economic rebound. The deficit ratio is projected to keep falling in 2022 and 2023, while remaining above 3% of GDP. Public debt ratio is expected to keep falling in 2022 and 2023, while remaining at high levels over the medium term. Medium-term sustainability risks are assessed as high. The increase in corporate indebtedness during the crisis coincided with the build-up of corporate liquidity buffers. Sizeable State loan guarantees has prevented a spike in corporate bankruptcies, and there are no signs at this stage about a future surge of bankruptcies or a wave of insolvencies. However, the possibility that these guarantees could be called on implies a downward risk to public finances. Non-performing loans are low but a possible increase when support measures are phased out represents a risk to the financial system. Between 2015 and 2019, there has been no structural consolidation of public finances, and the sharp deterioration in 2020 aggravated medium-term sustainability challenges. A reform of an organic law on the modernisation of public finances management entered into force in 2022. It includes a multiannual expenditure rule applicable to total public spending and the extension of the prerogatives of the national fiscal council (High Council of Public Finances, HCFP). In addition, an  evaluation of public spending is planned, to identify the most efficient expenditures favouring growth, social inclusion and the ecological and digital transition. The contribution of these measures to consolidating public finances in the medium and long term and to ensuring a sustained reduction of public debt will depend on its implementation, which will warrant close monitoring. The pension reform, aimed at unifying the currently existing 42 different regimes, was put on hold and the timeline for the next steps has so far not been announced. Significant fiscal efforts are needed to put France’s public debt on a sustained downward trajectory.Imbalances (unsustainable trends, vulnerabilities and associated risks) 
 
  
 
average to significantly below that level (at 20.1% 
in  2021  compared  to  an  EU  average  of  31.9%). 
These  cuts  in  social  contributions  and  income 
taxes  have  been  very  targeted,  leaving  the  tax 
wedge  at  comparatively  high  levels  for  workers 
earning the average wage or above. The tax wedge 
remains  high  also  for  second  earners  (see  Graph 
A18.1). All in all, the reforms increased the ability 
of  the  tax  and  benefits  system  to  reduce  income 
inequality (as measured by the effect of taxes and 
benefits  on  the  GINI  coefficient  which  is  now 
above the EU average).  

France 
is  doing  moderately  well  on 
digitalisation  of  the  tax  administration. 
Digitalisation  can  help  reduce  tax  arrears  and  cut 
compliance  costs.  Outstanding  tax  arrears  have 
declined  slightly  by  0.2  pp.  to  6.4%  of  total  net 
revenue.  This  is  significantly  below  the  EU27 
average of 31.8%, though that average is inflated 
by very large values in a few Member States. The 
VAT gap (an indicator of the effectiveness of VAT 
enforcement  and  compliance)  has  decreased  by 
0.5  pp  and  it  stands  at  7.4%,  below  the  EU-wide 
gap  of 10.5%. Furthermore, the average forward-
looking effective corporate income tax  rates were 
considerably above the EU average in 2020.   

ANNEX 18: TAXATION 
ANNEX 18: TAXATION 

This  Annex  provides  an 
indicator-based 
overview  of  France’s  tax  system.  It  includes 
information  on  the  tax  structure,  i.e.  the  types  of 
tax that France derives most revenue from, the tax 
burden  for  workers,  and  the  progressivity  and 
redistributive  effect  of  the  tax  system.  It  also 
provides 
tax  collection  and 
compliance  and  on  the  risks  of  aggressive  tax 
planning. 

information  on 

France’s tax revenues are high in relation to 
GDP across all tax types. Total tax revenue was 
45.6% of GDP in 2020 (among the highest in the 
EU)  compared  to  the  EU  average  of  40.1%.  Tax 
revenues were above the EU average across major 
tax  types  including  taxes  on  labour,  consumption 
and  capital.  Tax  revenues  have  also  increased 
since  2010,  while  a  slight  decrease  is  observable 
since  2018, 
labour  and 
consumption taxation. Recurrent property taxation, 
a  relatively  growth-friendly  tax  source,  generates 
3% of GDP in revenue, the highest in the EU, while 
the revenue from environmental taxation (at 2.2% 
of GDP) is at the EU average.  

in  particular 

in 

France’s  labour  tax  burden  is  very  high 
except  for  workers  earning  low  wages.  A 
series of tax reforms have reduced the tax wedge 
(a  measure  of  the  difference  between  the  wage 
cost for employers and the net wage for workers) 
in particular for low-wage earners. Between 2010 
and 2021, the tax wedge for workers earning 50% 
of the average wage was cut from close to the EU 

Table A18.1: Taxation indicators 

(1) Forward-looking effective tax rate (OECD). 
(*) EU-27 simple average as there is no aggregated EU-27 value. 

Source: European Commission and OECD 

60 

2010201820192020202120102018201920202021Total taxes (including compulsory actual social contributions) (% of GDP)42.346.345.345.637.940.139.940.1Labour taxes (as % of GDP)22.224.123.123.520.020.720.721.5Consumption taxes (as % of GDP)10.711.711.611.410.811.111.110.8Capital taxes (as % of GDP)9.410.410.610.77.18.28.17.9Total property taxes (as % of GDP)4.04.64.54.61.92.22.22.3Recurrent taxes on immovable property (as % of GDP)2.93.13.03.01.11.21.21.2Environmental taxes as % of GDP1.92.42.32.22.42.42.42.2Tax wedge at 50% of Average Wage (Single person) (*)34.127.221.415.820.133.932.432.031.531.9Tax wedge at 100% of Average Wage (Single person) (*)49.947.447.246.647.041.040.240.139.939.7Corporate Income Tax - Effective Average Tax rates (1) (*)31.731.729.419.819.519.3Difference in GINI coefficient before and after taxes and cash social transfers (pensions excluded from social transfers)7.98.28.511.98.47.97.48.3Outstanding tax arrears: Total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)6.66.431.931.8VAT Gap (% of VTTL)7.97.411.210.5Dividends, Interests and Royalties (paid and received) as a share of GDP (%)4.54.83.610.710.5FDI flows through SPEs (Special Purpose Entities), % of total FDI flows (in and out)0.00.047.846.236.7Tax structureProgressivity & fairnessTax administration & complianceFinancial Activity RiskFranceEU-27 
 
 
 
  
 
 
 
Graph A18.1: Tax wedge indicators 

The tax wedge is defined as the sum of personal income taxes and employee and employer social security contributions net of 
family allowances, expressed as a percentage of total labour costs (the sum of the gross wage and social security contributions 
paid by the employer). It is calculated for specific types of tax payers in terms of household composition and income level 
expressed as % of average wage. Data on tax wedges can be consulted in the ‘Tax and benefit database’ by ECFIN 
https://europa.eu/economy_finance/db_indicators/tab/ 
(1) The second earner average tax wedge measures how much extra personal income tax (PIT) plus employee and employer social 
security contributions (SSCs) the family will have to pay as a result of the second earner entering employment, as a proportion of 
the second earner’s gross earnings plus the employer SSCs due on the second earner’s income. For a more detailed discussion see 
OECD (2016), “Taxing Wages 2016”, OECD Publishing, Paris. http://dx.doi.org/10.1787/tax_wages-2016-en  
(*) EU-27 simple average as there is no aggregated EU-27 value. 

Source: European Commission 

61 

20.141.147.054.047.7At 50% of Average Wage (Singleperson)At 67% of Average Wage (Singleperson)At 100% of Average Wage (Singleperson)At 167% of Average Wage (Singleperson)For second earner at 67% of AverageWage (Two earner couple, 1st earner100% of AW) (1)Tax wedge 2021 (%)FREU-27 (*) 
  
 
ANNEX 19: KEY ECONOMIC AND FINANCIAL INDICATORS 
ANNEX 19: KEY ECONOMIC AND FINANCIAL INDICATORS 

Table A19.1: Key economic and financial indicators 

(1) NIIP excluding direct investment and portfolio equity shares 
(2) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches.  
Source: Eurostat and ECB, as of 02-05-2022, where available; European Commission for forecast figures (Spring forecast 2022) 

62 

2004-072008-122013-1820192020202120222023Real GDP (y-o-y)2.30.41.31.8-7.97.03.11.8Potential growth (y-o-y)1.81.20.90.90.91.21.41.4Private consumption (y-o-y)2.30.61.21.8-7.14.73.42.0Public consumption (y-o-y)1.71.51.21.0-3.26.31.70.5Gross fixed capital formation (y-o-y)3.9-0.91.84.0-8.611.62.02.9Exports of goods and services (y-o-y)4.51.23.51.6-15.89.38.37.5Imports of goods and services (y-o-y) 6.01.23.92.3-11.98.06.76.0Contribution to GDP growth:Domestic demand (y-o-y)2.50.51.32.1-6.56.72.71.9Inventories (y-o-y)0.2-0.10.20.0-0.20.00.1-0.4Net exports (y-o-y)-0.40.0-0.2-0.3-1.10.20.30.3Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.50.40.20.20.40.50.60.6Capital accumulation (y-o-y)0.80.60.50.60.30.60.60.6Total factor productivity (y-o-y)0.60.30.20.20.10.10.20.2Output gap1.8-1.1-1.01.9-7.0-1.70.00.4Unemployment rate8.79.09.98.48.07.97.67.6GDP deflator (y-o-y)2.11.10.81.32.50.82.23.0Harmonised index of consumer prices (HICP, y-o-y)1.91.90.91.30.52.14.93.1Nominal compensation per employee (y-o-y)3.02.31.50.0-2.94.93.83.3Labour productivity (real, hours worked, y-o-y)1.00.21.00.40.4-0.8-1.21.0Unit labour costs (ULC, whole economy, y-o-y)1.52.10.8-0.74.4-0.21.81.9Real unit labour costs (y-o-y)-0.50.90.0-1.91.8-1.0-0.4-1.1Real effective exchange rate (ULC, y-o-y)0.6-0.30.2-4.6....Real effective exchange rate (HICP, y-o-y)0.0-1.20.3-1.41.5-0.4..Net savings rate of households (net saving as percentage of net disposable income)9.210.08.59.215.7...Private credit flow, consolidated (% of GDP)8.65.65.27.912.96.5..Private sector debt, consolidated (% of GDP)110.9131.7143.0152.6173.6167.9..of which household debt, consolidated (% of GDP)42.953.057.262.268.767.0..of which non-financial corporate debt, consolidated (% of 68.078.885.890.4105.0100.9..Gross non-performing debt (% of total debt instruments and total loans and advances) (2)2.64.23.42.22.0...Corporations, net lending (+) or net borrowing (-) (% of GDP)0.90.9-0.1-0.4-1.4-0.2-0.8-0.8Corporations, gross operating surplus (% of GDP)18.017.417.418.416.919.018.618.8Households, net lending (+) or net borrowing (-) (% of GDP)2.33.72.82.88.05.63.73.1Deflated house price index (y-o-y)9.7-0.3-0.32.54.4...Residential investment (% of GDP)6.36.46.16.56.16.8..Current account balance (% of GDP), balance of payments0.2-0.7-0.7-0.3-1.9-0.6-1.1-0.1Trade balance (% of GDP), balance of payments0.1-1.3-0.7-0.9-1.9-1.2..Terms of trade of goods and services (y-o-y)-0.7-0.40.70.90.6-0.9-3.60.9Capital account balance (% of GDP)0.00.00.00.10.10.5..Net international investment position (% of GDP)-4.8-11.9-16.2-25.3-30.2-34.5..NENDI - NIIP excluding non-defaultable instruments (% of GDP) -6.7-23.8-30.9-34.8-41.9-40.6..IIP liabilities excluding non-defaultable instruments (% of GDP) 175.3239.1237.8258.0298.6287.9..Export performance vs. advanced countries (% change over 5 -4.3-9.3-4.1-2.1-6.4...Export market share, goods and services (y-o-y)-4.4-4.00.5-0.7-5.6-0.63.53.1Net FDI flows (% of GDP)1.71.51.00.21.6-0.6..General government balance (% of GDP)-3.0-5.5-3.4-3.1-8.9-6.5-4.6-3.2Structural budget balance (% of GDP)..-2.8-3.3-4.4-5.3-4.5-3.3General government gross debt (% of GDP)65.683.196.397.4114.6112.9111.2109.1forecast 
 
 
 
 
  
 
ANNEX 20: DEBT SUSTAINABILITY ANALYSIS 
ANNEX 20: DEBT SUSTAINABILITY ANALYSIS 

‘adverse interest-growth rate’ scenario assumes a 
in  the 
less  favourable  snowball  effect  than 
baseline.  In  the  ‘financial  stress’  scenario,  the 
country  temporarily  faces  higher  market  interest 
rates in 2022.  

Graph 2 shows the outcome of the stochastic 
projections.  These  projections  show  the  impact 
on  debt  of  2  000  different  shocks  affecting  the 
government’s 
economic 
growth,  interest  rates  and  exchange  rates.  The 
cone covers 80% of all the simulated debt paths, 
therefore excluding tail events. 

budgetary 

position, 

Table  2  shows  the  S1  and  S2  fiscal 
sustainability 
indicators  and  their  main 
drivers.  S1  measures  the  consolidation  effort 
needed to bring debt to 60% of GDP in 15 years. 
S2  measures  the  consolidation  effort  required  to 
stabilise  debt  over  an  infinite  horizon.  The  initial 
budgetary position measures the effort required to 
cover  future  interest  payments,  the  ageing  costs 
component  accounts  for  the  need  to  absorb  the 
projected 
public 
expenditure  such  as  pensions,  health  care  and 

in  ageing-related 

change 

This  annex  assesses  fiscal  sustainability 
risks  for  France  over  the  short,  medium  and 
long term. It follows the same multi-dimensional 
approach as the 2021 Fiscal Sustainability Report, 
updated  on  the  basis  of  the  Commission  2022 
spring forecast. 

Table  1  presents 
the  baseline  debt 
projections.  It  shows  the  projected  government 
debt  and  its  breakdown  into  the  primary  balance, 
the  snowball  effect  (the  combined  impact  of 
interest payments and nominal GDP growth on the 
debt  dynamics)  and  the  stock-flow  adjustment. 
These projections assume that no new fiscal policy 
measures  are  taken  after  2023,  and  include  the 
expected  positive  impact  of  investments  under 
Next Generation EU. 

Graph  1  shows  four  alternative  scenarios 
around  the  baseline, to  illustrate the  impact 
of changes in assumptions. The ‘historical SPB’ 
scenario  assumes  that  the  structural  primary 
balance (SPB) gradually returns to its past average 
level.  In  the  ‘lower  SPB’  scenario,  the  SPB  is 
permanently  weaker  than  in  the  baseline.  The 

Table A20.1: Debt sustainability for France 

Source: European Commission 

63 

Table 1. Baseline debt projections20192020202120222023202420252026202720282029203020312032Gross debt ratio (% of GDP)97.4114.6112.9111.2109.1108.7107.8107.5107.4107.5107.8108.2108.7109.0Change in debt-0.417.2-1.7-1.7-2.1-0.4-0.9-0.3-0.10.10.30.30.50.4of whichPrimary deficit1.67.65.13.21.71.81.81.92.12.22.22.22.22.3Snowball effect-1.57.0-7.0-4.3-3.6-2.2-2.7-2.2-2.2-2.1-1.9-1.8-1.7-1.9Stock-flow adjustment-0.42.90.2-0.5-0.20.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)16.627.822.019.418.518.818.718.919.119.319.519.720.020.1S1S2Overall index (pps. of GDP)4.60.7of whichInitial budgetary position0.52.0Debt requirement3.8Ageing costs0.4-1.3of whichPensions0.2-2.1Health care0.20.6Long-term care0.20.7Others-0.2-0.5                                                                       Table 2. Breakdown of the S1 and S2 sustainability gap indicators8590951001051101151201252019202120232025202720292031BaselineHistorical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioGraph 1. Deterministic debt projections (% of GDP)p10-p20p20-p40p40-p60p60-p80p80-p90859510511512520192020202120222023202420252026Graph 2. Stochastic debt projections(% of GDP)MedianBaseline 
 
 
 
   
 
long-term  care,  and 
requirement 
measures  the  additional  adjustment  needed  to 
reach the 60% of GDP debt target. 

the  debt 

Finally,  the  heat  map  presents  the  overall 
fiscal  sustainability  risk  classification.  The 
short-term  risk  category  is  based  on  the  S0 
indicator,  an  early-detection  indicator  of  fiscal 
stress in the upcoming year. The medium-term risk 
category  is  derived  from  the  debt  sustainability 
analysis  (DSA)  and  the  S1  indicator.  The  DSA 
assesses  risks  to  sustainability  based  on  several 
criteria: the projected debt level in 10 years’ time, 
the debt trajectory (‘peak year’), the plausibility of 
fiscal  assumptions  and  room  for  tighter  positions 
if  needed 
the 
probability  of  debt  not  stabilising  in  the  next  5 
years  and  the  size  of  uncertainty.  The  long-term 
risk category is based on the S2 indicator and the 
DSA. 

(‘fiscal  consolidation  space’), 

Moreover,  the  sustainability  gap  indicator  S1 
signals  that  an  adjustment  of  4.6 pps.  of  GDP  of 
the structural primary balance would be needed to 
reduce  debt  to  60%  of  GDP  in  15  years’  time 
(Table 2).  Overall, 
reflect 
vulnerabilities  due  to  the  high  debt  level  and 
sensitivity to adverse shocks. 

the  high 

risks 

the  DSA  points 

Long-term  risks  to  fiscal  sustainability  are 
medium.  Over  the  long  term,  the  sustainability 
gap indicator S2 (at 0.7 pp. of GDP) points to low 
risks,  while 
to  substantial 
vulnerabilities,  leading  to  the  overall  medium  risk 
assessment.  The  S2  indicator  suggests  that  the 
projected  decline  in  public  pension  expenditure 
relative  to  GDP  will  help  stabilise  debt  over  the 
long  term,  despite  budgetary  pressures  stemming 
from health care and long-term care (table 2). 

short-term 

Overall, 
fiscal 
sustainability are low. The Commission’s early-
detection  indicator  (S0)  does  not  signal  major 
short-term fiscal risks.  

risks 

to 

Medium-term  risks  to  fiscal  sustainability 
are  high.  The  two  elements  of  the  Commission’s 
medium-term  analysis  lead  to  this  conclusion. 
First,  the  debt  sustainability  analysis  (DSA)  shows 
that  government  debt  is  projected  to  broadly 
stabilise at the high level of around 110% of GDP 
in 2032 in the baseline (Table 1). This debt path is 
also  sensitive 
to  fiscal, 
macroeconomic  and 
financial  variables,  as 
illustrated by alternative scenarios (some of which 
pointing  to  high  risks)  and  stochastic  simulations. 

to  possible  shocks 

Table A20.2: Heat map of fiscal sustainability risks for France 

(1) Debt level in 2032: green: below 60% of GDP, yellow: between 60% and 90%, red: above 90%. (2) The debt peak year 
indicates whether debt is projected to increase overall over the next decade. Green: debt peaks early; yellow: peak towards the 
middle of the projection period; red: late peak. (3) Fiscal consolidation space measures the share of past fiscal positions in the 
country that were more stringent than the one assumed in the baseline. Green: high value, i.e. the assumed fiscal position is 
plausible by historical standards and leaves room for corrective measures if needed; yellow: intermediate; red: low. (4) Probability 
of the debt ratio exceeding in 2026 its 2021 level: green: low probability, yellow: intermediate, red: high (also reflecting the initial 
debt level). (5) The difference between the 90th and 10th percentiles measures uncertainty, based on the debt distribution under 
2000 different shocks. Green, yellow and red cells indicate increasing uncertainty.  
Source: European Commission (for further details on the Commission’s multi-dimensional approach, see the 2021 Fiscal 
Sustainability Report) 

64 

BaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallMEDIUMMEDIUMHIGHHIGHMEDIUMLOWDebt level (2032), % GDP109107118117111Debt peak year20212021203220322021Fiscal consolidation space83%82%95%83%83%Probability of debt ratio exceeding in 2026 its 2021 level23%Difference between 90th and 10th percentiles (pps. GDP)21LOWMEDIUMDeterministic scenariosStochastic projectionsLOWHIGHHIGHHIGHShort termMedium termLong termOverall                               (S0)Overall     (S1+DSA)S1Debt sustainability analysis (DSA)S2Overall     (S2+DSA)Overall