Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of France and delivering a Council opinion on the 2023 Stability Programme of France
Date: 2023-05-24
Institutions: European Commission, Secretariat-General
Subjects: France, economic policy, economic recovery, economic reform, energy policy, fiscal policy, improvement of housing, professional qualifications, stability pact, stability programme

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 24.5.2023  COM(2023) 610 final  Recommendation for a COUNCIL RECOMMENDATION on the 2023 National Reform Programme of France and delivering a Council opinion on the 2023 Stability Programme of France {SWD(2023) 610 final}  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

on the 2023 National Reform Programme of France and delivering a Council opinion on 
the 2023 Stability Programme of France 

THE COUNCIL OF THE EUROPEAN UNION, 

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

Having regard to Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of 
the  surveillance  of  budgetary  positions  and  the  surveillance  and  coordination  of  economic 
policies1, and in particular Article 5(2) thereof, 

Having  regard  to  Regulation  (EU)  No  1176/2011  of  the  European  Parliament  and  of  the 
Council  of  16  November  2011  on  the  prevention  and  correction  of  macroeconomic 
imbalances2, and in particular Article 6(1) thereof, 

Having regard to the recommendation of the European Commission, 

Having regard to the resolutions of the European Parliament, 

Having regard to the conclusions of the European Council, 

Having regard to the opinion of the Employment Committee, 

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

Having regard to the opinion of the Social Protection Committee, 

Having regard to the opinion of the Economic Policy Committee, 

Whereas: 

(1) 

Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council3,  which 
established  the  Recovery  and  Resilience  Facility,  entered  into  force  on  19  February 
2021. The Recovery and Resilience Facility provides financial support to the Member 
States  for  the  implementation  of  reforms  and  investments,  entailing  a  fiscal  impulse 
financed  by  the  EU.  In  line  with  the  European  Semester  priorities,  it  contributes  to 
economic  and  social  recovery  and  to  the  implementation  of  sustainable  reforms  and 
investments,  in  particular  to  promote  the  green  and  digital  transition  and  make  the 
Member States’ economies more resilient. It also helps strengthen public finances and 
boost  growth  and  job  creation  in  the  medium  and  long  term,  improve  territorial 
cohesion  within  the  EU  and  support  the  continued  implementation  of  the  European 
Pillar of Social Rights. The maximum financial contribution per Member State under 
the Recovery and Resilience Facility was updated on 30 June 2022 in accordance with 
Article 11(2) of Regulation (EU) 2021/241.  

1 
2 
3 

OJ L 209, 2.8.1997, p. 1. 
OJ L 306, 23.11.2011, p. 25. 
Regulation  (EU)  2021/241  of  the  European  Parliament  and  of  the  Council  of  12  February  2021 
establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17). 

EN 

1 

  EN 

                                                 
(2) 

On 22 November 2022, the Commission adopted the 2023 Annual Sustainable Growth 
Survey4,  marking  the  start  of  the  2023  European  Semester  for  economic  policy 
coordination. The European Council endorsed the priorities of the survey around the 
four  dimensions  of  competitive  sustainability  on  23  March  2023.  On  22  November 
2022,  on  the  basis  of  Regulation  (EU)  No  1176/2011,  the  Commission  also  adopted 
the 2023 Alert Mechanism Report, in which it identified France as one of the Member 
States that may be affected or may be at risk of being affected by imbalances, and for 
which an in-depth  review would be needed. On  the same date, the Commission also 
adopted  an  opinion  on  France’s  2023  draft  budgetary  plan.  The  Commission  also 
adopted a recommendation for a Council recommendation on the economic policy of 
the euro area, which the Council adopted on 16 May 2023, as well as the proposal for 
the 2023 Joint Employment Report analysing the implementation of the Employment 
Guidelines  and  the  principles  of  the  European  Pillar  of  Social  Rights,  which  the 
Council adopted on 13 March 2023.  

(3)  While the EU economies  are showing remarkable resilience, the  geopolitical  context 
continues  to  have  a  negative  impact.  As  the  EU  stands  firmly  with  Ukraine,  the  EU 
economic  and  social  policy  agenda  is  focused  on  reducing  the  negative  impact  of 
energy shocks on both vulnerable households and companies in the short term, and on 
keeping  up  efforts  to  deliver  on  the  green  and  digital  transition,  support  sustainable 
and inclusive growth, safeguard macroeconomic stability and increase resilience in the 
medium  term.  It  also  focuses  heavily  on  increasing  the  EU’s  competitiveness  and 
productivity. 

(4) 

On  1  February  2023,  the  Commission  issued  the  Communication  A  Green  Deal 
Industrial  Plan  for  the  Net-Zero  Age5  to  boost  the  competitiveness  of  the  EU’s  net-
zero  industry  and  support  the  fast  transition  to  climate  neutrality.  The  plan 
complements  ongoing  efforts  under  the  European  Green  Deal  and  REPowerEU.  It 
aims to provide a more supportive environment for scaling up the EU’s manufacturing 
capacity  for  the  net-zero  technologies  and  products  required  to  meet  the  EU’s 
ambitious climate targets, as well as ensuring access to relevant critical raw materials, 
including  by  diversifying  sourcing,  properly  exploiting  geological  resources  in 
Member States and maximising the recycling  of raw materials. The plan  is  based on 
four pillars:  a predictable and simplified regulatory  environment,  speeding up access 
to finance, enhancing skills, and open trade for resilient supply chains.  On 16 March 
2023,  the  Commission  also  issued  the  Communication  Long-term  competitiveness  of 
the EU: looking beyond 20306, structured along nine mutually reinforcing drivers with 
the objective to work towards a growth enhancing regulatory framework. It sets policy 
improvements,  well  focused 
priorities  aimed  at  actively  ensuring  structural 
investments and regulatory measures for the long-term competitiveness of the EU and 
its Member States. The recommendations below help address those priorities. 

(5) 

In 2023, the European Semester for economic policy coordination continues to evolve 
in  line  with  the  implementation  of  the  Recovery  and  Resilience  Facility.  Fully 
implementing  the  recovery  and  resilience  plans  remains  essential  for  delivering  the 
policy priorities under the European Semester, as the plans address all or a significant 
subset  of  the  relevant  country-specific  recommendations  issued  in  recent  years.  The 
2019, 2020 and 2022 country-specific recommendations remain equally relevant also 

4 
5 
6 

COM(2022) 780 final. 
COM(2023) 62 final.  
COM(2023) 168 final.  

EN 

2 

  EN 

                                                 
(6) 

(7) 

for  recovery  and  resilience  plans  revised,  updated  or  amended  in  accordance  with 
Articles 14, 18 and 21 of Regulation (EU) 2021/241.  
The REPowerEU Regulation7 adopted on 27 February 2023 aims to rapidly phase out 
the  EU’s  dependence  on  Russian  fossil  fuel  imports.  This  will  contribute  towards 
energy security and the diversification of the EU’s energy supply, while increasing the 
uptake of renewables, energy storage capacities and energy efficiency. The Regulation 
enables  Member  States  to  add  a  new  REPowerEU  chapter  to  their  national  recovery 
and  resilience  plans  in  order  to  finance  key  reforms  and  investments  that  will  help 
achieve the REPowerEU objectives. They will also help boost the competitiveness of 
the EU’s net-zero industry as outlined in the Green Deal  Industrial Plan for the Net-
Zero Age and address the energy-related country-specific recommendations issued to 
the  Member  States  in  2022  and,  where  applicable,  in  2023.  The  REPowerEU 
Regulation  introduces  a  new  category  of  non-repayable  financial  support,  made 
available  to  Member  States  to  finance  new  energy-related  reforms  and  investments 
under their recovery and resilience plans.  

On 8 March 2023, the Commission adopted a communication providing fiscal policy 
guidance for 2024. It aims to support the preparation of Member States’ stability and 
thereby  strengthen  policy  coordination8.  The 
convergence  programmes  and 
Commission recalled that the general escape clause of the Stability and Growth Pact 
will be deactivated at  the end of 2023.  It  called  for fiscal  policies in  2023-2024 that 
ensure  medium-term  debt  sustainability  as  well  as  raise  potential  growth  in  a 
sustainable manner. Member States were invited to set out in their 2023 stability and 
convergence programmes how their fiscal plans will ensure that the 3% of GDP deficit 
reference value is adhered to as well as plausible and continuous debt reduction, or for 
debt  to  be  kept  at  prudent  levels  in  the  medium  term.  The  Commission  invited 
Member States to phase out national fiscal measures introduced to protect households 
and  firms  from  the  energy  price  shock,  starting  with  the  least  targeted  ones.  It 
indicated that, if support measures needed to be extended because of renewed energy 
price  pressures,  Member  States  should  target  such  measures  much  better  than  in  the 
past  towards  vulnerable  households  and  firms.  The  Commission  proposed  that  the 
fiscal  recommendations would be quantified and differentiated and be formulated on 
the basis of net primary expenditure, as proposed in its Communication on orientations 
for  a  reform  of  the  EU  economic  governance  framework9.  It  recommended  that  all 
Member States should  continue to  protect  nationally  financed investment and ensure 
the  effective  use  of  the  Recovery  and  Resilience  Facility  and  other  EU  funds,  in 
particular  in  light  of  the  green  and  digital  transition  and  resilience  objectives.  The 
Commission  indicated  that  it  will  propose  to  the  Council  to  open  deficit-based 
excessive deficit procedures in spring 2024 on the basis of the outturn data for 2023, in 
line with existing legal provisions. 

(8) 

On  26  April  2023,  the  Commission  presented  legislative  proposals  to  implement  a 
comprehensive  reform of the EU's economic  governance rules. The central  objective 
of the proposals is to strengthen public debt sustainability and promote sustainable and 

7 

8 
9 

Regulation  (EU)  2023/435  of  the  European  Parliament  and  of  the  Council  of  27  February  2023 
amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans 
and  amending  Regulations  (EU)  No  1303/2013,  (EU)  2021/1060  and  (EU)  2021/1755,  and  Directive 
2003/87/EC (OJ L 63, 28.2.2023, p. 1). 
COM(2023) 141 final. 
COM(2022) 583 final. 

EN 

3 

  EN 

                                                 
(9) 

inclusive growth in all Member States through reforms and investments. The proposals 
aim at providing Member States with more control over the design of their medium-
term plans, while putting in place a more stringent enforcement regime to ensure that 
Member  States  deliver  on  the  commitments  undertaken  in  their  medium-term  fiscal-
structural plans. The objective is to conclude the legislative work in 2023. 

On  28  April  2021,  France  submitted  its  national  recovery  and  resilience  plan  to  the 
Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant 
to  Article  19  of  Regulation  (EU)  2021/241,  the  Commission  assessed  the  relevance, 
effectiveness,  efficiency  and  coherence  of  the  recovery  and  resilience  plan,  in 
accordance with the assessment guidelines of Annex V to that Regulation. On 13 July 
2021,  the  Council  adopted  its  Decision  on  the  approval  of  the  assessment  of  the 
recovery and resilience plan for France10. The release of instalments is conditional on 
a decision by the Commission,  taken in  accordance with  Article 24(5) of  Regulation 
(EU)  2021/241,  that  France  has  satisfactorily  fulfilled  the  relevant  milestones  and 
targets  set  out  in  the  Council  Implementing  Decision.  Satisfactory  fulfilment 
presupposes  that  the  achievement  of  preceding  milestones  and  targets  has  not  been 
reversed. 

(10)  On 11 May 2023, France submitted its 2023 National Reform Programme and, on 11 
May 2023, its 2023 Stability Programme, in line with Article 4(1) of Regulation (EC) 
No  1466/97.  To  take  account  of  their  interlinkages,  the  two  programmes  have  been 
assessed  together.  In  accordance  with  Article  27  of  Regulation  (EU)  2021/241,  the 
2023  National  Reform  Programme  also  reflects  France’s  biannual  reporting  on  the 
progress made in achieving its recovery and resilience plan.  

in 

addressing 

(11)  The Commission published the 2023 country report for France  11 on 24 May 2023. It 
assessed  France’s  progress 
country-specific 
recommendations adopted by the Council between 2019 and 2022, and took stock of 
France’s  implementation  of  the  recovery  and  resilience  plan.  Based  on  this  analysis, 
the  country  report  identified  gaps  with  respect  to  those  challenges  that  are  not 
addressed  or  only  partially  addressed  by  the  recovery  and  resilience  plan,  as  well  as 
new and emerging challenges. It also assessed France’s progress on implementing the 
European  Pillar  of  Social  Rights  and  on  achieving  the  EU  headline  targets  on 
employment, skills and poverty reduction, as well as progress in  achieving the UN’s 
Sustainable Development Goals.  

relevant 

the 

(12)  The  Commission  carried  out  an  in-depth  review  under  Article  5  of  Regulation  (EU) 
No 1176/2011 for France and published its results on 24 May 202312. It concluded that 
France  is  experiencing  macroeconomic  imbalances.  In  particular,  vulnerabilities 
related  to  high  government  debt,  and  competitiveness  and  low  productivity  growth, 
which  have  cross-border  relevance,  remain  present  but  have  shown  some  signs  of 
reduction.  Government  debt  has  been  declining  since  the  rebound  in  GDP  in  2021, 
following  an  increase  during  the  pandemic.  In  2022,  various  fiscal  measures 
significantly mitigated the impact of the energy crisis but slowed debt reduction. Debt 
is forecast to further decline this year and next, but it is projected to enter an upward 
trend again thereafter in the absence of policy action, remaining high and above pre-

10 

11 
12 

Council Implementing Decision of 13 July 2021 on the approval of the assessment of the recovery and 
resilience plan for France (ST 10162/21; ST 10162/21 ADD 1). 
SWD(2023) 610 final. 
SWD(2023) 633 final. 

EN 

4 

  EN 

                                                 
pandemic levels, and medium-term fiscal sustainability challenges remain high. Policy 
measures  taken  in  recent  years  aiming  at  enhancing  potential  growth  might  help 
correct the projected increase in public debt in the medium term. Several reforms have 
been adopted to boost cost competitiveness. A small positive effect on competitiveness 
is  already  visible,  and  their  full  impact  is  expected  to  materialise  over  the  coming 
years.  Likewise,  labour  productivity  is  expected  to  benefit  from  the  effective 
implementation  of planned investments  and reforms.  The French  economy  displayed 
resilience over the last year, as cost competitiveness was less affected by increases in 
energy  prices  than  in  the  rest  of  the  euro  area.  Exports  are  improving  owing  to  the 
further  recovery  of  cross-border  tourism  and  the  aircraft  industry,  which  were  much 
affected by the pandemic. While private sector debt increased during the worst of the 
pandemic, higher corporate borrowing went hand in hand with increases in equity and 
accumulation  of  liquidity  buffers.  Higher  interest  rates  may  make  public  and  private 
deleveraging more difficult. The policy response has been favourable, but there remain 
challenges,  centred  on  public  finance  management.  An  effective  implementation  of 
recently adopted reforms remains central to further reduce vulnerabilities, namely the 
reform  of  public  finances  management  and  the  new  mechanism  to  conduct  annual 
public spending evaluations. Both actions are crucial to  continue to curb expenditure 
and keep public debt on a sustained downward trend. Moreover, the government has 
adopted  a  reform  of  the  public  pension  system  that  is  expected  to  help  public  debt 
sustainability. 

(13)  Based on data validated by Eurostat,13 Frances’s general government deficit decreased 
from 6.5 % of GDP in 2021 to 4.7 % in 2022, while general government debt fell from 
112.9% of GDP at the end of 2021 to 111.6% at the end of 2022. On 24 May 2023, the 
Commission published a report under Article 126(3) TFEU;14 the report discussed the 
budgetary situation of France, as its general government deficit in 2022 exceeded the 
3%  of  GDP  Treaty  reference  value,  while  its  general  government  debt  exceeded  the 
60% of GDP Treaty reference value and did not respect the debt reduction benchmark. 
The report concluded that the deficit and debt criteria were not fulfilled. Also, in line 
with the Communication of 8 March 2023,15 the Commission did not propose to open 
new excessive deficit procedures in spring 2023; in turn, the Commission stated that it 
would  propose  to  the  Council  to  open  deficit-based  excessive  deficit  procedures  in 
spring 2024, on the basis of the outturn data for 2023. France should take account of 
this in the execution of its 2023 budget and in preparing the Draft Budgetary Plan for 
2024. 

(14)  The  general  government  balance  has  been  impacted  by  the  fiscal  policy  measures 
adopted to mitigate the economic and social impact of the increase in energy prices. In 
2022, such revenue-decreasing measures included the reduction of the domestic tax on 
final  electricity  consumption  (TICFE);  while  such  expenditure-increasing  measures 
included  direct  subsidies  to  compensate  gas  and  electricity  suppliers  for  the  cap  on 
regulated  gas  and  electricity  prices,  subsidies  to  limit  the  increase  of  retail  transport 
fuel  prices  and  to  energy-intensive  enterprises,  as  well  as  transfers  to  low-income 
households.  The  cost  of  these  measures  was  partly  offset  by  new  taxes  on  windfall 
profits  of  energy  producers  and  suppliers,  namely  an  exceptional  solidarity  tax  on 

13 

14 

15 

Eurostat-Euro Indicators, 47/2023, 21.4.2023 

COM(2023) 633 final, 24.5.2023. 

COM(2023) 141 final, 8.3.2023. 

EN 

5 

  EN 

                                                 
fossil fuel and refining companies and a mechanism for capping infra-marginal market 
revenues from electricity generation, as well as indirect tax revenues from and lower 
subsidies to renewable energy producers, stemming from the positive gap between the 
market  and  the  reference  electricity  prices.  The  Commission  estimates  the  net 
budgetary  cost  of  these  measures  at  0.9%  of  GDP  in  2022.  At  the  same  time,  the 
estimated cost of COVID-19 temporary emergency measures dropped to 0.5% of GDP 
in 2022, from 2.6% in 2021. 

(15)  On 18 June 2021, the Council recommended that in 2022 France16 use the Recovery 
and  Resilience  Facility  to  finance  additional  investment  in  support  of  the  recovery, 
while  pursuing  a  prudent  fiscal  policy.  Moreover,  France  should  preserve  nationally 
financed investment. 

(16)  According to the Commission estimates, the fiscal stance17 in 2022 was supportive, at 
- 2.0%  of  GDP.  As  recommended  by  the  Council,  France  continued  to  support  the 
recovery  with  investments  financed  by  the  Recovery  and  Resilience  Facility. 
Expenditure financed by Recovery and Resilience Facility grants and other EU funds 
amounted to 0.6% of GDP in 2022 (0.7% of GDP in 2021). The marginal decrease in 
expenditure financed by  Recovery and Resilience Facility grants and other EU funds 
in 2022 was due to the frontloaded implementation of the plan over the first two years 
thereof. Nationally financed investment provided an expansionary contribution of 0.1 
percentage points to the fiscal stance.18 France therefore preserved nationally financed 
investment,  as  recommended  by  the  Council.  At  the  same  time,  the  growth  in 
nationally  financed  primary  current  expenditure  (net  of  new  revenue  measures) 
provided  an  expansionary  contribution  of  1.7  percentage  points  to  the  fiscal  stance. 
This  significant  expansionary  contribution  included  the  additional  impact  of  fiscal 
policy measures to mitigate the economic and social impact of the increase in energy 
prices  (additional  net  budgetary  cost  of  0.8%  of  GDP).  At  the  same  time,  the 
indexation  of  pensions,  social  benefits  and  public  wages  also  contributed  (0.4%  of 
GDP)  to  the  growth  in  net  primary  current  expenditure.  France  therefore  did  not 
sufficiently limit the growth in nationally financed current expenditure. The significant 
expansionary  contribution  of  nationally  financed  current  expenditure  was  only 
partially due to the measures to address the economic and social impact of the increase 
in energy prices, as well as the costs to offer temporary protection to displaced persons 
from Ukraine. 

(17)  The macroeconomic scenario underpinning the budgetary projections  in  the Stability 
Programme is favourable in 2023 and thereafter. The government projects real GDP to 
grow by 1.0% in 2023 and 1.6% in 2024. By comparison, the Commission 2023 spring 
forecast projects a lower real GDP growth of 0.7% in 2023 and 1.4% in 2024, mainly 

16 

17 

18 

Council  Recommendation  of  18  June  2021  delivering  a  Council  opinion  on  the  2021  Stability 
Programme of France, OJ C 304, 29.07.2021, p. 43. 
The  fiscal  stance  is  measured  as  the  change  in  primary  expenditure  (net  of  discretionary  revenue 
measures), excluding Covid-19 crisis-related temporary emergency measures but including expenditure 
financed  by  non-repayable  support  (grants)  from  the  Recovery  and  Resilience  Facility  and  other  EU 
funds,  relative  to  medium-term  potential  growth. For  more  details  see  Box 1  in  the  Fiscal  Statistical 
Tables. 
Other  nationally  financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.3 percentage points of GDP, mainly explained by the impact of capital transfers paid in the context of 
the French recovery plan, France Relance, not funded by RRF grants. 

EN 

6 

  EN 

                                                 
(18) 

due  to  lower  contributions  to  growth  of  domestic  demand  in  2023,  stemming  from 
gross fixed capital formation and inventories, and of external demand in 2024. 

In its 2023 Stability Programme, the government expects that the general government 
deficit  ratio  will  increase  to  4.9%  of  GDP  in  2023.  The  increase  in  2023  mainly 
reflects  the  slowing  down  of  economic  activity  and  expected  revenue  shortfalls. 
According to the Programme, the general government debt-to-GDP ratio is expected to 
decrease  from  111.6%  at  the  end  of  2022  to  109.6%  at  the  end  of  2023.  The 
Commission  2023  spring  forecast  projects  a  government  deficit  of  4.7%  of  GDP  for 
2023. This is lower than the deficit projected in the Stability Programme, mainly due 
to a higher tax elasticity expected by the Commission, leading to higher revenues. The 
Commission 2023 spring forecast projects a similar general government debt-to-GDP 
ratio, of 109.6% at the end of 2023. 

(19)  The government balance in 2023 is expected to continue to be impacted by the fiscal 
policy measures adopted to mitigate the economic and social impact of the increase in 
energy prices. They consist of measures extended from 2022, in particular the decrease 
in the TICFE and the direct subsidies to compensate gas and electricity suppliers for 
the  cap  on  regulated  gas  and  electricity  prices,  as  well  as  new  measures  such  as  the 
means-tested transport fuel voucher (“chèque carburant”) for low-income households, 
replacing  the  generalised  rebate  applied  in  2022,  and  the  subsidies  to  micro-,  small- 
and medium-sized enterprises not benefitting from regulated electricity tariffs, to cover 
for the increase in the energy bill until end-2023. The cost of these measures continues 
to  be  partly  offset  by  taxes  on  windfall  profits  on  energy  producers  and  suppliers, 
namely  a  mechanism  for  capping  infra-marginal  market  revenues  from  electricity 
generation,  as  well  as  by  the  indirect  tax  revenues  from  and  lower  subsidies  to 
renewable energy producers, stemming from the positive gap between the market and 
the reference electricity prices. Taking these revenues into account, the net budgetary 
cost  of  the  support  measures  is  projected  in  the  Commission  2023  spring  forecast  at 
1.0 % of GDP in  202319. Most measures in  2023 do not  appear targeted to the most 
vulnerable  households  or  firms,  and  do  not  fully  preserve  the  price  signal  to  reduce 
energy  demand  and  increase  energy  efficiency.  As  a  result,  the  amount  of  targeted 
support measures, to be taken into account in the assessment of compliance with the 
fiscal recommendation for 2023, is estimated in the Commission 2023 spring forecast 
at  0.2%  of  GDP  in  2023  (compared  to  0.1%  of  GDP  in  2022).  Finally,  the  2023 
government  balance  is  expected  to  benefit  from  the  phasing  out  of  COVID-19 
temporary emergency measures of 0.5% of GDP. 

(20)  On  12  July  2022,  the  Council  recommended20  that  France  ensure  in  2023  a  prudent 
fiscal  policy,  in  particular  by  limiting  the  growth  of  nationally  financed  primary 
current expenditure below medium-term potential output growth21, taking into account 
continued temporary and targeted support to households and firms most vulnerable to 
energy  price  hikes  and  to  people  fleeing  Ukraine.  At  the  same  time,  France  should 
stand  ready  to  adjust  current  spending  to  the  evolving  situation.  France  was  also 
recommended  to  expand  public  investment  for  the  green  and  digital  transitions,  and 

19 

20 

21 

The  figure represents the level of annual budgetary cost of those  measures, including current revenue 
and expenditure as well as – where relevant – capital expenditure measures. 
Council  Recommendation  of  12  July  2022  on  the  National  Reform  Programme  of  France  OJ  C  334, 
1.9.2022, p. 79. 
Based  on  the  Commission  2023  spring  forecast,  the  medium-term  (10-year  average)  potential  output 
growth of France is estimated at 6.3% in nominal terms.  

EN 

7 

  EN 

                                                 
(21) 

for  energy  security  taking  into  account  the  REPowerEU  initiative,  including  by 
making use of the Recovery and Resilience Facility and other Union funds. 

In  2023,  the  fiscal  stance  is  projected  in  the  Commission  2023  spring  forecast  to  be 
contractionary  (+0.5%  of  GDP),  in  a  context  of  high  inflation.  This  follows  an 
expansionary fiscal stance in 2022 (-2.0% of GDP). The growth in nationally financed 
primary  current  expenditure  (net  of  discretionary  revenue  measures)  in  2023  is 
projected to provide a contractionary contribution of 0.6% of GDP to the fiscal stance. 
This  includes  the  increased  cost  of  the  targeted  support  measures  to  households  and 
firms  most  vulnerable  to  energy  price  hikes  by  0.1%  of  GDP.  In  sum,  the  projected 
growth  of  nationally  financed  primary  current  expenditure  is  in  line  with  the 
recommendation  of  the  Council.  Expenditure  financed  by  Recovery  and  Resilience 
Facility  grants  and  other  EU  funds  amounted  to  0.4%  of  GDP  in  2023,  while 
nationally  financed  investment  provided  a  neutral  contribution  to  the  fiscal  stance22. 
Therefore,  France  plans  to  finance  additional  investment  through  the  Recovery  and 
Resilience  Facility  and  other  EU  funds,  and  it  plans  to  preserve  nationally  financed 
investment. It plans to finance public investment for the green and digital transitions, 
and  for  energy  security,  such  as  investments  under  the  plan  France  2030  to  foster 
investment in state-of-the-art R&D and in the digital realms, as well as investments in 
renewable  energy in heating systems  and renovation  of public and private buildings, 
measures  supporting  the  decarbonisation  of  industry,  investments  in  sustainable 
transport,  health  and  education,  which  are  partly  funded  by  the  Recovery  and 
Resilience Facility and other EU funds. 

(22)  According  to  the  Stability  Programme  the  general  government  deficit  is  expected  to 
decline to 4.4% of GDP in 2024. The decrease in 2024 mainly reflects the withdrawal 
of most energy support measures, jointly with higher tax elasticities. The programme 
expects the general government debt-to-GDP ratio to remain broadly stable at 109.5% 
at the end of 2024. Based on policy measures known at the cut-off date of the forecast, 
the Commission 2023 spring forecast projects a government deficit of 4.3% of GDP in 
2024. This is lower than the deficit projected in the programme, mainly due to a base 
effect stemming from an already lower deficit projected by the Commission for 2023. 
The Commission 2023 spring forecast projects a similar general government debt-to-
GDP ratio, of 109.5% at the end of 2024.  

(23)  The  Stability  Programme  envisages  the  phasing  out  of  most  of  the  energy  support 
measures in 2024. The Commission currently assumes the net cost of energy support 
measures at 0.2% of GDP in 2024. These estimates hinge upon the assumption of no 
renewed  energy  price  increases.  The  energy  support  measures  that  are  currently 
planned to remain in place in 2024 do not appear targeted to vulnerable households or 
firms.  They  do  not  fully  preserve  the  price  signal  to  reduce  energy  demand  and 
increase energy efficiency. 

(24)  Council Regulation (EC) No 1466/97 calls for an annual improvement in the structural 
budget balance toward the medium-term objective by 0.5% of GDP as a benchmark.23 

22 

23 

Other  nationally  financed  capital  expenditure  is  projected  to  provide  an  expansionary  contribution  of 
0.3 percentage points of GDP, mainly explained by the impact of capital transfers paid in the context of 
the French recovery plan, France Relance, not funded by RRF grants and of the investment plan France 
2030. 
Cf. Article 5 of Council Regulation (EC) No 1466/97, which also requires an adjustment of more than 
0.5%  of  GDP  for  Member  States  with  a  government  debt  exceeding  60%  of  GDP,  or  with  more 
pronounced debt sustainability risks. 

EN 

8 

  EN 

                                                 
Taking into account fiscal sustainability considerations,24 the need to reduce the deficit 
to below the 3% of GDP reference value, and improvement in the structural of at least 
0.7%  of  GDP  for  2024  would  be  appropriate.  To  ensure  such  an  improvement,  the 
growth  in  net  nationally  financed  primary  expenditure25  in  2024  should  not  exceed 
2.3%,  as  reflected  in  this  recommendation.  At  the  same  time,  the  remaining  energy 
support  measures  (currently  estimated  by  the  Commission  at  1.0%  of  GDP  in  2023) 
should be phased out, contingent on energy market developments and starting from the 
least targeted ones, and the related savings should be used to  reduce the government 
deficit.  Based  on  Commission  estimates,  this  would  lead  to  a  growth  in  net  primary 
expenditure below the recommended maximum growth rate for 2024. 

(25)  Assuming  unchanged  policies,  the  Commission  2023  spring  forecast  projects  net 
nationally financed primary expenditure to grow at 3.1% in 2024, which is above the 
recommended  growth  rate.  The  adjustment  projected  in  the  Commission  forecast  is 
less than the savings from the full phasing out of energy support measures. This is due 
to increased investments under the programme France 2030 and the full withdrawal of 
the production tax on firms’ value added. 

(26)  According to the programme, government investment is expected to remain stable at 
3.8%  of  GDP  between  2023  and  2024.  The  programme  refers  to  reforms  and 
investments, that are expected to contribute to fiscal sustainability and sustainable and 
inclusive growth. These include a reform of the governance of public finances  and a 
new  spending  review  mechanism,  reforms  of  the  pension  and  unemployment  benefit 
system,  as  well  as  investments  to  foster  the  green  and  digital  transitions,  which  are 
also  part  of  the  Recovery  and  Resilience  Plan.  The  Stability  Programme  outlines  a 
medium-term  fiscal  path  until  2027.  According  to  the  programme,  the  general 
government deficit is expected to gradually decline to 3.7% of GDP in 2025, to 3.2% 
in 2026 and to 2.7% by 2027. The general government deficit is therefore planned to 
decrease  below  3%  of  GDP  in  2027.  According  to  the  programme,  the  general 
government debt-to-GDP ratio is expected to decrease from 109.5% at the end of 2024 
to 108.3% by the end of 2027. 

(27) 

In accordance with Article 19(3), point (b) and Annex V, criterion 2.2 of Regulation 
(EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually 
reinforcing reforms and investments to be implemented by 2026. The implementation 
of  France’s  recovery  and  resilience  plan  is  underway.  France  submitted  1  payment 
request,  corresponding  to  38  milestones  and  targets  in  the  plan  and  resulting  in  an 
overall  disbursement  of  EUR  7 400 000.  Milestones  reflect  progress 
the 
implementation  of  reforms  in  the  areas  of  public  finance,  housing,  mobility, 
employment,  skills  and health. Several  targets  reflect major investments  in the fields 
of  energy  renovation  of  buildings,  decarbonisation  of  industry,  clean  vehicles, 
research, youth employment, and education. France submitted a revision of its plan in 
April  2023,  including  a  REPowerEU  chapter.  France's  request  to  modify  its  plan  is 
based  on  the  need  to  factor  in  the  high  inflation  experienced  in  2022,  supply  chain 

in 

24 

25 

The Commission estimated that France would need an average annual increase in the structural primary 
balance as a share of GDP of 0.7 percentage points to achieve a plausible debt reduction. This estimate 
was  based  on  the  Commission  autumn  2022  forecast.  The  starting  point  for  this  estimate  was  the 
projected  government  deficit  and  debt  for  2024  which  assumed  the  withdrawal  of  energy  support 
measures in 2024.  
Net  primary  expenditure  is  defined  as  nationally  financed  expenditure  net  of  discretionary  revenues 
measures and excluding interest expenditure as well as cyclical unemployment expenditure. 

EN 

9 

  EN 

                                                 
disruptions  and  the  downward  revision  of  its  maximum  Recovery  and  Resilience 
Facility  grant  allocation.  The  inclusion  of  the  new  REPowerEU  chapter  in  the 
recovery  and  resilience  plan  will  allow  additional  reforms  and  investments  to  be 
financed in support of France’s strategic objectives in the field of energy and the green 
transition. The systematic and effective involvement of local and regional authorities, 
social  partners  and  other  relevant  stakeholders  remains  important  for  the  successful 
implementation  of  the  recovery  and  resilience  plan,  as  well  as  other  economic  and 
employment policies going beyond the plan, to ensure broad ownership of the overall 
policy agenda.  

(28)  The Commission approved most of France’s cohesion policy programming documents 
in  2022 except  the Saint-Martin programme, which was adopted on 20  March 2023. 
Proceeding  with  the  swift  implementation  of  the  cohesion  policy  programmes  in 
complementarity  and  synergy  with  the  recovery  and  resilience  plan,  including  the 
REPowerEU  chapter,  is  key  to  achieving  the  green  and  digital  transition,  increasing 
economic and social resilience as well as achieving balanced territorial development in 
in France. 

(29)  Beyond the economic and social challenges addressed by the recovery and resilience 
plan, France faces  a number of additional challenges  related to the shortage of skills 
and inequalities in the education system, and to energy policy and the green transition. 
Addressing  those  challenges  could  help  boost  the  skills  of  workers,  increase  labour 
productivity,  make  French  businesses  more  energy  efficient,  and  in  turn  make  the 
French economy more competitive overall. 

(30)  Labour shortages continue to rise. According to the 2023 survey on labour force needs 
(‘Pôle  Emploi’),  61%  of  employers  anticipate  further  hiring  difficulties  in  2023,  in 
particular  for  skilled  labour  in  construction  and  industry  –  two  sectors  severely 
impacted  by  the  green  and  digital  transition.  In  recent  years,  France  has  boosted 
investment  in  the  upskilling  and  reskilling  of  workers,  in  part  supported  by  the 
Recovery  and  Resilience  Facility.  However,  evaluations  show  that  multiple  barriers 
persist to  the upskilling of the low-skilled, undermining the effectiveness of targeted 
programmes  such  as  the  ‘investment  plan  in  skills.  Although  on  the  rise,  the 
participation of low-skilled workers in training remains much lower than that of other 
workers, and they tend to benefit less from training that leads to a qualification. This 
suggests that further boosting the number of young people entering the labour market 
with sufficient basic skills and qualifications should remain a priority of the education 
system.  

(31)  Despite  an  overall  level  of  public  spending  above  the  OECD  average  and  good 
outcomes,  the  French  education  system  is  marked  by  a  significant  share  of  low 
achievers,  and  socio-economic  background  remains  a  strong  predictor  of  pupils’ 
performance.  Underachievement  and  inequalities  in  acquired  skills  in  mathematics 
remain a particular concern. According to national and international surveys, average 
performance in mathematics has steadily decreased over the past 30  years  in France. 
Some steps have been taken to strengthen the acquisition of basic skills, including by 
reinforcing the continuous training of teachers in mathematics and French, initiated in 
2019,  and  adding  a  one-hour  support  module  in  mathematics  and  French  to  the  first 
year of secondary school from school year 2023/24 on. The plan to halve class sizes in 
first  and  secondary  grades  in  disadvantaged  public  pre-primary  and  primary  schools 
has almost been completed and the long-term impact on the learning outcomes of the 
300 000  pupils  concerned  is  being  assessed.  However,  a  substantial  share  of 
disadvantaged pupils, outside of priority areas, do not benefit from it. Challenges also 

EN 

10 

  EN 

(32) 

remain,  despite  investments  and  progress,  with  regard  to  the  access  of  pupils  and 
students with disabilities to the mainstream education system. 

In 2022, France continued to invest in the apprenticeship system and in further work-
based learning options, such as the reform of vocational training in secondary schools. 
While these measures could have a positive outcome, their impact is yet to be felt and 
would  require  a  greater  involvement  of  professionals  and  teachers  in  the  design  of 
programmes. Despite measures to improve teaching conditions, including an increase 
of teachers’ wages, concerns remain over the attractiveness of the teaching profession 
and the high share of contractual staff,  who often have lower levels of qualifications 
and experience than permanent staff and insufficient access to training opportunities. 
Overall, the teacher-to-student ratio remains among the highest in the EU. 

(33)  The French energy mix is less reliant on fossil fuels than other EU countries, although 
it remains dependent on imported fossil fuels. France’s consumption of natural gas has 
dropped by 16% in the period August 2022 - March 2023, compared with the average 
gas  consumption  over  the  same  period  in  the  preceding  5  years,  beyond  the  15% 
reduction target. France could keep pursuing efforts to temporarily reduce gas demand 
until  31  March  202426.  The  current  geopolitical  situation  and  high  energy  prices  are 
also increasing the urgency for France to further step up its efforts to meet renewable 
energy targets laid down in its national energy and climate plan. With 19.1% of gross 
final energy consumption from renewable energy, France missed its renewables target 
of  23%  for  2020.  It  is  also  not  on  track  to  reach  its  2030  renewables  target  and  is 
lagging behind on deploying renewable energy, in particular for electricity production 
and  heating.  Swift  deployment  of  renewables  such  as  solar  and  wind  energy  would 
contribute to France’s energy security and supply diversification by reducing the use 
of fossil fuels. The low rate of renewables deployment can be explained by slow and 
complicated administrative procedures related to  permitting.  Delays in permitting for 
all  technologies  (onshore  and  offshore  wind  as  well  as  solar)  are  linked  to  a  lack  of 
political  support  for  projects,  inadequate  planning  and  long  and  complex  permitting 
procedures.  There  are  also  public  acceptance  and  legal  challenges,  which  create 
uncertainty for investors and developers. The permitting process could be accelerated 
by  the  allocation  of  more  staff  and  financial  resources  in  central  administration  at 
regional levels  as well as in relevant authorities and grid operators.  Improved spatial 
planning procedures and the swifter application of tendering procedures are also key to 
securing  the  installation  of  renewable  projects.  France  adopted  a  law  in  2023  on  the 
acceleration  of  renewable  energy  production,  which  acknowledges  the  need  to 
considerably  develop  renewable  heat  and  gas  and  increase  the  share  of  renewable 
electricity  in  order  to  meet  the  growing  needs  of  electrification  of  uses.  If  properly 
implemented,  the  law  could  foster  a  faster  deployment  of  renewable  projects.  This 
could put France on a trajectory to achieve the 2030 objectives.  

(34) 

In order to bring its interconnection level to the 10% target for 2020, further support 
for cross-border electricity interconnectors (under development or planned) remains of 
crucial  importance  for  the  integration  of  large  shares  of  renewables  Frontloading 
investment in energy infrastructure, both domestic and cross-border, will help reduce 
dependence  on  fossil  fuel  and  in  particular  Russian  gas.  New  infrastructure  and 
network investments are recommended to be future proof where possible, in order to 
facilitate  their  long-term  sustainability  through  future  repurposing  for  sustainable 

26 

Council Regulation (EU) 2022/1369 and Council Regulation (EU) 2023/706. 

EN 

11 

  EN 

                                                 
fuels.  Interconnections  are  crucial  for  an  efficient  functioning  of  the  internal  energy 
market by pooling resources to achieve overall security of supply. 

(35)  The French recovery and resilience plan contains major projects in building renovation 
for social  and individual housing as  well as public buildings  and smaller businesses. 
On  the  renovation  of  residential  buildings,  most  projects  have  focused  on  one-step 
works,  leading  to  limited  renovations.  In  the  first  half  of  2022,  only  27%  of  works 
contained  at  least  two  steps  of  renovation,  and  only  5%  were  total  renovations. 
Extensive renovations could have a major impact on reducing energy consumption in 
the  building  sector.  In  addition,  greater  efforts  to  channel  public  and  private 
investment towards helping low-income households renovate buildings and renovating 
building stock with the worst energy performance could help eradicate the 5.2 million 
most energy-inefficient dwellings (housing with  an  energy efficiency rating of F and 
G)  by  2030.  The  2021  Climate  and  Resilience  Law  introduced  several  measures  to 
incentivise  the  extensive  renovation  of  buildings,  such  as  the  prohibition  of  rental 
housing  with  an  energy  efficiency  rating  of  G  as  of  2025,  F  from  2028  and  E  from 
2034.  To  encourage  more  significant  energy  efficiency  gains,  the  policy  framework 
could be improved to incentivise deep renovation and help France further increase the 
energy  efficiency  of  its  building  stock  with  a  particular  focus  on  low-income 
households. 

(36)  France represents nearly 11% of the EU’s total venture capital investment in climate 
technology start-ups and scale-ups. However, despite large public support, only 29% 
of  small  French  firms  have  invested  more  than  1%  of  their  turnover  to  become 
resource efficient (40% on average in the EU). Promoters of clean-tech manufacturing 
projects  are  confronted  with  a  high  administrative  burden  and  face  long  procedures 
and litigation risks. It takes 17 months on average to obtain a building permit, receive 
environmental  authorisation  and  carry  out  the  public  investigation  process  for  an 
industrial  project.  The  procedure  involves  blocking  points,  where  the  project  owner 
must  wait  for  replies  from  different  bodies  (administrative  court,  opinion  of  the 
environmental  authority,  report  from  the  public  investigator).  Furthermore,  a  public 
consultation must be held for large industrial projects. This process can last at least 6 
months,  which  adds  to  the  time  taken  to  obtain  the  building  permit,  receive 
environmental authorisation and carry out the public investigation. Investment projects 
may  also  be  subject  to  litigation  procedures  that  can  last  several  years,  leading  to 
projects  being  abandoned.  While  permitting  procedures  are  necessary  to  safeguard 
overriding public and private interests, they should  be simplified  and speeded up  for 
clean-tech  manufacturing  projects.  Launching  administrative  procedures  in  parallel 
and proposing industrial sites ready for use could also help save time. 

(37)  Labour  and  skills  shortages  in  sectors  and  occupations  key  for  the  green  transition, 
including  manufacturing,  deployment  and  maintenance  of  net-zero  technologies,  are 
creating  bottlenecks  in  the  transition  to  a  net-zero  economy.  High-quality  education 
and  training  systems  that  respond  to  changing  labour  market  needs  and  targeted 
upskilling and reskilling measures are key to reducing skills shortages and promoting 
labour inclusion and reallocation. To unlock untapped labour supply, these measures 
need  to  be  accessible,  in  particular  for  individuals  and  in  sectors  and  regions  most 
affected by the green transition. In 2022, labour shortages were reported in France for 
several occupations that required specific skills or knowledge for the green transition, 
including  civil  engineering  technicians,  power  production  plant  operators,  and 
engineering professionals.  

EN 

12 

  EN 

(38) 

(39) 

(40) 

In light of the Commission’s assessment, the Council has examined the 2022 Stability 
Programme and its opinion27 is reflected in recommendation (1) below.  

In view of the close interlinkages between the economies of euro area Member States 
and  their  collective  contribution  to  the  functioning  of  the  Economic  and  Monetary 
Union, the Council recommended that euro area Member States take action, including 
through  their  recovery  and  resilience  plans,  to  (i)  preserve  debt  sustainability  and 
refrain  from  broad-based  support  to  aggregate  demand  in  2023,  better  target  fiscal 
measures taken to mitigate the impact of high energy prices and reflect on appropriate 
ways to wind down support as energy price pressures diminish; (ii) sustain high public 
investment and promote private investment to support the green and digital transition; 
(iii)  support  wage  developments  that  mitigate  the  loss  in  purchasing  power  while 
limiting  second-round  effects  on  inflation,  further  improve  active  labour  market 
policies  and  address  skills  shortages;  (iv)  improve  the  business  environment  and 
ensure that energy support to companies is cost-effective, temporary, targeted to viable 
firms  and  that  it  maintains  incentives  for  the  green  transition;  and  (v)  preserve 
macro-financial  stability  and  monitor  risks  while  continuing  to  work  on  completing 
the Banking Union. For France, recommendations (1), (2), (3) and (4) contribute to the 
implementation of the first, second, third and fourth euro area recommendations.  

In  light  of  the  Commission’s  in-depth  review  and  this  assessment,  the  Council  has 
examined  the  2023  National  Reform  Programme  and  the  2023  Stability  Programme. 
Its recommendations under Article 6 of Regulation (EU)  No 1176/2011  are reflected 
in recommendation (1) below. Policies referred to in recommendation (1) help address 
vulnerabilities linked to high  government  debt and to  weak competitiveness  and low 
productivity  growth.  Recommendations  (2)  and  (3)  contribute 
to  addressing 
recommendation  (1).  Policies  referred  to  in  recommendation  (1)  contribute  to  both 
addressing  imbalances  and  implementing  the  recommendations  for  the  euro  area,  in 
line with recital 39.  

HEREBY RECOMMENDS that France take action in 2023 and 2024 to:  

1. 

Wind  down  the  energy  support  measures  in  force  by  the  end  of  2023,  using  the 
related  savings  to  reduce  the  government  deficit.  Should  renewed  energy  price 
increases  necessitate  support  measures,  ensure  that  these  are  targeted  at  protecting 
vulnerable  households  and  firms,  fiscally  affordable,  and  preserve  incentives  for 
energy savings.  

Ensure  prudent  fiscal  policy,  in  particular  by  limiting  the  nominal  increase  in 
nationally financed net primary expenditure in 2024 to not more than 2.3%. 

Preserve nationally financed public investment and ensure the effective absorption of 
RRF  grants  and  other  EU  funds,  in  particular  to  foster  the  green  and  digital 
transitions. 

For  the  period  beyond  2024,  continue  to  pursue  a  medium-term  fiscal  strategy  of 
gradual  and  sustainable  consolidation,  combined  with  investments  and  reforms 
conducive  to  higher  sustainable  growth,  to  achieve  a  prudent  medium-term  fiscal 
position. 

Further improve framework conditions to facilitate investment and innovation. 

27 

Under Articles 5(2) and 9(2) of Council Regulation (EC) No 1466/97. 

EN 

13 

  EN 

                                                 
2. 

3. 

4. 

Proceed  with  the  steady  implementation  of  its  recovery  and  resilience  plan  and 
swiftly  finalise  the  addendum,  including  the  REPowerEU  chapter,  with  a  view  to 
rapidly  starting  its  implementation.  Proceed  with  the  swift  implementation  of 
cohesion  policy  programmes,  in  close  complementarity  and  synergy  with  the 
recovery and resilience plan. 

Address  the  shortage  of  skills,  in  particular  by  providing  additional  work-based 
learning  options  and  raising  the  share  of  people  with  basic  skills.  Adapt  resources 
and methods to the needs of disadvantaged students and schools in order to make the 
education  and  training  system  more  equitable  and  inclusive.  Improve  the  working 
conditions and initial and continuous training for teachers. 

Reduce  overall  reliance  on  fossil  fuels.  Accelerate  the  deployment  of  renewable 
energies,  focusing  in  particular  on  wind,  solar  and  geothermal  sources  and  biogas, 
including  through  small-scale  renewable  energy  production  and  the  promotion  of 
collective  self-consumption,  and  promote  related  storage  technologies  through 
increased  public  investment  by  facilitating  private  investment  and  addressing 
permitting bottlenecks. Further upgrade electricity transmission and distribution grids 
and  increase  cross-border  electricity  interconnections.  Further  improve  the  policy 
framework to incentivise the deep renovation of buildings and the decarbonisation of 
heating systems, with a particular focus on low-income households and on building 
stock  with 
lowest  energy  performance.  Build  a  supporting  regulatory 
environment  to  increase  investment  in  clean-tech  manufacturing,  including  by 
simplifying and speeding up permitting. Step up policy efforts aimed at the provision 
and acquisition of the skills needed for the green transition. 

the 

Done at Brussels, 

For the Council 
The President 

EN 

14 

  EN