COMMISSION STAFF WORKING DOCUMENT 2023 Country Report - France Accompanying the document 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  SWD(2023) 610 final  COMMISSION STAFF WORKING DOCUMENT 2023 Country Report -  France Accompanying the document 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 {COM(2023) 610 final}  
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

France’s economy slows down in 
2023 amid still high inflation  

France’s  economy  slowed  significantly  in 
the  second  half  of  2022,  but  activity  is 
expected to recover as of the second half 
of  2023.  This  deceleration  stemmed  from 
significant  supply  bottlenecks  and 
rising 
energy  and  commodity  prices,  and  supply 
shortages  that  remained  significant.  After  the 
strong  rebound  of  6.8%  in  2021,  real  GDP  is 
estimated to have expanded by 2.6% in 2022. 
is  expected  to  remain 
Economic  activity 
first  half  of  2023. 
subdued  over 
Investment,  in  particular,  is  set  to  fall  on  the 
back  of  higher  production  costs, 
tighter 
financial 
heightened 
conditions 
uncertainty.  However,  the  projected  decrease 
in  inflation  is  expected  to  allow  for  a  gradual 
recovery  in  the  second  half  of  the  year. 
Activity  is  thus  forecast  to  increase  by  0.7% 
and by 1.4% in 2023 and 2024 respectively. 

and 

the 

In  2022,  Russia’s  invasion of  Ukraine led 
to  a  surge  in  energy  and  commodity 
prices  but  large  public  support  schemes 
significantly  cushioned  the  shock  to  the 
private  sector.  The  impact  of  the  energy 
crisis on both households and businesses was 
largely mitigated by the government measures 
and  inflation  in  France  remained  far  below 
other  EU  countries  in  2022,  at  +5.9%  against 
+9.2%  for  the  EU.  From  2023  onward,  the 
impact  of  the  war  in  Ukraine  on  France’s 
economy is expected to fade.  However, at the 
start  of  2023  the 
in  regulated 
electricity  and  gas  prices,  the  end  of  the  fuel 
rebate and the delayed transmission of energy 
prices are set to feed into consumer prices. In 
2023,  inflation  is  expected  to  progressively 
slow  down  as  wholesale  prices  of  energy  and 
commodities  have  fallen.  Overall,  inflation  is 

increase 

projected  to  reach  5.5% in  2023  and  2.5% in 
2024. 

lower 

revenues, 

impact  of 

Measures  to  counter  the  impacts  of  the 
energy  crisis  held  back  an  improvement 
in  public  finances  after  COVID-19.  The 
general  government  deficit  narrowed  to  4.7% 
of GDP in 2022, down from 6.5% in 2021 and 
9%  in  2020.  The  decline  in  the  deficit  was 
driven  by  growth  and  continued  dynamism  in 
tax 
the  phasing-out  of  most 
pandemic-related  emergency  measures  and 
recovery 
the  planned 
measures.  However,  these  deficit-reducing 
effects  were  partly  offset  by  the  budget  cost 
of measures adopted to mitigate the impact of 
high energy prices and, more broadly, inflation 
(See  Box  1).  In  turn,  the  interest  burden  on 
debt  increased  substantially,  mainly  driven  by 
bonds  indexed  to  inflation.  Looking  forward, 
the deficit is expected to reach 4.7% of GDP in 
2023  (still  reflecting  the  cost  of the  spending 
to  counter  the  energy  crisis)  and  to  decrease 
to 4.3% of GDP in 2024. At 111.6% of GDP in 
2022, public debt decreased only slightly and, 
going  forward,  is  set  to  decline  to  109.5%  of 
GDP by 2024. However, thereafter public debt 
is  projected  to  enter  again  an  upward  trend 
over the medium term in the absence of policy 
action. 

to 

high 

public 

faces 

France 
macroeconomic 
vulnerabilities, which are assessed in the 
in-depth  review. (1)  These  vulnerabilities  are 
related 
and 
competitiveness  challenges,  but  the  policy 
response  has  been  broadly  appropriate. 
Indeed, 
finance 
management entered into force in 2022 and a 
new  mechanism  to  conduct  annual  public 
spending  evaluations  has  been  adopted.  An 
effective implementation of these two reforms 

reform  of  public 

debt 

the 

(1)  European Commission (2023), In-Depth Review for 
France, Commission staff working document 
(COM(2023) 633 final).   

2 

 
 
                                                 
growth. The unemployment insurance reform 
of  2019,  which  entered  into  force  fully  in 
2021,  including  disincentives  to  the  excessive 
use  of  short-term  contracts,  may  have 
contributed  to  the  decline  of  labour  market 
segmentation  below  pre-crisis  levels  in  Q4-
2022,  in  line  with  the  EU  level  trend.  More 
recently, the December 2022 law introduced a 
countercyclical  modulation  of  the  duration  of 
unemployment  benefits,  depending  on  the 
state  of  the  labour  market.  Moreover,  the 
increase 
in  the  effective  retirement  age 
included in the current pension reform is set to 
have  a  positive  impact  on  potential  growth  in 
the  medium  term,  through  an  increase  in  the 
working  population.  In  line  with  principle  8  of 
the European Pillar of Social Rights, the active 
and 
involvement 
social 
stakeholders 
the 
acceptability of any reform. 

partners 
ensuring 

of 
is 

key 

to 

France  performs  well  overall  on  the 
social  scoreboard  linked  to  the  European 
Pillar of Social Rights. All of the scoreboard 
indicators (see Annex  14) are at or above the 
EU  average.  Some  weaknesses  nevertheless 
remain,  such  as  the  integration  of  vulnerable 
groups in the labour market, skills mismatches 
and low participation of low-qualified adults in 
learning. The education system is overall good, 
but  the  socio-economic  inequalities  continue 
to  impact  pupils’  educational  outcomes  (see 
Further priorities ahead). 

France performs well and is improving in 
most of the UN Sustainable Development 
goals  (SDGs).  Better  performances  can  be 
observed  in  fairness-related  SDGs  such  as 
gender  equality  (SDG 5)  and  some  education 
indicators  (SDG 4)  (see  Annex  1).  The  best 
improvements  can  be  seen  in  responsible 
consumption  and  production  (SDG 12)  and 
decent  work  dimensions  (SDG 8).  However, 
France  scores  below  the  EU  average 
in 
sustainable  cities  and  communities  (SGD 11) 
and  has  room  for  improvement  in  the  ‘no 
poverty’  dimension  (SDG 1).  Indeed,  France  is 
deviating  from  its  2030  target  on  poverty 
reduction, as the number of persons at risk of 
poverty  or  social  exclusion 
increased  by 
512 000  between  2019  and  2021.  Poverty 
risks  concern  mainly  single-parent  families, 

remains central to help curb public expenditure 
and put public debt on a sustained downward 
trend.  Major  reforms  to  lower  labour  costs, 
reduce production taxes and the corporate tax 
rate have helped restore cost competitiveness. 
The implementation of recent reforms for the 
simplification of the business environment and 
productivity-enhancing investments included in 
the  recovery  and  resilience  plan  (to  support 
the green and digital transitions and research) 
will  be  key  to  addressing  the  persisting 
structural  competitiveness  challenges.  Their 
full impact is expected to materialise over the 
medium term (see Annex 22). 

Labour market developments 

developments 

are 
Labour  market 
positive,  leading  to  higher  employment. 
Despite  the  economic  slowdown,  the  labour 
market remained dynamic in 2022, leading to 
further  declines  in  the  unemployment  rate, 
which  reached  its  lowest  level  since  Q1  2008 
(7.2%  in  Q4  2022).  The  employment  rate  for 
people  aged  15  to  64  also  reached  68.3%  in 
Q4  2022,  its  highest  recorded  level.  Despite 
some  improvement,  vulnerable  groups  still 
face persistent barriers to accessing the labour 
market (see Annex 14). 

Labour  shortages  and  skills  mismatches 
remain  important  issues.  Labour  shortages 
were  already  high  before  the  COVID-19  crisis 
and  increased  steadily  in  2021,  peaking  in 
2022.  Employers  are  reporting  the  lack  of 
adequately trained workers as one of the main 
barriers  to  recruitment,  ahead  of  workers’ 
demand  for  better  working  conditions.  The 
main 
industry, 
affected 
construction,  information  and  communication, 
education and health. The current outcomes of 
the  deployed  up-and  re-skilling  measures, 
such  as  the  plan  to  reduce  recruitment 
tensions,  call  for  the  available  training  to  be 
better  aligned  with  labour  market  needs  (see 
Annex 14). 

sectors 

are 

The effects of recent wide-ranging labour 
market reforms and support measures, as 
well  as  the  pension  reform,  are  set  to 
economic 
employment  and 
support 

3 

 
the  low-skilled,  children,  those  born  outside 
the EU and the self-employed (see Annex 14). 

Economic exposure to Russia’s 
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  country. 
Moreover, Russia represented only 9% of coke 
and  refined  petroleum  products  and  11%  of 
crude  petroleum  and  natural  gas  imports  in 
2022. France also has very limited non-energy 
trade  with  Russia.  However,  some  industrial 
sectors  have  been  affected  by  supply 
disruptions  of  key  components  from  Russia. 
This is the case in particular in the aeronautics 
(dependent  on 
titanium)  and  automotive 
sectors (palladium).  

High public and private debt and 
weak competitiveness remain 
macroeconomic challenges to be 
monitored  

The coexistence of high public and private 
debt  might  be  a  source  of  vulnerability. 
Private  sector  debt  was  already  high  before 
the  outbreak  of  the  pandemic.  In  2020  it 
surged  further,  also  helped  by  the  sizeable 
envelope  of  state-guaranteed  loans  deployed 
by  the  French  government.  This  scheme 
proved  successful 
in  stabilising  corporate 
balance-sheets and sustaining investment. The 
increase 
in  corporate  borrowing  remained 
accompanied  by  increases  in  equity  and  the 
accumulation  of  liquidity  buffers.  Economic 
growth 
facilitated  a  passive 
deleveraging,  but  credit  flows,  especially  for 
corporations,  remained  dynamic  throughout 
2022,  which  led  non-financial  corporations’ 
and  households’  debt  ratios  to  increase  and 
respectively.  For  both 
broadly  stabilise, 
ratios 
corporates  and  households,  debt 
remained  high 
reference 
compared 
benchmarks.  Indebtedness  in  nominal  terms 

in  2021 

to 

keeps  being  fuelled  by  dynamic  credit  flows, 
which gained momentum for corporates, while 
slowed  for  households  in  2022.  Nevertheless, 
according  to  the  euro  area  bank  lending 
survey (2),  credit  standards  tightened  in  the 
fourth  quarter,  especially  for  corporate  and 
housing  loans.  There  is  no  visible  risk  of  a 
wave  of  corporate  bankruptcies  so  far.  After 
decreasing  by  a  cumulative  50%  in  2021 
compared  to  2019,  corporate  bankruptcies 
rose  sharply  in  2022,  but  remained  around 
20%  below  the  pre-pandemic  levels.  The 
financial sector remains resilient and financing 
conditions  are  more  favourable  than  in  other 
EU countries, both in terms of credits volumes 
and interest rates. Yet high private debt might 
represent a source of vulnerability, in a context 
of rising interest rates. However, the structure 
of the French house credit market with a large 
majority 
and 
fixed-rates 
‘Haut 
macroprudential  measures  of 
Conseil de stabilité financière’ on house credit 
and  banks’  exposures  to 
large  and  high 
indebted corporate mitigate these risks. 

loans 
the 

of 

France’s exports were strongly hit by the 
COVID-19  crisis  in  2020  and  remained 
in  2021  and  2022.  Exports 
subdued 
declined  more  than  the  EU  average  in  2020 
and  only  rebounded  moderately  in  2021, 
partly  due  to  unfavourable  sectoral  exposure 
for 
the  COVID-19 
to 
aeronautics and tourism.  

including 

crisis, 

still 

In  2022,  net  exports 
contributed 
negatively to growth, remaining far below their 
pre-crisis  level.  Competitiveness  improved  in 
2022  as  a  result  of  lower  inflation  in  France 
than in its trading partners, the fall of the euro 
against the dollar and fiscal measures, notably 
reductions  in  taxes  on  production  and  the 
corporate  tax  rate.  This  came  after  two  years 
of  relative  stability,  as  the  increase  in  unit 
labour  costs  was  in  line  with  the  euro  area 
during the Covid-19 crisis.  

However,  figures  in  2020  and  2021  are 
difficult  to  interpret,  due  to  the  massive 
deployment of partial unemployment schemes. 
Unit  labour  costs  rose  sharply  in  2022  to 
partly  offset  the  brisk  increase  in  inflation 

(2)  European Central Bank, January 2023 euro area bank 

lending survey, 2023 

4 

 
                                                 
triggered  by  energy  prices.  Yet  the  increase 
was in line with those in the EU  and the euro 
area as a whole.  

(CICE), 
competitiveness  and  employment 
transformed 
into  a  permanent 
in  2019 
decrease in payroll charges paid by employers.  

While France’s labour productivity growth 
caught up with the euro area and the EU, 
structural  weaknesses  remain.  Labour 
productivity  growth  in  France  has  caught  up 
with the euro area and the EU average before 
the  COVID-19  crisis.  Although  productivity 
growth  has  recently  been  reined  in  by  still-
ongoing  post-COVID  labour  hoarding  and  the 
dynamic  response  of  employment  to  recent 
policy measures, labour productivity, measured 
in  full-time  equivalent  jobs,  is  projected  to 
gain momentum,  growing in line with the the 
euro  area  and  EU  averages  in  the  medium 
term.  

Despite  this,  structural  weaknesses  remain, 
including skills shortages and mismatches, the 
lack  of  digitalisation  among  small/medium-
sized  firms  and  stagnating  business  R&D 
intensity  (see  ‘Further  priorities  ahead’).  In 
addition,  restrictive  regulations  in  regulated 
professions  and  in  retail  have  weighed  on 
competition  and  business  dynamics,  with  the 
lower 
risk  of 
innovation  and  lower  productivity  gains  (see 
Annex  12).  Total  factor  productivity  growth  in 
France remains subdued and appears to be on 
a declining path. It is mainly accounted for by 
information  and  communication  services, 
finance  and  insurance  sectors,  as  well  as 
manufacturing of electronic products.  

to  higher  prices, 

leading 

least-performing 

In  part,  this  can  be  explained  by  a  rapidly 
the 
increasing  productivity  gap  between 
highest  and 
in 
firms, 
particular in  services.  Another  explanation  lies 
with the training of France’s workforce, as the 
skills of its workforce are below that of some 
peers (notably the Netherlands and Germany).  

The  French  recovery  and  resilience  plan 
and  the  ‘France  Relance’  plan  aim  to 
make  the  economy  more  competitive  by 
fostering  the  digitalisation  and  the 
inclusion of young people into the labour 
market and reducing taxes on production. 
A  range  of  measures  had  been  taken  before 
the 
weak 
to 
competitiveness,  such  as  the  tax  credit  for 

pandemic 

address 

Several  reform measures also helped address 
the  issue  of  sluggish  productivity  growth.  The 
PACTE  Law,  adopted  in  May  2019,  aimed  to 
help  firms  grow  by  reforming  the  firm-size 
restructuring 
the 
thresholds, 
procedure  and  encouraging 
target-based 
compensation. 

improving 

France  is  characterised  by  increasing 
regional  disparities  going  beyond  the 
enduring  divide  between  its  metropolitan 
and  outermost  regions.  While  the  capital 
region (Ile-de-France) had a GDP per capita of 
176% of the EU average, 23 out of 27 regions 
have  lost  ground  relative  to  the  EU  average, 
with  low  or  negative  growth  in  2010-2020 
(see Annex 17).  

The  drop  in  GDP  per  capita  was  particularly 
severe in 2019 and 2020. As a result, only two 
French  regions  had  a  GDP  per  capita  greater 
than the EU average in 2021. These disparities 
could  be  explained  by  variations  in  labour 
considerable 
productivity 
differences in regional innovation performance 
(in  predominantly  rural,  deindustrialized  and 
outermost 
educational 
attainment.  

as  well 

regions) 

and 

as 

The  divide  between  urban  and  rural  areas  in 
terms  of  economic  dynamism  and  long-term 
growth  prospects  has  become  an  issue  of 
public concern. Addressing regional imbalances 
is  key  to  ensuring  the  success  of  sectoral 
strategies  and  improving  France’s  long-term 
growth prospects.  

5 

 
 
 
Box1 

Energy policy response in France 

France  has  adopted  various  support  measures  to  cushion  the  impact  of  energy  price 
inflation  on  households  and  businesses.  For  2023,  the  gross  budget  costs  of  these 
measures are projected – in the Commission 2023 spring forecast – to amount to 1.5 % 
of GDP. (3) Most measures do not preserve the price signal and are not targeted at the 
most vulnerable, who are proportionally the most impacted. Most of the measures are 
temporary and set to expire by January 2024 at the latest. 

The  most  representative  measure  consists  of  a  cap  on  regulated  gas  and  electricity 
prices, benefitting households at large. For electricity, the increase was limited to 4% in 
2022 and 15% until January 2024. The regulated gas price in 2022 was frozen at the 
level  of  October  2021  and  its  increase  limited  to  15%  in  2023.  Other  significant 
measures  include  a  widespread  subsidised  discount  on  retail  liquid  fuels  in  2022, 
replaced by a fuel voucher for low-income households in 2023; subsidies to businesses, 
including smaller ones, to reduce their energy bills; and direct transfers to low-income 
households.  Other permanent measures, aimed more broadly at  offsetting  the effects 
of  inflation,  included  the  frontloaded  indexation  of  pensions  and  social  benefits,  the 
indexation of public sector wages and the withdrawal of the audio-visual tax. 

(EU)  2022/1854,  France  applies 

the  EU  solidarity 
Under  Council  Regulation 
contribution (4)  as  well  as  the mechanism  for  capping  infra-marginal  market  revenues 
from  electricity  generation.  The  budget  cost  of  the  support  measures  was  also  partly 
offset by savings stemming from public service energy obligations linked to renewable 
energy production. 

(3)  For 2022, the gross budget costs of the measures 
amounted to 1.4% of GDP. Some of the measures 
outlined in this box were already in place in 2022.] 

(4)  I.e. the application of a mandatory temporary solidarity 

contribution at a rate of at least 33% to the 
extraordinary and unexpected profits of businesses 
active in the extraction of crude petroleum, natural gas 
or coal, and the refinery sector. It is levied on any 
taxable profits (as determined under national tax rules 
in the fiscal year starting in 2022 and/or in 2023) which 
represent more than a 20% increase over average 
yearly taxable profits in 2018-2021. 

6 

 
                                                 
 
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 
investments  that  will  be  supported  by  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 3).  

one 

payment 

The  implementation  of  France’s  recovery 
and  resilience  plan  is  underway.  France 
submitted 
request, 
corresponding to 38 milestones and targets in 
the  plan  and 
in  an  overall 
resulting 
disbursement  of  EUR  7 400 000.  They  cover 
reforms in the areas of public finance, climate 
change, housing, mobility, labour market, skills 
and  health.  Several  targets  concern  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 
disruptions  and  the  downward  revision  of  its 
maximum  RRF  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  following,  more  detailed 
review  of 
measures being implemented under the RRP in 
no way implies formal Commission approval or 
rejection of any payment requests.  

in 
France’s  RRP  played  a  key  role 
accelerating  the  energy  renovation  of 
buildings  in  2021-22.  By  the  end  of  2022, 

7 

than 

helped  more 

technical  solutions).  The 

most  energy  renovation  projects  for  buildings 
had  been  selected  and  work  had  started, 
representing  an  investment  of  EUR 5.8  billion 
(with a heavy focus on public buildings). Public 
procurement  for  renovation  work  to  improve 
building  insulation  had  a  strong  leverage 
effect  on  the  sector  (upskilling  workers  and 
improving 
fast 
deployment  of  the  ‘MaPrimeRénov’  support 
700 000 
scheme 
households  in  their  energy  renovation  work, 
and  40 000  social  housing  dwellings  started 
renovation  work,  with  a  minimum  energy-
is 
saving  rate  of  30%.  This 
supported  by  major  reforms  such  as  the 
climate  and  resilience  law  adopted  in  August 
2021,  which  legislates  against  the  two  most 
energy-inefficient  categories  of  dwellings  in 
France  (passoires  thermiques,  or 
‘thermal 
sieves’)  by progressively prohibiting the rental 
the 
these  buildings.  The  revision  of 
of 
regulation  governing 
insulation  of  new 
buildings  (RE2020)  should  help  reduce  the 
energy intensity of the building sector. 

investment 

It 

processes 
in 
is  underway. 

in  energy  efficiency  and 
Investment 
the 
decarbonisation 
industrial  sector 
is 
expected to reduce greenhouse gas emissions 
by  5  million  tCO2eq  over  the  next  20  years. 
Despite  France  lagging  behind  on  the  2020 
renewable  energy  targets  –  with  renewable 
energy  representing  just  19.1%  of  its  gross 
final energy consumption, well below the 23% 
target  –  the 
include 
investment  dedicated  to  increasing  renewable 
electricity capacity.  

initial  RRP  did  not 

includes 

However,  the  RRP 
investment  in 
renewable  energy  in  heating  systems,  with 
renovations  of  buildings  supported  by  the 
‘MaPrimeRenov’  scheme  including  the  rollout 
of  heat  pumps  and  biomass  boilers,  and 
partial  and  indirect  support  for  renewable 
energy 
through  measures  supporting  the 
decarbonisation of industry.  

 
 
 
in 

The RRP provides for major investment in 
sustainable  transport.  One  of  the  largest 
the 
measures 
finances 
the 
reconstruction  and  modernisation  of 
the 
railway network, in particular local railway and 
freight lines. The electrification of vehicles was 
accelerated  with  financial  support  for  buying 
clean vehicles.  

RRP 

Reforms  of  public  finance  management 
and quality of public expenditure started 
to  be  delivered  in  2022.  The  RRP  includes 
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  finance  management. 
The  law  introduces  a  multiannual  expenditure 
rule applicable to total public spending, aimed 
at strengthening the multiannual dimension of 
budgetary 
further 
strengthened  by  extending  the  remit  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 
revenue  and 
expenditure  forecasts  in  the  annual  budget 
laws.  

the  plausibility  of 

decisions. 

This 

is 

technologies. 
deployment  of  key  digital 
Measures to support the digital skills of pupils 
are  also  underway  and  should,  for  instance, 
enable 1.4 million students in higher education 
to have access to digital training capacities by 
the end of 2024.  

to 

share 

relating 

significant 

A 
(around 
EUR 7.6 billion)  of  the  plan  supports 
measures 
employment, 
education  and  skills,  with  a  focus  on 
youth.  This  should  help  implement  the 
European  Pillar  of  Social  Rights.  General 
measures support the upskilling and re-skilling 
of  workers,  with  a  special  focus  on  digital 
skills.  Nearly  EUR 5.5  billion  are  dedicated  to 
supporting  young  people,  notably  through  the 
‘1  young  person,  1  solution’  plan.  Youth 
employment increased by 5 percentage points 
between  Q3 2019  and  Q3 2022,  and  half  of 
this 
is  due  to  the  number  of 
apprentices, which more than doubled over the 
period. A recent study (5) shows that while the 
net  quantitative  impact  of  the  hiring  subsidy 
targeted  at  people  under  26  was  limited,  it 
helped  young  people  get  hired  on  permanent 
or  longer  fixed  term  contracts.  The  RRP  also 
contributed to scale up orientation and labour 
market integration measures.  

increase 

In  this  respect,  France  is  expected  to  adopt  a 
multiannual  programming  law  for  2023-27. 
This  law  should  set  the  multiannual  targets 
that should underpin the stabilisation and then 
reduction  of  the  debt  ratio.  The  ultimate 
contribution  of  this  reform  to  public  debt 
reduction  will  crucially  depend  on 
the 
stringency  of  the  multiannual  expenditure 
targets  and  future  compliance  with  them.  In 
addition,  the  bases  of  a  new  spending  review 
framework  have  been  adopted,  in  the  context 
of  the  2023  budget  law.  As  of  2023,  regular 
public  expenditure  evaluations  should  be 
conducted,  and  their  results  factored  into 
financial  laws,  so  that  they  translate  into 
expenditure savings and efficiency gains.  

the  digital 
The  RRP  also  supports 
transition.  Digitalisation  of  health 
is  a 
priority,  including  support  for  digital  medical 
records,  interoperability,  secure  exchange  of 
data  and  training  of  health  professionals.  The 
research  and 
French  plan 

invests 

in 

(5)  Dares, Les effets sur l’emploi de l’aide à l’embauche 
des jeunes instaurée en 2020, Document d’études 
n°266, 2023 

8 

 
 
 
                                                 
Box 2: 

Key deliverables under the recovery and resilience plan in 2023-24  

  700 000 “MaPrimeRenov” grants allocated to households, to improve the insulation of their 

homes 

  20 million square meters of public buildings with energy renovation completed 

  Entry into force of the Climate and Resilience Law 

  700 projects financed that focus on ecological restoration and preservation of biodiversity in 

protected areas 

  Operationalisation of France’s new spending review framework 

  Entry into force of a new Public Finances Programming Law 

  45 000 new school classes equipped with digital resources 

  40 million patients having an electronic national health record 

  500 km of renovated local railway lines and 150 km of renovated freight lines 

  1 500 electric charging stations open to the public 

  Entry into force of decrees implementing the research programming law 

9 

 
 
 
 
 
 
 
 
 
 
FURTHER PRIORITIES AHEAD 

Beyond  those  tackled  by  the  RRP,  France 
faces  additional  challenges.  The  education 
system struggles to deliver good results and to 
address  inequalities,  especially  as  the  socio-
economic  background  of  pupils  remains  a 
determinant of their educational outcomes.  

improve 

France is lagging behind in terms of renewable 
energy  production  and  could 
its 
performance  on  energy  efficiency,  notably  by 
promoting  thorough  energy  renovation  of 
buildings.  Both  challenges  would 
require 
investing  in  green  skills  for  the  workforce. 
France  would  benefit  from  putting  its  public 
debt on a downward trajectory, in particular by 
effectively implementing, in the medium term, 
the fiscal reforms included in the recovery and 
resilience  plan.  Finally,  French  businesses’ 
competitiveness  is  still  held  back  by  several 
structural weaknesses.  

Addressing  these  challenges  will  also  help  to 
make further progress in achieving those SDGs 
where France currently shows room for further 
improvement,  namely  Sustainable  cities  and 
communities (SDG 11) and No poverty (SDG 1).  

An effective multiannual fiscal 
trajectory to curb public debt 

France’s  high  public  deficit  and  debt 
continue  to  pose  high  sustainability 
challenges  over  the  medium  term.  After 
the historical peaks reached in 2020, following 
the  COVID-19  crisis, 
the  public  deficit 
remained elevated and public debt declined to 
111.6% of GDP in 2022 and, according to the 
Commission  2023  spring  forecast  is  expected 
to  decline  further,  to  109.5%  by  2024,  Still 
well above pre-pandemic levels. This is largely 
due  to  a  high  level  of  public  expenditure, 
exacerbated by the fiscal response deployed to 
counter  the  effects  of  recent  energy  price 
hikes.  

10 

it 

is  expected 

In 2022, France’s public expenditure, at 58.1% 
of  GDP,  remained  the  highest  in  the  EU,  well 
above  the  EU  average  of  49.8%  of  GDP.  And, 
according  to  the  Commission  2023  spring 
forecast, 
remain  so 
throughout  2023  and  2024.  Public  debt 
sustainability  challenges  are  still  assessed  as 
high  over  the  medium  term,  with  public  debt 
projections  showing  an  upward  trend  again, 
although  the  projected  decline  in  age-related 
expenditure  helps  mitigate  such  challenges  in 
the long term (see Annex 21).  

to 

The  fiscal  reforms  adopted  under  the 
French RRP constitute a promising avenue 
for  controlling  the  dynamics  of  public 
spending  and,  ultimately,  reducing  public 
debt.  The  cornerstone  of  this  effort  is  the 
setting of a stringent multiannual  expenditure 
ceiling,  starting  from  the  adoption  of  the 
multiannual  public  finance  programming  law 
for 2023-27.  

fiscal 

newly 

adopted 

spending 

trajectory 

The 
review 
framework should support compliance with the 
duly 
multiannual 
identifying  potential  savings.  Moreover, 
it 
should  be  key  to  increasing  the  efficiency  of 
public  expenditure  and  channelling  resources 
towards  priority  policy  areas,  such  as growth-
enhancing 
investment,  green  and  digital 
transition and social and economic resilience.  

by 

these 

reforms 

Ultimately, 
should  help 
strengthen  France’s  growth  potential  and 
mitigate  public  debt  sustainability  challenges. 
In  this  regard,  it  is  of  the  utmost  importance 
that  the  new  spending  review  framework 
attains  better  results  than  past  attempts, 
when  they  were  either  limited,  short-lived  or 
difficult to quantify. Likewise, compliance with 
the  multiannual  budget  targets  should  be 
ensured,  compared  to  the  track  record  in  the 
past. 

 
 
The  new  pension  reform  is  expected  to 
impact  on  pension 
have  a  positive 
sustainability.  This  reform,  presented 
in 
January  2023,  strongly  differs  from  the  one 
envisaged  during  the  previous  presidential 
term, which focused on a broad unification of 
the  pension  regimes  and  was  eventually 
abandoned in 2020. The main objective of the 
new reform is first and foremost to ensure the 
system  is  balanced  by  2030 (6).  Its  chief 
elements  are  a  progressive  increase  in  the 
statutory retirement age from 62 to 64 years, 
reform 
the  acceleration  of  a  previous 
extending the required contribution period and 
the  ending  of  some  of  the  main  special 
pension schemes. (7)  

By  increasing  the  labour  participation  rate  of 
older  workers,  the  reform  might  positively 
affect  potential  growth  in  the  medium  term. 
Targeted  actions  to  help  senior  workers 
integrate  into  the  labour  market  could  help 
support this.  

Despite  the  envisaged  positive  impact  on 
pension  sustainability,  as  well  as  some 
progress  in  terms  of  convergence  among 
in 
pension  schemes,  the  pension  system 
France remains complex and the multiplicity of 
schemes  remains  an  obstacle  to 
labour 
mobility (8).  The  distributional  impacts  of  the 
reform  call  for  close  monitoring,  and  further 
detailed  analysis  is  needed  of  the  social 
effects of the reform. 

(6)  According to projections by the pension advisory council 
(Conseil d’orientation des Retraites, COR) of September 
2022, the current pension system would accumulate 
deficits of EUR 12.4 billion in 2027 and EUR 13.5 billion 
in 2030. 

(7)  The reform integrates into the general pension regime 
the special schemes for all new recruits to: the Paris 
public transport company (RATP), the electricity and gas 
industries (e.g. EDF), the Banque de France, clerks of 
notaries and CESE (French Economic, Social and 
Environmental Council). 

(8)  European Commission, 2022 Country Report – France, 

SWD(2022) 612 final 

11 

Unlocking productivity growth to 
boost competitiveness 

In  the  years  before  the  COVID-19  crisis, 
France’s trade performance showed some 
improvement,  following  a  long  period  of 
deterioration. France faced a significant and 
continuous  contraction  in  its  export  market 
shares  over  the  decade  until  2012  but  they 
stabilised  in  2013-19,  accompanied  by  an 
In 
improvement 
particular,  growth  in  unit  labour  cost  was 
moderate in the few years before the COVID-
19  crisis,  when  large  cuts  in  social  security 
contributions  were  adopted  (tax  credit  for 
competitiveness  and  employment,  CICE  and 
Responsibility  Pact).  Unit 
costs 
increased  moderately  by  2.0%  between  2013 
and 2019 (5.7% in the euro area).  

cost-competitiveness. 

labour 

in 

Despite  rising  wage  growth  in  2022,  the 
increase  in  unit  labour  costs  was  in  line 
with the EU and the euro area. Unit labour 
costs  grew  by  5.3%  in  France  over  2020  and 
2021,  compared  to  4.6%  in  the  euro  area. 
to 
However, 
interpret;  the  massive  deployment  of  partial 
unemployment  schemes, 
labour 
hoarding, 
to  misleading  productivity 
led 
readings.  

figures  are  difficult 

reflecting 

these 

France’s 
labour  productivity’s  recent 
evolution appears positive compared with 
the  euro  area  and  the  EU,  but  structural 
weaknesses  persist.  Labour  productivity 
growth in France caught up with the euro area 
and  the  EU  average  before  the  COVID-19 
crisis.  Although  productivity  growth  has 
recently been reined in by still-ongoing labour 
hoarding, labour productivity, measured in full-
time  equivalent  jobs,  is  projected  to  gain 
momentum, growing in line with the euro area 
and  EU  averages  in  the  medium  term.  Yet 
structural  weaknesses 
notably 
increasing  skills  shortages  and  mismatches,  a 
stagnating business R&D intensity and lack of 
digitalisation among smaller firms. In addition, 
restrictive regulations in regulated professions 
and in retail have weighed on competition and 
business dynamics, with the risk of leading to 
and 
lower 
higher 

innovation 

remain, 

prices, 

 
                                                 
adopted 

productivity  gains.  In  the  retail  sector,  France 
has 
on 
stringent 
operations and establishment since 2019 (see 
Annex 12).  

restrictions 

Business R&D intensity is stagnating and 
France’s  innovation  performance  does 
not  reflect  the  high 
level  of  public 
support  for  business  innovation.  The  high 
level of public support for business innovation 
(the  highest  in  the  EU  as  %  of  GDP,  relying 
primarily  on  the  tax  credit  scheme  ‘crédit 
impôt recherche’) has not had a tangible effect 
on 
for 
innovation  output,  as  measured 
example by patents (see Annex 11).  

Over  the  course  of  2020,  innovative  activity 
among  French  businesses  was  significantly 
below that in the EU: less than 30% of French 
companies  innovated  in  2020  compared  to 
36%  in  the  EU.  However,  the  French  RRP  and 
the  longer-term  strategy  France  2030  may 
boost  innovation  in  the  coming  years,  since 
they  devote  sizeable  investment  to  research, 
targeting 
and 
development 
strategic 
hydrogen, 
sectors 
decarbonation  of 
industry  and  advanced 
digital technologies. 

innovation, 
as 
such 

to 

funding 

Diffusion  and  adoption  of  digital 
technologies  among  French  businesses  is 
comparatively  low.  While  the  French  RRP 
provides  extra 
the  business 
digitalisation  action  ‘France  Num’,  smaller 
French  firms’  digital  intensity  (47%)  is  still 
lagging  behind  the  EU  average  (55%).  Only 
12%  of  small  businesses  sell  online  (EU 
average: 18%). In term of digital skills, France 
faces a severe shortage of ICT specialists (see 
Annex 10). 

for 

corporate 

Containing production costs and providing 
a  favourable  business  environment  are 
key 
investment  and 
competitiveness.  Firms  in  France  have  to 
face  high  compulsory  levies.  However,  the 
recent reduction in the corporate tax  rate and 
taxes  on  production  could  help  preserve  or 
attract  industrial  activity.  Since  2022,  as  in 
other EU countries, labour shortages and skills 
costs  and  general 
mismatches,  energy 
uncertainty about the future have weighed on 
corporate  investment,  although  it  has  held  up 

increased,  at 

better  than  expected.  While  smaller  firms’ 
access  to  finance  remains  satisfactory,  late 
payments  from the public  and  private  sectors 
have 
their  expense.  The 
integration  of  French  businesses  into  the 
single market is the lowest in the EU (9). Higher 
integration  could  help  them  grow  and  boost 
productivity gains. 

Large investment programmes supporting 
industry’s  transition  towards  net  zero 
could  reinforce  competitiveness.  Through 
its  recovery  and  resilience  plan  and  the  long-
term  strategy 
‘France  2030’,  significant 
financial support is provided to businesses for 
their green transition and the growth of clean 
energy  technologies.  Indeed,  France  has  a 
low-carbon 
strong  manufacturing  base 
technologies  and 
including 
hydrogen  and  nuclear,  and  is  expected  to 
to  other  decarbonised-generation 
expand 
technologies, 
offshore 
windfarms.  

components, 

including 

new 

in 

in 

capital 

investment 

France represents nearly 11% of the EU’s total 
venture 
climate 
technology  start-ups  and  scale-ups.  France 
also suffers less than the rest of the EU from 
skills’ shortages in the manufacturing of clean 
energy  technologies.  Despite  the  large  public 
support  however,  only  29%  of  small  French 
firms  have  invested  more  than  1%  of  their 
turnover  to  become  resource  efficient  (EU 
average: 40%)  

Investment  in  clean  tech  manufacturing 
is  however  hampered  by  long  permitting 
procedures. It takes 17 months on average to 
obtain a building permit, receive environmental 
the  public 
authorisation  and  carry  out 
investigation  process 
industrial 
project (10). The procedure involves bottlenecks, 
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 

for  an 

(9)  France’s intra-EU trade as a share of GDP has slightly 
declined for several years and is now the lowest in the 
EU with 16.5% (against 42% on average for EU 
countries). Source: Eurostat 

(10)  Assemblée nationale, Propositions des pilotes pour le 

projet de loi industrie verte, April 2023 

12 

 
                                                 
industrial  projects.  This  process  can  last  at 
least  6  months,  which  adds  to  the  average 
time  of  17  months.  Investment  projects  may 
also  be  subject  to  litigation  procedures  that 
can  last  several  years,  leading  to  projects 
being  abandoned.  The  French  government 
announced  a  bill  of 
law  for  the  green 
industries,  which  could  include  measures  to 
accelerate factories’ establishment (11). 

Addressing inequalities in 
education 

to 

Despite  public  spending  on  education 
above  the  OECD  average,  the  French 
education  system 
is  marked  by  a 
significant  share  of  low  achievers  and 
high  inequalities.   The  share  of  students 
lacking  basic  skills  remains  high,  especially  in 
mathematics.  Performance  remains  strongly 
background. 
socio-economic 
linked 
However,  the  COVID-19  pandemic  did  not 
significantly  deepen  existing  socio-economic 
inequality,  as  measures  taken  to  support  the 
most  disadvantaged  pupils  were  successful, 
although  to  a  higher  extent  in  French  than  in 
mathematics.  These  inequalities  weigh  on  the 
workforce’s  up-  and 
re-skilling  potential, 
fuelling  at  a  later  stage  labour  market  and 
social challenges (see Annex 14).  

is  higher 

in  France 

Public  spending 
in 
secondary education but lower in primary and 
to 
tertiary  education  compared 
the  EU 
average,  while 
recommends 
the  OECD 
prioritising  spending  in  education  from  the 
earliest  age  to  better  tackle  inequality  and 
school dropout. (12)  

Reform  measures  adopted  in  2017  to 
halve class sizes for the first and second 
grades  in  disadvantaged  public  primary 
schools  helped  bring  class  size  more  in 
line with the OECD average.  While it is too 

results 

early  to  assess  the  long-term  impact  of  this 
reform  on  the  learning  outcomes  of  almost 
300 000  students,  a  recent  report by  the 
Senate (13)  shows  encouraging 
in 
maths,  but  outcomes  in  French  are  more 
mixed. It also welcomes the increased support 
for  teachers,  who  benefited  from  vocational 
training to implement this policy,  but calls for 
more  sustained  efforts  to  help  teachers 
develop  new  pedagogical  practices.  Moreover, 
many socio-economically disadvantaged pupils 
are  not  covered  by  the  measure,  as  they  are 
not  attending  schools  in  priority  areas  (REP, 
REP+).  

to  national  and 

Underachievement  in  maths  and  major 
inequalities remain a source of particular 
concern,  affecting  potential  growth. 
According 
international 
surveys, average performance in mathematics 
has steadily decreased over the past 30 years 
for  all  categories  of  pupils,  and  in  particular 
for  disadvantaged  pupils.  According 
to 
the  Economic  Analysis 
researchers 
Council (14), labour productivity in France could 
substantially 
in 
increase 
mathematics improved (see Annex 15). 

if  performance 

of 

The  percentage  of  early  school  leavers 
stood  at  7.6%  in  2022,  continuing  the 
downward  trend  of  the  last  decade,  but 
some  disparities  exist.  Early  leaving  is 
higher among young people with low-educated 
parents  and  those  born  outside  of  France. 
Compared  to  the  national  average,  boys  and 
pupils  living  in  rural  areas  and  in  outermost 
regions also lag behind. The inclusion of pupils 
with  a  disability,  while  progressing,  remains  a 
challenge,  mainly  due  to  the  shortage  of 
support  specialists  and  low  accessibility  (see 
Annex 15).  

Difficulties  in  recruiting  teachers  and 
their  working  conditions  remain  major 
challenges.  The  French  Court  of  Auditors 
recently warned about the growing difficulties 

(11)  France’s Ministry of Economy, Industrie verte: un projet 

de loi en co-construction, April 2023 .  

(12)  Cour des comptes, Mobiliser la communauté éducative 
autour du projet d’établissement, Rapport public 
thématique, 2023 

(13)  French Senate, Bilan des mesures éducatives du 
quinquennat, Rapport d'information n° 543, 2022 

(14)  https://www.cae-eco.fr/baisse-de-la-productivite-en-

france-echec-en-maths 

13 

 
                                                 
                                                 
in recruiting teachers (15), particularly in certain 
regions  and  disciplines.  Supply  teachers  are 
recruited to fill the vacant posts, but often do 
not  have the  same  level  of  qualifications  and 
practical experience as permanent teachers.  

In  2022,  the  Council  of  the  EU  recommended 
that  France  improve  working  conditions  and 
continuous  training  for  teachers.  In  response, 
the  French  government  upgraded  teachers’ 
wages  in  2023  and  opened  new  vocational 
training  centres 
(see  Annex 15). 
in  2022 
Moreover, while OECD reports show that giving 
schools a high degree of autonomy can have a 
positive  impact  on  pupils’  performance  (when 
coupled  with  accountability),  the  court  of 
auditors  warns  that  in  practice  head  teachers 
have  limited  margins  to  adapt  to  students’ 
needs and local circumstances. (16) 

Energy: focusing efforts on 
renewable energy, deep 
renovation, and green skills 

in 

France  missed  its  renewables  target  for 
2020  in  terms  of  gross  final  energy 
consumption  and  could  have  difficulties 
meeting the new 2030 objective. France is 
terms  of  deploying 
lagging  behind 
renewable  energy,  in  particular  for  electricity 
production  and  heating.  Delays  in  permitting, 
for  all  technologies  (onshore  and  offshore 
wind as well as solar) are related to a lack of 
political  support  for  projects, 
inadequate 
planning  and  long  and  complex  permitting 
procedures,  as  well  as  public  acceptance  and 
legal  challenges,  which  create  uncertainty  for 
investors and developers. 

of 

law  on 

recently  adopted 

the 
The 
acceleration 
energy 
production  acknowledged  the  need  to 
considerably develop renewable heat and 
gas  and  increase  electrification.  The  new 

renewable 

is 

therefore  crucial 

law  gives  momentum  to  a  faster  deployment 
of renewable projects that could place France 
on a trajectory to achieve the 2030 objectives. 
It 
to  swiftly  adopt 
implementing  acts  (e.g.  based  on  overriding 
public  interest,  agrivoltaics,  tariff  reductions, 
etc.),  as  well  as  a  new  multiannual  energy 
programme  (Programmation  Pluriannuelle  de 
l’Energie)  that  reflects  the  level  of  political 
ambition  of  the  new  law  and  the  appropriate 
balance between energy sources.  

strengthening  human  and 
In  addition, 
engineering capacities, both at the level of the 
state (central administration and decentralised 
services) and regional and local authorities will 
be  key  in  accelerating  the  deployment  of 
renewables on the ground.  

France  is  facing  rising  temperatures  and 
sea levels, and the increasing occurrence 
of  heatwaves,  droughts,  and  forest  fires. 
Two  thirds  of  the  population  is  exposed  to 
climate  change  and  it  is  projected  that  by 
2050 two billion cubic meters of water will be 
lacking  (see  Annex 6).  France  is  facing  an 
increasingly  severe  water  scarcity  challenge 
exacerbated  by  repetitive  drought  periods. (17)  
This  questions 
the  fair  and  sustainable 
distribution of scare resources for biodiversity, 
agriculture,  energy  production  and  drinking 
purposes. Mitigating water risks requires better 
synergies 
local 
administrations  and  river  basin  management 
bodies. (18)  

between 

national 

and 

Since  2000,  nuclear  production  losses  due  to 
high  river  temperatures  and  low  river  flows 
have  represented  an  average  of  0.3%  of 
annual production, which has a serious impact 
on the security of electricity supply. Security of 
supply  has  also  been  affected  by  the  lower 
availability  of  hydropower  output,  exposed  to 
droughts,  while  the  trend  for  acute  long  dry 
periods is expected to become more frequent, 
even 
it  alternates  with  floods.  Swift 
deployment of renewables would contribute to 
France’s energy security. 

if 

(15)  Cour des comptes, Devenir enseignant : la formation 
initiale et le recrutement des enseignants, 2023 

(17)  Toreti, A., et al. Drought in Europe March 2023, 

European Commission, Joint Research Centre, 2023 

(16)  Cour des comptes, Mobiliser la communauté éducative 
autour du projet d’établissement, Rapport public 
thématique, 2023 

(18)  Cour des comptes, Une organisation inadaptée aux 
enjeux de la gestion quantitative de l’eau, Rapport 
public annuel, 2023 

14 

 
                                                 
                                                 
can  help 

reduce 
Energy  efficiency 
emissions and dependence on fossil fuels. 
The  French  recovery  and  resilience  plan 
contains major projects in building renovation, 
both for social and individual housing, as well 
as  public  buildings  and  smaller  businesses. 
The  heavy  focus  on  renovating  buildings 
belonging  to the  public  sector  has  a  knock-on 
effect  on  the  renovation  sector  as  a  whole 
processes, 
(improvement 
promotion  of 
innovative 
solutions).  In  view  of  the  challenge,  efforts 
should  be  maintained,  beyond  the  recovery 
and  resilience  plan,  in  particular  for  regional 
local  authorities,  which  should  take 
and 
advantage  of  all  budget  and 
financial 
engineering tools available, such as third-party 
financing. 

of 
technical 
industrial  and 

Regarding  the  renovation  of  residential 
buildings,  most  projects  benefitting  from 
‘MaPrimeRénov’  have  focused  on  one-
step  works,  leading  to  light  renovations, 
while  deep  renovations  could  make  a 
major  dent  in  energy  consumption.  In  the 
first  half  of  2022,  only  27 %  of  works 
contained  at  least  two  steps  of  renovation, 
and  only  5 %  were  global  renovations (19). 
Public  and  private  investment 
in  building 
renovation  should  focus  particularly  on  low-
income  households (20)  and  on  the  building 
stock  with  worst  energy  performance,  to 
eradicate 
the  5.2  million  most  energy-
inefficient dwellings (housing ranked F and G) 
by 2030.   

The 2021 national Climate and Resilience Law 
introduced  some  measures  which  should 
incentivise  the  deep  renovation  of  buildings, 
such as prohibition the renting of housing with 
an Energy Performance Certificate (EPC) of “G” 
class 
than 
450 kWh/m²/year  as  from  2023,  extended  to 
other housing of “G” class in 2025, to “F” from 
2028 and “E” from 2034.  

consuming  more 

and 

(19)  Inspection générale des Finances, Comité d’évaluation 
du plan France Relance, Deuxième rapport France 
Stratégie, 2022. 

(20)  In 2021 6% of households were unable to keep their 

as 

as  well 
services 

Several other avenues could be explored, such 
as strengthening ‘MaPrimeRenov’ Sérénité’ and 
reducing  the  remaining  costs  for  the  poorest 
developing 
households, 
‘Mon 
accompanying 
accompagnateur Renov’). In addition, synergies 
between  energy  renovation  support  schemes 
and  aid  for  self-consumption  of  energy  and 
energy  communities  (the  potential  of  which 
remains  largely  untapped)  could  also  help 
cushion the consequences of the energy crisis 
and make renovations more efficient.  

(such  as 

operators, 

labour  shortages 

In  France,  in  the  context  of  the  green 
transition, 
in  key 
sectors  have  increased  in  recent  years, 
also  linked  to  a  lack  of  relevant  skills. 
This  has  created  bottlenecks 
in  the 
transition to a net-zero economy. In 2022, 
labour  shortages  were  reported  in  France  for 
54  occupations  that  required  specific  skills  or 
knowledge  for  the  green  transition,  including 
civil engineering technicians, power production 
engineering 
plant 
professionals. (21)  The 
rate 
increased  across  key  sectors,  such  as 
construction  (from  0.4%  in  2015  to  2%  in 
2021) and manufacturing (from 0.6% in 2015 
to  1.7%  in  2021),  with  both  sectors  standing 
below  the  EU  average  of  3.6%  and  1.9%, 
respectively,  in  2021. (22)  In  2022,  labour 
factor 
shortages  were 
constraining production in industry (for 19.3% 
of  firms)  and  construction  (for  45.3%  of 
firms). (23)    Upskilling  and  reskilling  for  the 
green  transition,  including  for  people  most 
labour 
affected,  and  promoting 

and 
job  vacancy 

reported  as  a 

inclusive 

(21)  Data on shortages is based on European Labour 

Authority (2023), EURES Report on labour shortages and 
surpluses 2022. National authorities report through a 
questionnaire, based on administrative data and other 
sources, as submitted by the EURES National 
Coordination Offices. Definitions of shortages differ, 
thus data is not comparable across countries and 
covers a wide variety of sectors.  

Skills and knowledge requirements are based on the 
ESCO (European Skills Competences and Occupations) 
taxonomy on skills for the green transition (for 
occupations at ISCO 4-digit level, of which there are 
436 in total. Examples are identified based on their 
ESCO “greenness” score and relevant sectors. 

(22)  Eurostat (JVS_A_RATE_R2) 

home adequately warm. 

(23)  European Business and Consumer Survey 

15 

 
                                                 
                                                 
 
to 
markets  are  essential  policy 
accelerate  the  transition  to  net-zero  and 
ensure its fairness (see Annex 8). 

levers 

from 

switching 

Fiscal support for fossil fuels reduces the 
public budget available for investment in 
renewable  energy  and  disincentivises 
consumers 
to 
alternatives,  notably  in  transport.  France 
spent around EUR 11 bn of subsidies on fossil 
fuels  in  2020  (second  highest  in  the  EU),  an 
amount  that  rose  significantly  between  2015 
and 2020. (24)  That contribution accounted  for 
around 20% of the total amount of fossil fuel 
subsidies granted that year in the EU.  

Government  support  for  fossil  fuels  was 
mostly  directed  at  end-user  beneficiaries, 
generally via tax expenditure such as an excise 
tax  refund  for  diesel  used  in  road  freight 
transport (25).  Regarding  emergency  measures 
to  fight  rising  energy  prices,  France  put  in 
place  support  measures  for  households  and 
businesses  as  recommended.  Nevertheless, 
the measures were not targeted enough to the 
households  or  businesses  most  in  need  and 
did  not  preserve  the  price  signal  to  reduce 
energy 
and 
energy 
efficiency.  Most  of  the  expenditure  accounted 
for  subsidised  discounts  on  fossil  fuels  and 
compensation  for  gas  suppliers,  to  limit  gas 
prices (tariff shields). 

increase 

demand 

(24)  European Commission, Directorate-General for Energy, 
Badouard, T., Bon Mardion, J., Bovy, P., et al., Study on 
energy subsidies and other government interventions in 
the European Union : final report : 2022 edition, 
Publications Office of the European Union, 2022 

(25)  OECD, Inventory of Support Measures for Fossil Fuels: 

Country Notes, OECD Publishing, Paris, 2022 
https://doi.org/10.1787/5a3efe65-en (accessed on 01 
March 2023) 

16 

 
 
                                                 
KEY FINDINGS 

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

  significant 
transition 
transport, 
hydrogen, etc.); 

investment 
(building 

industry 

renovation, 

in 

the  green 
clean 
decarbonisation, 

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

labour 

  promoting reforms in public finances; 

  the 

of 

digitalisation 

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

stagnating business R&D intensity and lack 
of digitalisation among smaller firms;  

  accelerating  French 

industry’s  transition 
towards net zero and building a supporting 
increase 
environment, 
regulatory 
investment 
in  cleantech  manufacturing, 
including  by  simplifying  and  speeding  up 
permitting 
for  net-zero  manufacturing 
projects; 

to 

and 

related 

  accelerating  the  deployment  of  renewable 
energies 
storage 
the 
technologies,  particularly  by  addressing 
permitting 
increased 
renewables  share  would  attenuate  the 
impact  of  droughts  and  heatwaves  on 
hydropower and nuclear output.  

bottlenecks; 

an 

  promoting  the  extensive  renovation  of 
the  decarbonisation  of 
buildings  and 
heating,  with  a  particular  focus  on  low-
income  households  and  on  the  building 
stock with the worst energy performance; 

  ensuring  adequate  training,  to  give  the 
workforce the skills necessary for the green 
transition. 

  orienting  research  towards  the  digital  and 

green transitions.  

France  should  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. 

investment 
Beyond  the  reforms  and 
under  the  RRP,  France  would  benefit 
from: 

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

  improving 

learning 

outcomes 

and 
addressing inequalities in education, raising 
the  share  of  people  with  basic  skills, 
providing  additional  work-based  learning 
options; 

  improving 

its 

by 
addressing  structural  weaknesses,  such  as 
the  lack  of  skills  and  skills’  mismatches, 

competitiveness 

17 

 
 
 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Cross-cutting indicators 

A1.  Sustainable Development Goals 

A2.  Progress in the implementation of country-specific recommendations 

A3.  Recovery and resilience plan - overview 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy security and affordability 

A8.  Fair transition to climate neutrality 

Productivity 

A9.  Resource productivity, efficiency and circularity 

A10.  Digital transformation 

A11.  Innovation 

A12.  Industry and single market 

A13.  Public administration 

Fairness 

A14.  Employment, skills and social policy challenges in light of the European Pillar of Social Rights 

A15.  Education and training 

A16.  Health and health systems 

A17.  Economic and social performance at regional level 

Macroeconomic stability 

A18.  Key financial sector developments 

A19.  Taxation 

A20.  Table with economic and financial indicators 

A21.  Debt sustainability analysis 

A22.  Macroeconomic imbalance procedure assessment matrix 

21 

24 

24 

26 

31 

33 

35 

36 

36 

41 

46 

49 

49 

51 

53 

55 

59 

61 

61 

63 

65 

67 

70 

70 

72 

74 

75 

78 

 
 
 
LIST OF TABLES 

A2.1. 
Summary table on 2019-2022 CSRs 
A3.1. 
Key elements of the French RRP('s) 
A5.1. 
Resilience indices summarising the situation across RDB dimensions and areas 
A6.1. 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
A7.1. 
Key Energy Indicators 
A8.1. 
Key indicators for a fair transition in France 
A9.1. 
Overall and systemic indicators on circularity 
A10.1.  Key Digital Decade targets monitored by DESI indicators 
A11.1.  Key innovation indicators 
A12.1. 
Industry and the Single Market 
A13.1.  Public administration indicators 
A14.1.  Social Scoreboard for France 
A14.2.  Situation of France on 2030 employment, skills and poverty reduction targets 
A15.1.  EU-level targets and other contextual indicators under the European Education Area strategic framework 
A16.1.  Key health indicators 
A18.1.  Financial soundness indicators 
A19.1.  Taxation indicators 
A20.1.  Key economic and financial indicators 
A21.1.  Debt sustainability analysis - France 
A21.2.  Heat map of fiscal sustainability risks - France 
A22.1.  Assessment of macroeconomic imbalances matrix 

LIST OF GRAPHS 

A1.1. 
Progress towards the SDGs in France in the last 5 years 
A2.1. 
France’s progress on the 2019-2022 CSRs (2023 European Semester) 
A3.1. 
Total grants disbursed under the RRF 
A3.2. 
Fulfilment status of milestones and targets 
A3.3. 
Disbursements per pillar 
A4.1. 
Cohesion policy funds 2021-2027 in France: budget by fund 
A4.2. 
Synergies between Cohesion policy funds and RRF pillars in France 
A4.3. 
Cohesion policy funds contribution to the SDGs in 2014-2020 and 2021-2027 in France 
A6.1. 
Thematic – greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2021 
A6.2. 
Thematic - Energy mix (top) and electricity mix (bottom), 2021 
A6.3. 
Thematic – environmental investment needs and current investment, p.a. 2014-2020 
A7.1. 
Storage levels in France 
A7.2. 
Share of gas consumption per sector, 2021 
A8.1. 
Fair transition challenges in France 
A8.2. 
Distributional impacts of energy prices due to rising energy expenditure (2021-2023) 
A9.1. 
Trend in material use 
A9.2. 
Treatment of municipal waste 
A12.1.  Total factor productivity (2005=100) 
A12.2.  Business environment and productivity drivers 
A13.1.  France. Performance on the single market scoreboard governance tools 
A13.2.  France. Indicators of Regulatory Policy and Governance: stakeholder engagement 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2019-2070 
A17.1.  GDP per capita (2010) and GDP growth (2011-2020) - France 
A17.2.  Labour productivity, EU, France NUTS 2 regions, 2000-2020 
A19.1.  Tax revenues from different tax types, % of total taxation 
A19.2.  Tax wedge for single and second earners, % of total labour costs, 2022 

22 

27 
31 
35 
36 
41 
46 
50 
52 
53 
55 
60 
61 
62 
63 
65 
70 
72 
74 
76 
77 
78 

25 
26 
32 
32 
32 
33 
33 
34 
36 
37 
38 
41 
42 
46 
47 
49 
50 
55 
57 
60 
60 
65 
65 
67 
68 
73 
73 

 
 
 
 
 
CROSS-CUTTING INDICATORS 
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  and  the 
environmental crisis, 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  the  SDGs  in  an 
EU context. 

France  is  improving  on  five  SDG  indicators 
to 
(SDGs  2,  7,  9,  12,  13) 
environmental  sustainability,  but  is  moving 
away from the SDGs on four others (SDGs 6, 
11, 14, 15). It needs to catch up with the EU 

related 

average  on  SDG  11  (Sustainable  cities  and 
communities).  France  has  made  considerable 
progress on SDG 12 (Responsible consumption and 
production)  and  on  SDG  13  (Climate  action),  in 
particular  by  reducing  average  CO2  emissions  per 
km  from  new  passenger  cars  (from  109.8  g  in 
2016  to  108.6  g  in  2021)  and  reducing  the 
generation  of  waste.  The  French  recovery  and 
resilience  plan  (RRP)  provides  for 
large-scale 
investments  in  the  green  transition  such  as  the 
sustainable 
energy  efficiency  of  buildings, 
transport or the circular economy. However, France 
is moving away from SDG 11 on sustainable cities 
and communities and is below the EU average. Its 
performance  is  dragged  down  by  more  people 
suffering  from  severe  housing  deprivation  (from 
2.3%  in  2015  to  3.8%  in  2020),  the  population 
living  in  households  suffering  from  noise  (from 
16.4%  in  2015  to  20.7%  in  2020),  and  the 
population  reporting  crime,  violence  or  vandalism 
in  their  area  (from  14.2%  in  2015  to  17.7%  in 
2020). France is also moving away from SDG 6 on 
clean water and sanitation, but remains above the 

Graph A1.1: Progress towards the SDGs in France in the last 5 years 

For detailed datasets on the various SDGs, see the annual Eurostat report ‘Sustainable development in the European Union’; for 
details on extensive country-specific data on the short-term progress of Member States: Key findings – Sustainable development 
indicators – Eurostat (europa.eu). The status of each SDG in a country is the aggregation of all indicators for the specific goal 
compared to the EU average. A high status does not mean that a country is close to reaching a specific SDG, but signals that it is 
doing better than the EU on average. The progress score is an absolute measure based on the indicator trends over the past 5 
years. The calculation does not take into account any target values as most EU policy targets are only valid for the aggregate EU 
level. Depending on data availability for each goal, not all 17 SDGs are shown for each country. 
Source: Eurostat,  latest update of early April 2023, except for the EU Labour Force Survey (LFS) indicators released on 27 April 
2023. Data mainly refer to 2016-2021 or 2017-2022. 

23 

 
 
 
 
 
 
challenges  persist  to  improve  productivity  growth 
in France (see Further priorities ahead). 

is 

France 
indicators 
improving  on  SDG 
related  to  macroeconomic  stability  (SDGs  8, 
16, 17) but still needs to catch up compared 
to the EU. While it has made progress on SDG 16 
(Peace, justice and strong institutions) and on SDG 
17 (Partnerships for the goals), it performs below 
the EU average. France spends less on law courts 
(EUR  91.9  per  capita)  than  the  EU  average  (EUR 
107.0)  in  2021.  The  population  now  has  less 
confidence  in  the  European  Parliament  (38%  of 
the  population  versus  49%  for  the  EU).  France  is 
also  penalised  by  its  financial  governance,  with 
general  government  debt  of  111.6%  of  GDP  in 
2022  (EU  average  84.0%)  and  a  low  share  of 
environmental taxes in total tax revenues (4.8% in 
2021, EU average 5.5%). The French RRP contains 
reforms  of  the  governance  of  public  finances, 
which  are  expected  to  improve  the  quality  and 
efficiency  of  public  spending  and  allow  it  to 
prioritise  growth  and  environmentally  friendly 
expenditure. 

As the SDGs form an overarching framework, any 
links  to  relevant  SDGs  are  either  explained  or 
depicted with icons in the other Annexes. 

EU  average.  Upcoming 
in  water 
networks  is  envisaged  in  the  RRP,  also  in  the 
outermost regions.  

investment 

France  is  improving  on  almost  all  SDG 
indicators related to fairness (SDGs 3, 4, 5, 7, 
8, 10), but is moving away from the goal on 
SDG 1 (No poverty). It performs very well on this 
dimension  of  the  SDGs.  Some  indicators  linked  to 
quality  education  (SDG  4)  are  improving,  such  as 
the lower rate of early leavers from education and 
training (from 8.8% of the population aged 18-24 
in  2017  to  7.6%  in  2022)  or  higher  tertiary 
educational  attainment 
(from  44.5%  of  the 
population aged 25-34 in 2017 to 50.4% in 2022). 
However,  these  global  indicators  do  not  capture 
some  specific  issues  encountered  in  the  French 
education system, such as the persisting influence 
of  socio-economic  background  on  educational 
outcomes and peculiarities about some vulnerable 
groups  (see  Further  priorities  ahead).  France  is 
moving away from SDG 1 (No poverty), with more 
people at risk of poverty or social exclusion (from 
18.7%  of  the  population  in  2016  to  19.2%  in 
2021)  or  living  in  households  with  very  low  work 
intensity (from 7.8% in 2016 to 10.7% in 2021). 

France is improving and performs well on all 
SDGs on productivity (SDGs 4, 8, 9). On SDG 8 
(Decent  work  and  economic  growth),  the  country 
demonstrates progressive and high performance in 
its  investment  rate  (24.2%  of  GDP  versus  22.4% 
for  the  EU  in  2021).  Between  2017  and  2022, 
France  managed  to  lower  the  share  of  young 
people  not  in  education,  employment  or  training 
(from  13.2%  of  the  population  aged  15-29  to 
12.0%)  and  lower  the  long-term  unemployment 
rate (from 2.9% of the active population to 2.0%). 
Although  France  is  progressing  towards  SDG  9 
(Industry,  innovation  and  infrastructure)  overall 
and  is  near  the  EU  average,  some  innovation 
indicators  are  stagnating,  such  as  gross  domestic 
expenditure  on  R&D  (2.22%  of  GDP  in  2016, 
in  2021)  or  the  number  of  patent 
2.21% 
applications  (159  per  million  inhabitants  in  2017, 
161 in 2022; see also Annex 11). The French RRP 
as  well  as  the  long-term  investment  plan  ‘France 
2030’  provide  for  significant  investments  in  R&D 
such  as  key  digital 
in 
strategic 
computing, 
quantum 
technologies 
cybersecurity), 
(hydrogen, 
transition 
aeronautics,  decarbonation  of  industry)  and  the 
digitalisation  of  administration  (including  e-health 
structural 
and  digital  education).  However, 

sectors 
(cloud, 
green 

24 

 
 
 
 
ANNEX 2: PROGRESS IN THE IMPLEMENTATION OF COUNTRY-SPECIFIC 
RECOMMENDATIONS 

Graph A2.1: France’s progress on the 2019-2022 
CSRs (2023 European Semester) 

The Commission has assessed the 2019-2022 
country-specific  recommendations  (CSRs) (26) 
addressed to France as part of the European 
Semester.  These  recommendations  concern  a 
wide  range  of  policy  areas  that  are  related  to  11 
of  the  17  Sustainable  Development  Goals  (see 
Annexes  1  and  3). The  assessment  considers  the 
policy  action  taken  by  France  to  date (27)  and  the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (28).  At  this  stage  of  RRP  implementation, 
78%  of  the  CSRs  focusing  on  structural  issues 
from  2019-2022  have  recorded  at  least  ‘some 
progress’,  while  20%  recorded  ‘limited  progress’ 
(see  Graph A2.1).  As  the  RRP  is  implemented 
further,  considerable  progress 
in  addressing 
structural CSRs is expected in the years to come. 

Source: European Commission 

(26)  2022 CSRs: EUR-Lex - 32022H0901(10) - EN - EUR-Lex 

(europa.eu) 

      2021 CSRs: EUR-Lex - 32021H0729(10) - EN - EUR-Lex 

(europa.eu) 
2020 CSRs: EUR-Lex - 32020H0826(10) - EN - EUR-Lex 
(europa.eu) 
2019 CSRs: EUR-Lex - 32019H0905(10) - EN - EUR-Lex 
(europa.eu) 

(27)  Including policy action reported in the national reform 

programme and in Recovery and Resilience Facility (RRF) 
reporting (twice a year reporting on progress in implementing 
milestones and targets and resulting from the payment 
requests assessment). 

(28)  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 considers the 
degree of implementation of the measures included in the 
RRP and of those carried out outside of the RRP at the time 
of assessment. Measures laid down in the Annex of the 
adopted Council Implementing Decision on approving the 
assessment of the RRP, which are not yet adopted or 
implemented but considered credibly announced, in line with 
the CSR assessment methodology, warrant ‘limited progress’. 
These measures. Once implemented, these measures can 
lead to ‘some/substantial progress or full implementation’, 
depending on their relevance. 

25 

No progress2%Limited progress20%Some progress30%Substantial progress38%Full implementation10% 
 
                                                 
                  
 
 
 
 
   
 
Table A2.1: Summary table on 2019-2022 CSRs 

(Continued on the next page) 

26 

FranceAssessment in May 2023*RRP coverage of CSRs until 2026**Revelant SDGs2019 CSR 1Limited 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 applicableSDG 8, 16Usewindfallsgainstoacceleratethereductionofthegeneralgovernment debt ratio. Not relevant anymoreNot applicableSDG 8, 16Achieve 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: Assessment of the quality of public spending (construction of financial laws)Relevant RRP measures being planned as of 2023: Governance of public finances (entry into force of a new Public Finances Programming Law)SDG 8, 16Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimes,withtheviewtoenhancetheirfairnessand sustainability.Substantial ProgressSDG 82019 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 2021: Reform of the unemployment insurance, Hiring subsidies for youth under 26, Hiring subsidies for apprenticeshipsRelevant RRP measures being planned as of 2022:  Hiring subsidies for professionalization contractsSDG 8, 10and address skills shortages and mismatches.Some ProgressRelevant RRP measures being implemented as of 2021: Increase of resources for France CompétencesRelevant RRP measures being planned as of 2022: FNE-TrainingSDG 42019 CSR 3Substantial ProgressFocus investment-related economic policy on research and innovation (while improving the efficiency of public support schemes, including knowledge transfer schemes), Substantial ProgressRelevant RRP measures being implemented as of 2021: Innovate for the green transition, Innovating for the resilience of our business models, Support teaching, research, development and innovation ecosystems, Governance of the Programme d’investissements d’avenirRelevant RRP measures being planned as of 2022: R&D recovery strategy - National Research AgencyRelevant RRP measures being planned as of 2023: Structural aspects of the Research Programming LawSDG 9, 10, 11renewable energy, energy efficiency and interconnections with the rest of the Union, Some ProgressRelevant RRP measures being implemented as of 2021: Energy renovation of private housing, Thermal renovation of public buildings, Support to demand for clean vehiclesRelevant RRP measures being planned as of 2022: Revised thermal regulation RE2020, Develop decarbonised hydrogenSDG 7, 9, 10, 11, 13and on digital infrastructure, taking into account territorial disparities.Substantial ProgressRelevant RRP measures being planned as of 2022: High-speed broadband planSDG 9, 10, 112019 CSR 4Substantial 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 ProgressSDG 8, 9, 10, 12Reduce regulatory restrictions, in particular in the services sector,Limited ProgressRelevant RRP measures being planned as of 2022: Law on accelerating and simplifying public action (“loi ASAP”), Law on differentiation, decentralization, deconcentration and on various measures to simplify local public action (3DS)SDG 8, 9and fully implement the measures to foster the growth of firms.Full ImplementationNot applicableSDG 8, 92020 CSR 1Substantial ProgressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability,whileenhancinginvestment.Not relevant anymoreNot applicableSDG 8, 16Strengthentheresilienceofthehealthsystembyensuringadequatesuppliesofcriticalmedicalproductsandabalanceddistributionofhealth workers, and by investing in e-Health.Substantial ProgressRelevant RRP measures being planned as of 2022: Renovation of medico-social establishmentsRelevant RRP measures being planned as of 2023: Modernisation and restructuring of hospitals and health care supplyRelevant RRP measures being planned as of 2024: Digital health SDG 3 
 
 
  
 
Table (continued) 

(Continued on the next page) 

27 

2020 CSR 2Substantial ProgressMitigate the employment and social impact of the crisis,Substantial progressRelevant RRP measures being implemented as of 2021: Hiring subsidies for youth under 26, Hiring subsidies for apprenticeshipsRelevant RRP measures being planned as of 2022:  Hiring subsidies for professionalization contractsSDG 1, 2, 8, 10 including by promoting skills Substantial progressRelevant RRP measures being implemented as of 2021: Reskilling through dual training programmesRelevant RRP measures being planned as of 2022: FNE-TrainingSDG 4and active support for all jobseekers.Some progressRelevant RRP measures being planned as of 2022: Aided contracts for youth, “Personalised guidance towards employment and autonomy” and youth guarantee, Personalised pathways for NEET youth aged 16-18, Increase of resources for Pôle EmploiSDG 82020 CSR 3Substantial ProgressEnsure the effective implementation of measures supporting the liquidity of firms, in particular for small and medium-sized enterprises.Full ImplementationSDG 8, 9 Front-load mature public investment projectsSubstantial ProgressRelevant RRP measures being implemented as of 2021: Thermal renovation of public buildingsRelevant RRP measures being planned as of 2022: Support for cultural sectors and heritage renovations, High-speed broadband planSDG 8, 16and promote private investment to foster the economic recovery.Substantial ProgressRelevant RRP measures being implemented as of 2021: Energy renovation of private housingRelevant RRP measures being planned as of 2022: Digitization of companiesRelevant RRP measures being planned as of 2023: Energy renovation of very small enterprises (VSEs) and small and medium sized enterprises (SMEs)SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularonsustainable transport,Substantial ProgressRelevant RRP measures being implemented as of 2021: Support to the railway sector, Support to demand for clean vehicles, Daily mobility: development of public transport, Mobility lawRelevant RRP measures being planned as of 2022: Support plan to the aeronautics sectorSDG 11clean and efficient production and use of energy,Some ProgressRelevant RRP measures being implemented as of 2021: Energy renovation of private housing, Thermal renovation of public buildings, Decarbonisation of industryRelevant RRP measures being planned as of 2022: Develop decarbonised hydrogenSDG 7, 9, 13energy (infrastructures)Some ProgressRelevant RRP measures being implemented as of 2021: Acceleration of work on transport infrastructureRelevant RRP measures being planned as of 2023: Strengthening the resilience of electricity networks and energy transition in rural areasSDG 7, 9, 13and digital infrastructuresSubstantial ProgressRelevant RRP measures being planned as of 2022: High-speed broadband planSDG 9as well as research and innovation.Substantial ProgressRelevant RRP measures being implemented as of 2021: Innovate for the green transition, Innovating for the resilience of our business models, Support teaching, research, development and innovation ecosystemsRelevant RRP measures being planned as of 2022: R&D recovery strategy - National Research AgencySDG 9 
 
 
  
 
Table (continued) 

(Continued on the next page) 

28 

2020 CSR 4Some ProgressContinue to improve the regulatory environment,Limited ProgressRelevant RRP measures being planned as of 2022: Law on accelerating and simplifying public action (“loi ASAP”), Law on differentiation, decentralization, deconcentration and on various measures to simplify local public action (3DS)SDG 8, 9reduce administrative burdens for firmsSome ProgressRelevant RRP measures being planned as of 2022: Law on accelerating and simplifying public action (“loi ASAP”)SDG 8, 9and simplify the tax system.Substantial ProgressSDG 8, 9, 10, 122021 CSR 1Some ProgressIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudent fiscal policy. Preserve nationally financed investment.Full implementationNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Limited ProgressNot applicableSDG 8, 16At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboth the revenue and expenditure sides of the budget, and to the Some progressNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Some progressNot applicableSDG 8, 162022 CSR 1Some ProgressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Stand ready to adjust current spending to the evolving situation.Full ImplementationNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityandother Union funds.Substantial ProgressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringcredibleandgradualdebtreductionandfiscalsustainabilityinthemediumtermthroughgradualconsolidation,investmentandreforms.Limited ProgressNot applicableSDG 8, 16Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimestoenhanceitsfairnesswhileunderpinningits sustainability.Substantial ProgressSDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 13 July 2021.SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtostarting their implementation.2022 CSR 3Some ProgressAddresstheshortageofskillsbyraisingtheshareofpeoplewithbasic skills, providing additional work-based learning options andSome ProgressRelevant RRP measures being implemented as of 2021: Plan for youth: higher education for post-baccalaureate students;  Increase in the resources of France CompétencesRelevant RRP measures being planned as of 2023: Reskilling through dual training programmes SDG 4improvingthelearningoutcomesofallstudents,inparticularbyadaptingresourcesandmethodstotheneedsofdisadvantagedstudents and schoolsLimited ProgressRelevant RRP measures being planned as of 2022: digital transformation of the school; Personalised pathways for NEET youth aged 16-18SDG 4, 8, 10andbyimprovingtheworkingconditionsandcontinuoustrainingofteachers.Some ProgressRelevant RRP measures being planned as of 2022: digital transformation of the schoolSDG 4RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
  
 
Table (continued) 

Note: 
* See footnote (26).  
** RRP measures included in this table contribute to the implementation of CSRs. Nevertheless, additional measures outside the 
RRP are necessary to fully implement CSRs and address their underlying challenges. Measures indicated as 'being implemented' 
are only those included in the RRF payment requests submitted and positively assessed by the European Commission.  
Source: European Commission 

29 

2022 CSR 4Limited ProgressReduce overall reliance on fossil fuels.Limited ProgressRelevant RRP measures being implemented as of 2021: Mobility law; Energy renovation of private housing; Support to the railway sectorRelevant RRP measures being planned as of 2022: Revised thermal regulation RE2020; Climate & Resilience LawSDG 7, 9, 13Acceleratethedeploymentofutility-scaleanddecentralisedrenewableenergiesthroughincreasedpublicinvestmentandbyfacilitatingprivateinvestment,includingbyfurtherstreamliningpermittingproceduresandensuringadequatestaffingofauthorisingadministrations.Limited ProgressRelevant RRP measures being planned as of 2022: Climate & Resilience Law; Develop decarbonised hydrogenSDG 7, 8, 9, 13Improvethepolicyframeworktoincentivisethedeeprenovationofbuildings.Limited ProgressRelevant RRP measures being planned as of 2022: Revised thermal regulation RE2020; Climate & Resilience LawSDG 7, 8, 9Expand energy interconnection capacity.Some ProgressSDG 7, 9, 13 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN - OVERVIEW 

The  Recovery  and  Resilience  Facility  (RRF)  is 
the centrepiece of the EU’s efforts to help it 
recover  from  the  COVID-19  pandemic,  speed 
up  the  twin  transition  and  strengthen 
resilience  against  future  shocks.  The  RRF 
also  contributes  to  implementation  of  the 
SDGs  and  helps  to  address  the  Country 
Specific  Recommendations  (see  Annex 4). 
recovery  and 
France  submitted 
(RRP)  on  29 April 2021.  The 
resilience  plan 
on 
Commission’s 
positive 
23 June 2021 
on 
and 
Council’s 
the  way  for  disbursing 
13 July 2021  paved 
EUR 39.4 billion in grants  under the RRF over the 
2021-2026 period.   

its  current 

assessment 

approval 

Table A3.1: Key elements of the French RRP('s) 

Source: European Commission  

Since  the  entry 
into  force  of  the  RRF 
Regulation  and  the  assessment  of  the 
national  recovery  and  resilience  plans, 
geopolitical  and  economic  developments 
have caused major disruptions across the EU. 
In  order  to  effectively  address  these  disruptions, 
the  (adjusted)  RRF  Regulation  allows  Member 
States to amend their recovery and resilience plan 
for  a  variety  of  reasons.  In  line  with  article  11(2) 
of the RRF, the maximum financial contribution for 
France was moreover updated on 30 June 2022 to 
an amount of EUR 37.5 billion in grants. 

In  this  context,  France  submitted  an  amended 
RRP  to  the  Commission  on  20  April  2023  to 
take  account  of  the  revised  maximum  financial 
contribution,  in  line  with  Article  18  of  the  RRF 
Regulation  and  due  to  objective  circumstances 
that make it no longer possible to achieve certain 
milestones  and  targets  in  the  RRP  in  line  with 
Article 21 of the RRF Regulation. France's request 

to modify its plan is based on the need to factor in 
the  high  inflation  experienced  in  2022,  supply 
chain disruptions and the downward revision of its 
maximum  RRF  grant  allocation.  The  revised  RRP 
includes a new REPowerEU chapter with additional 
reforms  and  investments  related  to  renewable 
energy,  energy  efficiency,  net-zero  industry  and 
fossil-free  hydrogen.  This  is  part  of  the  EU’s 
efforts  to  respond  to  the  economic  hardship  and 
global  energy  market  disruptions  caused  by 
Russia’s invasion of Ukraine.   

France’s progress in implementing its plan is 
published  in  the  Recovery  and  Resilience 
Scoreboard (29).  The  Scoreboard  also  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole, in a transparent manner. The 
graphs in this Annex show the current state of play 
of  the  milestones  and  targets  to  be  reached  by 
France 
as 
subsequently 
satisfactorily fulfilled by the Commission. 

assessed 

and 

EUR  12.25  billion  has  so  far  been  disbursed 
to  France  under  the  RRF.  The  Commission 
disbursed EUR 5.1 billion to France in pre-financing 
in  September  2021,  equivalent  to  13%  of  the 
financial allocation. France’s first payment request 
was positively assessed by the Commission, taking 
into  account  the  opinion  of  the  Economic  and 
Financial  Committee,  leading  to  EUR  7.4  billion 
being  disbursed  in  financial  support  (net  of  pre-
financing)  on  4  March  2022.  The  related  38 
milestones  cover  reforms  in  the  areas  of  public 
finance, 
unemployment 
insurance,  skills,  and  health,  as  well  as 
investments  in  energy  renovation  of  buildings, 
decarbonisation  of 
industry,  clean  vehicles, 
research, youth employment, and education. 

housing,  mobility, 

(29)  https://ec.europa.eu/economy_finance/recovery-and-

resilience-scoreboard/country_overview.html 

30 

Current RRPScope Initial planCID adoption date13 July 2021Total allocation EUR 39.4 billion in grants (1.6% of 2021 GDP)Investments and reforms 70 investments and 22 reforms Total number of milestones and targets175 
 
 
   
 
                                                 
 
Graph A3.1: Total grants disbursed under the RRF 

Graph A3.2: Fulfilment status of milestones and 
targets 

Note: 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 the 
total estimated cost of the respective RRP. 
Source: RRF Scoreboard  

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

Graph A3.3: Disbursements per pillar 

Note: Each disbursement reflects progress in the implementation of the RRF, across the six policy pillars. This graph displays how 
disbursements under the RRF (excluding pre-financing) relate to the pillars. The amounts were calculated by linking the milestones 
and targets covered by a given disbursement to the pillar tagging (primary and secondary) of their respective measures. 
Source: RRF Scoreboard 

31 

€ 12.25billionSatisfactorily fulfilledNot fulfilled0.00.20.40.60.81.01.21.41.61.82.0Green transitionDigitaltransformationSmart,sustainable andinclusive growthSocial andterritorialcohesionHealth, andeconomic, socialand institutionalresiliencePolicies for thenext generation 
  
   
 
 
   
 
   
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

The  EU  budget  of  over  EUR  1.2  trillion  for 
2021-2027  is  geared  towards  implementing 
the  EU’s  main  priorities.  Cohesion  policy 
investment amounts to EUR 392 billion across the 
EU and represents almost a third of the overall EU 
budget, including around EUR 48 billion invested in 
line with REPowerEU objectives.   

(ESF+),  France  allocates  EUR  2.78  billion  to 
reducing  poverty  and  social  exclusion.  Benefits  of 
this  funding  include:  tailored  guidance  to  support 
social 
the  most 
vulnerable  including  food  aid,  and  help  with 
exercising  rights  and  accessing  social  services 
such as housing.  

inclusion;  and  support  for 

Graph A4.1: Cohesion policy funds 2021-2027 in 
France: budget by fund 

(1) million EUR in current prices, % of total; (total amount 
including EU and national co-financing) 
Source: European Commission, Cohesion Open Data 

(ERDF) will  boost  R&D, 

In  2021-2027,  in  France,  cohesion  policy 
funds (30)  will  invest  EUR  8.6  billion  in  the 
green  transition  and  EUR  1.6  billion  in  the 
digital  transformation  as  part  of  the 
country’s total allocation of EUR 29 billion. In 
particular,  the  European  Regional  Development 
Fund 
innovation  and 
digitalisation by allocating over EUR 3.3 billion for 
a smarter Europe. This will notably help France to 
increase the share of GDP devoted to R&D to the 
European  target  of  3%  (compared  to  2.2%  in 
2018).  The  ERDF  will  also  promote  the  energy 
transition  by  supporting  energy  performance 
improvements for about 100 000 households and 
more  than  1 000 000  square  meters  of  public 
buildings in all French regions. Particular attention 
should  be  paid  to  supporting  the  growth  and 
competitiveness  of  over  100 000  SMEs  by 
introducing innovations into products or processes. 
The  Just  Transition  Fund  (JTF)  will  deliver  further 
economic diversification and foster job creation in 
areas  most  affected  by  the  energy  transition, 
while promoting the up- and reskilling of workers. 
It  will  in  particular  enable  the  creation  of  3 250 
jobs in the industrial areas in the northern part of 
the  country.  Under  the  European  Social  Fund  Plus 

(30)  European Regional Development Fund (ERDF), European 
Social Fund+ (ESF+), Just Transition Fund (JTF), excluding 
Interreg programme.  Total amount includes national and EU 
contributions. Data source: Cohesion Open Data.   

Of  the  investments  mentioned  above,  EUR 
2.3  billion  will  be  invested  in  line  with 
REPowerEU objectives. This is on top of the EUR 
1.7  billion  dedicated  to  REPowerEU  under  the 
2014-2020  budget.  EUR  1.5  billion  (2021-2027) 
and  EUR  1.2  billion  (2014-2020)  is  for  improving 
energy  efficiency;  EUR  789  million  (2021-2027) 
and EUR 528 million (2014-2020) is for renewable 
energy  and  low-carbon  R&I;  and  EUR  64  million 
(2021-2027) is for smart energy systems. 

Graph A4.2: Synergies between Cohesion policy 
funds and RRF pillars in France 

(1) million EUR in current prices (total amount, including EU 
and national co-financing)   
Source: European Commission  

In  2014-2020,  cohesion  policy  funds  made 
EUR  18.7  billion  available  to  France (31),  with 
an  absorption  of  67% (32). 
Including  national 
financing,  the  total  investment  amounts  to  EUR 
32.6 billion - around 0.2% of GDP for 2014-2020.  

France  continues  to  benefit  from  cohesion 
support  economic 
to 
policy 
recovery,  step  up  convergence  and  provide 
vital support to regions following the COVID-

flexibility 

(31)  Cohesion policy funds include the ERDF, ESF and the Youth 
Employment Initiative (YEI). ETC programmes are excluded 
here. According to the ‘N+3 rule’, the funds committed for 
2014-2020 must be spent by 2023. REACT-EU is included in 
all figures. The total amount includes EU and national co-
financing. Data source: Cohesion Open Data. 

(32)  2014-2020 Cohesion policy EU payments by MS is updated 

daily on Cohesion Open Data.   

32 

15.90255%11.00838%2.1137%ERDFESF+JTF7.504 1.875 7.311 12.350 1.237 291 8.574 1.640 5.155 9.058 318 2.531 02000400060008000100001200014000Green transitionDigital transitionSmart, sustainableand inclusivegrowthSocial and territorialcohesionHealth, economic,social andinstitutionalresiliencePolicies for the nextgenerationEU CP 2014-2020EU CP 2021-2027 
 
  
                                                 
  
                                                 
 
19  pandemic.  The  Recovery  Assistance  for 
Cohesion and the Territories of Europe instrument 
(REACT-EU) (33)  under  NextGenerationEU  provides 
EUR 3.9 billion on top of the 2014-2020 cohesion 
policy  allocation  for  France.  REACT-EU  finances 
short-term  support  schemes  for  over  5 400  firms 
and  helps  improve  health  services  for  more  than 
2.8 million individuals. In addition, EUR 736 million 
was  provisionally  allocated  to  France  through  the 
Brexit  Adjustment  Reserve  (BAR),  and  Cohesion’s 
Action  for  Refugees  in  Europe  (CARE)  supports 
France  and  its  regions  in  providing  emergency 
assistance to people fleeing from Russia’s invasion 
of  Ukraine.  With  SAFE  (Supporting  Affordable 
Energy),  the  2014-2020  cohesion  policy  funds 
may  also  be  mobilised  by  France  to  support 
jobs  and  companies 
vulnerable  households, 
particularly affected by high energy prices. 

Graph A4.3: Cohesion policy funds contribution to 
the SDGs in 2014-2020 and 2021-2027 in France 

(1) 5 largest contributions to SDGs in million (EUR) current 
prices 
Source: European Commission  

In both 2014-2020 and 2021-2027, cohesion 
policy  funds  have  contributed  substantially 
the  Sustainable  Development  Goals 
to 
(SDGs).  These  funds  support  11  of  the  17  SDGs, 
notably SDG 8 ‘decent work and economic growth’ 
and 
and 
infrastructure’ (34).  

innovation 

‘industry, 

SDG 9 

Fund 

two  CAP  Funds 

2023-2027.  The 
(European 
Agricultural  Guarantee  Fund  and  European 
Agricultural 
for  Rural  Development), 
contribute  to  the  European  Green  Deal  while 
ensuring  long-term  food  security.  They  promote 
social,  environmental  and  economic  sustainability 
and  innovation  in  agriculture  and  rural  areas,  in 
coordination  with  other  EU  funds.  The  European 
Maritime  and  Fisheries  Fund  made  EUR  588 
million available  to France in 2014-2020 and the 
European  Maritime,  Fisheries  and  Aquaculture 
Fund allocates EUR 567 million in 2021-2027.  

France  also  benefits 
from  other  EU 
programmes,  notably  the  Connecting  Europe 
Facility,  which  under  CEF  2  (2021-2027)  has  so 
far  allocated  EU  funding  of  EUR  288.5  million  to 
25  specific  projects  on  strategic 
transport 
networks.  Similarly,  Horizon  Europe  has  so  far 
allocated  nearly  EUR  1.1  billion  to  French  R&I  on 
top  of  the  EUR  7.4  billion  earmarked  under  the 
previous  programme  (Horizon  2020).  The  Public 
Sector  Loan  Facility  set  up  under  the  Just 
Transition  Mechanism  makes  EUR  78  million  of 
grant  support  from  the  Commission  available  for 
projects  located  in  France  for  2021-2027,  which 
will  be  combined  with  loans  from  the  EIB  to 
support  investments  by  public  sector  entities  in 
just transition regions.  

France 

Instrument 
designing 

(TSI) 
The  Technical  Support 
and 
in 
supports 
implementing  growth-enhancing 
reforms, 
including  those  set  out  in  its  recovery  and 
resilience  plan  (RRP).  France  has  received 
significant  support  since  2017.  Examples (35) 
include  support  to  facilitate  the  deployment  and 
adoption  of  the  French  digital  application  for 
special  educational  needs;  and  to  develop  digital 
solutions  to  support,  protect  and  promote  the 
rights of victims of crime.  

Other EU funds provide significant support to 
France.  The  common  agricultural  policy  (CAP) 
made available EUR 81.4 billion in 2014-2022 and 
will keep supporting France with EUR 45.6 billion in 

(33)  REACT-EU allocation on Cohesion Open Data. 

(34)  Other EU funds contribute to the implementation of the 
SDGs. In 2014-2022, this includes both the European 
Agricultural Fund for Rural Development (EARDF) and the 
European Maritime and Fisheries Fund (EMFF). 

(35)  Country factsheets on reform support are available here. 

33 

9.025   6.443   4.534   3.294   3.245   6.959   5.431   3.884   2.977   2.628   01.0002.0003.0004.0005.0006.0007.0008.0009.00010.000SDG 8 Decentwork andeconomic growthSDG 9 Industry,innovation,infrastructureSDG 1 No povertySDG 7 Affordableand clean energySDG 4 QualityeducationEU CP 2014-2020 (millions EUR)EU CP 2021-2027 (millions EUR) 
  
                                                 
                                                 
in 

the  areas 

France  shows  stronger  capacities  than  the  EU 
‘sustainable  use  of 
average 
resources’,  ‘cybersecurity’,  'digital  for  personal 
space'  and  ‘inequalities  and  social  impact  of  the 
transitions’. There is room for improving capacities 
compared to the EU in ‘financial globalisation’.  

Table A5.1: Resilience indices summarising the 
situation across RDB dimensions and areas 

Data are for 2021, and EU-27 refers to the value for the EU 
as a whole. Data underlying EU-27 vulnerabilities in the area 
‘value chains and trade’ are not available as they comprise 
partner concentration measures that are not comparable with 
Member States’ level values. 
Source: JRC Resilience Dashboards - European Commission 

ANNEX 5: RESILIENCE 

This  Annex 
illustrates  France’s  relative 
resilience capacities and vulnerabilities using 
the  Commission’s 
resilience  dashboards 
(RDB) (36).  Comprising  a  set  of  124  quantitative 
indicators,  the  RDB  provide  broad  indications  of 
Member  States’  ability  to  make  progress  across 
four interrelated dimensions: social and economic, 
green, digital, and geopolitical. The indicators show 
vulnerabilities (37)  and  capacities (38)  that  can 
become  increasingly  relevant,  both  to  navigate 
ongoing  transitions  and  to  cope  with  potential 
future shocks. To this end, the RDB help to identify 
areas  that  need  further  efforts  to  build  stronger 
and  more  resilient  economies  and  societies.  They 
in  Table  A5.1  as  synthetic 
are  summarised 
resilience 
illustrate  the  overall 
relative  situation  for  each  of  the  four  dimensions 
and their underlying areas for France and the EU-
27 (39). 

indices,  which 

green 

dimensions, 

According  to  the  set  of  resilience  indicators 
under  the  RDB,  France  generally  displays  a 
similar  level  of  vulnerabilities  compared  to 
the  EU  average.  France  shows  medium 
vulnerabilities  in  the  social  and  economic,  digital 
and 
and  medium-low 
vulnerabilities in the geopolitical dimension of the 
RDB.  It  has  higher  vulnerabilities  than  the  EU 
average in the areas ‘cybersecurity’ and ‘digital for 
personal  space’.  France  has 
low 
vulnerabilities  in  relation  to  ‘raw  material  and 
energy  supply’,  ‘security  and  demography’,  and 
‘inequalities  and 
the 
the  social 
transitions’. 

impact  of 

relatively 

Compared  to  the  EU  average,  France  shows 
an  overall  similar  level  of  capacities  across 
all  RDB  indicators.  It  has  overall  medium-high 
resilience  capacities  in  the  social  and  economic, 
digital  and  green  dimensions  of  the  RDB,  and 
medium  capacities  in  the  geopolitical  dimension. 

(36)  For details see https://ec.europa.eu/info/strategy/strategic-
planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en; see also 2020 Strategic 
Foresight Report (COM(2020) 493). 

(37)  Vulnerabilities describe features that can exacerbate the 

negative impact of crises and transitions, or obstacles that 
may hinder the achievement of long-term strategic goals. 

(38)  Capacities refer to enablers or abilities to cope with crises 
and structural changes and to manage the transitions.  

(39)  This Annex is linked to Annex 1 on SDGs, Annex 6 on the 
green deal, Annex 8 on the fair transition to climate 
neutrality, Annex 9 on resource productivity, efficiency and 
circularity, Annex 10 on the digital transition and Annex 14 
on the European pillar of social rights. 

34 

FREU-27FREU-27Vulnerabilities IndexHighMedium-highMediumMedium-lowLowNot availableCapacities IndexHighMedium-highMediumMedium-lowLowNot availableDimension/AreaVulnerabilitiesCapacitiesSocial and economicHealth, education and workInequalities and social impact of the transitionsGreenEconomic & financial stability and sustainabilitySustainable use of resourcesClimate change mitigation & adaptationDigitalEcosystems, biodiversity, sustainable agricultureDigital for industryDigital for personal spaceCybersecurityDigital for public spaceRaw material and energy supplyGeopoliticalValue chains and tradeFinancial globalisationSecurity and demography 
 
                                                 
 
  
 
 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

France’s  green  transition  requires  continued 
action on several aspects including deploying 
renewables, improving energy efficiency, and 
reversing  the  decrease  in  the  capacity  for 
net  carbon  removals  through 
land  use. 
Implementation  of  the  European  Green  Deal  is 
in  France;  this  Annex  provides  a 
underway 
snapshot of the key areas involved (40).  

less  than 

France  has  not  yet  defined  all  the  climate 
policy  measures  it  needs  to  reach  its  2030 
climate 
target  for  the  effort  sharing 
sectors (41).  Data  for  2021  on  greenhouse  gas 
emissions  in  these  sectors  are  expected  to  show 
its  annual 
the  country  generated 
emission  allocations (42).  Current  policies  are 
projected  to  reduce  these  emissions  by  -31% 
relative  to  2005  levels  in  2030,  not  a  sufficient 
reduction  to  reach  the  effort  sharing  target  even 
before  the target  was  raised in  line  with the  EU’s 
55%  objective,  let  alone  France’s  new  target  to 
reduce  by  47.5% (43).  France  allocates  46%  of  its 
Recovery  and  Resilience  Facility  grants  to  key 
reforms  and  investments  to  attain  the  climate 

(40)  The overview in this Annex is complemented by the 

information provided in Annex 7 on energy security and 
affordability, Annex 8 on the fair transition to climate 
neutrality and environmental sustainability, Annex 9 on 
resource productivity, efficiency and circularity, Annex 11 on 
innovation, and Annex 19 on taxation. 

(41)  Member States’ greenhouse gas emission targets for 2030 
(‘effort sharing targets’) were increased by Regulation (EU) 
2023/857 (the Effort Sharing Regulation) amending 
Regulation (EU) 2018/842, aligning the action in the 
concerned sectors with the objective to reach EU-level, 
economy-wide greenhouse gas emission reductions of at 
least 55% relative to 1990 levels. The Regulation sets 
national targets for sectors outside the current EU Emissions 
Trading System, notably: buildings (heating and cooling), road 
transport, agriculture, waste, and small industry. Emissions 
covered by the EU ETS and the Effort Sharing Regulation are 
complemented by net removals in the land use sector, 
regulated by Regulation (EU) 2018/841 (the Land Use, Land 
Use Change and Forestry (LULUCF) Regulation) amended by 
Regulation (EU) 2023/839. 

(42)  France’s annual emission allocations for 2021 were some 

334.4 Mt CO2eq, and its approximated 2021 emissions were 
at 327.5 Mt (see European Commission, Accelerating the 
transition to climate neutrality for Europe’s security and 
prosperity: EU Climate Action Progress Report 2022, 
SWD(2022)343). 

(43)  See the information on the distance to the 2030 climate 

policy target in Table A6.1. Existing and additional measures 
as of 15 March 2021.  

objectives (44).  France  has  a 
legally  binding 
national  objective,  adopted  through  the  2019 
energy and climate law, to reach climate neutrality 
by 2050. 

Graph A6.1: Thematic – greenhouse gas emissions 
from the effort sharing sectors in Mt CO2eq, 
2005-2021 

Source: European Environmental Agency. 

France is not on track to meet its net carbon 
removals  target  for  2030  for  its  land  use 
sector.  France’s  forests  and,  to  a  lesser  extent, 
grasslands  achieve  a  major  share  of  net  carbon 
removals  through  land  use,  while  croplands  and 
settlements  are  net  emission  sources.  For  2030, 
France’s  land  use,  land  use  change  and  forestry 
(LULUCF)  net  removals  target  implies  to  remove 
34 046 kt CO2eq  (see  Table  A6.1) (45).  While  the 
LULUCF  sink  grew  between  1990  and  2008, 
followed  by a period of stagnation, it has been in 
sharp decline since 2013. This is caused by higher 
tree  mortality  due  to  droughts  and  pest  attacks 
and larger wood harvests. 

In  France,  the  composition  of  its  energy  mix 
and  its  relative  distribution  among  energy 
sources  has  not  changed  in  the  last  decade. 
The  share  of  fossil  fuels  in  France’s  energy  mix 
has  been  around  half  of  its  energy  mix,  reaching 
47%  in  2021.  The  share  of  nuclear  in  the  energy 
mix  has  been  stable  at  40%  since  2016  and 
renewable  sources  have  been  slightly  increasing 
from  8%  in  2011  to  13%  in  2021  (see  Graph 
A6.2). In 2021, France’s electricity mix was highly 

(44)  For example, investments in buildings renovation, 

decarbonisation of industry, clean mobility, support for low-
carbon and renewable hydrogen production, as well as 
legislation on climate resilience with reforms for the greening 
of industry, buildings, transport or agriculture.  

(45)  This value is indicative and will be updated in 2025 (as 

mandated by Regulation (EU) 2023/839). 

35 

05010015020025030035040045020052021Domestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
                                                 
       
                                                 
 
 
decarbonised,  with  69%  coming  from  nuclear, 
23% from renewable sources and 8% from fossil 
fuels.  In  2021,  France  relied  on  natural  gas  for 
42% of its heat and on primary solid biofuels for 
up  to  29%  while  10%  was  covered  by  non-
renewable  waste.  France  intended  to  phased  out 
coal  in  2022,  but  it  allowed  two  coal  plants  to 
continue  production  in  the  winter  2022/23  and 
another one is set to operate until 2024. 

Graph A6.2: Thematic - Energy mix (top) and 
electricity mix (bottom), 2021 

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. 

France’s  high  share  of  nuclear  energy 
together with renewables play a central role 
in decarbonising its energy system. In 2021, in 
the electricity mix the share for wind reached 7% 
and  the  share  for  solar  reached  3%.  Hydropower 
continues  to  be  the  largest  source  of  renewable 
energy  within  the  electricity  mix  (12%  share). 
France  missed  its  2020  renewables  target  of  a 
23%  share  of  renewable  energy  sources  in  final 
energy  consumption  by  4  percentage  points. 
France’s  NECP  sets  a  33%  target  of  renewable 

sources  in  gross  final  energy  consumption  by 
2030,  which  was  considered  as  adequate.  France 
will need to substantially strengthen its renewable 
energy  target  in  the  updated  NECP  to  reflect  the 
more  ambitious  EU  climate  and  energy  targets  in 
the Fit for 55 Package and in the REPowerEU Plan.  
France’s  RRP  does  not  contain  direct  support 
measures to increase the production of renewable 
energy.  As 
of 
renewables,  the  most  relevant  investment  is  the 
‘decarbonised  hydrogen’  measure,  amounting  to 
EUR  1 925  billion  (as  part  of  a  larger  national 
strategy involving EUR 7 billion until 2030).  

consumption 

regards 

the 

in 

in 

the 

challenges 

faces  major 

current  NECP (46). 

the  building  stock 

in 
France 
decarbonising 
sector  and 
its  building 
increasing  its  energy  performance.  France’s 
NECP  targets  for  primary  and  final  energy 
consumption  (PEC  and  FEC)  were  considered  of 
modest and sufficient ambition respectively in the 
2020  Commission  assessment.  Based  on  the 
energy  consumption  trajectory  for  2018-2021, 
France is expected to be on track to meet its 2030 
target  for  primary  and  final  energy  consumptions 
The 
notified 
the  energy 
decarbonisation  and  upgrade 
performance  of 
(which 
represents  45%  of  final  energy  consumption  and 
25%  of  greenhouse  gas  emissions)  pose  major 
challenges. According to France’s RRP, around one 
third  of  around  EUR  18  billion  allocated  to  green 
investments  will  be  spent  on  building  renovation. 
The  RRP  tackles  energy  efficiency,  notably  with 
substantial  investments  in  building  renovations 
across  different  sectors:  public  buildings,  private 
residential buildings and social housing, and SMEs. 
The reform of thermic regulation of new buildings 
(RE2020)  will  enshrine  good  practices  in  the  area 
of  housing.  Measures  for  decarbonising  industrial 
processes  and  the  circular  economy  are  also 
expected  to  help  achieve  a  more  efficient  and 
sustainable use of energy. 

is  relatively  well  positioned  on 
France 
sustainable  mobility,  but  air  pollution 
remains  a  concern.  CO2  emissions 
from 
transport rose until 2005 but have declined since. 
Zero-emission  vehicle  registrations  are  growing 
fast;  in  2022,  France  was  among  the  top  10  EU 
countries  concerning  the  share  of  zero-emission 

(46)  After the conclusion of the negotiations for a recast EED, the 
ambition of both the EU and national targets, as well as of 
the national measures for energy efficiency to meet these 
targets, is expected to increase. 

36 

3%15%29%40%13%Solid fossil fuels, peatand oil shaleGasOilNuclearRenewables1%6%1%23%69%Solid fossil fuels, peatand oil shaleGasOilRenewablesNuclear 
      
                                                 
cars 

passenger 
registrations.  The 
in  new 
electrification of the railway network is above the 
EU  average.  In  2020,  rail  represented  a  relatively 
low  share  in  the  modal  split  of  freight,  but  for 
passenger  transport,  its  share  was  the  second 
highest in the EU. The French RRP includes reforms 
and  investments  to  support  the  rail  sector  and 
encourage  zero-emission  mobility  and  public 
transport.  The  RRP  also  aims  to  accelerate 
transport investments, yet it lacks focus on cross-
border  aspects  of  the  Trans-European  Transport 
network.  France  is  facing  continuous  air  quality 
and  air  pollution  concerns,  particularly  in  relation 
to nitrogen dioxide and PM10 despite reductions in 
air pollutants and fine particulates. France has the 
potential  to  rely  more  on  environmental  taxes  to 
reduce  air  pollution  and  to  promote  resource 
efficiency,  waste  reduction  and  apply  the  polluter 
pays principle (47) (see Annex 19). 

Graph A6.3: Thematic – environmental investment 
needs and current investment, p.a. 2014-2020 

EUR  21.7  billion,  with  a  gap  of  at  least  EUR  13.9 
billion, per year (see Graph A6.3) (49).  France aims 
to have 30% of its protected under environmental 
law. To date, 27.6% of land and 37.7% of marine 
areas  (44,7%  including  outermost  regions)  are 
protected (50). Investment in wastewater treatment 
is needed in some 100 urban areas. 

of 

occurrence 

Rising  temperature  and  sea  levels,  and  the 
increasing 
heatwaves, 
droughts,  and  forest  fires  are  the  most 
significant  risks  from  climate  change.  Two 
thirds  of  the  population  are  exposed  to  climate 
change, and it is projected that by 2050 two billion 
m3  of  water  will  be  lacking.  The  stress  on  crops 
caused by heat and drought depresses yields. The 
share  of  forests  at  risk  of  fire  is  rising.  It  is 
projected  that  half  of  France’s  forests  will  be 
subject  to  that  risk  by  2050 (51).  Risks  differ 
significantly  at  regional  and  local  levels,  and 
different sectors of government provide the policy 
response.  This  calls  for  national  coordination, 
including  through  setting  clear  objectives  and 
targets (52). France’s RRP supports actions on urban 
densification, protecting biodiversity, strengthening 
water  networks,  and  restoring  forests.  Concerning 
water-related risks, France presented a water plan 
on  30  March  2023,  aimed  to  adapt  water 
management policy to climate change. 

France  provides  fossil  fuel  and  other 
environmentally harmful subsidies that could 
be  considered  for  reform,  while  ensuring 
food  and  energy  security  and  mitigating 
social effects. Environmentally harmful subsidies 
have  been  identified,  via  an  initial  assessment,  in 
the  agriculture,  forestry  and  fishing,  electricity, 
gas, steam and air conditioning, transportation and 
storage,  mining  and  quarrying  and  construction 
sectors.  In  its  green  budgeting  exercise,  France 
identified EUR 10.8 billion of expenses in its 2022 
budget that are ‘unfavourable to the environment’, 
mostly  tax  rebates  and  exemptions  on  energy 

(49)  When also accounting for needs estimated at EU level only 

(e.g., water protection, higher circularity, biodiversity 
strategy). 

(50)  In 2021, France had 28% terrestrial protected areas (Natura 
2000 and nationally designated areas), against the EU 
average of 26.4% (European Environment Agency, 2023, 
Natura 2000 Barometer). 

(51)  2ème Plan National d’Adaptation au Changement Climatique, 
Ministère de la Transition Écologique et Solidaire, 2018. 

(52)  Renforcer l’atténuation, engager l’adaptation, Haut Conseil 

pour le Climat, Rapport annuel 2021. 

Source: European Commission. 

France would benefit from investing more in 
environmental  protection  and  in  measures 
addressing  pollution,  protecting  biodiversity 
and  promoting  the  circular  economy (48). 
Between  2014 
environmental 
investment  needs  were  estimated  to  be  at  least 
EUR 35.6 billion, while yearly investment stood at 

and  2020, 

(47)  European Commission, 2021, Green taxation and other 

economic instruments – Internalising environmental costs to 
make the polluter pay, Ensuring that polluters pay. 

(48)  Environmental objectives include pollution prevention and 
control, water management, circular economy and waste, 
biodiversity and ecosystems (European Commission, 2022, 
Environmental Implementation Review, country report 
France). 

37 

83610.6194.0993.7602.4235.12411.9038.8036.5923.2210,02000,04000,06000,08000,010000,012000,014000,0Pollutionprevention andcontrolWater (industries,excl. protection)Circular economy(incl. waste)Biodiversity andecosystemsR&I&D and otherEUR million (at current prices)Current investmentTotal need 
      
                                                 
                                                 
sectors 

including 

economic 

products.  Their  amount  has  increased  by  some 
EUR 9 billion, aimed at mitigating the social impact 
of  energy  price  increases  on  households  and 
various 
the 
construction  industry.  Examples  of  such  subsidies 
include  the  reduced  VAT  rate  for  fertilisers  and 
pesticides,  the  excise  tax  refund  for  diesel  fuel 
used in agriculture, the reduced energy tax rate for 
light fuel oil used in mobile machinery, the excise 
tax exemption on coal  for biomass producers, the 
excise tax exemption on the use of natural gas or 
the reimbursement of excise duty on diesel used in 
freight  and  other  categories  of  passenger 
transport (53).  France  could  build  on  its  green 
budgeting  exercise  to  prioritise  candidates  for 
reform. 

to 

mitigate 

pressures 

France  could  further  apply  environmental 
taxes 
on 
environmental  resources.  While  revenue  from 
environmental  taxes  increased  in  2021,  it  is  still 
not  back  to  pre-COVID-19  levels  (see  Annex  19). 
For  instance,  taxation  could  help  reduce  the 
amount  of  soil  that  is  artificialised  in  order  to 
reduce the pressure on agriculture lands, forestry, 
and  water  ecosystems,  in  line  with  the  French 
strategy  and  the  ongoing  legislative  process  on 
‘zero net artificialisation’ of soils by 2050.  

(53)  Fossil fuel figures in EUR of 2021 from the 2022 State of 

the Energy Union report. Initial assessment of 
environmentally harmful subsidies done by the Commission 
in the 2022 toolbox for reforming environmentally harmful 
subsidies in Europe, using OECD definitions, and based on the 
following datasets: OECD Agriculture Policy Monitoring and 
Evaluations; OECD Policy Instruments for the Environment 
(PINE) Database; OECD Statistical Database for Fossil Fuels 
Support; IMF country-level energy subsidy estimates. Annex 4 
of the toolbox contains detailed examples of subsidies on 
the candidates for reform. 

38 

 
                                                 
Table A6.1: Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources: (1) Historical and projected emissions, as well as Member States’ climate policy targets and 2005 base year emissions 
under the Effort Sharing Decision (for 2020) are measured in global warming potential (GWP) values from the 4th Assessment 
Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ climate policy targets and 2005 base 
year emissions under the Effort Sharing Regulation (for 2030) are in GWP values from the 5th Assessment Report (AR5). The 
table above shows the base year emissions 2005 under the Effort Sharing Decision, using AR4 GWP values. Emissions for 2017-
2021 are expressed in percentage change from 2005 base year emissions, with AR4 GWP values. 2021 data are preliminary. The 
table shows the 2030 target under Regulation (EU) 2023/857 that aligns it with the EU’s 55% objective, in percentage change 
from 2005 base year emissions (AR5 GWP). Distance to target is the gap between Member States’ 2030 target (with AR5 GWP 
values) and projected emissions with existing measures (WEM) and with additional measures (WAM) (with AR4 GWP values), in 
percentage change from the 2005 base year emissions. Due to the difference in global warming potential values, the distance to 
target is only illustrative. The measures included reflect the state of play as of 15 March 2021.  
(2) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2023 
greenhouse gas inventory submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 
amending Regulation (EU) 2018/841 (LULUCF Regulation) – Annex IIa, kilotons of CO2 equivalent, based on 2020 submissions. 
(3) Renewable energy and energy efficiency targets and national contributions are in line with the methodology established under 
Regulation (EU) 2018/1999 (Governance Regulation).  
(4) Percentage of total revenue from taxes and social contributions (excluding imputed social contributions). Revenue from the EU 
Emissions Trading System is included in environmental tax revenue.  
(5) Expenditure on gross fixed capital formation for the production of environmental protection services (abatement and 
prevention of pollution) covering government, industry, and specialised providers.  
(6) European Commission, Study on energy subsidies and other government interventions in the European Union, 2022 edition.  
(7) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters. This 
indicator is based on modelling of the current risk from floods, wildfires and windstorms as well as earthquakes, and an 
estimation of the current insurance penetration rate. The indicator does not provide information on the split between the 
private/public costs of climate-related disasters. A score of 0 means no protection gap, while a score of 4 corresponds to a very 
high gap (EIOPA, 2022).  
(8) Sulphur oxides (SO2 equivalent), ammonia, particulates < 10 µm, nitrogen oxides in total economy (divided by GDP).  
(9) Battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV). 

39 

2030200520172018201920202021target/valueWEMWAMGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq; %; pp398,2-11%-14%-16%-23%--47,5%-16,5-16,5Net carbon removals from LULUCF (2)kt CO2eq-50.711-20.592-19.652-18.227-21.622-17.055-34046n/an/a200520172018201920202021Share of energy from renewable sources in gross final consumption of energy (3)%9%16%16%17%19%19%33%Energy efficiency: primary energy consumption (3)Mtoe261,0239,3238,6235,2207,9224,4202,2Energy efficiency: final energy consumption (3)Mtoe160,1149,0146,5145,1130,0143,2120,9201620172018201920202021201920202021Environmental taxes (% of GDP)% of GDP2,22,32,42,32,22,22,42,22,2Environmental taxes (% of total taxation)(4)% of taxation 4,95,05,15,14,84,85,95,65,5Government expenditure on environmental protection% of total exp.1,71,71,71,81,71,81,71,61,6Investment in environmental protection (5) % of GDP0,40,40,40,5--0,40,40,4Fossil fuel subsidies (6)EUR2021bn8,79,311,712,110,8-53,050,0-Climate protection gap (7) score 1-40,51,31,5Net greenhouse gas emissions1990 = 10084,087,084,082,073,077,076,069,072,0Greenhouse gas emission intensity of the economykg/EUR'100,220,220,210,200,20-0,310,300,26Energy intensity of the economykgoe/EUR'100,120,120,110,110,11-0,110,11-Final energy consumption (FEC)2015=100101,3100,698,998,087,696,7102,994,6-FEC in residential building sector2015=100104,8103,099,699,396,6105,8101,3101,3106,8FEC in services building sector2015=100100,6102,1100,398,491,698,4100,194,4100,7Smog-precursor emission intensity (to GDP) (8)tonne/EUR'100,60,60,50,50,5-0,90,9-Years of life lost due to air pollution by PM2.5per 100.000 inh.435,9399,1395,4323,7261,3-581,6544,5-Years of life lost due to air pollution by NO2per 100.000 inh.149,0143,2127,8116,569,9-309,6218,8-Nitrates in ground watermg NO3/litre22,422,127,918,919,2-21,020,8-Land protected areas% of total17,522,0-26,926,928,026,226,426,4Marine protected areas% of total15,0--37,7-37,610,7-12,1Organic farming% of total utilised agricultural area5,36,07,07,78,7-8,59,1-201720182019202020212022202020212022Share of zero-emission vehicles (9)% in new registrations1,21,41,96,79,812,85,48,910,7Number of AC/DC recharging points (AFIR categorisation)---n/a5465376454188626330028432518Share of electrified railways%57,158,258,5n/an/a63,056,6n/a56,6Hours of congestion per commuting driver per year30,130,130,830,8n/an/a28,7n/an/a'Fit for 55'DistanceProgress to policy targetsNational contribution to 2030 EU targetFranceEUMobilityFiscal and financialindicatorsEnergyPollutionBiodiversityClimate 
 
   
 
ANNEX 7: ENERGY SECURITY AND AFFORDABILITY 

sensitive 

France is highly dependent on imported fossil 
fuels  in  general.  This  makes  its  economy 
particularly 
to  global  price 
developments, requiring it to step up efforts 
Its  electricity 
on  the  energy  transition. 
production  was  severely  affected  by  low 
nuclear  and  hydro  output,  meaning  that 
France  became  a  net  importer  for  the  first 
time  since  at  least  1980 (54).  This  Annex (55) 
sets  out  actions  carried  out  by  France  to  achieve 
the  REPowerEU  objectives,  including  through  the 
implementation of its recovery and resilience plan, 
improve  energy  security  and 
in  order 
affordability  while  accelerating  the  clean  energy 
transition,  and  contributing  to  enhancing  the  EU’s 
competitiveness in the clean energy sector (56).   

to 

the 

stress, 

despite 

France  showed  a  high  level  of  gas  supply 
security 
challenging 
circumstances.  Although  its  nuclear  park 
experienced 
its 
considerable 
decarbonised  electricity  generation  capacity 
can  contribute  to  overall  security  of  supply 
in Europe. In 2021, 22% of France’s gas imports 
came from Russia (11 billion cubic metres (bcm)), 
which  was  below  the  EU  average  (24%).  The 
country  has  considerable  liquefied  natural  gas 
(LNG)  import  potential  and  is  the  second  largest 
LNG  importer  in  the  EU  with  114  mcm/d.  France 
fulfilled  its  gas  storage  obligations  last  winter, 
reaching  100%  by  1  November  2022, 
(20 
percentage  points  above  its  legal  obligation),  and 
ended  the  heating  season  with  a  filling  gas 
storage  at  28.90%  by  15  April  2023 (see  Graph 
A7.1) (57).It has a total capacity of 132 TWh in gas 

(54)  Germany, Spain and the UK went from importers of French 

electricity to exporters to France. 

(55)  It is complemented by Annex 6 as the European Green Deal 
focuses on the clean energy transition, by Annex 8 on the 
actions taken to mitigate energy poverty and protect the 
most vulnerable ones, by Annex 9 as the transition to a 
circular economy will unlock significant energy and resource 
savings, further strengthening energy security and 
affordability, and by Annex 12 on industry and single market 
complementing ongoing efforts under the European Green 
Deal and REPowerEU. 

(56)  in line with the Green Deal Industrial Plan COM(2023) 62 
final, and the proposed Net-Zero Industry Act COM(2023) 
161 final 

(57)  Regulation of the European Parliament and of the Council 
amending Regulations (EU) 2017/1938 and (EC) No 
715/2009 with regard to gas storage and Implementing 
Regulation (EU) 2022/2301 of 23 November 2022 setting 
the filling trajectory with intermediary targets for 2023 for 
each Member State with underground gas storage facilities 
on its territory and directly interconnected to its market area. 

storage  facilities (58).  France’s  energy  system  is 
currently under considerable stress as a large part 
of its nuclear park is undergoing, or has undergone 
in 2022, maintenance works.   To compensate for 
the 
loss  of  electricity  production,  France 
temporarily  suspended  the  emissions  cap  on  its 
coal-fired  power  plants  and  recommissioned  two 
more  coal  power  plants.  Although  EDF  shows  not 
to be in any significant way dependent on Russian 
is  nevertheless 
uranium  or 
dependent on Russia for recycling its spent nuclear 
fuel  (uranium),  given  that  certain  steps  of  the 
recycling process can currently only be carried out 
in Russia. 

services,  EDF 

Graph A7.1: Storage levels in France 

Source: JRC calculation based on AGSI+ Transparency 
Platform, 2022 (Last update 2 May 2023) 

demand 
energy 

comprised 
alongside 

To  address  security  of  supply,  France’s 
response 
reduction 
efficiency 
measures 
improvements.    France  launched  a  strategy  to 
reduce  demand  and  the  energy  consumption  of 
gas,  fuel  and  electricity.  The  goal  is  to  achieve  a 
40% demand reduction in order to be net zero by 
2050. Recent measures and the high energy prices 
led to a gas demand reduction of about 16% over 
the  period  August  2022  –  March  2023  when 
compared to the previous 5-years average. 

(58)  Fourteen storage facilities (Saint-Illiers, Beynes Supérieur, 
Beynes Profond, Gournay-sur-Aronde, Chéméry, Céré-la-
Ronde, Soings-en-Sologne, Trois Fontaines l’Abbaye, Cerville, 
Germiny-sous-Coulombs, Saint-Clair-sur-Epte) are managed 
by Storengy and VGS Lussagnet and Izaute are managed by 
Teréga. 

40 

 
 
                                                 
 
                                                 
 
 
Graph A7.2: Share of gas consumption per sector, 
2021 

Source: Eurostat 

France’s  electricity  system  is  interconnected 
with six of its neighbouring countries, four of 
which  are  EU  Member  States  (Belgium, 
Germany,  Italy  and  Spain).  Its  cross-border 
electricity  interconnection  level  is  currently 
below  the  15%  target  for  2030.  Cross-border 
energy  infrastructure  is  key  to  the  security  of 
supply,  market  integration  and  the  integration  of 
renewables.  Several  new  cross-border  electricity 
projects  are  being  developed:  notably  a  first 
Ireland,  and  additional 
interconnector  with 
capacities  or  capacity  increases  with  Belgium, 
Germany  and  Spain.  Some  of  these  projects  have 
suffered  delays. 
is 
including 
interconnected  with  four  countries, 
Belgium, Germany and Spain. It includes a pipeline 
linking  France  to  Norwegian  gas  fields  and 
comprises  four  LNG  terminals (59).  In  view  of  the 
interconnector 
changing  supply  situation, 
between  France  and  Germany  has  recently  been 
fitted  to  allow  for  a  reverse  flow  of  gas  into 
Germany  without  the  need  for  a  deodorisation 
unit.  Physical  gas  flows  from  France  to  Germany 
started  in  October  2022.  Also,  in  October  2022, 
the French, Spanish and Portuguese heads of state 
joint  statement 
issued  a 
and  governments 
proposing a Green Energy Corridor. 

France’s  gas 

system 

the 

(59)  The gas is delivered to the French territory through seven 

entrance points, including five gas pipelines interconnected 
with the Belgian (Taisnières), Spanish (Larrau, Biriatou), 
German (Obergailbach) and Norwegian (Dunkerque) networks 
and four LNG import terminals with a total capacity of 
around 34 bcm/year: Tonkin (3 bcm/year); Montoir-de-
Bretagne (10 bcm/year), Fos Cavaou (8.25 bcm/year), and 
Dunkerque (13 bcm/year, since 2017). 

The  availability  of  the  French  nuclear  fleet 
for the coming months is a key factor for the 
security  of  power  supply  in  France,  with 
potential impact also beyond France. The rate 
of return to service of reactors currently shut down 
as  part  of  scheduled  maintenance,  or  the  specific 
programme  for  monitoring  and  repairing  stress 
corrosion  cracking  (SCC),  are  therefore  crucial.  Up 
until  the  beginning  of  December  2022,  the 
availability of the nuclear fleet followed the trend 
envisaged  by  the  French  electricity  transmission 
system  operator  RTE.  From  December  2022,  the 
availability  of  the  nuclear  fleet  was  expected  to 
increase  slightly  to  around  45  GW  (out  of  an 
installed  capacity  of  61.3  GW)  at  the  end  of 
January  2023,  before  decreasing  again  from 
February  onwards  with  the  start  of  the  2023 
outage  campaign (60).  With  regard  to  SCC-related 
work, EDF reported that a total of 16 reactors are 
among  the most  susceptible  to  SCC.  In  December 
2022, the work was either finished or ongoing for 
4  reactors.  Inspection  and  repair  work  has  begun 
on 6 reactors and will be carried out in 2023 on 6 
other  reactors.  The  normal  functioning  of  nuclear 
power  plants  was  also  affected  in  summer  2022 
by  successive  heat  waves,  causing  few  nuclear 
reactors 
their  power,  while  high 
temperatures  are  expected  to  become  more 
frequent. 

reduce 

to 

is 

Although its electricity production is already 
lagging 
largely  decarbonised,  France 
behind  on  deploying  renewable  energy,  in 
particular  for  electricity  production  and 
heating,  which  affects  its  energy  security. 
The  installed  capacity  of  wind  and  solar  PV 
amounted to 21.1 GW and 17.4G W respectively at 
the  end  of  2022.  This  showed  a  considerable 
increase  in  2022  of  solar  PV  (2.6  GW)  and  wind 
installation  (2.8  GW).  The  delays  in  renewables 
deployment  are  related  to  a  combination  of 
political  and  regulatory  factors  –  from  a  lack  of 
political  support  for  projects,  inadequate  planning 
and  long  and  complex  permitting  procedures,  to 
issues  related  to  public  acceptance  and  legal 
challenges.  These  create  uncertainty  for  investors 
and  developers.  The  recent  legal  proposal  for  the 
deployment  of 
includes 
measures  on  renewables  in  power  production,  in 
particular  on  permitting,  offshore  renewables  and 
the 
public  acceptance.  However,  although 
production  of  heat  by  heat  pumps  increased 

renewable  energy 

(60)  RTE – Analyse du passage de l’hiver 2022-2023 – 

December 2022. 

41 

18.2%31.4%0.7%17.1%31.9%0.6%EnergyIndustryTransportServices and public sectorHouseholdsAgriculture, forestry andfishery 
     
                                                 
                                                 
considerably  in  2021  (+13%) (61),  the  untapped 
potential  for  renewables  in  heating  and  cooling 
requires further action, including on district heating 
and waste heat.  

to 
Energy  efficiency  measures  helped 
improve  energy  security  in  France,  with  a 
major  information  campaign,  guidelines  for 
public  buildings,  and  even  an  ‘electricity 
forecast’ app, which is part of daily weather 
forecasts  on  TV.  However,  the  effects  of 
more structural measures such as renovation 
work  on  buildings  remain  to  be  seen  and 
monitored. Among the measures implemented to 
improve  security  of  supply,  France  has  also 
focused on increasing energy efficiency, combining 
short-term  measures  with  implementation  of  the 
national  Long-term  Renovation  Strategy.  In  its 
2021  Climate  and  Resilience  Law,  France  has 
made  progress  in  strengthening  building  codes, 
labelling  and  the  application  of  energy  audits  for 
businesses.  This 
introduced  some 
law  also 
measures  which  should 
incentivise  the  deep 
renovation  of  buildings,  such  as  the  renting 
prohibition of housing with an Energy Performance 
Certificate (EPC) of “G” class and consuming more 
than  450kWh/m²/year  as from  2023,  extended  to 
other housing of “G” class in 2025, to “F” in 2028 
and  “E”  in  2034.  However,  France  is  still  carrying 
out  a  very  low  number  of  checks  on  products 
covered  by  ecodesing  and  energy  labelling.  This 
generates  serious  concerns  with  respect  to  the 
level  playing  field  among economic  operators and 
uncertainty  as  to  the  compliance  levels  of  the 
concerned products, and therefore possible missed 
energy and CO2 savings (62). 

(61)  France has the second most air source heat pumps in the EU 
(9 million), which are mainly used for cooling  - Heat Pumps 
in the European Union - 2022 Status Report on Technology 
Development, Trends, Value Chains and Markets (Clean 
Energy Technology Observatory). 

(62)  The internet-supported information and communication 
system for the pan-European market surveillance 

42 

Graph A7.3: France’´s energy retail energy prices 
for indusutry (top) and households (bottom) 

(1) On electricity, the band consumption is DC for households 
and ID for industry 
(2) On gas, the band consumption is D2 for households and I4 
for industry 
Source: Eurostat 

France  has  taken  important  measures  to 
protect  households  and  businesses  in  order 
to  address  rising  energy  prices,  however  it 
didn’t  target  those  most  at  risk.  It  has 
introduced  price  interventions  through  regulated 
tariffs (‘tariff shield’), freezing the regulated price 
(‘bouclier  tarifaire  gaz’)  and 
of  natural  gas 
partially  freezing  the  regulated  price  of  electricity 
(‘bouclier  tarifaire  électricité’).  It  also  provides 
fossil fuel discounts. To a lesser extent, France has 
introduced  targeted  payments  for  households, 
giving vouchers to low-income households to cover 
either electricity, gas or heating oil bills as well as 
vouchers to low-income households that use their 
vehicles  for  work.  France  has  also  put  in  place 
measures  to  help  energy  intensive  industries  and 
SMEs  to  face  energy  price  increases  (Annex  12). 
High level of subsidies did not always target those 
most  at  risk  and  supported  the  consumption  of 
fossil  fuels  without  contributing  to  lower  the  bills 
on a more permanent basis by swiftly accelerating 
self-consumption and energy efficiency.  

France  has  a  strong  manufacturing  base  of 
low-carbon  technologies  and  components 
(including  hydrogen  and  nuclear),  and  is 

 
                                                 
   
 
vehicles,  funds  of  funds,  etc.)  in  order  to 
support  innovators  in  setting  up  and  scaling 
the  development  of  their  solutions  in  the 
clean  energy  sector.  This  set  of  financing 
is  completed  with  a  number  of 
measures 
successive regulatory sandboxes setup by CRE and 
the relevant ministers in the field of energy. These 
allowed  a  number  of  experiments  to  take  place, 
for instance on the participation of battery storage 
in  system  services,  dynamic  retail  electricity 
pricing  schemes,  biomethane/synthetic  methane 
injection  into  distribution  networks,  or  pooling  of 
different  types  of  renewable  energy  generation 
assets  (e.g.  solar  and  wind)  under  the  same 
connection point to build on their complementarity. 
France’s many  renowned universities and grandes 
écoles  offering  top-level  training  courses  on 
environment, 
energy 
technologies constitute an asset for its innovation 
ecosystem.  However,  in  the  nuclear  sector,  the 
absence  of  new  construction  projects  between   
early-1990s and the mid-2000s (up to the launch 
of  the  Flamanville  EPR  construction  in  2007) 
resulted  in  a  loss  of  experience  which  partly 
explains  the  delays  and  additional  costs  faced  by 
this latest project. 

climate 

clean 

and 

In  addition, 

expected  to  expand  it  to  other  decarbonised 
generation  technologies,  in  particular  new 
offshore  windfarms.  France 
is  among  the 
leading  countries  in  Europe  that  export  nuclear 
technologies  worldwide.  French  resilience  and 
recovery  plan  focuses  heavily  on  hydrogen,  while 
France 
is  one  of  the  world’s  top  hydrogen 
providers.  France  is  well positioned  in  the  field  of 
hydrogen,  with  industry  leaders  in  hydrolysis  and 
fuel  cell  technologies.  The  transition  to  clean 
energy  is  mineral  intensive  and  will  require  a 
substantial  supply  of  many  critical  minerals.  To 
this  end,  despite  limited  mineral  resources,  the 
country  is  considering  extracting  lithium  from  its 
soil. 
the  deployment  of  some 
renewable  technologies  such  as  solar  PV  remains 
hindered  by  the  lack  of  available  and  trained 
workforce for the installation of energy generation 
assets,  despite  a  level  of  shortages  that  is  below 
the  EU  average  in  the  manufacturing  of  clean 
energy  technologies.  There  are  French  companies 
among  the  biggest  European  manufacturers  of 
nuclear  equipment  and  smart  meters.  There  are 
also  major  new  French  players  in  the  batteries 
field, with as many as three gigafactories planned 
in  the  territory  of  France, two  of  which  by  French 
in  collaboration  with  French  car 
companies, 
manufacturers. 
France 
In  October 
announced an additional EUR 30 billion investment 
plan  for  2030.  This  targets  French  industrial 
development in the energy, automotive and space 
sectors,  including  EUR  8  billion  earmarked  for 
energy 
the 
decarbonisation  of  industry,  in  hydrogen  and  in 
small  modular  reactors;  EUR 4 billion  for  electric 
and  plug-in  hybrid  vehicles.  However,  public 
investment in research and innovation (R&I) as an 
EU  Energy  Union  priority  slightly  decreased  from 
0.076% in 2014 to 0.073% in 2021 (as a share of 
GDP).  There  was  nonetheless  an  upward  trend  in 
venture  capital  invested  in  climate  tech  start-ups 
and  scale-ups  (6%  in  2021  compared  to  4.2%  in 
2020  as  a  percentage  of  total  venture  capital 
invested  in  France),  with  France  representing 
nearly  11%  of  the  EU’s  total  venture  capital 
investments  in  climate  tech  start-ups  and  scale-
ups. These investments play a key role in bridging 
the  gap  between  R&I  and  market  uptake,  helping 
to boost EU competitiveness. 

investment 

technology 

2021, 

in 

Relying  mainly  on  the  schemes  implemented 
by  ADEME  and  BPIFrance,  as  well  as  the  PIA 
funds, 
very 
has 
comprehensive  set  of  support  measures 
(consisting  of  loans,  subsidies,  investment 

France 

setup 

a 

43 

 
Table A7.1: Key Energy Indicators 

(1)  The ranking of the main supliers is based on the latest available figures (for 2021) 
(2) FSRU included 
(3) Venture Capital investments include Venture Capital deals (all stages) and Private Equity Growth/Expansion deals (for 
companies that have previously been part of the portfolio of a VC investment firm). 
Source: Eurostat, Gas Infrastructure Europe (Storage and LNG Transparency Platform), JRC SETIS (2022), JRC elaboration based 
on PitchBook data (06/2022) 

44 

EU20182019202020212018201920202021Import Dependency [%] 47%48%44%44%58%61%57%56%of Solid fossil fuels 101%100%96%73%44%44%36%37%of Oil and petroleum products 98%98%99%97%95%97%97%92%of Natural Gas 105%104%95%96%83%90%84%83%Dependency from Russian Fossil Fuels [%]of Hard Coal31%27%34%35%40%44%49%47%of Crude Oil14%13%9%9%30%27%26%25%of Natural Gas 20%20%17%22%40%40%38%41%20152016201720182019202020212022Gross Electricity Production (GWh)579,465564,082561,977581,819570,949532,386555,283-Combustible Fuels51,18063,96972,87857,64762,14856,90158,263-Nuclear437,428403,195398,359412,942399,012353,833379,361-Hydro60,51365,68655,13570,47261,57267,09563,956-Wind21,42121,38124,60928,59934,72239,86136,831-Solar 7,7548,6609,58710,92512,33013,45915,732-Geothermal 9298133127128133100-Other Sources1,0771,0941,2761,1081,0371,1041,039-Net Imports of Electricity (GWh)-64,063-41,501-40,129-62,967-57,667-45,039-44,892-   As a % of electricity available for final consumption -14%-9%-9%-14%-13%-11%-10% -Electricity Interconnection (%)--9.40%7.89%8.10%8.50%5.07%5.63%20152016201720182019202020212022*Gas Consumption (in bcm)39.843.243.441.542.439.341.637.5Gas Imports - by type (in bcm)47.951.255.757.573.562.361.3-Gas imports - pipeline42.444.446.547.153.245.345.3-Gas imports - LNG5.56.89.210.520.317.015.9-Gas Imports - by main source supplier (in bcm)* (1)Norway20.018.619.318.018.716.814.5-Russia5.48.98.610.116.711.213.4-Not specified2.61.72.86.26.511.68.6-Algeria7.79.47.66.97.57.27.6-Others12.212.617.416.324.115.417.2-2019202020212022LNG TerminalsNumber of LNG Terminals (2)4444LNG Storage capacity (m3 LNG)1,370,0001,370,0001,370,0001,370,000Underground StorageNumber of storage facilities15151515Operational Storage Capacity (bcm)13.413.213.213.72019202020212022VC investments in climate tech start-ups and scale-ups (EUR Mln) (3)166.8314.7738.4n.a.as a % of total VC investments in France2.7%4.2%6.0%n.a.Research & Innovation spending in Energy Union R&i priorites (2)Public R&I (EUR mln)1458.51618.91822.2n.a.Public R&I (% GDP)0.060%0.070%0.073%n.a.Private R&I (EUR mln)2970.6n.a.n.a.n.a.Private R&I (% GDP)0.12%n.a.n.a.n.a.CLEAN ENERGYELECTRICITYFRANCEENERGY DEPENDENCEDIVERSIFICATION OF GAS SUPPLIES 
 
   
 
ANNEX 8: FAIR TRANSITION TO CLIMATE NEUTRALITY 

This  Annex  monitors  France’s  progress  in 
ensuring  a  fair  transition  towards  climate 
neutrality  and  environmental  sustainability, 
notably  for  workers  and  households 
in 
vulnerable situations. Up-and reskilling action is 
key  to  support  a  fair  green  transition  in  line  with 
the  Council  Recommendation (63) 
the 
implementation  of  REPowerEU.  France’s  recovery 
and  resilience  plan  (RRP)  puts  a  significant  focus 
on  a  fair  green  transition,  especially  through 
energy  renovation  of  buildings,  including  social 
housing (64),  complementing  the  territorial  just 
transition  plans  and  action  supported  by  the 
European Social Fund Plus (ESF+). 

and 

Graph A8.1: Fair transition challenges in France 

Source: Eurostat, EMPL-JRC GD-AMEDI/AMEDI+ projects and 
World Inequality Database (see Table A8.1). 

French 

the  green  economy 

in  France’s  sectors  most 
Employment 
affected  by  the  green  transition  slightly 
declined  while 
is 
expanding.  The  greenhouse  gas  (GHG)  emissions 
intensity  of  France’s  workforce  decreased  from 
12.5 to 10.6 tonnes per worker between 2015 and 
2021,  and  is  now  below  the  EU  average  of  13.7 
tonnes  (see  Graph A8.1,  Table A8.1).  Employment 
(EII) 
in 
represented a share of 1.4% of total employment 
in  2020 
(EU  average:  3.0%).  Since  2015, 
employment in mining and quarrying decreased by 
11.8%  along  with  the  closure  of  the  remaining 
coal mines and the decline of petroleum refineries. 
The  number  of  jobs in the  French  green  economy 
has  risen  quickly.  Total  jobs  in  the  environmental 
goods  and  services  sector  grew  by  15.1%  during 
2015-20  (EU:  +14.6%),  reaching  2.3%  of  total 

energy-intensive 

industries 

(63)  Council Recommendation of 16 June 2022 on ensuring a fair 
transition towards climate neutrality (2022/C 243/04) covers 
employment, skills, tax-benefit and social protection 
systems, essential services and housing. 

employment  (EU:  2.5%;  see  Annex  9  for  circular 
jobs specifically). A wider variety of relevant green 
jobs  amounts  to  14%  of  total  employment,  with 
only  19%  of  these  jobs  held  by  women (65).  The 
job  vacancy  rate  in  construction,  which  is  a  key 
sector  for  the  green  transition,  is  2.5%  amongst 
business units with 10 employees or more (66). The 
low  carbon  strategy  would  create  200  000  jobs 
over the 2019-2030 period. (67)  

In 

skills 

shortages. 

Up-  and  reskilling  actions  in  declining  and 
transforming sectors decreased, in a context 
energy-intensive 
of 
industries,  workers’  participation  in  education  and 
training declined from 20.5% in 2015 to 15.1% in 
2022,  though  it  remained  above  the  EU  average 
(10.4%). In France, 42% of citizens believe they do 
not  have  the  necessary  skills  to  contribute  to  the 
green  transition  (EU:  38%). (68)  In  the  light  of 
available  forecasting  studies (69),  developing  such 
skills  appears  to  be  a  priority.  In  December  2022 
the  government  announced  the  launch  of  the 
National Observatory for Green Jobs and Skills (70), 
tasked  with  identifying  training  needs.  In  this 
context,  social  partners  also  play  a  key  role  as 
stakeholders  of  organisations 
that  promote 
training  and  skills  for  workers (71).  Inequalities  in 
education  and  training  systems  persist,  and 
vulnerable  groups  still  face  barriers  to  access 
training.  To  address  these  challenges,  specific 
investment  under  the  Just  Transition  Fund  (JTF) 
will support the up- and re-skilling of workers and 
jobseekers in regions most affected by the climate 
transition  and  help  them  adapt  to  new  emerging 
employment  opportunities.  In  addition,  5.8%  of 
ESF+ funding in France contributes to green skills 
and jobs, notably through by developing academic 
guidance and educational content promoting green 
jobs.  

(65)  Margontier S. (2021), Métiers verts et verdissants: près de 4 

millions de professionnels en 2018, Ministère de la Transition 
Ecologique et de la Cohésion des territoires. 

(66)  Eurostat (JVS_A_RATE_R2) 

(67)  DARES & France Stratégie, Les métiers en 2030, Quelles 
perspectives de recrutement en région et au niveau 
national?, 2022. 

(68)  Special Eurobarometer 527. Fairness perceptions of the 

green transition (May – June 2022). 

(69)  DARES & France Stratégie, 2022. 

(70)  https://www.ecologie.gouv.fr/lobservatoire-national-des-

emplois-et-metiers-leconomie-verte 

(71)  France Stratégie, Les opérateurs de compétences au défi de 

(64)  See 2022 Country Report (Annex 6). 

la transition écologique, July 20222. 

45 

00.20.40.60.811.21.41.61.82GHG per workerEmployment EIIEducation &training EIIEnergy povertyTransportpoverty(proxy)CarboninequalityEU LatestFR Latest (vs EU Latest)FR 2015 (vs EU Latest) 
 
  
                                                 
                                                 
 
Table A8.1: Key indicators for a fair transition in France 

Source: Eurostat (env_ac_ainah_r2, nama_10_a64_e, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-
JRC GD-AMEDI/AMEDI+ projects and World Inequality Database (WID). 

Graph A8.2: Distributional impacts of energy prices 
due to rising energy expenditure (2021-2023) 

electricity,  gas,  and  other  fuels (73)  that  were 
above  10%  of  their  household  budget  (below  the 
estimated  EU  averages  of  26.9%  and  48.2%, 
respectively). In October 2022, the government set 
a target of cutting France's energy consumption by 
10%, from 2019 levels, by 2024 – a first step in a 
longer-term  plan  to  become  carbon  neutral  by 
reducing energy use 40% by 2050. 

the 

The  increased  energy  prices  in  2021-2023 
negatively  affect  households’  budgets,  in 
particular  for  low-income  groups.  As  a  result 
of energy price changes during the August 2021 to 
January  2023  period  relative  to  the  18  months 
prior (cf. Annex 7), in the absence of policy support 
and  behavioural 
share  of 
responses, 
individuals  living  in  households  spending  more 
than  10%  of  their  budget  on  energy  would  have 
increased  by  7.1  percentage  points  (pps)  overall 
and  by  8.1  pps  among  the  (expenditure-based) 
AROP  population  (below  the  EU-level  increase  of 
respectively) (74). 
16.4  pp  and  19.1  pps, 
lower-middle 
Expenditure  shares  of 
income groups would have increased the most, in 
particular  for  gas,  but  less  than  EU-level  effects 
for  all  groups  (see  Graph A8.2).  Among  the 
(expenditure-based) AROP population, the share of 
individuals living in households with budget shares 
for  private  transport  fuels (75)  above  6%  would 
have  increased  by  2.0  pps,  less  than  the  EU 
average  increase  (by  5.3  pps),  reaching  25.5%  in 
January 2023 due to the increase in transport fuel 
prices (vs. 37.9% in the EU).  

low  and 

Access to public transport displays an urban-
rural  divide.  Roughly  half  of  French  citizens 
perceive  public  transport  to  be  available  (49%  vs 
55%  in  the  EU),  affordable  (51%  vs  54%  in  the 

(73)  Products defined according to the European Classification of 
Individual Consumption according to Purpose (ECOICOP): 
CP045. 

(74)  EMPL-JRC GD-AMEDI/AMEDI+ ; see details in the related 

technical brief.  

(75)  ECOICOP: CP0722. 

Mean change of energy expenditure as a percentage (%) of 
total expenditure per income decile (D) due to observed price 
changes (August 2021 – January 2023 relative to the 18 
months prior), excl. policy support and behavioural responses. 
Source: EMPL-JRC GD-AMEDI/AMEDI+ projects, based on 
Household Budget Survey 2015 and Eurostat inflation data 
for CP0451 and CP0452. 

Energy  poverty  indicators  have  worsened  in 
recent  years  and  the  spike  in  energy  prices 
can  be  expected  to  aggravate  the  situation. 
The  share  of  the  population  unable  to  keep  their 
homes  adequately  warm  increased  from  5.5%  in 
2015  to  6%  in  2020  (EU:  6.9%) (72)  and  is 
expected  to  have  increased  further  in  light  of 
rising  energy  prices.  In  2021,  15.5%  of  the 
population  at  risk  of  poverty  (AROP)  (EU:  16.4%) 
and  6.5%  of  lower  middle-income  households  (in 
deciles  4-5)  were  affected 
(EU:  8.2%).  The 
announced energy saving plan aims to help people 
reduce their energy use, including financial support 
for  switching  from  gas  boilers  to  more  energy-
efficient  heat  pumps.  Before  the  price  hikes,  an 
estimated  16.5%  of  the  total  and  42.1%  of  the 
had 
(expenditure-based) 
AROP 
on 
residential 

expenditure 

population 

budget 

shares 

(72)  Energy poverty is a multi-dimensional concept. The indicator 
used focuses on an outcome of energy poverty. Further 
indicators are available at the Energy Poverty Advisory Hub.   

46 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%ElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasElectricityGasD1D2D3D4D5D6D7D8D9D10FR GasFR ElectricityEU GasEU ElectricityIndicatorDescriptionFR 2015FR LatestEU LatestGHG per workerGreenhouse gas emissions per worker - CO2 equivalent tonnes12.510.6 (2021)13.7 (2021)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24), automotive (C29) - %1.51.4 (2020)3 (2020)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries - %20.515.1 (2022)10.4 (2022)Energy povertyShare of the total population living in a household unable to keep its home adequately warm - %5.56 (2021)6.9 (2021)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport - %23.525.5 (2023)37.1 (2023)Carbon inequalityAverage emissions per capita of top 10% of emitters vs bottom 50% of emitters4.84.8 (2020)5 (2020) 
 
   
                                                 
                                                 
 
  
 
EU) and of good quality (55% vs 60% in the EU). 
In  this  respect,  rural  areas  in  France  perform 
significantly  worse  than  urban  areas  and  worse 
than rural areas in the EU overall (76). The average 
carbon  footprint  of  the  top  10%  of  emitters 
among the population in France is about 4.8 times 
higher  than  that  of  the  bottom  50%  (see  Graph 
A8.1),  i.e.  slightly  less  pronounced  than  the  EU 
average  (5.0 times).  In  France,  the  average  levels 
of  air  pollution  in  2020  stood  above  the  EU 
average  (8.6  vs  11.2  µg/m3  PM2.5),  with  16%  of 
the population living in regions exposed to critical 
levels  of  air  pollution (77),  leading  to  significant 
health impacts, in particular on vulnerable groups, 
and 16 540 premature deaths annually (78).  

(76)  EU (rural): 46%, 48% and 56% respectively. Special 

Eurobarometer 527. 

(77)  Two times higher than the recommendations in the WHO Air 

Quality Guidelines (annual exposure of 5µg/m3) 

(78)  EEA- Air Quality Health Risk Assessment 

47 

 
 
                                                 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The  circular  economy  transition  is  key  to 
climate  and 
delivering  on 
the  EU’s 
environmental  goals  and  provides 
large 
socio-economic  benefits. It  spurs  job  growth, 
innovation  and  competitiveness  and 
fosters 
resilience  and  resource  security.  The  circularity 
transition  of  industry,  the  built  environment  and 
agri-food  can  generate  significant  environmental 
improvements (see Annex 6), as they rank among 
the most resource-intensive systems.  

France  is  on  track  to  meet  the  EU’s  circular 
economy  goals, although  there remain  areas 
in  which  improvement  is  needed.  The  EU’s 
2020 circular economy action plan (CEAP) aims at 
doubling  circular  material  use  by  2030.  In  this 
respect,  France’s  performance  rose  to  19.8%  in 
2021  compared  to  19.4%  in  2016,  far  above the 
EU average of 11.7% in 2021. The CEAP also aims 
to  significantly  decrease 
the  EU’s  material 
footprint.  France’s  performance  is  below  the  EU 
average, with 10.9 tonnes per head vs 13.7 tonnes 
per head in 2020, and has been decreasing by 3% 
points since 2010. As regards health and safety in 
circular jobs, fatal accidents in waste management 
and  materials  recovery  are  above  the  average  of 
the  EU 
all  economic  sectors  and  above 
average (79). 

circular 

remaining 

France  recently  adopted  new  policies  to 
address 
economy 
challenges. The 2020 ‘loi relative à la lutte contre 
le gaspillage et à l’économie circulaire’ (anti waste 
and  circular  economy  law)  contains  50  measures 
and obligations to deliver on the objectives of the 
CEAP.  Measures  notably  target  plastic  and  food 
waste,  information  to  consumers,  reuse,  repair, 
and planned obsolescence. 

in  particular  municipal  waste, 

The  current  generation  and  treatment  of 
waste, 
is 
stagnating.  France’s  generation  of  municipal 
waste  remains  above  the  EU  average  of  530 kg 
per head. With a recycling rate of municipal waste 
of  45.1%  in  2021,  France  has  missed  the  EU 
target for recycling 50% by 2020. France is at risk 
of  missing  the  EU’s  recycling  target  for municipal 
waste for 2025. France is also considered to be at 
risk  of  missing  the  2025  recycling  target  of  50% 

(79)  9.45 fatal accidents p. 100 000 employed in 2018-2020 vs 
2.94 for all sectors in France; 6.33 in the EU-27 for waste 
collection, treatment and disposal activities 

48 

for  plastic  packaging  waste.  This  is  in  particular 
due  to  the  inefficient  collection  and  treatment  of 
municipal  biowaste.  The  packaging  waste  stream 
of most concern is plastic; with a 26.9% recycling 
rate in 2019, it is far from the 2025 target (50%). 
The landfilling rate stands at 25% in 2021, above 
the  EU  average  (23%  in  2021) and  far  from  the 
target of 10% by 2035. France will need to make 
further  efforts  to  meet  the  EU’s  recycling  targets 
through  improvements  in  separate  collection  and 
treatment  of  waste  in  view  of  recycling,  in 
particular for biowaste and plastic packaging. 

Graph A9.1: Trend in material use 

Source: Eurostat 

The industrial system is increasingly circular. 
With  regard  to  resource  productivity,  the  French 
industrial system is performing better than the EU 
average,  with  a  purchasing  power  standard  per 
kilogramme  of  3.1  vs  2.3  for  the  EU  in  2021, 
further  increasing  France’s  resilience  (see  Annex 
5).  France’s  inter-company  synergy  programme 
can  further  develop  opportunities  for  industrial 
symbiosis.  France’s  commitments 
for  green 
growth encourage industries and economic players 
to develop new circular models. 

The  built  environment  system  continues  to 
exacerbate  the  depletion  of  resources, 
despite  recent  improvements.  The  recovery 
rate  of  construction  and  demolition  waste  has 
slightly  increased  since  2016  but  remains  well 
below  the  EU  average  (74%  vs  89%).  There  is 
renovating  existing  buildings  and 
scope  for 
improving  their  use  instead  of  building  new  ones, 
as  well  as  increasing  the  share  of  secondary  raw 
materials used in construction. With regard to soil 

0.020.040.060.080.0100.0120.00.02.04.06.08.010.012.014.016.0201620172018201920202021kg/capitatonnes/capitaMaterial footprint France (tonnes/capita)Material footprint EU-27 (tonnes/capita)Trade in recyclable raw materials France (imports extra EU, kg/capita)Trade in recyclable raw materials EU-27 (imports extra EU, kg/capita) 
 
 
                                                 
             
 
sealing,  positive  note  is  taken  of  the  ongoing 
efforts to reach net zero artificialisation by 2050. 
An  extended  producer  responsibility  scheme  for 
the  building  sector  was  introduced  in  January 
2022  to  help  stimulate  the  secondary  raw 
material market. It includes the separate collection 
free of charge and traceability of construction and 
demolition waste. 

Graph A9.2: Treatment of municipal waste 

The agri-food system is an important part of 
it  needs  to 
the  French  economy,  and 
accelerate  its  circularity  transition.  Further 
progress  can  be  made  towards  sustainable, 
in  food  production.  Despite 
circular  models 
measures  such  as  banning  supermarkets  and 
commercial  catering  from  destroying  unsold  food 
products,  France’s  food  waste  is  close  to  the  EU 
average of 131 kg per head, and remains an issue. 
The food value chain circularity still remains to be 
developed.  France’s  composting  and  anaerobic 
digestion increased to 108 kg per head in 2021.  

There remains a financing gap in the circular 
economy, 
including  waste  management.  
Additional investments will be required to address 
growing  needs.  The  financing  gap  was  estimated 
at  EUR  4.7  billion  per  year  between  2014  and 
2020.  Over  this  period,  investment  needs  were 
estimated  to  be  at  least  EUR  8.8  billion  per  year, 
while  investment  baselines  were  EUR  4.1  billion 
per  year  (see  Annex  6).  Investing  in  the  circular 
economy 
is  key  to  achieving  the  transition. 
Investment areas such as eco-design, repair, reuse 
and remanufacturing as well as the uptake of new 
business  models  will  be  necessary  to  reach  the 
EU’s circular economy objectives. France is already 
using  funds  from  the  ERDF,  EAFRD  and  the  RRF, 
but further investments are needed. 

Source: Eurostat 

Table A9.1: Overall and systemic indicators on circularity 

(1) Persons employed in the circular economy only tracks direct jobs in selected sub-sectors of NACE codes E, C, G and S; (2) the 
circular material use rate measures the share of material recovered and fed back into the economy in overall material use, 
including composting and digestion; (3) the recovery rate of construction and demolition waste includes waste which is prepared 
for reuse, recycled or subject to material recovery, including through backfilling operations; (4) soil sealing: 2016 column refers to 
2015 data; (5) food waste includes primary production, processing and manufacturing, retail and distribution, restaurants and 
food services, and households.  
Source: Eurostat, European Environment Agency 

49 

553558557555538561-1000100200300400500600201620172018201920202021Kg per capita Difference waste generated/treatmentLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27AREA201620172018201920202021EU-27 Latest year EU-27Overall state of the circular economyMaterial footprint (tonnes/capita)12.614.013.813.610.9-13.72020YoY growth in persons employed in the circular economy (%)1-1.37.2----2.92019Water exploitation index plus (WEI+) (%)2.13.31.72.8--3.62019IndustryResource productivity (purchasing power standard (PPS) per kilogram)2.72.62.82.93.13.12.32021Circular material use rate (%)219.418.819.720.019.219.811.72021Recycling rate (% of municipal waste)39.740.240.741.041.745.149.62021Built environmentRecovery rate from construction and demolition waste (%)371.0-73.0-74.0-89.02020Soil sealing index (base year = 2006)4105.0-109.2---108.32018Agri-foodFood waste (kg per capita)5----133.0-131.02020Composting and digestion (kg per capita)98.0100.0106.0104.097.0108.0100.02021 
             
 
   
 
ANNEX 10: DIGITAL TRANSFORMATION 

transformation  by  2030, 

Digital  transformation  is  key  to  ensuring  a 
resilient and competitive economy. In line with 
the  Digital  Decade  Policy  Programme,  and  in 
particular  with  the  targets  in  that  Programme  for 
digital 
this  Annex 
describes  France’s  performance  on  digital  skills, 
digital 
the 
digitalisation  of  businesses  and  public  services. 
Where relevant, it makes reference to progress on 
implementing  the  Recovery  and  Resilience  Plan 
(RRP).  France  allocates  21%  of  its  total  RRP 
budget to digital (EUR 8.4 billion) (80). 

infrastructure/connectivity 

and 

The  Digital  Decade  Policy  Programme  sets 
out a pathway for Europe’s successful digital 
transformation  by  2030.  The  Programme 
provides  a  framework  for  assessing  the  EU’s  and 
Member States’ digital transformation, notably via 
the  Digital  Economy  and  Society  Index  (DESI).  It 
also  provides  a  way  for  the  EU  and  its  Member 
States  to  work  together,  including  via  multi-
country  projects,  to  accelerate  progress  towards 
the  Digital  Decade  digital  targets  and  general 
objectives (81).  More  generally,  several  aspects  of 
digital  transformation  are  particularly  relevant  in 
the current context. In 2023, the European Year of 
Skills, building the appropriate skillset to make full 
use of the opportunities that digital transformation 
offers  is  a  priority.  A  digitally  skilled  population 
increases the development and adoption of digital 
technologies  and  leads  to  productivity  gains (82). 
Digital  technologies,  infrastructure  and  tools  all 
play  a  role  in  the  fundamental  transformation 
needed to adapt the energy system to the current 
structural challenges (83). 

France is in line with the EU average in terms 
of digital skills, but it is still far from the EU 
frontrunners and faces a severe shortage of 
ICT  specialists.  It  scores  above  the  EU  average 

(80)  The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII of the RRF 
Regulation. 

(81)  The Digital Decade targets as measured by DESI indicators 
and complementary data sources are integrated to the 
extent currently available and/or considered particularly 
relevant in the MS-specific context.  

(82)  See for example OECD (2019): OECD Economic Outlook, 

Digitalisation and productivity: A story of complementarities, 
OECD Economic Outlook, Volume 2019 Issue 1 | OECD 
iLibrary (oecd-ilibrary.org). 

(83)  The need and possible actions for a digitalisation of the 
energy system are laid out in the Communication 
‘Digitalisation the energy system – EU action plan’ 
(COM(2022)552. 

50 

for basic digital skills and matches the EU average 
for ICT specialists. There is an imbalance between 
the  190 000  recruitment  needs  for  computer 
engineers  and  the  number  of  young  beginners 
(155 000) (84).  A  RRP  measure  supporting  the 
acquisition of digital skills across the workforce by 
increasing  personal  training  budgets  to  develop 
digital  skills  for  20 500  employees  is  expected  to 
help address the skills related challenges.  

France made considerable progress in digital 
infrastructure/connectivity.  Coverage  of  fibre 
to  the  premises  (FFTP)  increased  substantially  by 
10  percentage  points,  standing  at  73 %  in  2022 
(compared  to  56 %  in  the  EU).  Coverage  in  rural 
areas also increased considerably, with a coverage 
of  fibre  to  the  premises  at  46%  against  an  EU 
average  of  41%.  The  RRP  supports  the  ‘France 
Très Haut Débit’ plan to accelerate the deployment 
of  optical  fibre  across  the  whole  country.  The 
plan's  objective  is  for  everyone  living  in  France 
(including  in  rural  areas),  to  be  able  to  access 
digital  connectivity  of  more  than  100Mbit/s  at 
home  and  work  by  the  end  of  2025.  As  regards 
mobile connections, overall 5G coverage increased 
to  89%  (above  the  EU  average  of  81%)  and  5G 
coverage on the 3.4-3.8 GHz spectrum band, which 
is  essential  for  enabling  advanced  applications 
requiring  large  spectrum  bandwidth,  stands  at 
52% (above the EU average of 41%). 

Overall,  French  companies  have  increased 
their  use  of  digital  technologies  in  business 
operations,  but  SMEs  are  lagging  behind.  As 
part  of  its  RRP,  France  plans  to  invest  EUR 385 
million  to  help  small,  medium  and  mid-tier 
companies  to  finance  digitalisation  strategies  by 
2022.  This  includes  an  additional  allocation  for 
‘France Num’ and a plan to help retailers digitalise 
their  operations.  Moreover,  as  part  of  the  fourth 
‘programme      d’investissements  d’avenir  (PIA4)’, 
the  RRP  includes  innovation  support  programmes 
and activities to foster the research and innovation 
ecosystem. These actions are focused on strategic 
technologies  in  key  markets  in  which  France 
considers  it  essential  to  be  a  global  player 
(quantum 
cybersecurity,  artificial 
to 
intelligence,  cloud,  etc.).  France  started 
implement  these  actions,  with  strategies  per  key 
area  being  published.  22%  of  enterprises  use  big 
data,  compared  with  an  EU  average  of  14%,  and 
45%  use  electronic  information  sharing.  But  the 

computing, 

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

enseignements, 2014 

 
 
                                                 
                                                 
 
performing well on the access to electronic health 
records  and  pre-filled  forms,  where  its  score  is 
significantly lower than the EU average (54 vs 71 
and 47 vs 68).  

share  of  small  and  medium-sized  enterprises 
(SMEs) with at least basic digital intensity levels is 
below  the  EU  average.  In  particular,  only  13%  of 
French  SMEs  sell  online,  compared  with  an  EU 
average of 19%. 

France  scores  fairly  on  digitalisation  of 
public  services.  France’s  performance  on  digital 
public services for citizens and businesses is below 
the  EU  average,  but  its  share  of  e-Government 
users is high. Moreover, France has one electronic 
identification  (eID)  scheme  notified  under  the 
is  not 
regulation.  However,  France 
eIDAS 

Table A10.1: Key Digital Decade targets monitored by DESI indicators 

(1) The 20 million target represents about 10% of total employment. 
(2) The Fibre to the Premises coverage indicator is included separately as its evaluation will also be monitored separately and 
taken into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75 % of Union enterprises have taken up one or more of the following, in line with their business operations: (i) cloud 
computing services; (ii) big data; (iii) artificial intelligence.   

Source: Digital Economy and Society Index 

51 

EUDigital Decade target by 2030 DESI 2021DESI 2022DESI 2023DESI 2023(EU)Digital skillsAt least basic digital skillsNA62%62%54%80%% individuals2021202120212030ICT specialists (1)4.5%4.5%4.5%4.5%20 million% individuals in employment aged 15-7420202021202120212030Digital infrastructure/connectivityFixed Very High Capacity Network (VHCN) coverage53%63%73%73%100%% households20202021202220222030Fibre to the Premises (FTTP) coverage (2)53%63%73%56%-% households20202021202220222030Overall 5G coverage0%74%89%81%100%% populated areas202020212022202220305G coverage on the 3.4-3.8 GHz spectrum bandNANA52%41%-% populated areas202220222030Digitalisation of businessesSMEs with at least a basic level of digital intensityNANA64%69%90%% SMEs202220222030Big data (3)22%22%22%14%75%% enterprises20202020202020202030Cloud (3)NA25%25%34%75%% enterprises2021202120212030Artificial Intelligence (3)NA7%7%8%75%% enterprises2021202120212030Digitalisation of public servicesDigital public services for citizensNA697177100Score (0 to 100)2021202220222030Digital public services for businessesNA807984100Score (0 to 100)2021202220222030Access to e-health recordsNANA5471100Score (0 to 100)202320232030France 
 
  
 
 
 
 
ANNEX 11: INNOVATION 

This  Annex  provides  a  general  overview  of  the 
performance  of  France’s  research  and  innovation 
system,  which  is  essential  for  delivering  the  twin 
green and digital transition. 

France is a strong innovator according to the 
2022  edition  of  the  European  Innovation 
Scoreboard (85) but its performance lead over 
is  narrowing.  France’s 
the  EU  average 
innovation  performance  is  below  the  average  of 
the  EU’s  strong  innovators  (105.4%  compared  to 
114.5%) and is decreasing over time (-1.0%). Total 
R&D  intensity  stood  at  2.21%  in  2021,  slightly 
below the EU average and still far from the target 
of 3% initially set for 2020. 

Over  the  last  decade,  France  has  not  been 
able to enhance the performance of its public 
research  system  and  to  fully  restore  the 
attractiveness of academic research careers. 
Between 2009 and 2019, there has been a slight, 
but  steady,  decline  in  public  R&D  intensity (86) 
which  has  been  detrimental  to  the  country’s 
scientific  performance.  Notably,  the  share  of 
France’s scientific publications among the top 10% 
most  cited  publications  worldwide  has  been  on  a 
slightly declining trend since 2010 and fell to 8.9% 
in 2019, below the EU average of 9.8%. While the 
country has the second-highest proportion of new 
science  graduates  in  the  EU,  which  hints  at  an 
abundant  pool  of  human  resources  for  research 
and  innovation,  it  has  not  been  able  to  fully  take 
advantage  of  this  key  strength  as  the  French 
research  system  continues  to  suffer  from  the 
increasing precarity of academic research careers. 
As an illustration, over the last decade the age at 
which  young  researchers  are  able  to  secure  a 
stable  position  as  researcher  or  lecturer  has 
increased  by  almost  2  years,  while  the  age  at 
is  obtained  has 
which  the  doctoral  degree 
remained stable (87). 

the  adoption  of 

With 
the  Research 
Programming  Law  in  December  2020,  whose 

(85)  2022, European Innovation Scoreboard, Country profile: 

France (https://ec.europa.eu/assets/rtd/eis/2022/ec_rtd_eis-
country-profile-fr.pdf). The EIS provides a comparative 
analysis of innovation performance in EU countries, including 
the relative strengths and weaknesses of their national 
innovation systems. 

(86)  Defined as public gross domestic expenditure on R&D as a 

percentage of GDP 

(87)  L’état de l’emploi scientifique en France, rapport 2020, 

Ministère de l’Enseignement Supérieur et de la Recherche. 

implementation  is  a  key  deliverable  under 
the  French  Recovery  and  Resilience  Plan, 
France  has  taken  an  important  first  step 
towards  tackling  this  challenge.  On  top  of 
setting a budgetary path to progressively enhance 
public  R&D  funding  until  2030,  the  Research  Law 
aims  to  make  research  careers  more  attractive, 
notably  through  better  remuneration  and  the 
introduction  of  new  recruitment  channels.  These 
include  a  new  tenure-track  programme  called 
‘chaires  de  professeur 
the 
programme  concerns  only  a  small  proportion  of 
positions and it has gotten off to a slow start, as 
noted 
the 
Senate’s 
in 
implementation  of 
the  Research  Law  of 
July 2022 (88). 

junior’.  However, 

report 

the 

on 

Business  R&D  intensity  is  stagnating  and 
France’s  innovation  performance  is  not  on 
par with  the  high level  of  public  support  for 
business innovation. Business R&D intensity has 
remained  stable  at  around  1.44%  between  2012 
and  2021.  So  far,  the  large  volume  of  public 
support  for  business  innovation  –  which  is  the 
highest  in  the  EU  as  a  percentage  of  GDP  and 
relies primarily on a tax credit scheme called crédit 
impôt  recherche  (CIR)  –  has  not  had  a  tangible 
effect  on  innovation  output,  as  measured  for 
example by patents. Rather, France’s international 
patenting  activity  has  steadily  declined  over  the 
last  10 years  and  is  now  below  EU  average. 
Regarding the efficiency of the CIR, the evaluation 
conducted  by  the  National  Commission  for  the 
Evaluation  of  Innovation  Policies  showed  that  the 
scheme  had  positive  effects  on  small  and 
medium-sized enterprises (SMEs) (both in terms of 
R&D  activity  and  economic  performance)  but  no 
significant  effects  on  larger  firms (89).  In  that 
regard, an OECD study notably demonstrated that 
the  amount  of  R&D  induced  by  one  euro  of  R&D 
tax subsidy is lower in France than in the countries 
used  for  comparisons,  where  the  tax  aid  is  often 
less generous and targeted at smaller firms (90). 

France  can  count  on  a  vibrant  and  well-
developed start-up ecosystem which however 

(88)  http://www.senat.fr/rap/r21-766/r21-766.html 

(89)

https://www.strategie.gouv.fr/sites/strategie.gouv.fr/file

s/atoms/files/fs-2021-rapport-cnepi-cir-juin.pdf 

(90)  OECD (2020), ‘How effective are R&D tax incentives? New 

evidence from the OECD microBeRD project’, Directorate for 
Science, Technology and Innovation Policy Note, OECD, Paris, 
http://www.oecd.org/sti/microberd-policy-note.pdf. 

52 

 
 
                                                 
                                                 
 
 
Table A11.1: Key innovation indicators 

(1) EU average for the latest available year or the year with the highest number of country data. 
Source: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest Europe 

or 

This 

remains  highly  concentrated  geographically. 
According to the State of EU Tech 2022, France is, 
after  Germany,  the  EU  Member  State  with  the 
highest  number  of  USD  1billion+  European  tech 
favourable 
‘unicorns’. 
companies, 
environment  for  start-ups  is  notably  linked to  the 
country’s  capacity  to  attract  investors  and,  in 
particular,  to  the  growing  availability  of  venture 
capital  over  the  last  decade  (venture  capital 
investment  as  percentage  of  GDP  has  more  than 
tripled  between  2010  and  2021).  While  very 
dynamic,  France’s  start-up  ecosystem  remains, 
the  Paris 
however,  highly  concentrated 
region (91).  On  a  per  capita  basis,  France  is  only 
slightly above European average when it comes to 
the number of start-ups per 1 m inhabitants (307, 
compared  to  269  for  the  European  average) (92). 
This  is  also  a  reflection  of  the  existing  disparities 
in  terms  of  innovation  performance  within  the 
country,  with  many 
lagging  behind 
compared to the capital region (Annex 17). 

regions 

in 

and 

undertaken 

Plan, 
under 

the  appropriate 

France  has  been  gradually  equipping  itself 
instruments  and 
with 
governance framework to increasingly direct 
R&I  efforts  towards  accelerating  the  twin 
transition.  The  share  of  green  inventions  in 
France’s patenting activity (based on patents filed 
under  the  PCT) has  remained  stagnant,  at  around 
15%,  over  the  last  ten  years.  As  part  of  the 
significant 
Resilience 
Recovery 
investments, 
four 
the 
Investments for the Future Programme (PIA4), will 
be  directed  towards  the  development  of  key 
technologies  for  the  green  and  digital  transitions. 
To  support  these  efforts,  the  governance  of  the 
PIA4  has  been  revised  with  a  view  to  ensuring  a 
clearer  strategic  steer  of  its  different  thematic 
investment  strategies.  As  a  complement  to  the 
PIA4,  the  challenge-oriented 
investment  plan 
‘France  2030’,  launched  in  2021,  will  provide  an 
additional  EUR  34  billion  to  foster  innovation  and 
help new ‘champions’ emerge in key sectors, with 
a  particular  focus  on  low-carbon  energy  and  the 
decarbonisation of industry.  

(91)  More than half of French start-ups are located in the Paris 
region, according to La French Tech’s startup ecosystem 
map, powevered by Dealroom.co. 

(92)  State of European Tech 2022 

53 

R&D intensity (Gross domestic expenditure on R&D as % of GDP)2.182.232.192.302.212.26Public expenditure on R&D as % of GDP0.780.750.710.740.720.76Business enterprise expenditure on R&D (BERD) as % of GDP1.381.441.441.521.451.49Scientific publications within the top 10% most cited publications worldwide as % of total publications 10.29.78.9::9.8Patent Cooperation Treaty (PCT) patent applications per billion GDP (in PPS)4,14.23,1::3,3Public-private scientific co-publications as % of total publications7.488.58.48.67.1Public expenditure on R&D financed by business enterprise (national) as % of GDP0.034:0.032::0.054New graduates in science & engineering per thousand pop. aged 25-34:20.922.624.1:16Total public sector support for BERD as % of GDP0.421::::0.194R&D tax incentives: foregone revenues as % of GDP0.2740.2820.284 : :0.1Share of environment-related patents in total patent applications filed under PCT (%)15.1 14.8 14.1 : :13.3Venture capital (market statistics) as % of GDP0.0290.0330.0660.0760.0960.074Employment in fast-growing enterprises in 50% most innovative sectors5.14.14.1::5.5EUaverage (1)Finance for innovation and economic renewalKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2021France2010201520192020 
                                                 
 
  
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

France’s  productivity  has  been  hampered  by 
structural weaknesses.  Since the 2000s, labour 
productivity  has  increased  less  in  France  than  in 
the  euro  area,  with  the  highest  gains  for  the 
manufacturing sector and the worst results for the 
construction  sector.  The  slow  growth  of  labour 
productivity is partly  due to the stagnation of the 
total factor productivity.  

Graph A12.1: Total factor productivity (2005=100) 

* European Commission forecast.  
Source: Ameco, European Commission.  

Low  gains  in  productivity  are  linked  to  France’s 
structural  weaknesses.  The  latter  include  the  lack 
of  skills  and  skills’  mismatches  (annex  14),  the 
lack of digitalisation among SMEs (annex 10) and 
a  stagnating  business  R&D 
(annex 
11).   Investment under France’s recovery plan will 
help tackle those structural weaknesses.  

intensity 

located 

industrial 

is  key  to 
Containing  production  costs 
competitiveness. 
increasing 
According 
to  France’s  national  productivity 
board (93), its low competitiveness is mainly due to 
rising  production  costs  rather  than  unfavourable 
specialisation. Faced with rising costs, many firms 
have 
their  production  sites  abroad. 
Employment  in  the  foreign  industrial  subsidiaries 
of  French  groups  corresponds 
to  68%  of 
employment  in  the  industrial  sector  in  France, 
compared  to  35%  in  Germany,  27%  in  Italy  and 
10%  in  Spain.  Taxes,  like  other  costs,  influence 
location  decisions.  France  reduced  the  corporate 
tax  rate  and  taxes  on  production,  but  further 

reduction  could  help  preserve  or  attract  industrial 
activity. According to France’s national productivity 
board, if France had the same level of production 
taxes  as  its  partners,  its  share  of  production  site 
creation by non-EU multinationals in Europe would 
increase by 17%.  

industry  has  been 

Soaring  energy  costs  have  further  penalised 
industrial  competitiveness.   From  October 
2021  until  September  2022,  production  prices  in 
French  industry  increased  by  26%,  mainly  due  to 
the increase in energy prices (+61%) (94). While the 
whole  of  European  industry  has  experienced  the 
increase  in  gas  prices  since  Russia’s  invasion  of 
Ukraine,  French 
further 
penalised  by  the  unavailability  of  many  French 
nuclear power stations. Wholesale electricity prices 
in  France  have  become  higher  than  in  Germany, 
whereas  they  used  to  be  lower (95).  Although  the 
loss  of  French  industrial  production  due  to  higher 
energy  prices  is  estimated  to  be  just  1.5%,  it  will 
be higher in the energy-intensive industries (4.5% 
for  metallurgy  and  3.8%  for  the  wood  and  paper 
industry) (96).  Together  with  concerns  about 
security  of  energy  supply,  higher  energy  prices 
could  also  prompt industrial  companies  to  further 
locate  their  production  sites  outside  France  and 
the  EU.  France  has  put  in  place  measures  which 
help energy-intensive industries and SMEs to face 
the  energy  price  increases.  France  also  subsidises 
firms’  investment  to  increase  energy  efficiency 
and  decarbonise  production  processes,  especially 
under  its  recovery  plan  and  the  France  2030 
investment  plan.  The  government  also  announced 
a  bill  of  law  to  support  the  green  transition  of 
industry.    

Industry  in  France  increasingly  suffers  from 
disruptions  of  supply  chains.  In  2022,  43%  of 
French firms faced constraints linked to materials 
shortage. This share has been soaring since 2020, 
when  it  was  only  16%.  It  is  now  above  the  EU 
average 
impacted 
(32%).  This  has  heavily 
industries  which  have  a  high  share  of  material 
inputs,  such  as  automotive,  aerospace,  defence, 
and consumer goods (97).  

(94)  INSEE 

(95)  C. Mini C and M. Bordigoni, L’industrie face aux prix de 
l’énergie, Les Notes de La Fabrique, 10/11/2022.  

(96)  Insee, Refroidissement, note de conjuncture, 12/2022 

(93)  Conseil national de la productivité, Productivité et 

(97)  France’s supply chain and Roland Berger, Les enjeux 

compétitivité, 5/2022 

stratégiques des opérations en 2021, 2021 

54 

8090100110120050607080910111213141516171819202122*23*24*(2005=100)FRDEESITEA19 
 
   
                                                 
                                                 
 
 
France’s strategic dependencies appear to be 
in  line  with  the  EU  average.  Regarding  critical 
raw materials, France’s import concentration index 
is  just  slightly  above  the  EU  average.  Regarding 
products, France had a lower number of vulnerable 
products (98) than its main European neighbours in 
2020 (99).  Products  for  which  French 
imports 
appeared to be sourced from a limited number of 
included  chemicals,  pharmaceuticals, 
countries 
metals and some capital goods. For 25% of these 
products, the main non-European supplier is China.  

Corporate  investment  has  held  up  better 
than  expected,  but  too  few  SMEs  invest  to 
innovate  and  become  greener.  In  2022,  net 
private  investment  represented  4.7%  of  France’s 
GDP, above the EU average (3.4%). However, only 
a little more than 20% of French firms invested to 
develop  new  products,  processes  and  services  in 
2021, against 50% of firms in the best performing 
Member  States (100).  Only  29%  of  SMEs  invested 
more  than  1%  of  their  turnover  to  become 
resource efficient (EU average: 39%) (101).  

The main barrier to investment has been the 
lack of available staff. When asked about long-
term  barriers  to  investment (102),  French  firms 
point  to the  lack  of  available  staff  (84%  of  firms 
in France vs 85% in the EU), energy costs (78% vs 
82%), uncertainty about the future (74% vs 78%), 
labour 
(64%  vs  60%),  business 
regulations (58% vs 61%), demand for products or 
services (54% in France vs 53% in the EU) and the 
availability of finance (45% vs 43%). SMEs’ access 
to  loans  is  good,  whereas  access  to  equity  is 
around the EU average (103).  

regulations 

in 

renewable 

Long  permitting  procedures  have  hampered 
investment 
energy 
infrastructure, but France has adopted a law 
to  improve  the  situation.  To  accelerate  the 
deployment  of  renewable  energy,  France  adopted 
a  law  on  10  March  2023.  The  law  deals  with 

(98)  Products for which imports are concentrated in some extra-
EU countries and which have low diversification potential 

(99)  Ministry of Economy, France, Vulnerability of French and 

European imports, 17/12/2020.  

delays 

several  causes  of  long  administrative  procedures, 
such  as  frequent  updating  of  urban  planning 
for 
documents, 
due 
complementary 
tedious 
information 
procedures 
for  ground-mounted  photovoltaic 
projects. France still needs to increase the staffing 
in the competent authorities. 

requests 
and 

to 

Long  permitting  procedures  have  hampered 
investment  in  clean  tech  manufacturing.  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 (104).  The  procedure 
involves 
bottlenecks, 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  average  time  of  17  months. 
Investment  projects  may  also  be  subject  to 
litigation  procedures  that  can  last  several  years, 
leading to projects being abandoned.  

Late  payments  have  reduced  SMEs’  liquidity. 
Late  payments  from  the  public  and  business 
sectors  drastically  increased  in  France  in  2022, 
compared  to  2021,  and  are  now  above  the  EU 
average (105).  40%  of  public  health  bodies  pay 
after the deadline (106), which significantly impacts 
SMEs.  Large  companies’  payment  periods have 
also kept increasing since 2019: only 41% of them 
pay  on  time  (vs  75%  of  SMEs).  Due  to  late 
payments, SMEs had EUR 12 bn less in liquidity in 
2021, while large companies had EUR 16 bn more. 

Regarding integration into the Single Market 
and  digitalisation,  French  SMEs  are  lagging 
behind.  SMEs  represent  a  share  of  French  added 
value  which is small (42.3%)  compared to the EU 
average  (51.8%) (107).  French  businesses  and  in 
particular  SMEs  could  better  exploit  the  single 
market opportunities to grow. Intra-EU imports and 
exports  as  a  share  of  GDP  have  slightly  declined 
for  several  years.  They  are  now  the  lowest in  the 
EU  with  16.5%  of  GDP  (against  42%  on  average 

(104) Assemblée nationale, Propositions des pilotes pour le projet 

(100) EIBIS 2022, EU overview, 8/11/2022, p.13  

de loi industrie verte, April 2023 

(101) EC, Flash Eurobarometer 498: SMEs, resource efficiency and 

(105) Intrum, European payment report 2022, 21/6/2022. Survey 

green markets, 2022 

conducted between January and April 2022 

(102) EIBIS 2022, EU overview, 8/11/2022, p.23 

(106) Banque de France, Rapport de l’observatoire des délais de 

(103) European Investment Fund, EIF SME access to finance index, 

paiements, 6/2022 

2022, 14/10/2022.  

(107) EC, SME Performance Review, France country sheet, 7/2022 

55 

 
                                                 
                                                 
for  EU  Member  States).  Only  6%  of  French  SMEs 
sell  online  cross  border  (EU  average:  9%) (108). 
SMEs’  digitalisation  is  still  lagging  behind  the  EU 
average. Only 47% of French SMEs have at least a 
basic  level  of  digital  intensity  against  55%  in  the 
EU. 

Graph A12.2: Business environment and 
productivity drivers 

Exclusive  rights  for  accountants  and  tax  advisers 
the  development  of 
remain  broad,  harming 
innovative  services.  The  long  duration  of  the 
mandatory qualification for estate agents could be 
an obstacle for new market entrants. For lawyers, 
which  is  the  most  regulated  profession in  the  EU, 
regulatory  restrictions  are  only  slightly  below  the 
EU  average (110).  In  the  retail  sector,  France  has 
adopted  stringent  restrictions  on  operations  and 
establishment since 2019 (ELAN,  Egalim 1, 2 and 
3, PACTE and CLIMA laws). It is the most restrictive 
Member  State 
regulatory 
regarding 
frameworks (111).  The  recently  adopted  Egalim  3 
law (112) introduces new restrictions on promotions 
and  commercial  negotiations,  which  may  have  a 
negative impact on consumer choice and prices.   

retail 

Source: 1) % of GDP, 2021 Eurostat;  
2) composite indicator, 2021 European Investment Fund 
access to finance index;  
3) average payment delay in number of days, 2022 Intrum;  
4) % of firms in manufacturing facing constraints, 2022 
European Commission business consumer survey;  
5) proportion of contracts awarded with a single bidder, 2022 
Single Market Scoreboard. 

to 

into 

could  do  more 
integration 

facilitate 
France 
businesses' 
the  Single 
Market. France is among the five Member States 
with  the  highest  number  of  infringement  cases 
relating 
it 
implements  most  directives  into  national  law  on 
time, the conformity  deficit is slightly  higher than 
the EU average (109). France’s SOLVIT centre, which 
helps  businesses  and  citizens  deal  with  breaches 
of EU rights in other EU countries, is understaffed. 

to  Single  Market 

rules.  While 

Reducing  regulatory  restrictions  in  services 
could  boost  competition  and  productivity. 
Regulatory  restrictions  remain  high  in  several 
regulated  professions,  in  particular  accountants 
and tax advisers, patent agents, estate agents and 
architects,  mostly  in  the  form  of  shareholding 
requirements  and  company  form  restrictions. 

(108) EC, Digital Economy and Society Index 2022 

(109) EC, Single Market Scoreboard, 2022 

(110) EC, Communication on updating the reform 

recommendations for regulation in professional services, 
COM(2021)385. 9/7/2021  

(111) EC, Retail restrictiveness indicator (2022 update), 

forthcoming 

(112) Loi n° 2023-221 du 30 mars 2023 tendant à renforcer 

l’équilibre dans les relations commerciales entre fournisseurs 
et distributeurs (JO, 31 mars 2023). 

56 

1) Businessinvestments2) EIF access tofinance index3) Payment gap- G2B3) Payment gap- B2B4) Materialshortage4) Labourshortage5) Single bidsEuropean UnionFrance 
   
                                                 
 
 
                                                 
 
Table A12.1: Industry and the Single Market 

(*) Last available year 
Source: (1) AMECO, (2) Eurostat, (3) ECFIN BCS, (4) Eurostat, (5) COMEXT and Commission calculations, (6) Eurostat, (7) Eurostat, 
(8) OECD, (9) Single Market Scoreboard, (10) EIB survey, (11) Eurostat: (12) Intrum, (13) SAFE Survey, (14) EIF SME Access to 
Finance Index. Eurostat 

57 

POLICY AREAINDICATOR NAME20182019202020212022EU27 average (*)Net private investment, level of private capital stock, net of depreciation, % GDP (1)4.64.734.74.83.7Net public investment, level of public capital stock, net of depreciation, % GDP (1)0.10.40.20.20.30.4Real labour productivity per person in industry (% yoy)(2)2.1-1.2-9.74.2-2.81.4Cost competitive-nessNominal unit labour cost in industry (% yoy)(2)-0.5-2.57.7062.9Material shortage (industry), firms facing constraints, % (3)221816314347Labour shortage using survey data (industry), firms facing constraints, % (3)131410111928Vacancy rate (business economy)(4)n.a.n.a.n.a.n.a.0.73.1Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials (5)0.20.170.160.170.190.18Installed renewables electricity capacity, % of total electricity produced (6)37.238.940.441.5n.a.50.9Single Market integrationEU trade integration, % (7)16.916.815.216.519.445.8RestrictionsEEA Services Trade Restrictiveness Index (8)0.060.060.060.060.060.05Public procurement Single bids, % of total contractors (9)171918192229Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle (10)22.924.921.921.322.829.6Bankruptcies, Index (2015=100)(11)8580.649.143.165.286.8Business registrations, Index (2015=100) (11)132.7153.1159.4186189.8121.2Payment gap - corporates B2B, difference in days between offered and actual payment (12)21015121613Payment gap - public sector, difference in days between offered and actual payment (12)11121382315Share of SMEs experiencing late payments in past 6 months, % (13)n.a.50.843.943.547.343EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1 (14)0.910.760.830.85n.a.0.46EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 1 (14)0.210.360.130.2n.a.0.23BUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeHEADLINE INDICATORSEconomic StructureRESILIENCEShortagesStrategic dependenciesSINGLE MARKET 
 
 
 
   
 
ANNEX 13: PUBLIC ADMINISTRATION 

This  Annex  outlines  the  performance  of 
is 
France’s  public  administration,  which 
essential for providing services and carrying 
out  reforms.  After  the  ‘yellow  vest’  and  COVID-
19 crises, perceptions of government effectiveness 
in  France  fell  to  the  level  of  the  EU  average.  In 
response  to these  crises, France  revised its public 
administration 
reform  agenda,  with  a  shift 
towards  more  simplification  and  proximity  at 
territorial 
the  State'  at 
(‘re-arming 
departmental  level),  and  launching  the  reform  of 
the  senior  civil  service.  These  reforms  are  part  of 
its recovery and resilience plan (RRP). 

level 

The  civil  service  in  France  is  experiencing 
several  challenges.  While  the  number  of  public 
employees  as  a  proportion  of  the  population  is 
higher  than  in  other  Member  States,  the  public 
administration  is  confronted  with  an  ageing  civil 
service and decreasing attractiveness. Recruitment 
issues also vary according to the territory and type 
of  position.  The  government's  main  response  to 
the reduced attractiveness of the civil service as a 
place  to  work  has  been  to  use  more  contract 
agents and increase starting salaries.  

The  cross-cutting  reform  of  the  senior  civil 
service, set out in the recovery and resilience 
plan,  is  under  way.  France  has  taken  several 
measures  to  reform  recruitment  procedures  and 
competency frameworks. These aim to: (i) diversify 
the  profiles  of  senior  civil  servants; (ii)  harmonise 
initial training; (iii) develop continuing education to 
improve  the  culture  of  public  service;  (iv)  develop 
career paths by adapting selection procedures and 
encouraging mobility between the civil service and 
the private sector.  

Challenges  persist  as 
regards  gender 
equality  among  senior  civil  servants.  Gender 
parity  in  senior  administrative  positions  is  below 
the  EU  average.  The  Sauvadet  Law,  which  ten 
years  ago  brought  in  quotas  for  women  in  senior 
civil  service  positions,  seems  to  be  having  less 
effect.  The  proportion  of  women  continues  to  fall 
further below the 40% target set by the law. 

show 

The OECD indicators on regulatory policy and 
governance 
below-average 
performance  on  public  consultation  (Graph 
the  use  of  evidence-based 
A13.2).  While 
policymaking  instruments  is  generalised,  public 
consultations on non-environmental issues are not 
conducted  on  a  systematic  basis.  This  can  make 
for less inclusive policymaking. 

As a response to the pandemic and to reform 
its  territorial  management,  France  launched 
a  new  decentralisation  process.  The  new  3DS 
Law  (differentiation,  decentralisation,  devolution 
and simplification) aims to give local governments 
more  discretion  in  various  fields  (transport,  social 
housing,  health,  etc.)  and  provides  for  a  limited 
transfer of competences on a case-by-case basis, 
while  also  simplifying  local  public  services.  The 
participation of local authorities in health policy is 
supported  by  Article  119  of  the  3DS  Law,  which 
modifies  the  rules  of  organisation,  operation  and 
supervision  of  the  regional  health  agencies. 
Implementation  has  not  really  begun  yet:  only  2 
decrees  implementing  the  3DS  Law  have  been 
published,  compared  to  the  80  decrees  that  are 
expected. 

France’s  performance  on  digital  public 
services  is  slightly  below  the  EU  average 
(Table  A13.1  and  Annex  10).  The  government  has 
made significant efforts on digitalisation in recent 
years.  The  France  Connect  platform  provides 
than  1  000  administrative 
access 
services, according to the government.  

to  more 

civil, 

days 

(440 

The  justice  system  is  still  facing  challenges 
as  regards  judicial  efficiency.  The  estimated 
time  needed  to  resolve  cases  fell  in  2021  but 
remains  above  the  levels  reached  in  previous 
years 
commercial, 
for 
administrative  and  other  cases  and  495  days  for 
litigious  civil  and  commercial  cases).  The  overall 
quality  of  the  justice  system  is  good,  although 
digital  tools  are  used 
in  only  some  courts. 
Investments are being made  to increase the level 
of digitalisation, in particular for civil and criminal 
proceedings, and to make court decisions available 
online.  Significant  investments  have  been  made 
and  major  initiatives  have  been  taken  to  address 
the ongoing lack of human resources. No systemic 
deficiencies  in  judicial  independence  have  been 
reported (113). 

France  lags  in  most  indicators  that measure 
performance 
single  market 
the 
governance tools (Graph A13.1 and Annex 12). 

on 

(113) For a more detailed analysis of the performance of the 
justice system in France, see the 2023 EU Justice 
Scoreboard (forthcoming) and the country chapter for France 
in the 2023 Rule of Law Report (forthcoming). 

58 

 
 
                                                 
 
Table A13.1: Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2022 value. If not available, the 2021 value is shown. 
(3) 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. (4) Defined as the absolute value of the difference between the 
percentage of men and women in senior civil service positions. 
Flags: (b) break in time series; (d) definition differs; (u) low reliability. 
Source: ICT use survey, Eurostat (# 1); E-government benchmark report (# 2); Open data maturity report (# 3); Labour Force 
Survey, Eurostat (# 4, 5, 7), European Institute for Gender Equality (# 6); Fiscal Governance Database (# 8, 9); OECD Indicators of 
Regulatory Policy and Governance (# 10). 

Graph A13.1: France. Performance on the single 
market scoreboard governance tools 

Graph A13.2: France. Indicators of Regulatory 
Policy and Governance: stakeholder engagement 

Red denotes a poor performance; green, a good performance  
TRIS: Technical Regulation Information System 
IMI: Internal Market Information System 
Source: Single Market Scoreboard 

Source: OECD indicators of Regulatory Policy and Governance 
Surveys 2017 and 2021, http://oe.cd/ireg 

59 

0.000.501.001.502.002.503.0000.511.522.53FR2017FR2021FR2017FR2021Primary lawsSecondary lawsStakeholder engagement MethodologyOversightSystematic adoptionTransparencyEU-27FR201720182019202020212022EU-27(2)177.079.582.4n/a87.1n/a64.82n/an/an/a71.669.769.772.93n/a0.80.90.91.01.00.8439.740.041.142.245.1 (b)48.152.0524.224.025.515.313.6 (b)17.016.9637.040.442.838.637.837.811.071.61.61.61.61.5 (bd)1.6 (d)1.580.70.70.70.70.7n/a0.790.90.90.90.90.9n/a1.5101.88n/an/an/a1.89n/a1.7Medium term budgetary framework indexIndicator (1)E-government and open government dataShare of individuals who used the internet within the last year to interact with public authorities (%)E-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with tertiary education (levels 5-8, %)Participation rate of public administration employees in adult learning (%)Gender parity in senior civil service positions (4)Ratio of 25-49 to 50-64 year olds in NACE sector OPublic financial management Strength of fiscal rules indexEvidence-based policy makingRegulatory governance 
 
 
 
     
 
   
 
FAIRNESS 
ANNEX 14: EMPLOYMENT, SKILLS AND SOCIAL POLICY CHALLENGES IN LIGHT OF 
THE EUROPEAN PILLAR OF SOCIAL RIGHTS  

The  European  Pillar  of  Social  Rights  is  the 
compass  for  upward  convergence  towards 
better  working  and  living  conditions  in  the 
EU.  This  Annex  provides  an  overview  of  France’s 
progress in implementing the Pillar’s 20 principles 
and EU headline and national targets for 2030 on 
employment, skills and poverty reduction. 

Table A14.1: Social Scoreboard for France 

situation  of  vulnerable  groups  continues  to  be 
challenging.  For  some,  such  as  non-EU-born 
people, the employment gap is increasing as their 
situation  is  improving  at  a  slower  pace.  In  Q4-
2022,  the  employment  rate  of  several  groups 
remained  significantly  below  the  overall  average. 
This  included  low-qualified  people  (ISCED  0-2; 
53.9%)  and  non-EU-born  people  (61.2%),  among 
whom  women  are  particularly  affected  (51.7%). 
Inequalities  in  educational  outcomes  (see  Annex 
15)  affect  employment  perspectives  for  these 
groups.  Further  attention  is  needed  on  evaluating 
and adjusting active labour market policies to the 
specific  needs  of  vulnerable  groups.  European 
Social  Fund  Plus  (ESF+)  investments  in  France 
support 
tailored  
employment  and  social  guidance  and  access  to 
training for the unemployed. 

particularly 

through 

this, 

for 

Skills  mismatches  and  low  adult  learning 
participation of low-qualified people are key 
the  digital  and  green 
challenges 
transitions.  The  share  of  low-qualified  adults 
(aged  25-64,  ISCED  0-2)  participating  in  adult 
learning is significantly lower (5.3% in 2022) than 
that  of  the  more  qualified  (ISCED  3-8,  14.9%). 
Evaluations show that low-qualified people benefit 
less  from  training  leading  to  qualifications  (see 
Education and Training Monitor 2022). The Monitor 
and the conclusions of the third evaluation of the 
plan d’investissement dans les compétences  point 
to the need to further support these groups to help 
them access training and improve their mobility on 
the  labour  market.  This  builds  on  the  already 
significant investments made in up- and reskilling 
and  should  be  done  in  coordination  with  ESF+ 
programmes.  Effective  coordination  between  the 
regional  authorities  in  charge  of  training  for  the 
unemployed  and  the  French  public  employment 
services  (PES)  is  key,  particularly  in  light  of  the 
reorganisation of the PES to create France Travail. 
The  lack  of  candidates  with  adequate  skills  has 
been  continuously  reported  by  employers  as  one 
of  the  main  barriers  to  recruitment (114),  while 
labour shortages remain stable and high (2.4% in 
Q4-2022).  This  is  observed  particularly  in  the 
construction  and  services  sectors (115).  In  2021, 
62.0%  of  individuals  had  basic  or  above  basic 

(114) DARES, Analyses n°26, June 2022. 

(115) Banque de France, Point sur la conjoncture française à début 

novembre 2022, 2022. 

Update of 27 April 2023. 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 2023. 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. Indicator 
on housing cost overburden not yet available for 2021. 
Source: Eurostat 

Although  the  economy  and  employment 
continue  to  improve  after  the  COVID-19 
crisis  overall,  vulnerable  groups  still  face 
difficulties  in  integrating  into  the  labour 
market.  The  employment  rate  has  continued  to 
increase  for  the  overall  population  (74.0%  in 
2022)  and  for  young  people  (aged  15-29;  48.6% 
in  2022).  Both  are  still  below  the  EU  average 
(74.7% and 49.2% respectively). Nevertheless, the 

60 

7.662.012.05.84.4174.07.32.0108.2219.222.746.4424.15.657.12.8Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of population aged 20-64, 2022)Unemployment rate(% of active population aged 15-74, 2022)Long term unemployment(% of active population aged 15-74, 2022)GDHI per capita growth                                                              (2008=100, 2021)Social protection and inclusionAt risk of poverty or social exclusion rate                                            (% of total population, 2021)At risk of poverty or social exclusion rate for children                       (% of population aged 0-17, 2021)Impact of social transfers (other than pensions) on poverty reduction (% reduction of AROP, 2021)Disability employment gap(percentage points, 2021)Housing cost overburden(% of total population, 2020)Children aged less than 3 years in formal childcare(% of population under 3-years-old, 2021)Self-reported unmet need for medical care(% of population 16+, 2021)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketEarly leavers from education and training(% of population aged 18-24, 2022)Share of individuals who have basic or above basic overall digital skills (% of population aged 16-74, 2021)Youth NEET rate(% of population aged 15-29, 2022)Gender employment gap(percentage points, 2022)Income quintile ratio(S80/S20, 2021) 
 
 
 
  
 
                                                 
 
overall  digital  skills,  8 percentage  points  (pps) 
above  the  EU  average  (53.9%)  but  still  far  from 
the EU’s best performers. France invests heavily in 
up-  and  reskilling,  such  as  under  the  plan  de 
reduction  des  tensions  de  recrutement;  however, 
the observed challenges suggest there is scope to 
better  align  training  systems  with  labour  market 
needs  and  target  support  at  vulnerable  groups. 
The country’s recovery and resilience plan includes 
top-ups  of  individual  learning  accounts  for  digital 
skills,  and 
to 
vocational  training for unemployed  people.  This is 
expected  to  contribute  to  achieving  the  French 
target  to  have  at 
least  65%  of  all  adults 
participating  in  training  every  year  by  2030 
(starting from 51.3% in 2016). 

the  ESF+  co-finances  access 

France has a high rate of enrolment in early 
childhood  education  and  care  of  children 
aged  less  than  3  years,  but  inequalities  and 
staff  shortages  persist.  In  2021,  57.1%  of 
under-3-year-olds  benefited  from  childcare  (EU: 
36.2%).  However,  the  enrolment  gap  between 
children at risk of poverty and social exclusion and 
those without such a risk is among the highest in 
the EU at 40.6 pps (2020). Around 80% of families 
below  the  poverty  threshold  do  not  use  childcare 
services (116).  Severe  staff  shortages  further  limit 
the  availability  of  childcare.  While  early  school 
leaving  shows  a  downward  trend  (7.6%  in  2022, 
below  the  EU  average  of  9.6%),  big  urban-rural 
differences remain, and the high impact of socio-
economic  inequalities  on  pupils’  educational  out-
comes continues to be a problem (see Annex 15). 

Despite  an  overall  stable  poverty  rate  since 
the  beginning  of  the  COVID-19  crisis,  some 
indicators  suggest  the  social  situation  is 
deteriorating.  Social  transfers  have  a  strong 
impact on poverty reduction in France (46.44% vs. 
37.08%  for  the  EU  in  2021).  After  transfers,  the 
share  of  people  at  risk  of  poverty  or  social 
exclusion  remained  stable  between  2020  (19.3%) 
and  2021  (19.2%),  and  below  the  EU  average 
(21.9%  in  2021)  but  the  number  of  people 
affected  increased  by  35000,  and  by  512 000 
compared  to  2019  (break  in  time  series).  Certain 
groups  are  particularly  affected,  such  as  single-
parent  families,  low-qualified  people,  children, 
non-EU-born  people  and  self-employed  people, 
the  outermost  regions.  Some 
particularly 
the  December  2022 
measures, 

in 
such  as 

list 

unemployment  insurance  system  reform  and  the 
reform  of  the  minimum  income  could  negatively 
affect  the  social  situation  of  some  groups  and 
their  impact  should  be  monitored.  Lack  of  access 
to  affordable  housing  increases  poverty  risks. 
Amid  declining  public  investment,  there  is  a  high 
level  of  unmet  need  for  social  housing  (2.15 
million  on  a  waiting 
in  2020  and 
increasing) (117).  In  2020,  it  is  estimated  that 
around  300 000  persons  were  homeless,  among 
which about 40 000 were rough sleepers (118). The 
adoption  of  the  draft  law  preventing  the  illegal 
occupation  of  properties  would  make  it  easier  to 
end  a  lease  if  rent  is  not  paid  although  this  may 
harm some vulnerable groups. In 2021, despite an 
overall  reduction  in  the  number  of  minimum 
income  beneficiaries,  most  food  banks  (57%) 
reported  a  large  or  moderate  increase  in  the 
number of beneficiaries compared to the situation 
before the COVID-19 crisis (119). The assessment of 
the  anti-poverty  plan  by  France  Stratégie (120) 
points  to  implementation  difficulties,  notably  with 
measures  on  access  to  housing,  and  the  need  to 
ensure  that  the  social  impact  of  un-employment 
and pension reforms is duly taken into account. 

Table A14.2: Situation of France on 2030 
employment, skills and poverty reduction targets 

(1) Adult Education Survey, adults in learning in the past 12 
months; (2) Number of persons at risk of poverty or social 
exclusion (AROPE), reference year 2019. 
Source: Eurostat, DG EMPL 

(117) Fondation Abbé Pierre, L’état du mal-logement en France, 

2022. 

(118) Cour des comptes, L’hébergement et le logement des 
personnes sans domicile pendant la crise sanitaire du 
printemps 2020, 2020. 

(119) DREES, Études et Résultats n° 1218, February 2022. 

(116) Cnaf, France Stratégie, HCFEA, Séminaire premiers pas, 

(120) France Stratégie, Évaluation de la stratégie nationale de 

2021. 

prévention et de lutte contre la pauvreté, 2022. 

61 

IndicatorsLatest dataTrend            (2015-2022)National target by 2030EU target by 203074.0(2022)48.4(2016)+512(2021)Adult learning1 (%)6560Employment (%)7878Poverty reduction2 (thousands)-1 100-15 000 
                                                 
 
   
 
                                                 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  for 
France’s education and training system in light  of 
the  EU-level 
targets  and  other  contextual 
indicators  under  the  European  Education  Area 
strategic framework, based on the 2022 Education 
and Training Monitor. 

education 

Pupil  backgrounds  remain  a  strong  predictor 
Socio-economic 
outcome. 
of 
performance  gaps  are  stable  or  widening, 
depending on subject and grade (121). In 2022, the 
Council  of  the  EU  therefore  recommended  France 
to  raise  the  share  of  people  with  basic  skills 
(reading, writing, maths) by addressing inequalities 
in  the  education  system  and 
improving  the 
working  conditions  and  continuous  training  of 
teachers. 

France  has  achieved  the  EU-level  targets  on 
enrolment  in  early  childhood  education  and 
care  and  early  leaving  from  education  and 
training,  but  some  disparities  exist.  For 
children above 3, enrolment in pre-primary school 
is  mandatory  and  almost  universal.  For  those 
under  3,  the  participation  rate  is  also  high,  at 
57.2% 
(EU:  32.3%),  but  participation  among 
disadvantaged  children  is  much  lower,  at  24.3% 
(see Annex 14). Early school leaving stood at 7.6% 
in 2022, continuing the downward trend of the last 
decade; however, it is higher among young people 
with low-educated parents (19.1%) (122) and those 
born  outside  of  France  (around  12%).  Compared 
with the national average, boys and those living in 
rural areas also lag behind (see Table A15.1). 

Underachievement  and  major  inequalities  in 
maths  are  of  particular  concern.  In  maths, 
both top performers and low achievers lag behind 
pupils  in  other  Member  States (123).  According  to 
national and international surveys, average maths 
performance, in particular of disadvantaged pupils, 
has  continuously 
three 
decades (124). Comprehensive national competence 
tests  showed  that,  in  2021,  9  in  10  pupils  of  the 
20% socio-economically most advantaged quintile 
had  at  least  a  satisfactory  level  in  maths,  while 

fallen 

last 

the 

in 

(121) DEPP (ed.), L’État de l’école – édition 2022, Ch. 29, Les 
inégalités sociales dans l’enseignement scolaire. 

(122) Eurostat (EU Labour Force Survey 2021 - ad hoc module for 

parental education). 

(123) 2019 Trends in International Mathematics and Science 

Study. 

(124) DEPP (ed.), L’État de l’école – édition 2022, Ch. 24, Les 

compétences des élèves en mathématiques depuis 1987. 

62 

only  half  of  pupils  in  the  most  disadvantaged 
quintile  did (125).  Researchers  of  the  government’s 
Economic  Analysis  Council  found  that 
labour 
productivity in  France  could  substantially  increase 
if maths performance improved (126). 

entry 

teachers  had 

exams (127), (128). 

Shortages  of  teachers  and  their  working 
conditions remain major challenges. According 
to  a  2023  report  of  the  French  Court  of  Auditors, 
around 1100 posts remained vacant every year on 
average  between  2017-2021  following  public 
teacher 
Contractual 
teachers are recruited to fill the vacant posts, but 
often do not have the same level of qualifications 
and  experience  as  permanent  teachers.  In  2022, 
4500  new  contractual 
to  be 
recruited,  against  1730  in  2021.  The  Court  also 
remarked that given the low number of candidates 
at  the  entry  exams  in  certain  subjects  (such  as 
maths, technology, engineering and certain foreign 
languages), success rates are high, casting doubts 
on  the  quality  of  recruitments.  Additionally,  the 
French Court of Auditors recommended to improve 
initial 
recruitment 
education 
has 
French 
procedures. 
implemented  various  measures:  in  2022,  new 
continuous  training  centres  opened  their  doors;  in 
2023,  salaries  (especially  of  beginning  and  mid-
top-ups  for 
career 
additional tasks are planned.  

and 
government 

increased  and 

teachers) 

teacher 

The 

As  landmark  reforms  of  recent  years  are 
coming to a close, their long-term impact on 
learning  outcomes  of  pupils  remains  to  be 
assessed.  The  major  reform  of  reducing  class 
sizes has been completed for the first and second 
grades  in  disadvantaged  public  primary  schools, 
bringing  class  sizes  more  into  line  with  the  OECD 
average.  Class  sizes  of  the  last  pre-primary  year 
will continue to be reduced until 2023/24. Regular 
national tests taken by all pupils in certain grades 

(125) DEPP (ed.), L’État de l’école – édition 2022, Ch. 29, Les 
inégalités sociales dans l’enseignement scolaire, data 
source: Comprehensive national competence tests at the 
beginning of lower secondary school (6e) and the beginning 
of upper secondary school (2nde), September 2021. 

(126) Conseil d’analyse économique, Martin/Renault/Roux, Baisse 

de la productivité en France: échec en « maths »?, September 
2022. 

(127) Ministère de l’Éducation nationale et de la Jeunesse, 

Résultats des concours enseignants de la session 2022, July 
2022. 

(128) Cour des Comptes, Devenir Enseignant : La formation initiale 
et le recrutement des enseignants des premier et second 
degrés, February 2023. 

 
 
                                                 
                                                 
 
Table A15.1: EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Source: (1,3,4,5,7,8,9,10,11) = Eurostat; 2 = OECD (PISA); 6 = European Commission (Joint Research Centre). Notes: Data is not 
yet available for the remaining EU-level targets under the European Education Area strategic framework, covering 
underachievement in digital skills and participation of adults in learning. The equity indicator shows the gap in the share of 
underachievement in reading, mathematics and science (combined) among 15-year-olds between the lowest and highest quarters 
of socio-economic status. 

help  to  diagnose  pupils’  difficulties  and  to 
the  education 
measure 
system. 

the  performance  of 

they  receive  a  certificate  delivered  via  the  public 
and  open  platform  PIX.  The  platform  also  allows 
pupils to develop their digital skills. 

‘Conseil  National  de 

Further measures focus on innovation, school 
autonomy,  evaluation  and  digitalisation.  In 
the  context  of  the 
la 
Refondation’  launched  in  September  2022,  the 
French  government  opened  a  specific  round  of 
consultation on the future of education. It calls on 
local  authorities,  teachers, 
schools  to  gather 
parents  and  pupils  and  set  up 
innovative 
pedagogical  projects  to  improve  pupils’  learning 
outcomes. The projects might receive funding from 
the  newly  established  ‘pedagogical  innovation 
fund’,  which provides  schools  with  EUR 500 m  for 
2022-2027.  All  schools  are  evaluated  externally 
every  5 years,  combined  with  a  self-evaluation. 
France also invests in the evaluation of education 
policies to promote evidence-based policy making, 
with  the  eight-year  programme  ‘innovation,  data 
and  experimentation  in  education  (IDEE)’.  France 
also put in place a digital competence framework, 
based  on  the  European  DigComp  framework. 
Pupils’ digital skills are tested at regular intervals; 

The  inclusion  of  pupils  with  a  disability 
inclusion  has 
remains  a  challenge.  While 
progressed  (an  additional  78 500  pupils  with  a 
disability  attend  mainstream  schools  compared 
with  5  years  ago),  the  shortage  of  support 
specialists  and  low  accessibility  (physical  and 
pedagogical) have hampered further progress (129). 

While  tertiary  education  attainment  is  high, 
the  number  of  STEM  graduates  remained 
roughly  stable  in  the  last  5 years.  50.4%  of 
25-34-year-olds  held  a  higher  education  diploma 
in 2022, up from 44.8% in 2015. Between 2015-
2020,  the  share  of  STEM  graduates  rose  only 
slightly  from  25.2%  to  25.9%,  leading  to  risks  of 
skill mismatches and shortages. 

(129) Le Défenseur des droits de la République Française, 

L’accompagnement humain des élèves en situation de 
handicap, August 2022. 

63 

96%100.0%91.9%100.0%2020, p93.0%2020Reading< 15%21.5% 20.0%20.9%201822.5%2018Mathematics< 15%23.5% 22.3%21.3%201822.9%2018Science< 15%22.1% 21.1%20.5%201822.3%2018< 9 %9.2%11.0%7.6% 9.6%Men10.0%12.5%9.2%11.1%Women8.4%9.4%6.0%8.0%Cities8.7%9.6%6.8%8.6%Rural areas7.7%12.2%8.3%10.0%Native8.7%10.0%7.2%8.3%EU-born16.3%u20.7%11.1%u20.3%Non EU-born16.4%23.4%12.2%22.1%6Equity indicator (percentage points)::20.9201819.320187Exposure of VET graduates to work based learningTotal ≥ 60% (2025) : :70.5%60.1%45%44.8%36.5%50.4%42.0%Men40.6%31.2%46.6%36.5%Women48.8%41.8%54.0%47.6%Cities52.4%46.2%59.6%52.2%Rural areas36.2%26.9%37.0%30.2%Native45.7%37.7%50.9%43.0%EU-born41.3%32.7%40.8%39.5%Non EU-born38.1%27.0%48.5%35.7%27.1% 38.3%30.9%202039.2%202020152022IndicatorTargetFranceEU27FranceEU271Participation in early childhood education (age 3+)2Low achieving 15-year-olds in:Early leavers from education and training (age 18-24)3Total3By gender4By degree of urbanisation5By country of birthTertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth11Share of school teachers (ISCED 1-3) who are 50 years or over 
                                                 
 
  
 
ANNEX 16: HEALTH AND HEALTH SYSTEMS 

A  healthy  population  and  an  effective, 
accessible  and  resilient  health  system  are 
prerequisites  for  a sustainable  economy and 
society.  This  Annex  provides  a  snapshot  of 
population health and the health system in France.  

Life  expectancy  in  France  is  above  the  EU 
average  and  has  slightly  rebounded  after  it 
fell  in  2020.  This  reflects  the  slight  decrease  in 
COVID-19  mortality  in  2021 (130).  France  fares 
comparatively  well 
in  avoiding  deaths  from 
treatable causes. Cancers and circulatory diseases 
followed  by  COVID-19  are  the  leading  causes  of 
death.  

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

Health  spending  relative  to  GDP  in  France 
was  above  the  EU  average  in  2020.  In  2020, 
total  healthcare  spending  increased  to  12.2%  of 
GDP.  This  is  in  line  with  the  upward  trend  in  all 
Member States in 2020. In France, this increase is 
largely  due  to  a  substantial  GDP  contraction  (by 
almost  8%,  compared  to  5.6%  in  the  EU  overall). 
As  a  share  of  total  public  spending,  health 
expenditure increased slightly from 14.4% in 2019 
to 14.6% in 2020. Health expenditure broken down 
by type of provider follows the EU average pattern. 
For 
in  2020,  primary  healthcare 
accounted for around 12% of all health spending, 
slightly  below  the  EU  average  of  13%.  The  total 
volume  of  antibiotics  prescribed  in  primary  care 
remains  among  the  highest  in  the  EU.  Reducing 
the prescription of antibiotics may help safeguard 
public health. The public share of health spending 
is  above  the  EU  average  (79%  in  2020).  Public 
spending on health is projected to increase by 1.1 
(pps)  of  GDP  by  2070 
percentage  points 
(compared to 0.9 pps for the EU overall).  

instance, 

(130) Based on data provided directly by Member States to ECDC 
under the European Surveillance System (data current as of 
13 April 2023) 

64 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2019-2070 

AWG reference scenario 
Source: European Commission / EPC (2021) 

Spending  on  prevention  in  France  amounted 
to  2.9%  of  total  spending  on  healthcare  in 
2020,  compared  to  3.4%  for  the  EU  overall. 
Between  2020  and  2019,  spending  on  prevention 
in  France  increased  by  59%,  compared  to  a  26% 
increase  for  the  EU  overall.  Across  the  EU,  this 
increase  was  primarily  driven  by  spending  on 
disease  detection,  surveillance, 
control  and 
response programmes as part of the public health 
response to COVID-19. Between 2019 and 2020, a 
remarkable  proportional 
reported 
spending  was  noted  in  France  for  early  disease 
detection  programmes  and  disaster  preparedness 
and  emergency  response  programmes.  For  the 
latter,  France 
the  second  highest 
reported 
proportional increase of all Member States. 

increase 

in 

France  faces  a  shortage  of  doctors.  There 
were  3.2  practising  doctors  per  1 000  population 
in  2020  (against  4  on  EU  average).  The  increase 
since  2010,  against  a  backdrop  of  an  ageing 
population,  is  lower  than  in  the  EU  overall. 
Furthermore,  46.5%  of  doctors  are  aged  over  55, 
which  may  increase  the  shortage  in  the  longer 
term  if  policies  do  not  aim  for  more  sustainable 
levels  of  staff.  Another  challenge  is  the  territorial 
distribution  of  doctors,  with  no  progress  observed 
in  closing  gaps  between  regions  in  the  last  10 
years.  The  remuneration  of  doctors  seems  to  be 
comparatively  high,  but  the  gap  in  remuneration 
between  self-employed  and  salaried  specialists  is 
substantial.  The  limited  increase  of  salaries  for 
doctors since 2010 may make it less attractive for 
students  to  enter  medical  professions  in  the 
future.  The  density  of  nurses  is  above  the  EU 
average  (11.3  per  1 000 population  in  2020),  but 
is 
the 
comparatively  low,  also  when  comparing  to  other 
EU  countries.  This  may  pose  a  challenge  to 
maintain  the  current  provision  rates  of  nurses  in 

remuneration 

hospital 

nurses 

of 

82.782.782.883.082.382.480.980.981.081.380.480.1201620172018201920202021FranceEU6.68.40.91.10246810EUFrance% of GDP20192070increase 
 
       
                                                 
       
 
Table A16.1: Key health indicators 

Note: The EU average is weighted for all indicators, except for (*) and (**), for which the EU simple average is used. The simple 
average for (*) uses data for 2020 or most recent year if former not available. Doctors' density data refer to practising doctors in 
all countries except EL, PT (licensed to practice) and SK (professionally active). Nurses' density data refer to practising nurses in all 
countries except FR, PT, SK (professionally active) and EL (nurses working in hospitals only).  
Source: Eurostat; except: ** ECDC 

in  particular 

the longer term, also in view of the pandemic and 
its  impact  on  staff  retention.  Staff  shortages  will 
play  out 
in  underserved  areas 
(‘medical  deserts’),  with  a  risk  of  exacerbating 
health  inequalities.  The  creation  of  territorial 
communities of health professionals is expected to 
help  improve  access  to  care.  It  is  necessary  to 
assess  the  impact  of  Ma  Santé  2022  measures, 
including internships of GPs in underserved areas, 
grants  and  installation  support,  support  for  new 
working  solutions,  and  task-shifting  solutions. 
Attracting  health  professionals  to  regions  with  a 
lower  density  of  doctors  may  require  more 
complex  policy  solutions,  taking  into  account  also 
other incentives than remuneration. 

Through  its  recovery  and  resilience  plan, 
France plans to invest EUR 4.5 billion (11.4% 
of  the  plan’s  total  value)  to  strengthen  its 
health  system.  This  concerns  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. 

Two  reforms  included  in  the  plan  were  already 
implemented in 2021: (i) a law reforming hospital 
governance,  which  will  make  the  organisation  of 
hospitals  more  flexible;  and  (ii)  a  law  on  social 
debt  and  autonomy,  which 
the 
independence  of  older  people  and  people  with 
disabilities.  

supports 

65 

20172018201920202021EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)62.161.360.659.0NA91.7 (2020)Cancer mortality per 100 000 population238.9233.9230.9226.6NA242.2 (2020)Current expenditure on health, % GDP 11.411.211.112.2NA10.9 (2020)Public share of health expenditure, % of current health expenditure83.083.383.684.7NA81.2 (2020)Spending on prevention, % of current health expenditure 1.91.91.92.9NA3.4 (2020)Acute care beds per 100 000 population309304300NANA387.4 (2019)Doctors per 1 000 population *3.13.13.23.2NA3.9 (2020)Nurses per 1 000 population *10.510.811.111.3NA8.3 (2020)Consumption of antibacterials for systemic use in the community, daily defined dose per 1 000 inhabitants per day (total consumption for CY and CZ) **23.023.623.318.719.914.5 (2021) 
 
 
 
 
 
   
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

This  Annex  showcases  the  economic  and 
social  regional  dynamics  in  France,  providing 
an  update  on  economic,  social  and  territorial 
cohesion 
in  and  among  the  French  regions 
compared  with  the  EU  as  a  whole  and  the  main 
regional economic recovery challenges. 

Regional disparities have increased in France 
during  the  last  decade.  Most  French  NUTS 2 
regions (23 out of 27) have lost ground relative to 
the  EU  average  in  terms  of  GDP  per  head  (PPS). 
The drop in GDP per capita was particularly severe 
in  2019  and  2020,  as  a  result  of  the  COVID-19 
outbreak,  which  caused  the  biggest  post-war 
recession, with tourist and border regions suffering 
the  most.  Local  tourism  in  the  outermost  regions 
also  suffered,  but  they  were  the  only  French 
regions  not  to  experience  a  decrease  in  GDP  per 
capita.  Only  two  French  regions  had  a  GDP  per 
capita  greater  than  the  EU  average  in  2021  (Île-
de-France  at  176  and  Rhône-Alpes  at  105). 
Noticeable  disparities  persist 
in  metropolitan 
France  (with  Lorraine  and  Picardie  at  the  lowest 
end  of  the  spectrum  at  76)  and,  even  more 
markedly,  between  metropolitan  France  and  the 
French  outermost  regions,  where  GDP  remains 
generally  low.  GDP  per  capita  dropped  from  74% 
of the EU average in 2010 to 65% in Guadeloupe 
in  2021,  and  from  52%  to  44%  in  Guyane.  GDP 
per  capita  has  also  been  substantially  lower  in 
France's rural areas than in urban areas. Real GDP 
per  capita  growth  was  low  (or  even  negative)  in 
most  French  regions  in  2010-2020,  significantly 
affecting 
social 
development perspectives.  

economic 

France's 

and 

Graph A17.1: GDP per capita (2010) and GDP 
growth (2011-2020) - France 

(1) Bubble size corresponds to population size in 2020 
Source: Eurostat 

Most  French  regions  are  at  risk  of  being 
caught  in  a  development  trap   (131).  These 

regions  experienced  frequent  or  long  periods  of 
below-average  growth  in  GDP,  productivity  and 
employment, often due to the decline of industries 
that  had  once  been  their  main  source  of  wealth. 
This  was  a  particular  concern  for  regions  such  as 
Basse-Normandie,  Picardie,  Lorraine,  Limousin, 
Languedoc-Roussillon and Auvergne, which all had 
a GDP per capita below the EU average. 

in 

from  wide  variations 

Regional  disparities  in GDP  per  capita partly 
stem 
labour 
productivity. During the last two decades, labour 
productivity has been higher than the EU average 
in  all  French  regions,  except  Mayotte. 
is 
generally much lower in the less developed regions 
of  the  country.  In  2021,  productivity  in  Île-de-
France was 1.7 times higher than in Limousin and 
1.8 times higher than in Mayotte.  

It 

Most  French  regions  are  around  the  EU 
average  on  competitiveness (132).  Ile-de-France 
is  an  exception  being 
significantly  more 
competitive  than  the  EU  average.  Corse  and  the 
outermost  regions  are  at  the  other  end  of  the 
in 
spectrum.  Considerable  differences  persist 
regional  innovation  performance.  Innovation  and 
technology-related  activities  are  concentrated  in 
the  most  developed  regions  of  the  country.  Only 
five  regions  have  a  share  of  employment  in  such 
activities above the national average of 4.6% (133). 
There  are  also  marked  differences  between  the 
five  regions  with  strong  or  very  strong innovation 
performance  (Ile-de-France,  Rhône-Alpes,  Midi-
and 
Pyrénées, 
Bretagne), 
regions 
considered  moderate  innovators,  and  the  five 
outermost regions plus Corse that are categorised 
as emerging innovators. 

Provence-Alpes-Côte-d’Azur 

seven  metropolitan 

the 

The uptake of ITC technologies by individuals 
is  relatively  high  in  France,  albeit  with  some 
differences  between  regions  and  a  moderately 
higher  uptake  in  cities  (83%)  than  in  rural  areas 
(78%). 

Some  of  the  less  developed  regions  are 
lagging behind in terms of human capital. The 
highest  share  of  the  population  with  tertiary 
education is found in Île-de-France (around 63%). 
It  is  much  lower  in  regions  like  Corse  (32%), 
(22%).  The 
(30%)  and  Guyane 
Guadeloupe 

(131) European Commission, 2021, Cohesion in Europe towards 

(132) 2022 regional competitiveness index. 

2050, 8th report on economic, social and territorial cohesion. 

(133) Source: regional innovation scoreboard, 2022 

66 

 
 
 
                                                 
                                                 
 
 
Graph A17.2: Labour productivity, EU, France NUTS 
2 regions, 2000-2020 

Source: Eurostat 

Table A17.1:Selected indicators at regional level - France 

Source: Eurostat, EDGAR database 

proportion  of  early  school  leavers  is  very  high  in 
Guyane where around 23% of the population aged 
18-24  dropped  out  of  school.  Highly  educated 
population  tend  to  concentrate  in  cities,  where 
49%  of  the  population  aged  25-64  has  a  high 
level  of  educational  attainment  (compared  with 
32% in rural areas). 

The  French 
labour  market  still  displays 
significant  regional  disparities,  while  the 

67 

unemployment  rate  in  2021  was  generally 
higher  in  France  than  the  EU  average.  The 
unemployment  rate  is  highest  in  the  outermost 
regions (particularly Mayotte, 27.8%), but displays 
important differences also in metropolitan France. 
It  is  generally higher in  cities (8.9%)  than in  rural 
areas (6.3%). Similarly, the incidence of poverty is 
higher in cities (more than 22% of the population 
were  at  risk  of  poverty  and  social  exclusion)  than 
than  15%).  Despite 
in 

rural  areas 

(less 

NUTS 2 RegionGDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP growthGDP per head growthUnemployment rateR&D expenditureEmployment in high-technology sectorsEmployment in knowledge-intensive servicesRegional Competitiveness Index (RCI)GHG emissions per headEU27 = 1002021EU27 = 1002021Average % change on the preceding year, 2011-2020Average % change on the preceding year, 2011-2020Average % change on the preceding year, 2011-2020% of active population 2021% of GDP, 2013% of total employment, 2021% of total employment, 2021EU27 = 1002022tCO2 equivalent per head, 2021European Union100,0100,00,20,80,67,02,34,840,7100,07,2France104,0114,0-0,10,4-0,17,92,24,646,6108,96,1Île-de-France176,0152,5-0,10,50,17,92,98,155,1142,83,6Centre — Val de Loire86,0101,1-0,2-0,3-0,47,21,63,842,4100,37,3Bourgogne86,098,9-0,1-0,3-0,27,11,02,343,596,78,6Franche-Comté78,095,8-0,3-0,5-0,67,02,75,137,895,26,4Basse-Normandie81,092,4-0,6-0,5-0,56,41,32,840,995,28,6Haute-Normandie87,0105,8-0,7-0,9-1,07,61,42,540,7100,78,3Nord-Pas de Calais85,0101,5-0,10,20,18,80,92,947,2101,68,4Picardie76,0101,6-0,3-0,5-0,69,71,42,343,0102,16,5Alsace95,0106,3-0,10,2-0,37,11,74,939,4109,35,5Champagne-Ardenne86,0100,2-0,3-0,7-0,68,90,81,444,292,98,2Lorraine76,098,6-0,4-0,8-0,78,51,32,143,196,213,8Pays de la Loire93,0100,90,00,90,16,01,23,642,0104,97,1Bretagne90,0100,80,41,10,55,82,04,142,6100,26,2Aquitaine92,0101,8-0,40,6-0,27,41,63,044,6102,25,3Limousin77,092,2-0,1-0,3-0,26,21,01,951,295,510,8Poitou-Charentes85,099,30,10,40,18,60,91,743,294,37,0Languedoc-Roussillon79,0100,2-0,30,5-0,411,42,43,449,098,55,0Midi-Pyrénées90,098,70,11,00,26,14,86,849,0108,76,2Auvergne84,098,90,40,50,27,02,32,841,895,810,0Rhône-Alpes105,0111,40,10,80,07,22,85,343,9110,85,0Provence-Alpes-Côte d’Azur100,0109,2-0,50,2-0,38,12,54,348,7107,35,9Corse82,098,8-0,80,5-0,69,10,338,876,15,6Guadeloupe65,0100,20,30,1-0,217,12,146,475,85,2Martinique72,095,00,70,21,112,852,287,75,9Guyane44,099,5-0,80,9-1,314,651,361,421,5La Réunion66,092,7-0,51,30,817,91,451,477,03,2Mayotte28,085,22,76,02,327,851,868,60,1 
 
 
 
  
 
unemployment  and  poverty  risks  being  greater  in 
urban  areas,  the  divide  between  urban  and  rural 
areas  in  terms  of  economic  dynamism  and  long-
term  growth  prospects  has  gained  crucial 
importance  in  the  public  debate.  This  is  notably 
due to the difficulty of finding a job in rural areas 
for  women  and  young  people,  as  well  as  by  the 
scarcity and remoteness of essential services, both 
private and public.   

68 

 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

Despite the pandemic and the war in Ukraine, 
the  French  banking  sector’s  solvency  has 
remained quite solid. With an annualised return-
on-equity of 6.2% in the first nine months of 2022 
(vs  6.1%  in  the  EU),  profitability  seems  to  have 
returned  to  pre-pandemic  levels.  The  capital-
adequacy  ratio  has  remained  broadly  stable  in 
recent  years,  and  reached  18.8%  in  September 
2022  (vs  18.6%  in  the  EU).  The  banking  sector’s 
non-performing-loan ratio also reached a new all-
time low at 1.8% (vs 1.8% in the EU) in September 
2022.  These  good  results  may  be  partly  due  to 
temporary  support  measures  by  the  ECB  and  the 
French  government, 
like  the  sizeable  public-
guarantee  scheme.  Banks  have  ample  liquidity, 
both  from  the  ECB  and  depositors.  Funding  from 
the ECB is still substantial, even though it sharply 
dropped  from  5.5%  of  banks’  total  liabilities  in 
August  2021  to  3.6%  in  December  2022  (vs  an 
average  of  4.3%  in  the  euro  area).  Even  though 
loans  have  grown  a  little  faster  than  deposits 
since 2021, funding from depositors remains solid 
in 
loan-to-deposit 
with  a 
September 2022 (vs 88.6% in the EU). 

ratio  of  94.5% 

France’s  financial  system  has  withstood  the 
immediate impact of the Russian invasion of 
Ukraine  and  the  related  sanctions.  Société 
Générale  was  the  bank  most  exposed  to  Russia, 
with  an  exposure  of  EUR 18.6 bn,  mainly  via  its 
Rosbank  subsidiary.  However,  Société  Générale 
decided  on  11 April 2022 to  cease  its  activities  in 
Russia  and  to  sign  an  agreement  to  sell  Rosbank 
and  its  Russian  insurance  subsidiaries  to  Interros 
Capital.  The  sale  will  cut  Société  Générale's 
common  equity  tier  1  ratio  by  roughly  20  basis 
points and lead to writing off the net book value of 
divested activities by around EUR 2 bn. In all other 
respects (energy intensity, exports to/imports from 
Russia),  the  French  economy  is  less  vulnerable 
than  most  other  Member  States.  Default  rates 
might  increase  in  some  more  vulnerable  sectors, 
but  banks  are  relatively  well  capitalised  and  their 
non-performing-loan  ratios  have  never  been  so 
low.  They  should  therefore  be  able  to  largely 
withstand a potential deterioration in the economic 
situation. 

The  residential  real-estate  market  exhibits 
medium vulnerabilities that are mitigated by 
appropriate  and  sufficient  macroprudential 

policy  measures (134).  In  2022,  the  European 
Systemic  Risk  Board  (ESRB)  identified  several  key 
vulnerabilities in the French real-estate market: (i) 
elevated  household  indebtedness;  (ii)  elevated 
rates  of  growth  in  home  loans;  (iii)  loose  lending 
standards  (albeit  improved  since  2019);  and  (iv) 
signs  of  house-price  overvaluation  in  some  large 
cities.  The  ESRB  considers  that  the  current  policy 
mix  is  appropriate  and  sufficient  and  has  been 
instrumental in mitigating risks. The introduction of 
debt-service-to-income  and  maturity  limits  in  the 
form of a recommendation in January 2021 led to 
a significant decrease in the share of new French 
home 
characteristics.  On 
risky 
14 September 2021, the High Council for Financial 
Stability  converted  the  recommendation  into  a 
legally  binding  measure.  The  internal  ratings-
based  risk  weights  for  mortgage  exposures  in 
France  are  among  the  lowest  in  the  EU.  The 
authorities should therefore consider: (i) increasing 
these risk weights if the associated vulnerabilities 
were  to  increase  further;  and  (ii)  rebuilding  the 
countercyclical capital buffer or replacing it with a 
sectoral  systemic  risk  buffer.  In  that  context,  the 
increase of the countercyclical capital buffer from 
0%  to  0.5%  as  of  7 April 2023,  and  a  further 
increase  to  1%  as  of  January  2024,  will  help  to 
reduce vulnerabilities. 

loans  with 

French  banks  actively  finance  the  economy 
on  quite  attractive  terms.  In  December  2022, 
year-on-year credit growth reached 8.4% (vs 5.5% 
in  the  euro  area)  for  lending  to  non-financial 
corporations and 5.2% (vs  3.7% in the euro area) 
for  lending  to  households.  Since  2008,  interest 
rates  for  new  loans  to  SMEs  have  been  low  in 
France.  And  with  the  introduction  of  government-
backed  loans  during  the  COVID-19  pandemic, 
these  rates  fell  to  unprecedentedly  low  levels. 
Since February 2022 however, interest rates have 
increased  across  the  board.  Nevertheless,  France 
continues to offer the lowest  interest rates in the 
EU for loans for house purchase (1.83% vs 2.93% 
in  the  euro  area  in  November  2022)  and  for 
corporate  loans  up  to  EUR 1 million  (2.77%  vs 
3.32%  in  the  euro  area).  In  contrast,  corporate 
loans  above  EUR  1  million  have  become 
particularly  expensive,  with  interest  rates  jumping 

(134)https://www.esrb.europa.eu/pub/pdf/reports/esrb.report22021
1_vulnerabilities_eea_countries~27e571112b.en.pdf?cb813
2dc3e0f0f53a4fce3292a690bd6. 

69 

 
 
 
                                                 
 
Table A18.1: Financial soundness indicators 

(1) Last data: Q3-2022. 
(2) Data is annualized. 
Source: ECB, Eurostat, S&P Global Capital IQ Pro. 

from  1.07%  in  December  2021  to  3.74%  in 
November 2022 (vs 3.26% in the euro area). 

for 

weaker 

relatively  high 

The  rise  in  interest  rates  could  present  a 
non-financial 
challenge 
corporations. Interest rates are now going up at 
a  time  when  the  outstanding  consolidated  gross 
debt  of  French  non-financial  corporations  (NFCs) 
in  comparison  with 
remains 
elsewhere  in  Europe  and  the  rest  of  the  world. 
Market-financing  rates  for  French  companies  are 
now  rising,  with  yields  for  the 
lowest-rated 
companies  showing  an  especially  pronounced 
increase.  However,  volumes  of  issuance  via  the 
bond  market  do  not  indicate  that  companies  are 
facing  any  particular  difficulties  in  accessing 
is  a 
market  financing.  The  only  exception 
slowdown in issuances by speculative-grade NFCs. 
Since  their  debt-maturity  profile  is  spread  over 
time and much of their borrowing is at fixed rates, 
French  NFCs  should  be  resilient  to  additional 
increases in interest rates. 

In general, French banks seem to make more 
effort  than  their  global  (and  especially  US) 
peers to reduce their financing of the fossil-
fuel  industry.  The  main  French  banks  have  all 
(NZBA) 
joined  the  Net-Zero  Banking  Alliance 
launched in April 2021 by the Finance Initiative of 
the  UN  Environment  Programme.  These  banks 
committed 
lending  and 
investment  portfolios  to  align  with  pathways  to 
net-zero GHG emissions by 2050 or sooner. Loans 
made  by  French  banks  to  the  renewables  sector 
increased by 8% between 2019 and 2020 to reach 

transition 

their 

to 

EUR  44.3  bn  in  2020.  French  banks  have  also 
accelerated  their  withdrawal  from  lending  to  the 
coal  industry,  which  only  represented  EUR  2.1 bn 
of their portfolio in 2020. In 2021, the six largest 
French  banks  were  the  first  in  the  world  to 
collectively  exit  the  unconventional  oil  and  gas 
sector  (such  as  tar  sands  and  fracking).  Since 
January  2022,  they  no 
longer  finance  any 
company with a more than 30% share of revenues 
from unconventional hydrocarbons. 

considerably 

Insurers continue to boast high solvency and 
levels,  but  unexpectedly  high 
liquidity 
inflation 
is  a  concern  for  the  non-life 
insurance  sector.  Insurers’  capital  requirements 
are comfortably covered, although coverage levels 
undertakings. 
vary 
Underwriting  profitability  generated  in  the  past 
has  enabled  insurers  to  strengthen  their  capital. 
However,  as 
the 
unexpectedly high level of current inflation is likely 
to  generate  significant  losses  for  insurers  in  the 
non-life  sector  in  France,  especially  for  long-tail 
business. 

case  elsewhere, 

across 

the 

is 

Investment funds have continued to grow. As 
in  2019,  investment  funds  benefited  from  strong 
growth in assets under management (+8.3%, EUR 
4.45 bn) in 2020. The impact of the pandemic was 
therefore  only  temporary,  as  the  drop  in  the  first 
half  of  2020  was  largely  offset  by  the  increase 
observed  in  the  second  half  of  the  year.  In  terms 
of  market  share,  most  investment  funds  continue 
to  be  organised  as  subsidiaries  of  banks  and 
insurers. 

70 

201720182019202020212022EUMedianTotal assets of the banking sector (% of GDP)368.0372.8382.4454.1442.3439.1276.8207.9Share (total assets) of the five largest banks (%)45.447.748.749.249.3--68.7Share (total assets) of domestic credit institutions (%)195.295.395.295.896.396.4-60.2NFC credit growth (year-on-year % change)6.66.45.612.24.58.4-9.1HH credit growth (year-on-year % change)6.05.66.44.95.65.2-5.4Financial soundness indicators:1        - non-performing loans (% of total loans)3.12.72.52.21.91.81.81.8- capital adequacy ratio (%)17.818.018.619.519.718.818.619.8- return on equity (%)26.46.56.04.17.16.26.16.6Cost-to-income ratio (%)171.674.172.370.465.564.560.651.8Loan-to-deposit ratio (%)1105.1109.1107.395.492.594.588.678.0Central bank liquidity as % of liabilities2.31.91.65.15.63.6-2.9Private sector debt (% of GDP)145.0148.4153.1175.0167.8--120.7Long-term interest rate spread versus Bund (basis points)49.238.738.336.538.055.9-93.3Market funding ratio (%)59.058.157.755.955.5-50.840.0Green bonds issued to all bonds (%)1.31.41.92.33.23.53.92.31-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States. 
 
   
 
ANNEX 19: TAXATION  

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

information  on 

France’s tax revenues are among the highest 
in the EU in relation to GDP. Table A19.1 below 
shows that France’s tax revenues as a percentage 
of  GDP  were  considerably  higher  than  the  EU 
aggregate  in  2021,  although  they  decreased  by 
0.4  percentage  points  (pps)  as  compared  with 
2020.  Revenues  from  labour  and  capital  taxes 
were in particular higher than the EU aggregate as 
a  share  of  GDP.  Revenue  from  property  taxes  (as 
% of GDP and as % of total taxation) is relatively 
high  in  an  EU  comparison,  in  particular  from 
recurrent  property  taxes,  which  are  among  the 
taxes  least  detrimental  to  growth  (see  Graph 
A19.1). Revenue from environmental taxes is close 
to  the  EU  aggregate  (as  %  of  GDP  and  as  %  of 
total taxation).  

The performance of the tax system should be 
viewed in the context of a high public deficit 
and  a  high  debt-to-GDP 
Fiscal 
sustainability  challenges  could  be  addressed  by 
making  greater  use  of  relatively  underused  tax 

ratio. 

Table A19.1: Taxation indicators 

types,  such  as  environmental  and  consumption 
taxes. In line with its Recovery and Resilience Plan 
(RRP), France enhanced certain fiscal measures to 
favour  the  energy  transition  and  reduced  tax 
reliefs  for  certain  polluting  activities  (e.g.  the 
penalty  system  within  the  road  vehicles  pollution 
tax).  However,  there  is  still  scope  to  address 
environmentally 
subsidies – e.g. the 
reduced rate of excise duty on fuel for commercial 
transport  by  road  (EUR 1.2 billion)  and  non-road 
diesel 
l’impact 
(EUR 1.1 billion  -  Rapport  sur 
environnemental  du  budget  de  l’Etat,  October 
2022). 

harmful 

Taxes  on  production  are  being  further 
reduced.  The  gradual  abolition  of  the  business 
value-added  contribution  (cotisation  sur  la  valeur 
ajoutée  des  entreprises – CVAE),  a  production  tax 
which concerns all French businesses with turnover 
over  EUR 500,000,  was  adopted  in  October  2022. 
CVAE tax rates will be reduced in 2023 to half the 
2022  level  and  CVAE  will  be  fully  abolished  in 
2024.  CVAE 
in  2022, 
forecast  to  decline  to  EUR  5.1  billion  in  2023. 
Furthermore,  the  cap  on  the  regional  economic 
contribution  (which  includes  the  CVAE  and  the 
company  property  tax  (cotisation  foncière  des 
entreprises – CFE),  which  is  based  on  the  rental 
value of the properties owned by the taxpayer) will 
be  reduced  from  2%  of  the  value  added  of  the 
company  in  2022  to  1.625%  in  2023.  A  further 

raised  EUR 8.7 billion 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average 
For more data on tax revenues as well as the methodology applied, see European Commission, Directorate-General for Taxation 
and Customs Union, Taxation trends in the European Union: data for the EU Member States, Iceland, Norway and United Kingdom: 
2021 edition, Publications Office of the European Union, 2021, https://data.europa.eu/doi/10.2778/843047 and the Data on 
Taxation webpage, https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
For more details on the VAT gap, see European Commission, Directorate-General for Taxation and Customs Union, VAT gap in the 
EU: report 2022, Publications Office of the European Union, 2022, https://data.europa.eu/doi/10.2778/109823. 
Source: European Commission, OECD. 

71 

2010201920202021202220102019202020212022Total taxes (including compulsory actual social contributions) (% of GDP)42.345.345.545.137.939.940.040.6Labour taxes (as % of GDP)22.223.123.422.920.020.721.320.9Consumption taxes (as % of GDP)10.711.611.411.710.811.110.711.2Capital taxes (as % of GDP)9.410.610.710.57.18.18.08.5Total property taxes (as % of GDP)4.04.54.64.01.92.22.22.2Recurrent taxes on immovable property (as % of GDP)2.93.03.02.31.11.21.21.1Environmental taxes as % of GDP1.92.32.22.22.42.42.22.2Tax wedge at 50% of average wage (Single person) (*)34.129.324.926.826.933.932.331.932.131.7Tax wedge at 100% of average wage (Single person) (*)49.947.246.546.947.041.040.139.939.639.7Corporate income tax - effective average tax rates (1) (*)31.729.425.919.519.419.1Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)7.98.510.410.88.67.78.17.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)4.04.331.640.7VAT Gap (% of VAT total tax liability, VTTL)8.68.011.09.1Tax structureProgressivity & fairnessTax administration & complianceFranceEU-27 
 
 
 
       
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Graph A19.1: Tax revenues from different tax types, % of total taxation 

Source: European Commission 

reduction to 1.25% is planned for 2024. 

Graph A19.2: Tax wedge for single and second 
earners, % of total labour costs, 2022 

Second  earners  at  a  wage  level  of  67%  of  the 
average  wage,  whose  spouses  earn  the  average 
wage,  were  subject  to  a  tax  wedge  much  higher 
than  the  EU  average.  Past  reforms  increased 
incentives  for  employment  at  lower  earnings 
levels.  They  also  increased  the  ability  of  the  tax 
and  benefits  system  to  reduce  income  inequality 
which,  as  measured  by  the  effect  of  taxes  and 
benefits on the GINI coefficient, is now above the 
EU average.  

France  performs  relatively  well  on  tax 
compliance  and  tax  administration.  France  is 
doing  moderately  well  on  digitalisation  of  the  tax 
administration,  which  can  help  reduce  tax  arrears 
and  compliance  costs.  Tax  arrears  have  slightly 
increased by 0.3 pps to 4.3% of total net revenue 
in  2020.  This  remains  significantly  below  the  EU-
27  average  of  40.7%,  though  that  average  is 
distorted  by  very  large  values  in  a  few  Member 
States.  The  VAT  gap 
the 
effectiveness of VAT enforcement and compliance, 
where  a  low  gap  means  high  effectiveness)  has 
decreased by 0.6 pps to 8.0%, which is below the 
EU-wide gap of 9.1%.  

indicator  of 

(an 

Second earner tax wedge assumes first earner at 100% of 
the average wage and no children. 
Source: European Commission 

France’s labour tax burden is higher than the 
EU  average,  except  for  workers  earning  low 
wages.  Graph  A19.2  shows  that  the  labour  tax 
wedge  for  France  in  2021  was  below  the  EU 
average  for  single  people  earning  50%  of  the 
average wage, but  higher than the EU average at 
higher levels of income, especially those above the 
average  wage.  This makes  the  French  tax  system 
more progressive than the EU average.  

72 

26.940.747.053.947.520253035404550556050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - FRSingle earner - EU averageSecond earner -  FRSecond earner -  EU average51.4327.5421.0150.8425.9323.24Tax revenue shares in 2021, France (outer ring) and the EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital4.034.320.511.000.280.195.012.643.892.750246810France -environmentaltaxationEU -environmentaltaxationFrance - propertytaxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, France and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
      
 
       
 
ANNEX 20: TABLE WITH ECONOMIC AND FINANCIAL INDICATORS 

Table A20.1: Key economic and financial indicators 

(1) Domestic banking groups and stand-alone banks, EU and non-EU foreign-controlled subsidiaries and EU and non-EU foreign-
controlled branches. 
(2) Net international investment position (NIIP) excluding direct investment and portfolio equity shares.  
Source:  Eurostat and ECB as of 2 May 2023, where available; European Commission for forecast figures (Spring forecast 2023). 

73 

2004-072008-122013-1920202021202220232024Real GDP (y-o-y)2.30.41.4-7.86.82.60.71.4Potential growth (y-o-y)1.81.20.80.81.11.11.11.1Private consumption (y-o-y)2.30.61.3-6.75.32.90.11.5Public consumption (y-o-y)1.71.51.2-4.06.42.61.10.9Gross fixed capital formation (y-o-y)3.9-0.92.1-8.211.52.21.21.7Exports of goods and services (y-o-y)4.51.23.2-16.88.87.04.43.8Imports of goods and services (y-o-y) 6.01.23.7-12.88.08.93.63.5Contribution to GDP growth:Domestic demand (y-o-y)2.50.51.4-6.57.02.70.61.4Inventories (y-o-y)0.2-0.10.1-0.2-0.30.60.00.0Net exports (y-o-y)-0.40.0-0.2-1.20.1-0.70.10.0Contribution to potential GDP growth:Total Labour (hours) (y-o-y)0.50.40.20.50.70.70.70.6Capital accumulation (y-o-y)0.80.60.50.30.50.60.60.6Total factor productivity (y-o-y)0.60.30.1-0.1-0.1-0.1-0.10.0Output gap1.7-1.2-0.5-6.5-1.20.2-0.30.0Unemployment rate8.79.09.78.07.97.37.47.5GDP deflator (y-o-y)2.11.10.82.81.33.05.42.6Harmonised index of consumer prices (HICP, y-o-y)1.91.90.90.52.15.95.52.5HICP excluding energy and unprocessed food (y-o-y)1.61.50.81.01.23.85.42.8Nominal compensation per employee (y-o-y)3.02.31.3-2.74.75.05.43.1Labour productivity (real, hours worked, y-o-y)1.00.20.90.5-1.5-1.90.21.0Unit labour costs (ULC, whole economy, y-o-y)1.52.10.64.80.54.84.92.1Real unit labour costs (y-o-y)-0.50.9-0.32.0-0.91.8-0.4-0.5Real effective exchange rate (ULC, y-o-y)0.20.0-0.70.50.11.6-0.6-1.5Real effective exchange rate (HICP, y-o-y)0.4-0.80.21.0-0.2-4.1..Net savings rate of households (net saving as percentage of net disposable income)9.210.08.615.512.8...Private credit flow, consolidated (% of GDP)8.65.65.713.56.5...Private sector debt, consolidated (% of GDP)110.9131.7144.5175.0167.8...of which household debt, consolidated (% of GDP)42.953.057.968.666.7...of which non-financial corporate debt, consolidated (% of GDP)68.078.886.6106.4101.1...Gross non-performing debt (% of total debt instruments and total loans and advances) (1)2.64.23.22.01.7...Corporations, net lending (+) or net borrowing (-) (% of GDP)0.90.9-0.2-1.11.3-1.10.00.4Corporations, gross operating surplus (% of GDP)18.017.417.517.118.717.618.018.0Households, net lending (+) or net borrowing (-) (% of GDP)2.33.72.87.64.83.33.53.0Deflated house price index (y-o-y)9.7-0.30.14.14.71.3..Residential investment (% of GDP)6.36.46.26.16.96.8..Current account balance (% of GDP), balance of payments0.2-0.7-0.5-1.80.4-2.1-0.5-0.3Trade balance (% of GDP), balance of payments0.1-1.3-0.8-1.8-1.2-3.3..Terms of trade of goods and services (y-o-y)-0.7-0.40.70.8-0.2-3.23.80.4Capital account balance (% of GDP)0.00.00.00.10.50.4..Net international investment position (% of GDP)-4.8-11.9-17.4-30.7-32.1-26.2..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-6.7-23.8-31.6-41.3-37.2-31.8..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)175.3239.1240.7299.4286.0278.7..Export performance vs. advanced countries (% change over 5 years)-5.3-9.1-3.2-8.0-7.4...Export market share, goods and services (y-o-y)-4.4-4.00.3-6.9-1.13.01.70.0Net FDI flows (% of GDP)1.71.51.00.2-0.4-0.4..General government balance (% of GDP)-3.0-5.5-3.4-9.0-6.5-4.7-4.7-4.3Structural budget balance (% of GDP)..-2.9-4.8-5.6-4.7-4.4-4.2General government gross debt (% of GDP)65.683.196.5114.6112.9111.6109.6109.5forecast 
 
 
 
      
 
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  Annex  assesses  fiscal  sustainability 
risks  for  France  over  the  short,  medium  and 
long term. It follows the same multi-dimensional 
approach  as  the  European  Commission’s  2022 
Debt Sustainability Monitor, updated based on the 
Commission 2023 spring forecast. 

1  -  Short-term  risks  to  fiscal  sustainability 
low  overall.  The  Commission’s  early-
are 
detection  indicator  (S0)  does  not  signal  major 
short-term  fiscal  risks  (Table A21.2) (135).  Gross 
financing  needs  are  expected  to  remain  large  at 
more than 22% of GDP in the short term (i.e. over 
2023-2024),  although  declining  compared  with 
the  recent  peak  in  2020  (Table 1  in  this  annex). 
Financial  markets’  perceptions  of  sovereign  risk 
Fitch 
positive. 
remain 
downgraded  France  to  AA-  at  the  end  of  April 
2023  on  account  of  social  protests  against  the 
pension 
reform  and  high  budget  deficits. 
Meanwhile,  Standard  &  Poor's  credit  rating  for 
France stands at AA with a negative outlook. 

However, 

overall 

2 - Medium-term risks to fiscal sustainability 
are high overall.  

The  DSA  for  France  shows  that,  under  the 
is 
baseline,  the  government  debt  ratio 
projected to increase over the medium term, 
reaching  around  126%  of  GDP  in  2033 
 (136) (137).  The  assumed  structural 
(Table 1) 

(135) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of macro-financial and 
fiscal variables that have proven to perform well in the past 
in detecting situations of upcoming fiscal stress.  

(136) The assumptions underlying the Commission’s ‘no-fiscal-
policy-change’ baseline notably comprise: (i) a structural 
primary deficit, before ageing costs, of 2.2% of GDP as of 
2024; (ii) inflation converging linearly towards the 10-year 
forward inflation-linked swap rate 10 years ahead (which 
refers to the 10-year inflation expectations 10 years from 
now); (iii) the nominal short- and long-term interest rates on 
new and rolled over debt converging linearly from current 
values to market-based forward nominal rates by T+10 (as 
for all Member States); (iv) real GDP growth rates from the 
Commission 2023 spring forecast until 2024, followed by 
EPC/OGWG ‘T+10 methodology’ projections between T+3 and 
T+10, i.e. for 2025-2033 (on average 0.5%); (v) ageing costs 
in line with the 2021 Ageing Report (European Commission, 
Institutional Paper 148, May 2021). For information on the 
methodology, see the 2022 Debt Sustainability Monitor 
(European Commission, Institutional Paper 199, April 2023). 

primary  balance  (a  deficit  of  2.2%  of  GDP) 
contributes  to  these  developments.  It  appears 
plausible  compared  with  past  fiscal  performance, 
indicating that the country has room for corrective 
action.  At  the  same  time,  the  baseline  projection 
benefits  up  to  2033  from  a  still  favourable 
(although  declining)  snowball  effect,  notably 
thanks  to  the impact  of  Next Generation  EU,  with 
real GDP growth at around 0.5% over 2025-2033. 
Government gross financing needs are expected to 
remain  large  and  increase  over  the  projection 
period,  reaching  around  27%  of  GDP  in  2033, 
above the level forecast for 2024. 

The  baseline  projection 
is  stress-tested 
against  four  alternative  scenarios  to  assess 
the  impact  of  changes  in  key  assumptions 
(Graph 1).  For  France,  reverting  to  a  historical 
fiscal  position  under  the 
‘historical  structural 
primary  balance  (SPB)’  scenario  would  slightly 
improve the government debt trajectory. If the SPB 
gradually converged its historical 15-year average 
(a  deficit  of  1.8%  of  GDP),  the  projected  debt-to-
GDP ratio would be about 3 pps. lower than in the 
baseline  by  2033.  A  permanent  worsening  of  the 
macro-financial  conditions,  as  reflected  under  the 
‘adverse interest-growth rate differential’ scenario 
(with a differential 1 pp. higher than the baseline) 
would result in a persistently higher debt ratio, by 
around  10  pps.  by  2033,  as  compared  with  the 
baseline.  A  temporary  worsening  of  financial 
conditions,  as  reflected  in  the  ‘financial  stress’ 
scenario  (with  a  temporary  increase  of  interest 
rates  by  2.3  pps.),  would  lead  to  a  slightly  higher 
debt  ratio  (+2 pps.  of  GDP  by  2033)  compared 
with  the  baseline.  The  ‘lower  structural  primary 
balance’ scenario (with the SPB level permanently 
0.3 pp. lower than in the baseline) would also lead 
to a higher government debt-to-GDP ratio (+3 pps. 
by 2033) compared with the baseline.   

risk 

Additionally, stochastic debt projections also 
(Graph 2) (138).  These 
indicate  high 
projections point to a 59% probability of the debt 
ratio in 2027 being greater than in 2022, entailing 
high  risk  given  the  initial  high  debt  level.  The 
uncertainty 
the  baseline  debt 
projection (as measured by the difference between 

surrounding 

(137) Table 1 shows the baseline debt projection and its 

(138) These projections show the impact on debt of 2000 different 

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.  

shocks affecting the government’s primary balance, 
economic growth, interest rates and exchange rates. The 
cone covers 80% of all simulated debt paths, therefore 
excluding tail events 

74 

 
 
                                                 
                                                 
 
 
from  the  private  sector, including  via  the  possible 
materialisation  of  state  guarantees  granted  to 
firms  and  self-employed  during  the  COVID-19 
crisis.  On  the  other  hand,  risk-mitigating  factors 
include the lengthening of debt maturity in recent 
years and relatively stable financing sources (with 
a  diversified  and  large investor  base).  In  addition, 
the structural reforms under the NGEU/RRF, if fully 
implemented, could have a further positive impact 
on GDP growth in the coming years, and therefore 
help to mitigate debt sustainability risks. 

the 10th and 90th debt distribution percentiles) is 
however limited. 

3  -  Long-term  risks  to  fiscal  sustainability 
are medium overall (139).  

The  S2  sustainability  gap 
indicator  (at 
1.2 pps.  of  GDP)  points  to  low  risk.  This 
suggests  that  France  would  need  to  improve  its 
structural  primary  balance  only  by  a  limited 
amount to ensure debt stabilisation over the long 
term.  This  result  is  underpinned  by  the  projected 
in  ageing-related  costs  (contribution 
decrease 
of  -1.3  pps.  of  GDP)  while  the  initial  budgetary 
position is unfavourable (contribution of +2.5 pps. 
of  GDP) (Table 2).  Long-term  developments  in 
ageing costs are primarily driven by the projected 
decrease 
expenditure 
(contribution of -2.1 pps. of GDP). However, health 
care  and  long-term  care  expenditure  is  projected 
to  increase  significantly  (joint  contribution  of  1.3 
pps. of GDP).  

pension 

public 

in 

Yet,  combined  with  debt  vulnerabilities 
highlighted by the S1 indicator, overall long-
term  risks  are  assessed  as  medium.  Indeed, 
the  S1  sustainability  gap  indicator  signals  that  a 
significant consolidation effort of 2.8 pps. of GDP 
would be needed to reduce debt to 60% of GDP by 
2070 (Table 2). This result is mainly driven by the 
high  level  of  the  French  government  deficit  and 
debt  (contributing  2.0  pps.  and  1.1  pps.  of  GDP, 
respectively),  only  slightly  offset  by  the  projected 
overall decline in ageing-related public spending. 

Finally,  several  additional  risk  factors  need 
to  be  considered  in  the  assessment.  On  the 
one  hand,  risk-increasing  factors  relate  to  the 
recent  increase  in  interest  rates,  the  expected 
increase in gross financing needs over the medium 
term  and  the  contingent  liability  risks  stemming 

(139) The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2024 that would be required 
to stabilise public debt over the long term. It is 
complemented by the S1 indicator, which measures the 
fiscal gap in 2024 to bring the debt-to-GDP ratio to 60% in 
the long term. For both the S1 and S2 indicators, the risk 
assessment depends on the amount of fiscal consolidation 
needed: ‘high risk’ if the required effort exceeds 6 pps. of 
GDP, ‘medium risk’ if it lies between 2 pps. and 6 pps. of 
GDP, and ‘low risk’ if the effort is negative or below 2 pps. of 
GDP. The overall long-term risk classification brings together 
the risk categories derived from S1 and S2. S1 may notch up 
the risk category derived from S2 when it signals a higher 
risk than S2. See the 2022 Debt Sustainability Monitor for 
further details. 

75 

 
                                                 
Table A21.1: Debt sustainability analysis - France 

Source: Commission services. 

Table A21.2: Heat map of fiscal sustainability risks - France 

Source: Commission services. 

76 

Table 1. Baseline debt projections20202021202220232024202520262027202820292030203120322033Gross debt ratio (% of GDP)114.6112.9111.6109.6109.5110.3111.5113.0114.8116.7118.8121.0123.4125.6Changes in the ratio17.2-1.8-1.3-2.00.00.81.21.51.81.92.12.22.42.2of whichPrimary deficit7.75.12.82.72.32.32.42.42.52.62.62.62.62.6Snowball effect6.6-7.4-4.2-4.5-2.3-1.5-1.2-0.9-0.8-0.6-0.5-0.4-0.2-0.5Stock-flow adjustments3.20.20.1-0.30.00.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)28.025.023.022.722.522.823.223.724.324.825.325.926.627.1S1S2Overall index  (pps. of GDP)2.81.2of which Initial budgetary position2.02.5Debt requirement1.1Ageing costs-0.3-1.3of which    Pensions-0.8-2.1     Health care0.50.6     Long-term care0.40.7Others-0.3-0.4Table 2. Breakdown of the S1 and S2 sustainability gap indicators70809010011012013014020202021202220232024202520262027202820292030203120322033Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p909010011012013020202021202220232024202520262027% of GDPGraph 2. Stochastic debt projections 2023-2027MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallHIGHHIGHHIGHHIGHHIGHHIGHDebt level (2033), % GDP125.6122.7128.9135.5127.5Debt peak year20332033203320332033Fiscal consolidation space92%88%93%92%92%Probability of debt ratio exceeding in 2027 its 2022 level59%Difference between 90th and 10th percentiles (pps. GDP)21.0(1)Debtlevelin2033.Green:below60%ofGDP.Yellow:between60%and90%.Red:above90%.(2)Thedebtpeakyearindicateswhetherdebtisprojectedtoincreaseoveralloverthenextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidtationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2027its2022level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifference 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.Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)LOWHIGHLOWMEDIUMMEDIUM 
 
 
 
 
 
  
 
 
   
 
ANNEX 22: MACROECONOMIC IMBALANCE PROCEDURE ASSESSMENT MATRIX  

medium term, to 125% of GDP by 2033. Likewise, 
private  debt  is  set  to  remain  high,  although 
dynamic  corporate  credit  flows  are  set  to  lose 
momentum  due  to  higher  interest  rates  and 
decelerating private-sector investment.  

in 

the 

the 

recent  years  have  contributed 

The  policy  response  to  imbalances  has  been 
broadly  appropriate,  but  its  full  impact  will 
only  materialise  over  time.  Important  reforms 
over 
to 
alleviating  the  fiscal  burden  on  labour,  while 
incentivising  employability  of 
low-skilled. 
These  measures  have  brought  about  a  dynamic 
employment  response  that  allowed  for  a  gradual 
decline 
rate.  while 
the  unemployment 
temporarily  weighing  on  labour  productivity.  The 
full  absorption  of  these  effects,  as  well  as  the 
implementation  of 
the 
the 
productivity-enhancing investments in the RRP are 
expected to further invigorate productivity growth. 
Coupled  with  improved  growth  prospects,  the 
reform  of  public  finances  management  that 
entered into force in 2022, and a new mechanism 
to  conduct  annual  public  spending  evaluations 
should  help  curb  public  expenditure  and  to  put 
public  debt  on  a  sustained  downward  trend. 
Finally,  the  recently  adopted  pension  reform  is 
expected to have a positive impact on public debt 
sustainability. 

reforms  and 

Based  on  this  assessment,  the  Commission 
considered  in  its  communication  European 
Semester – 2023 Spring Package (COM(2023) 
600 
to 
experience imbalances. 

that  France 

continues 

final) 

The  Macroeconomic 
Imbalance  Procedure 
matrix presents the main elements of the in-
depth  review  conducted  for  France. (140) 
France was selected for an in-depth review in the 
in-depth 
2023  Alert  Mechanism  Report.  This 
review  on  the  prevention  and  correction  of 
macroeconomic  imbalances  presents  the  main 
findings  on  the  gravity  and  evolution  of  the 
challenges  identified,  as  well  as  policy  responses 
and potential policy needs. Findings cover all areas 
of vulnerability assessed in the in-depth review. 

is 

declining, 

gradually 

Vulnerabilities  relate  to  high  public  debt, 
which 
as 
competitiveness and low productivity growth 
challenges  continue  to  recede.  Yet,  cost-
competitiveness indicators were less affected than 
in  the main  EU partners, while  labour  productivity 
is  reined  in  by  the  very  positive  response  of 
employment  to  a  number  of  fiscal  measures  and 
reforms.  Exports  have  recently  been  negatively 
affected  due  to  trade  specialisation  in  sectors 
severely  hit  by 
the  crisis  and  concomitant 
disruptions in supply chains, but they are expected 
to  improve  going  forward.    With  the  economic 
recovery  during  2021  and  2022,  the  government 
debt-to-GDP ratio edged down, though some risks 
remain as public debt is compounded by the high 
private-sector debt. 

by 

further, 

backed 
gaining  momentum. 

Going  forward,  competitiveness  is  set  to 
labour 
improve 
productivity 
Cost-
competitiveness indicators are forecast to improve 
in  the  coming  years  as  the  effect  of  policy 
measures  feeds  through,  while  the  labour  share 
should  stabilise  at  a  high  level  in  the  medium 
term. This should translate into faster productivity 
increases  that  would  also  be  underpinned  by 
reforms 
and 
recent  measures 
implemented  under  the  RRP,  as  well  as  by  the 
effects  of  the  investment  plan  France  2030.  In 
turn, lower inflation in France compared to peers is 
projected  to  keep  improving  cost  competitiveness.  
Public debt is forecast to keep falling by around 2 
points  of  GDP  until  end-2024,  although  still 
remaining  well  above  its  pre-pandemic  level. 
However,  in  absence  of  any  further  policy  action, 
public  debt  is  projected  to  rise  again  in  the 

upcoming 

(140)  European Commission (2023), In-Depth Review for France, 

Commission staff working document (COM(2023) 633 final),  
in accordance with Article 5 of Regulation (EU) No 
1176/2011 on the prevention and correction of 
macroeconomic imbalances.  

77 

 
 
                                                 
 
 
 
 
 
Table A22.1: Assessment of macroeconomic imbalances matrix 

Source: European Commission 

78 

Gravity of the challengeEvolution and prospectsPolicy responseUnsustainable trends, vulnerabilities and associated risksCompetitivenessIn the 2010s, France faced weak labour productivity growth. Low productivity growth, in combination with high public debt, increased the vulnerabilities of the French growth model. The productivity challenge remained the key determinant affecting non-price competitiveness, which had also been highlighted by weak export performance. Reforms enacted over the last decade and years aimed to address such vulnerabilities and raise productivity. Data after the subsiding of the Covid and terms-of-trade shocks confirm the recovery of French price and non-price competitiveness, as well as the improved outlook going forward.Lower inflation in France compared to peers allowed for a real depreciation in 2021 and 2022, which reflects structural advantages. Labour productivity growth in France caught up with the euro area and the EU average before the COVID-19 crisis and is projected to expand in line with them over the forecast horizon, while total factor productivity remains subdued. Despite productivity growth has recently been reined in by labour hoarding after the COVID-19 crisis, unit labour costs have grown more moderately than in other euro area and EU countries as wage developments remain contained. The expected improvements in productivity,  jointly with the recovery of demand for key French sectors and the fading of supply-chain disruptions should boost export prospects going forward.Recent policy actions are having and expected to have a significant impact on productivity, thereby improving both cost and non-cost competitiveness. The continued impact from the 2019 PACTE law and the ‘France Relance’ plan are likely to further foster productivity and potential growth. The investment plan France 2030 is expected to foster investment over the next decade on the green transition, state-of-the-art R&D and on the digital realms.Cost-competitiveness has been supported by a number of fiscal measures in recent years. They include the cut in social contributions since 2019, cuts in taxes on production, the support to apprenticeship contracts and the successive cuts in the corporate income tax. The unemployment benefit reforms that entered into force in 2021 and 2023 improve labour market efficiency by providing stronger incentives to work and hire as well as promoting decentralised bargaining. Public debtGeneral government debt rose sharply to 114.6% of GDP, in 2020 as a result of the COVID-19 crisis, and declined thereafter to 111.6% in 2022, which remains very high. This 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. Significant fiscal efforts are needed to put France’s public debt on a sustained downward trajectory.From 6.5% of GDP in 2021, the general government deficit narrowed further, to 4.7% in 2022, and is projected to fall to 4.3% of GDP by 2024. The public debt ratio is expected to rise to 125% of GDP over the medium term. Medium-term sustainability risks are assessed as high.The recent policy response to public debt vulnerabilities has been accurate. A reform of public finances management entered into force in 2022. It includes a multiannual expenditure rule and the extension of the prerogatives of the national fiscal council. However, approval is still pending on the public finances programming law on multiannual fiscal targets, which is essential for the proper functioning of the new framework. A new mechanism aimed to conduct regular evaluations of public spending, with the aim of identifying the most efficient expenditures has also been approved. The French government has passed a new pension reform, aiming at restoring the financial balance of the system by 2030. The reform embeds an increase of the statutory retirement age from 62 to 64 years, the acceleration of a previous reform extending the required contribution period for full pension and the ending of some of the main special pension schemes. The reform is expected to have a positive impact on public debt sustainability.