COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of France
Date: 2024-06-19
Institutions: European Commission, Secretariat-General
Subjects: France, budget policy, economic policy, economic recovery, economic reform, education policy, employment policy, energy policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 19.6.2024  SWD(2024) 610 final  COMMISSION STAFF WORKING DOCUMENT 2024 Country Report - France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of France {COM(2024) 610} - {SWD(2024) 600}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC AND EMPLOYMENT SNAPSHOT 

France’s economy slowed in 2023 
amid high inflation and tighter 
financial conditions 

France’s  economy  slowed  significantly  in 
the  second  half  of  2023,  but  activity  is 
expected  to  recover  progressively (1).  This 
deceleration stemmed from high inflation and 
tighter  financial  conditions.  Real  GDP 
is 
estimated  to  have  grown  by  0.7%  in  2023. 
Economic activity is expected to only gradually 
gather momentum  in  2024.  Investment is  set 
to  remain  subdued  until  the  cost  of  capital 
decreases. However, the projected decrease in 
inflation  is  expected  to  allow  for  a  gradual 
recovery  starting  in  the  second  half  of  the 
year.  Private  consumption  is  set  to  drive  GDP 
growth  as  inflationary  pressure  reduces  and 
households’  savings  rate  falls  gradually  back 
to  its  historical  average.  Activity  is  therefore 
forecast  to  increase  by  0.7%  in  2024  and 
1.3% in 2025. 

In  2022,  Russia’s  invasion of  Ukraine led 
to  a  surge  in  energy  and  commodity 
inflation.  After 
prices  that  drove  up 
peaking  at  7.0%  in  the  first  quarter  of  2023, 
HICP  inflation  decreased  throughout  the  year. 
It  reached  4.2%  in  the  fourth  quarter,  largely 
thanks  to  declining  energy  and  commodity 
prices.  It  fell  further  in  the  first  quarter  of 
2024,  softening  to  3.0%.  There  was  a 
in  consumer  price 
widespread  slowdown 
lower  commodity 
inflation,  particularly  as 
prices 
from 
to  pass 
started 
manufacturers  to  consumers.  The  downward 
trend  in  inflation  is  set  to  continue  as  energy 
and  commodity  prices  are  no  longer  putting 
pressure on inflation. After 5.7% in 2023, HICP 

through 

inflation  is  expected  to  reach  2.5%  in  2024 
and 2.0% in 2025. 

reduction. 

signs  of 

France’s  vulnerabilities  related  to  high 
public  debt  persist,  whereas  those  linked 
in  a 
to  competitiveness  challenges 
context  of  low  productivity  growth  are 
showing 
Fiscal 
sustainability risks remain high in the medium 
term.  However,  price-based  competitiveness 
indicators  evolved  favourably  since  2020, 
while unit labour costs rose in 2021-23 on the 
in  labour  productivity, 
back  of  a  decline 
although  the  latter  was  to  a  large  extent 
explained  by  temporary  factors.  Since  2019, 
structural 
increased 
significantly.  Labour  productivity  and  cost 
competitiveness  are  expected  to  improve  in 
the future (2). 

employment 

has 

Employment keeps growing, but 
challenges persist 

the 

Employment  growth 
is  slowing  after 
years  of  performing  strongly.  Despite  the 
labour  market 
economic  slowdown, 
continued  to  be  resilient  in  2023,  with  a 
limited  increase  in  unemployment.  Its  recent 
rise  is  mostly  related  to  an  increase  in  active 
population,  particularly  driven  by  the  pension 
reform  in  2023.  However,  at  7.5%  in  the 
fourth  quarter  of  2023,  the  unemployment 
rate  remains  high  compared  to  both  the  EU 
and  euro  area  averages,  Reducing  the  overall 
rate and the youth unemployment rate are key 
priorities for France. Although the employment 
rate and the activity rate reached record levels 
in  2023,  further  progress  in  employment  and 

(1)  The cut-off date for the data used to prepare the 

Country Report was 15 May 2024. 

(2)  See in-depth review under the macroeconomic 

imbalance procedure for France, European Commission, 
SWD(2024) 100 final. 

2 

 
 
 
 
for 

higher 

allowed 

rebound 

increase in the general government deficit and 
a  substantial  fall  in  GDP.  Since  then,  the 
economic 
some 
improvement  in  public  finances  despite  the 
sizeable  measures  deployed  to  mitigate  the 
effects  of  the  recent  crises.  Those  measures, 
jointly  with 
payments 
stemming  from  tightening  monetary  policy 
inflation,  hampered  a  faster 
and  higher 
reduction in public deficits. Thus, the observed 
decline  in  the  public  debt-to-GDP  ratio  until 
2023  has  been  mainly  due  to  nominal  GDP 
growth.  In  2023,  France’s  government  deficit 
remained  high,  at  5.5%  of  GDP,  while  the 
public debt ratio fell to 110.6% of GDP. 

interest 

in 

to 

the 

Commission’s 

the  medium 

Reducing public debt is a major challenge. 
According 
debt 
sustainability  analysis,  without  any  further 
policy  action,  public  debt  is  projected  to  keep 
term,  driven  by 
rising 
persistently  high  structural  primary  deficits 
(see  Annex  20).  Therefore,  France  is  assessed 
to  face  high  fiscal  sustainability  risks  in  the 
medium  term  and  medium  risks  in  the  long 
term.  Negative  shocks  to future  interest  rates 
or economic growth could significantly darken 
the  picture.  Boosting  competitiveness  and 
potential  growth  by 
labour 
productivity  and  strengthening  employment 
growth  would  help  reduce  public  debt  and 
mitigate medium-term sustainability risks. 

enhancing 

ratio,  especially 

High  public  and  private  debt  could  be  a 
source  of  vulnerability.  After  peaking  at 
174%  of  GDP  in  2020,  the  private  debt-to-
GDP 
for  non-financial 
corporations,  started  declining  driven  by  high 
nominal GDP growth. The fall continued due to 
a  significant  slowdown  in  credit  flows,  which 
was  the  result  of  tighter  financing  conditions 
starting  in  the  second  half  of  2022.  Despite 
remaining  high  at  154%  of  GDP,  private  debt 
returned  to  pre-pandemic  levels  in  2023. 
Private  debt  risks  remain  contained,  and  non-
performing  loans  kept  falling,  maintaining 
their historical lows in 2023. 

is  needed  to  support 
participation  rates 
economic  growth  and  reach  the  national 
employment  target  of  78%  for  2030.  Further 
improvements 
of 
disadvantaged groups and older workers in the 
labour market are warranted (see Annex 14). 

inclusion 

the 

in 

the 

reported 

Labour  shortages  and  skills  mismatches 
are  still  major  issues.  Labour  shortages 
increased  steadily  in  2021,  peaking  in  2022, 
but  have  decreased  since  the  beginning  of 
2023.  Employers 
lack  of 
adequately trained workers as one of the main 
barriers  to  recruitment,  ahead  of  workers’ 
demands  for  better  working  conditions.  The 
main 
industry, 
affected 
construction,  information  and  communication, 
education  and  health.  The  results  of  recent 
upskilling  and  reskilling  measures,  including 
efforts to reduce recruitment tensions and the 
training 
apprenticeship 
should  be  better  aligned  with  employers’ 
needs (see Annex 14). 

scheme, 

suggest 

sectors 

are 

Although  France  effectively  implements 
the  European  Pillar  of  Social  Rights,  it 
still  faces  challenges 
in  education, 
employment  and  rising  poverty.  Most  of 
the  Pillar  scoreboard  indicators  are  the  same 
as  or  above  the  EU  average  (see  Annex  14). 
Nevertheless, 
inequalities 
socio-economic 
persist,  affecting  pupils’  educational  results. 
Disadvantaged groups also face difficulties to 
enter  the  labour  market  and  participating  in 
suitable  training.  An  increasing  share  of  the 
population, especially children, is exposed to a 
risk of poverty  or social  exclusion, resulting in 
France  further  deviating  from  its  2030  target 
on poverty reduction. Energy poverty indicators 
have  worsened.  The  share  of  the  population 
unable  to  keep  their  homes  adequately  warm 
doubled between 2018 and 2022. 

Public debt risks entering an 
upward trend 

The COVID-19 and the energy crises have 
left a heavy legacy on public debt. Already 
high  in  2019,  the  public  debt  ratio  rose  to 
114.6%  of  GDP  in  2020  due  to  a  sharp 

3 

 
Box 1: 

France’s competitiveness in brief 

France’s  competitiveness  is  gradually improving,  supported  by  public  investment 
and reforms set out in the recovery and resilience plan (RRP). The country attracts the 
largest number of foreign direct investment projects compared to other Member States, 
mainly  due  to  the  availability  of  decarbonised  energy  and  reliable  infrastructure.  In 
addition,  government  financial  support  to  business  research  and  innovation  ranks 
among the highest in the EU.  

However, competitiveness challenges remain:  

•  Maintaining  employment  growth  and  tackling  high  unemployment.  Further 
efforts  are  needed  in  employment,  education  and  skills  to  raise  potential  growth. 
Higher  employment  should  be  accompanied  by  increases  in  labour  productivity  by 
reducing  persistent  skills  mismatches  and  shortages  and  improving  educational 
outcomes. 

•  Stagnating business R&D intensity especially in SMEs.  Business R&D remains 
well below the Europe 2020 strategy target of 2% of GDP, while the effectiveness 
of the sizeable public support schemes is often called into question. The uptake of 
digital  technologies  is  slow,  especially  in  SMEs.  In  addition,  the  administrative 
burden is still perceived as heavy, and regulatory barriers impede competition in the 
services sector. 

was due to lower inflation in France than in its 
trading  partners,  the  euro  falling  against  the 
dollar  and  government  measures,  especially 
reductions  in  taxes  on  production  and  the 
corporate tax rate. The increase in the cost of 
labour  was  in  line  with  the  euro  area  during 
the  COVID-19  crisis  in  2020,  higher  in  2021 
and  2022  and  then  slower  in  2023  thanks  to 
more moderate wage increases to compensate 
for relatively lower inflation. Reforms in recent 
years  and  ongoing  investments  are  expected 
to  keep  supporting  non-price  competitiveness 
and  productivity.  These  efforts  need  to  be 
sustained (see Box 1.1). 

Wage  growth  has  been  limited  and  is 
already  decreasing.  Real  wage  growth  over 
2022  and  2023  was  negative,  despite 
improvements  in  labour  market  conditions. 
Wage  growth  has  already  started  to  slow 
significantly  in  nominal  terms,  resulting  in 
continued  negative  real  wage  growth  in  Q4-
2023. However, the minimum wage indexation 
has  limited  losses  in  real  wages  for  many 
workers.  Between  December  2020  and 
January  2024,  the  minimum  wage  rose  by 
14.8%.  In  January  2023,  the  minimum  wage 

and 

housing 

transport 

Significant  investments  are  needed  to 
adapt to and mitigate climate change. The 
French  Court  of  Auditors highlighted  the  need 
for  action  to  address  the  consequences  of 
climate change that are likely to affect major 
infrastructure (3), 
energy 
natural 
equipment, 
environment.  There 
to 
decarbonise the economy at an unprecedented 
pace  that  will  require  a  sustained  investment 
agenda in the coming decades. A recent report 
by  France  Stratégie  estimates 
the 
investment  need  could  exceed  2  percentage 
points of GDP in 2030 compared to a scenario 
without climate action (4). 

is  also  a  need 

that 

and 

the 

Competitiveness 
is  showing  signs  of 
improvement.  Since  2020,  price-based  real 
effective  exchange  rates  depreciated  more  in 
France than in most other EU economies. This 

(3)  Cour des comptes, Rapport Public Annuel 2024, 
https://www.ccomptes.fr/sites/default/files/2024-
03/20240312-syntheses-RPA-2024.pdf. 

(4)  France Stratégie: J. Pisani-Ferry, S. Mahfouz (2023), THE 
ECONOMIC IMPLICATIONS OF CLIMATE ACTION - A 
Report to the French Prime Minister. 

4 

 
 
 
Box 2: 

UN Sustainable Development Goals (SDGs) 

France  is  making  progress  in  all  SDGs  related  to  competitiveness  and  productivity 
(SDG 4, 8, 9). Nevertheless, SDG 9 related to innovation, industry and sustainable infrastructure 
is  slightly  below  the  EU  average,  mostly  due  to  the  low  proportion  of  freight  transport 
infrastructure  and  households  with  high-speed  internet  connections.  Performance  in  work  and 
economic growth indicators (SDG 8) improved, except for the number of fatal accidents at work 
and the number of people working who are at risk of poverty. 

Out of the 17 SDGs, indicators for 8 SDGs remain below the EU average.  Besides those 
highlighted  above,  these  relate  to  sustainable  cities  and  communities  (SDG 11),  including 
resilient communities, fairness (SDGs 3, 7, 10) and macroeconomic stability (SDGs 16 and 17). 

factors is expected to diminish. France’s labour 
productivity,  measured  in  full-time  equivalent 
jobs, is projected to grow in line with the euro 
area and EU averages in 2024 and 2025. 

persist, 

Structural  weaknesses 
in 
particular  due  to  low  business  R&D  and 
skills shortages.  Public R&D  spending is not 
far from 1% of GDP, but business R&D is still 
well  below  the  goal  of  2%  of  GDP.  This  lags 
behind  the  aggregate  Europe  2020  strategy 
target  of  3%,  in  spite  of  sizeable  public 
support 
d’impôt 
recherche)  (see  Annex  11).  A  low  uptake  of 
technologies  by  businesses,  skills 
digital 
shortages  and  mismatches,  and  weak 
productivity in certain sectors continue to take 
a toll on productivity. 

schemes 

Crédit 

(e.g. 

region 

Significant  regional  disparities  persist. 
Most  French  regions  have  a  lower  GDP  per 
capita  than  the  EU  average,  except  for  the 
capital 
(Île-de-France,  176%)  and 
Rhône-Alpes (105%): 22 out of 27 regions lost 
ground  between  2012  and  2021  (see  Annex 
17).  These  disparities  mostly  stem  from 
differences  in  labour  productivity,  regional 
innovation performance (low in predominantly 
non-urban  areas  and  deindustrialised  regions) 
and  educational  attainment.  The  outermost 
regions  face  disadvantages  in  many  of  these 
areas.  In  addition,  some  regions,  in  particular 
non-urban areas, are more affected by a lack 
of  medical  services  (see  Annex  16).  Tackling 
improving 
regional 
France’s 
growth 
prospects. 

is  key  to 
economic 

imbalances 
long-term 

applied  to  more  than  17%  of  private  sector 
workers, compared to 12% in 2021. 

taxes 

production 

Temporary  factors  have  weighed  on 
France’s labour productivity growth since 
2020.  The  COVID-19  pandemic  triggered  a 
major  drop  in  labour  productivity,  from  which 
the  French  economy  has  not  yet  recovered. 
Employment  proved  very  resilient  during  the 
COVID-19  and  energy  crises  and  remained 
strong in 2023. Policy measures adopted since 
2018  may  help  explain  this  resilience.  These 
measures range from permanent cuts in social 
contributions  and 
to 
emergency  measures  during  the  crises  to 
support  firms  and  protect  employees.  One 
example  is  the  partial  activity  schemes  to 
avoid  massive  lay-offs  during  the  COVID-19 
crisis.  Decisive  policy  action  underpinned  the 
increase in apprenticeship contracts by almost 
600 000  between  January  2019  and  October 
2023, boosting job prospects for young people. 
In  turn,  market  expectations  in  a  context  of 
labour  market (5)  may  have 
tight 
led  to 
significant 
industrial 
labour  hoarding 
branches,  mainly  aeronautic  and  automotive 
industries.  Despite  contributing  to  positive 
employment  trends  in  recent  years,  these 
factors, 
impact, 
through  their  cumulative 
mechanically  weighed  on  labour  productivity. 
Despite  the  acute  decline  since  2020,  labour 
productivity in levels stands well above the EU 
average, at around 117% of the EU aggregate 
in  2023.  Looking  ahead,  the  impact  of  these 

in 

(5)  In October 2022, 62% of firms in the services sector, 
66% in industry and more than 80% in construction 
declared difficulties to recruit workers with the required 
skills. 

5 

 
 
 
IMPLEMENTATION OF KEY REFORMS AND 
INVESTMENTS USING EU INSTRUMENTS 

Funding from the Recovery and Resilience 
Facility (RRF) and cohesion policy funding 
is  mutually  reinforcing  France’s  efforts 
to  boost  its  competitiveness  and  foster 
sustainable  growth.  In  addition  to  the  EUR 
40.3 billion of RRF funding described in Annex 
3, cohesion policy provides EUR 16.8 billion to 
France  for  the  2021-2027  period.  Support 
combined 
from 
represents  around  2.04%  of  the  country’s 
2023  GDP,  compared  to  the  EU  average  of 
5.38% of GDP (see Annex 4). 

instruments 

these 

two 

Meanwhile,  the  European  Social  Fund  (ESF) 
has  been  oriented  towards  investment  in 
social  inclusion,  employment  guidance  and 
access  to  skills.  For  the  current  2021-2027 
programming period, ERDF support is aimed at 
innovation,  digitalisation  and 
the  green 
transition.  The  ESF+  continues  to  support 
social inclusion and investment in people. 

Developing a multi-annual fiscal 
pathway to reduce public debt 

Under  its  recovery  and  resilience  plan 
(RRP),  France  has  launched  important 
policy  measures  that  are  expected  to 
improve the country’s competitiveness. In 
particular, the RRP envisages major reforms in 
employment,  public 
finances,  healthcare, 
energy  consumption  and  renewable  energy 
sources.  France  also  made 
substantial 
investments 
in  the  energy  renovation  of 
buildings, sustainable transport, the green and 
digital transitions, research and innovation and 
reducing 
the  administrative  burden  on 
businesses. 

The  implementation  of  France’s  recovery 
and  resilience  plan  is  well  underway. 
France  submitted  three  payment  requests, 
corresponding  to  132  milestones  and  targets 
received  an  overall 
in 
disbursement  of  EUR  23.4  billion,  as  of  mid-
May 2024. Beyond the third payment request, 
the  implementation  of  the  plan  is  broadly  on 
track (see Annex 3).  

the  plan  and 

Cohesion  policy  funding  helps  tackle 
France’s  growth  and  competitiveness 
challenges  and  reduce  the  country’s 
territorial and social disparities. Under the 
2014-2020  cohesion  policy  programming 
period,  support  from  the  European  Regional 
Development  Fund’s 
focused  on 
research and innovation and energy efficiency. 

(ERDF) 

6 

This 

sets 

should 

contain 

Fiscal  reforms  under  the  RRP  provide 
appealing  avenues  to  credibly  reduce 
public  debt,  but  decisive  implementation 
will be of the utmost importance. Although 
delayed,  the  adoption  in  November  2023  of 
the  public  finances  programming  law  for 
2023-2027 
a  multi-annual 
up 
expenditure  standard  as  required  by  the 
organic law on modernisation of public finance 
management. 
the 
dynamics of public spending. However, abiding 
by  this  multiannual  expenditure  trajectory 
would  call  for  an  ambitious  and  effective 
implementation  of  the  new  spending  review 
programme,  in  force  since  January  2023.  The 
first  round  of  spending  reviews  produced  a 
in  July  2023  and 
report  to  Parliament 
contained  specific  proposals  for  potential 
expenditure  savings  and  increased  efficiency 
in several areas. However, concrete translation 
of  these  proposals  into  the  2024  budget  law 
appears to be limited. Going forward, it will be 
important  to  ensure  that  spending  review’s 
results  have  a  bigger 
impact  on  future 
budgetary  plans.  All  this  should  help  contain 
the  dynamics  of  public  spending,  which  is 
crucial  to  address  fiscal  sustainability  risks 
and  to  put  public  debt  on  a  sustained 
downward trend. 

 
 
Box 3: 

Combined actions for more impactful EU funds 

To  boost  economic  growth  and  maximise  the  impact  of  EU  funding,  France’s  RRP  includes 
measures  that  support  investments  under  other  EU  instruments,  creating  important  synergies 
and complementarities between the various funds. For example, to  get more young people into 
work or training, an integrated contractual framework was implemented, aiming to provide every 
young person with individual support. It includes a phase combining personalised guidance with a 
monthly subsidy to support participation in the programme, Youth guarantee. France is using RRP 
investments to finance the subsidies paid to young people along with ESF support to provide the 
guidance.  

scheme  to  decarbonise  industry  by  reducing 
energy  consumption.  These  measures  are 
complemented by reforms, such as the law on 
accelerating  and  simplifying  public  action  (Loi 
administrative 
simplifies 
ASAP),  which 
procedures for businesses and individuals. 

Improving employment conditions  

The  RRF  and  cohesion  policy  funds 
support  measures  aiming  to 
improve 
employment  and 
skills,  particularly 
among  disadvantaged  groups.  The  RRP 
temporary 
includes  measures,  notably  a 
reinforcement  of  the  capacities  of  the  public 
employment agency (Pôle Emploi,  now France 
Travail). The agency has been working to ease 
the  rapid  return  of  people  to  work  following 
the COVID-19  pandemic. Measures  supporting 
upskilling  and  reskilling,  with  emphasis  on 
digital  skills,  are  also  covered.  ESF+  aims  to 
contribute  to  developing  skills  by  investing  in 
access 
career 
transitions and promoting lifelong learning. 

supporting 

training, 

to 

is  supporting  young  people’s 
France 
education  and  employment.  The  RRP 
includes  12  measures  that  are  part  of  the 
package  “1  jeune  1  solution”,  with  notably  a 
reinforcement of the youth guarantee scheme, 
hiring  subsidies  for  apprentices  and  for  youth 
under  26,  pathways  for  early  school  leavers, 
and measures in higher education. In addition, 
the Youth Employment Initiative helped young 
people  not 
in  education,  employment  or 
training  to  find  a  position  or  another  solution 
after leaving education or losing their job. 

Boosting the green and digital 
transitions 

France  has  been  accelerating  the  energy 
renovation  of  buildings  since  2021. 
Around  740 000  households  have  been 
supported so far through the fast deployment 
of  the  MaPrimeRénov  scheme  and  grants 
allocated  to  renovating  social  housing  under 
the  RRP.  The  ERDF  is  devoting  more  than 
EUR 830  million  to  support  the  national  plans 
for energy efficiency renovations. 

These  efforts  have  been  underpinned  by 
reforms  such  as 
the  climate  and 
resilience  law,  which  targets  the  two  most 
energy-inefficient  categories  of  dwellings  in 
France (or ‘thermal sieves’). The revision of the 
regulation 
and 
environmental  standards  of  new  buildings 
(RE2020)  should  help  reduce  the  energy 
intensity of new buildings. 

governing 

energy 

the 

help 

transport  with 

France  is  making  major  investments  in 
sustainable  daily  mobility  and  developing 
public 
of 
complementary  actions  supported  by  the  RRP 
and  other  EU  funds.  The  RRP 
includes 
investments  to  create  new  urban  metro  lines. 
Furthermore,  the  ERDF  is  co-financing  cycling 
infrastructure  as  well  as 
and  pedestrian 
actions  aiming 
raise  awareness  and 
to 
promote sustainable modes of transport. 

France  is  taking  steps  to  help  SMEs  and 
mid-cap  companies  in  the  green  and 
digital  transitions.  Over  3 320  businesses 
received  support  to  modernise  and  digitalise 
their  operations.  The  RRF  also  supported  a 

7 

 
 
FURTHER PRIORITIES AHEAD 

France  faces  challenges  related  to  the 
skills  mismatches,  high  public  debt, 
stagnating  R&D  intensity,  low  uptake  of 
digital  technologies  by  businesses  and 
slow 
renewable  energy  deployment. 
Tackling those issues will help France to foster 
its  long-term  competitiveness  and  potential 
growth. It will also help achieve the UN SDGs. 

standard 

imbalance 

expenditure 

the 
The  policy  assessment  under 
macroeconomic 
procedure 
considers that France’s policy response to 
imbalances  has  been 
macroeconomic 
broadly  appropriate,  and  efforts  need  to 
be  sustained (6).  The  adoption  of  the  public 
finances programming law for the 2023-2027 
period  is  a  positive  step  ahead.  It  sets  up  a 
multi-annual 
that, 
together  with  an  effective  implementation  of 
the  new  spending  review  mechanism,  could 
prove  crucial  to  address  fiscal  sustainability 
risks  and  put  public  debt  on  a  sustained 
downward  trend.  Likewise,  the  reform  of  the 
public  pension  system  is  expected  to  have  a 
positive  impact  on  public  debt  sustainability. 
Other  reforms  have  contributed  to  alleviating 
the  fiscal  burden  on  labour,  bringing  about  a 
rise  in  employment,  especially  among  low-
skilled  people,  and  a  continuous  decline  in 
unemployment. 
boost 
productivity in the recovery and resilience plan 
(RRP)  and  in  cohesion  policy  programmes  by 
supporting  the  digital  transition  and  research 
are expected to play a major role in addressing 
the  competitiveness  challenges  facing  the 
French economy, while providing further boost 
to productivity growth in the coming years (7). 

Investments 

to 

(6)  See in-depth review for France, European Commission, 

SWD(2024) 100 final 

(7)  Model simulations conducted by the Commission using 
the QUEST model show that the economic impact of 
the NextGeneration EU in France could lead to an 
increase in GDP of between 0.6% and 1.0% by 2024. 
From 2025 to 2030, the impact on GDP could gradually 

8 

is 

important  that  the 

It 
identified 
challenges  are  addressed  at  both 
national  and  regional  levels  to  reduce 
regional 
the 
administrative  and  investment  capacity  in  a 
balanced way across the country. 

disparities 

improve 

and 

Implementing a comprehensive 
strategy to bring down public debt 

high 

keeps 

facing 

debt 
France 
sustainability  challenges  in  the  medium 
term. Despite edging down between 2021 and 
2023, public debt still bears the weight of the 
government’s  response  that  was  required  to 
counter  the  effects  of  recent  crises  and 
remains  well  above  its  pre-pandemic  level. 
Looking  ahead,  public  debt  is  projected  to 
increase in 2024 and 2025. Thereafter, in the 
absence  of  any  further  fiscal  adjustment,  a 
considerable  increase  is  expected,  keeping 
fiscal  sustainability  challenges  high  in  the 
medium  term,  although  the  projected  decline 
in age-related expenditure helps mitigate such 
challenges in the long term (see Annex 21). 

An  effective  strategy  to  reduce  debt 
should  focus  on  reducing  high  structural 
deficits.  The  general  government  deficit  is 
expected to remain high, above 5% of GDP in 
2024  and  2025.  In  turn,  France’s  public 
expenditure,  at  57.3%  of  GDP 
in  2023, 
remains  the  highest  in  the  EU,  with  some  7.9 
percentage  points  above  the  EU  average.  The 
Commission  2024  spring  forecast  projects  a 
similar  gap 
in  2024  and  2025.  Curbing 
primary deficits is necessary to reverse public 
from 
trends  and  would  benefit 
debt 

decline from 0.8% to 0.4%. See Box 2 of the 
Commission's analysis of the recovery and resilience 
plan of France (SWD(2021) 173 final). 

 
 
 
 
 
integrating  the  outcome  of  spending  reviews 
that  entered  into  force  last  year  into  future 
budgetary  decisions.  By  overcoming 
the 
limitations  of  previous  attempts,  such  a 
framework should make it possible for France 
to  identify  and  implement  large  expenditure 
savings and efficiency gains. This would make 
possible to channel more resources to priority 
policy  areas,  such  as  growth-enhancing 
investments,  the  green  and  digital  transitions, 
and  social  and  economic  resilience.  This 
comprehensive 
be 
strategy 
complemented  by  a  systematic  and  thorough 
assessment  of  the  complexity  of  the  tax 
system,  focusing  on  the  effectiveness  and 
budgetary  cost  of  tax  expenditures (8).  Tax 
expenditures  challenge  French  tax  system’s 
efficiency  and  transparency  and  adds  to  its 
complexity.  More  broadly,  they  may  lead  to 
suboptimal 
and 
efficiency  losses.  Tax  expenditures  remain 
numerous,  imply  a  heavy  budgetary  burden 
(amounting  to  above  3%  of  GDP  in  2022, 
excluding  the  tax  credit  on  competitiveness 
and  employment,  CICE),  and  could  be  made 
more efficient (9). 

investment 

decisions 

should 

Higher potential growth would contribute 
to  a  faster  reduction  in  public  debt. 
Potential growth in France has improved in the 
aftermath  of  the  crises  and  is  estimated  at 
1.1%  in  2023  (compared  to  0.8%  between 
2015 and 2019). Despite the sizeable positive 
contribution  of  labour  in  recent  years,  labour 
productivity  has  not  returned  to  pre-crisis 
levels, and total factor productivity (10) remains 
subdued. Looking ahead, further strengthening 
is  key  to  underpin  potential 
employment 
growth, 
competitiveness,  and,  ultimately, 
economic  resilience.  This  should  be  done  in 
parallel  with  efforts 
labour 
productivity,  by  addressing  the  weaknesses 
weighing  on  total  factor  productivity.  Priority 

increase 

to 

(8)  Tax expenditure are special provisions of the tax code 
such as exclusions, deductions, deferrals, credits, and 
tax rates that benefit specific activities or groups of 
taxpayers. 

(9)  Cour des comptes (2023), Piloter et évaluer les 

dépenses fiscales. Notes thématiques, Juillet 2023. 

actions  are  reducing  skills  mismatches  and 
shortages,  improving  educational  outcomes, 
maintaining  efficient  and  effective  support  to 
research and innovation and further expanding 
the spread of IT knowledge, especially in SMEs. 
Progress  in  both  employment  and  labour 
productivity would foster economic growth and 
contribute 
reducing  public  debt  and 
mitigating medium-term sustainability risks. 

to 

public 

The  pension  reform  adopted  in  2023  is 
expected  to  have  a  positive  impact  on 
debt 
employment and 
sustainability  in  the  medium  term.  By 
gradually  raising  the  statutory  retirement  age 
from  62  to  64,  the  participation  rate  of  older 
workers  is  projected  to  rise,  especially  in  the 
first  10  years (11),  thereby  raising  potential 
growth. Nevertheless, the social effects of the 
to  be 
reform  should  continue 
pension 
monitored. 

Addressing labour shortages and 
the decline in educational 
outcomes 

groups 

disadvantaged 

Although employment rose to record high 
levels, 
face 
barriers  in  accessing  the  labour  market. 
Although  the  employment  rate  of  the  20-64 
year-old  reached  a  record  high  of  74.4%  in 
2023, the unemployment rate remains one of 
the  highest  in  the  EU,  including  for  young 
people.  Employment  gaps for  people  with  low 
skills and people born outside the EU are high 
(see Graph 3.1). In addition, inequalities in the 
education  and  training  system  contribute  to 
exacerbating  the  challenges  disadvantaged 
groups  face  in  getting  into  work  or  training. 
Helping  people  from  disadvantaged  groups 
find  work  would  lead  to  stronger  and  more 
inclusive growth. 

Labour  and  skills  shortages  continue  to 
weigh  on  investment  and  productivity 

(10)  A measure of productivity accounting for effects in total 
output not caused by traditionally measured inputs of 
labour and capital. 

(11)  European Commission, 2024 Ageing Report Underlying 
Assumptions & Projections Methodologies. Institutional 
Paper 257, November 2023. 

9 

 
 
 
growth.  Overall,  labour  shortages  remain 
high,  but  have 
recently  declined.  These 
shortages  are  particularly  significant  in  the 
construction  sector  but  are  less  prevalent  in 
the  industry  and  services  sectors.  The  lack  of 
skilled workers is one of the main recruitment 
obstacles.  In  2022,  this  was  particularly  the 
case in the industry, ICT and health sectors. In 
addition,  labour  shortages  were  reported  in 
2023  for  a  number  of  occupations  that 
required specific skills for the green transition 
(see Annexes 8, 12 and 16) (12). 83% of French 
firms  (vs  81%  in  the  EU)  quote  labour  and 
skills shortages as one of the main barriers to 
investment  (see  Annex  12).  Overcoming  skills 
shortages  and  mismatches  would  enable  a 
better  distribution  of  workers  across  leading 
sectors,  potentially  accelerating  productivity 
growth. 

Graph 3.1: Characteristics of employed and 
unemployed people in 2022 (aged 20-64) 

Source: European Commission 

to 

in 
Strengthening  adult  participation 
training 
support  upskilling  and 
reskilling  could  stimulate  productivity. 
While  adult  participation  in  training  over  the 
last 12 months in France is still above the EU 
average,  only  around  25%  of  low-qualified 
in  2022. 
adults  participated 
in 
in  four 
Moreover,  since  2019,  only  one 
trainings target priority sectors, such as those 
linked  to  the  green  and  digital  transitions, 
healthcare  and  industry (13),  and  only  one  in 

learning 

(12)  DARES, ‘Les tensions sur le marché du travail en 2022’, 
Dares Resultats n°59, November 2023 and Eurostat 
data on health personnel. 

(13)  Dares (2023), Quatrième rapport du comité scientifique 
de l’évaluation du Plan d’investissement dans les 
compétences. 

10 

the  Plan 

five  enrolments  in  training  target  occupations 
suffering  from  skills  shortages.  Significant 
in  skills  have  already  been 
investments 
deployed,  such  as 
reduce 
recruitment  tensions  or  the  Skills  investment 
plan 
further 
measures  promoting  adult  training  are critical 
to help achieve the 2030 adult learning target. 
This  could  foster  employability,  especially 
people  from  the  most  disadvantaged  groups, 
and improve labour productivity. 

(see  Annex  14).  However, 

to 

continues 

labour 
Focusing  on  effective  active 
market  and social policies  remains  a key 
priority.  France 
to  promote 
activation  measures 
(helping  people  find 
work),  facilitate  access  to  training  for  all  and 
reform  public  employment  services  (PES)  to 
improve  their  performance  and  integration 
with social services. However, the employment 
and  social  impact  of  the  recently  adopted 
overhaul  of  the  PES,  France  Travail,  and  the 
reform  of  the  minimum  income  scheme,  with 
new  conditions  for  the  receipt  of  the  benefit  
has  yet  to  be  assessed.  France  is  deviating 
from  its  2030  target  on  poverty  reduction. 
Despite the country ranking among the highest 
in  the  EU  in  terms  of  public  expenditure  on 
social  protection,  the  share  of  the  population 
at  risk  of  poverty  or  social  exclusion  has 
increased (see Annex 14). Targeting measures 
at  disadvantaged  groups,  children  and  the 
outermost regions could help France reach its 
2030  national  employment  and  poverty 
reduction targets. 

the  2022  Programme 

A  decline  in  students’  performance  in 
basic  skills  could  weigh  on 
labour 
productivity  in  the  medium  to  long  term. 
Despite  high  public  spending  on  education, 
educational performance has deteriorated. The 
results  of 
for 
International  Student Assessment (PISA)  show 
that 28.8% of 15-year-olds underperformed in 
mathematics  in  France  vs  29.5  in  the  EU, 
26.9% in reading in France 26.2% vs in the EU 
and  23.8%  in  science  in  France  vs  24.2%  in 
the  EU;  resulting  in  scores  around  the  EU 
averages,  which 
also  worsened 
have 
substantially (see Annex 15). The share of low-
achieving  students  has  significantly  increased 
since 2018 in all three tested subjects, similar 
to  the  EU  trend.  There  has  also  been  a 

0102030405060708090100EmployedUnemployedLow education & migrantbackgroundLow education & non-migrantbackgroundNon-low education & migrantbackgroundNon-low education & non-migrantbackground 
  
 
noticeable  decline 
performing 
students, 
mathematics and reading. 

in 

the  share  of 

especially 

top 
in 

The  education  and  training  system  and 
basic  skills  could  be  strengthened  by 
boosting  support 
for  disadvantaged 
students.  Underachievement  in  basic  skills is 
pronounced among disadvantaged students. In 
particular, the 2022 PISA shows that 15-year-
old  students  with  a  migrant  background  face 
double the risk of underachievement than their 
native-born  peers  with  native-born  parents. 
Recent  reforms  in  France,  including  measures 
focusing  on  the  specific  needs  of  schools  in 
disadvantaged  areas,  such  as  the  reform  to 
halve class sizes, have the potential to reduce 
educational inequalities. However, their impact 
on learning outcomes in the medium and long 
term  has  yet  to  be  assessed.  To  encourage 
more social diversity in schools, France has set 
a  non-binding 
reduce  social 
segregation in public schools by 20% by 2027. 
The  national  policy  response  to  strengthen 
basic  skills  focuses,  in  particular,  on  the 
content  of  the  educational  programme.  It 
includes  reforms  to  increase  the  share  of 
learning  dedicated  to  basic  skills  and  to 
improve  the  school  climate,  including  through 
a recent anti-bullying plan (14). 

target 

to 

levels  and 

A  shortage  of  teachers  and  the  weak 
attractiveness of the profession weigh on 
educational  outcomes.  The  number  of 
applicants  in  teachers’  entry  exams,  across 
science, 
different  education 
technology,  engineering  and  mathematics  is 
falling.  In  addition,  the  rising  reliance  on 
temporary 
affects 
teachers 
to  a 
teaching  quality  and  contributes 
deterioration in working conditions (see Annex 
15). Making teacher profession more attractive 
learning 
will 
outcomes  and  help  students  integrate  in  the 
labour market. This can be done by improving 
working  conditions,  giving  more  autonomy  to 
schools (15) 
freedom, 

teaching  quality, 

pedagogical 

negatively 

improve 

and 

(14)  2022 PISA results show a correlation between exposure 
to bullying and a drop in mathematics score of 13 
points. 

(15)  2023 Country Report – France, page 14.  

11 

strengthening mentoring programmes for new 
initial  and 
teachers  and  providing  robust 
continuous 
the 
changing  needs  of  students,  including  those 
with a disability. 

training  that  aligns  with 

Tackling competitiveness 
challenges through structural 
reforms 

Although  France’s  public  support  to 
business  research  and  innovation  is  one 
of  the  highest  in  the  EU,  business  R&D 
intensity  is  below  that  of  innovation 
leaders,  such  as  Denmark  and  Sweden. 
France’s  public  support  to  business  R&D 
reached 0.45% of GDP in 2020, well above the 
EU  average  of  0.20% (16).  However,  business 
R&D  intensity  stagnated  at  around  1.44%  of 
GDP between 2012 and 2022 (see Annex 11) 
and ranked ninth among EU countries in 2022. 
The evaluation of the main support instrument 
– 
impôt 
recherche)  –  points  to  positive  effects  on 
innovation  output  in  SMEs  (measured,  for 
instance,  in  terms  of  patents  and  engineer 
staff)  but  no  significant  effects  on  larger 
firms,  despite 
the 
measure  on  larger  firms (17) (18).  However,  the 

the  concentration  of 

tax  credit  scheme 

(crédit 

the 

(16)  Commission calculations. The support is a sum of tax 

incentives amounting to 0.28% of GDP (OECD data) and 
of direct support (through grants, etc.) amounting to 
0.16% of GDP (Eurostat data). 

(17)  Lallement R. and M. Harfi (2021) : Évaluation du Crédit 
d’impôt recherche, Report by the National Commission 
for the Evaluation of Innovation Policies (CNEPI) 2021, 
France Stratégie, Available at: 
www.strategie.gouv.fr/publications/evaluation‐credit‐
dimpot‐recherche‐rapport‐ cnepi‐2021; 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 and Conseil d’analyse économique (2022), Focus 
N°090-2022 ‘Renforcer l’impact du Crédit d’impôt 
recherche’ Philippe Aghion, Nicolas Chanut et Xavier 
Jaravel. 

(18)  Other measures to support innovation target SMEs, 
such as the innovation tax credit, and the status of 
Young Innovative Companies (Jeunes Entreprises 
Innovantes), which provides social and fiscal benefits 
for startups meeting specific R&D intensity and growth 

 
 
 
 
efficiency  of  R&D  support  schemes  could  be 
improved,  including  by  targeting  support  to 
SMEs.  Academia-business  cooperation  related 
indicators  are  stagnating,  and  attractiveness 
of  academic  careers  is  worsening  (see  Annex 
11).  The  2021-2030  Research  Programming 
Law  under  the  RRP  and  other  announced 
measures  are  expected 
the 
efficiency  of  the  research  system,  notably  by 
strengthening  the  link  between  science  and 
economy,  and  making  research  careers  more 
attractive.  Nevertheless,  the  impact  of  these 
measures needs time to materialise and to be 
reflected in the indicators. 

to  enhance 

French 

businesses 

technologies  – 

The 
take-up  of  digital  technologies 
remains 
among 
comparatively low. French firms’ adoption of 
some  advanced 
including 
artificial  intelligence  and  cloud  computing  – 
falls short of the EU  average (see Graph 3.2). 
Although it is increasing, the number of French 
SMEs  with  at  least  a  basic  level  of  digital 
intensity  (52%)  is  still  below  the  EU  average 
(58%)  and far from the Digital  Decade target 
of  90%  by  2030.  The  French  RRP  supports 
business  digitalisation  through  several  sub-
measures  under  France  Num  (see  Annex  10). 
Cohesion  policy  funding  across  all  French 
regional  programmes  also  provides  support. 
Recent 
labour  market  reforms  and  other 
structural  reforms  may  also  contribute  to 
creating  framework  conditions  that  are  more 
conducive  to  R&D  and  ICT  investment  in 
French  firms (19).  However,  it  may  take  time 
for  the  full  impact  of  these  measures  to  be 
felt.  Moreover,  fostering  the  creation  of  local 
spread  of 
networks 
support 
technologies  and  encourage  workers 
to 
lead  to 
participate 
companies adopting more digital technologies. 

ICT  training  could 

that 

the 

in 

Graph 3.2: Percentage of businesses using 
digital technologies 

Most recent data available: 2023 (2020 for analysis of 
big data and 2022 for use of robots). Best performance: 
e-commerce sales: Lithuania; website and cloud 
computing: Finland; mobile apps: Cyprus; social media 
and big data: Malta; robots and artificial intelligence: 
Denmark; data analytics: Hungary. 
Source: Eurostat. Coverage: firms with more than 10 
employees 

Regulatory  barriers  are  holding  back 
productivity  growth 
in  some  services 
sectors.  Over  the  last  two  decades,  labour 
productivity growth has been largely driven by 
sectors  that  have  become  more  productive 
and  have  expanded  their  share  in  the  French 
economy.  This  mainly  applies  to  ICT  and 
finance 
contrast, 
insurance. 
manufacturing  and  agriculture,  which  had 
relatively  strong  productivity 
experienced 
growth,  have  continued  to  shrink,  dragging 
growth (20). 
down 
overall 
Productivity (21) 
in  professional  and  other 
services  and  retail  trade  has  remained  below 
the EU average level. It could be improved by 
lifting regulatory barriers (see Annex 12). 

productivity 

and 

By 

a 

favourable 

business 
Ensuring 
environment  would  stimulate  corporate 
investment and competitiveness. Despite a 
number  of  dedicated  reforms  in  recent  years, 
law  on  accelerating  and 
including 
simplifying  public  action  under  the  RRP,  the 
administrative  burden  on  businesses  is  still 
considered  to  be  heavy:  this  is  the  case  for 

the 

criteria. Support for emerging players is another key 
component of the France 2030 plan. 

(20)  The Commission’s estimates for labour productivity by 
sector; average annual growth 2001-2020 based on 
data in EU KLEMS & INTANProd database, 2023 
release. 

(19)  Cette, G., Lopez, J. & Mairesse, J. (2018). 

(21)  Eurostat – Wage adjusted labour productivity. 

12 

0102030405060708090100With e-commercesalesWith a websiteWith a mobile appfor clientsUse any socialmediaBuy cloudcomputing servicesAnalyse big dataUse industrial orservice robotsUse artificialintelligenceUse data analyticsFranceEU averageBest performer 
 
  
 
In 

life’). 

49% of businesses against  33% in the EU  on 
average.  France  estimates  that  excessive 
number of rules costs at least 3% of GDP per 
year (22). French businesses, in particular SMEs, 
could  better  seize  opportunities  provided  by 
the single market that could fuel their growth 
(see Annex 12). France is preparing a new law 
on simplification and growth (‘simplification of 
rapid 
economic 
implementation  of  the  Once-Only  Technical 
System  under  the  Single  Digital  gateway  will 
reduce  the  administrative  burden  on  firms. 
taxes  on 
Despite 
production,  at  4.7%  of  GDP  in  2022,  are  the 
second  highest  in  the  EU  and  well  above  the 
average  of  around  2.5%  of  GDP.  Additional 
efforts  to  reduce  production  taxes,  consistent 
with  the  overall  fiscal  consolidation  strategy, 
would  provide  an  extra  boost  to  businesses 
and encourage investment. 

recent  cuts,  France’s 

addition, 

a 

Removing obstacles to the green 
transition 

France  missed  its  renewables  target  for 
in 
2020  and  could  have  difficulties 
meeting the new objective for 2030. There 
are delays in granting permits for onshore and 
offshore  wind  and  solar  installations.  This  is 
caused by a delay with territorial planning for 
designating  renewables  acceleration  areas, 
inadequate  planning, 
long  and  complex 
permitting  procedures,  difficulties  with  public 
acceptance  and  legal  challenges.  To  achieve 
the  targets  set  in  the  updated  draft  national 
energy  and  climate  plan  for  2030  (NECP),  for 
solar energy (54-60 GW), a sustained increase 
in  its  deployment  is  needed  in  the  coming 
years  (from  3.5 GW  in  2023 (23)  to  at  least 
4.8 GW  per  year  on  average).  Similarly,  the 
deployment  of  offshore  wind  needs  to  be 
accelerated  by  2035,  given  the  lead  times  of 
the projects (see Annex 7). 

of 

law  on 

renewable 

recently  adopted 

the 
The 
energy 
acceleration 
production,  part  of 
the  REPowerEU 
chapter  of  the  RRP,  forms  the  basis  for 
renewable  projects  more 
deploying 
quickly.  However,  since  the  adoption  of  the 
law  a  year  ago,  almost  70%  of  implementing 
acts  have  yet  to  be  adopted.  A  new  multi-
annual  energy  programme  (Programmation 
Pluriannuelle de l’Energie) will clarify the level 
of  political  ambition  for  renewable  energy 
sources 
the  absence  of 
renewable electricity targets in the 2024 draft 
law  on  energy  security  sends  mixed  signals 
about  France’s  commitment  to  accelerating 
RES,  creating  uncertainty  for  investors  and 
labour  and  skills 
developers.  Moreover, 
shortages  persist 
in  key  green  transition 
sectors. Strengthening the development of the 
engineering  skills  needed  in  local  authorities 
would  also  help  with  assessments  of 
renewable energy projects. 

(RES).  However, 

(e.g.  key 

is  expected  to 

To  move  away  from  fossil  fuels,  the 
share  of  electricity  in  the  total  energy 
consumption 
increase 
significantly by 2035. France could manage 
these  growing  electricity  needs  by  relying  on 
energy  efficiency 
reforms  and 
investments  in  the  renovation  of  buildings 
using EU funds). In addition, the country should 
continue  its  energy  sufficiency  measures  (to 
encourage  changes in  consumer behaviour)  in 
the  coming  years.  In  parallel,  ramping  up 
electricity  production  from  RES  would  also  be 
needed alongside returning its existing nuclear 
capacity  to  full  production.  However,  building 
additional nuclear power plants announced will 
take  time  and  will  not  provide  the  required 
capacity 
term.  Further 
the  medium 
investment 
the  electricity  grids  and 
flexibility  solutions,  such  as  storage,  are 
needed  to  integrate  higher  volumes  of  RES, 
among  other  things,  and  ensure  security  of 
supply (24). 

in 

in 

(22)  The Simplification action plan of April 2024, available 

at https://presse.economie.gouv.fr/plan-daction-
simplification/, page 8. 

(23)  https://www.rte-france.com/actualites/bilan-electrique-
france-2023-nouvel-equilibre-systeme-electrique  

(24)  RTE (2022), Futurs énergétiques 2050 – Rapport 

complet 
(https://rtefutursenergetiques2050.com/documents), 
RTE (2023) Bilan prévisionnel 2023 French power 
system outlook (https://assets.rte-
france.com/prod/public/2023-10/2023-10-02-bilan-
previsionnel-2023-principaux-resultats.pdf). 

13 

 
 
 
to  significantly 

the  objectives  set  for  2030  and  2035  in  the 
NECP 
reduce  emissions, 
especially  in  the  transport  sector.  While  the 
measures  adopted  during  the  energy  crisis 
the 
have  been  wound  down, 
remaining  subsidies  and  targeting  them  at 
disadvantaged  groups  would  be  warranted  to 
preserve  price  signals  and  account 
for 
worsening  poverty  indicators  (see  Annexes  8 
and 14). 

reducing 

in 

investments 

To  ensure  that  the  green  transition  does 
not  hamper  competitiveness,  businesses 
will  have  to  invest  and  innovate.  The 
changes  to  processes  required  by  the  green 
transition  could  also 
initially  weigh  on 
businesses  due  to  higher  production  costs, 
especially  in  the  construction  and  automotive 
sectors (27).  France  is  supporting  this  shift  by 
providing  grants  for 
the 
decarbonisation  of  industries.  This  is  in  line 
with  the  country’s  green  transition  ambitions 
implemented  partly  France  2030  strategy.  In 
the  long  term,  the  impact  of  the  green 
transition  on  productivity  will  depend  on 
relative  prices  and 
the  effectiveness  of 
innovation  and  investment  in  these  areas.  To 
support  the  transition  from  the  demand  side, 
public  measures  could  encourage  consumers 
to 
carbon-intensive 
less 
consumption.  These  measures  may  include 
higher  taxes  on  high  carbon  products  and 
services,  potential  subsidies  for  low  carbon 
content,  and    labelling  that  accounts  for  the 
total  carbon 
footprint  of  products  and 
services (28). 

switch 

to 

Pressure  on  natural  resources,  especially 
water, is building up due to droughts and 
intensive  agriculture.  France  is  facing  the 
growing  challenge  of  water  scarcity.  The 
annual  investment  gap  for  2021-2027  for 
sustainable  water  management  is  estimated 
at  EUR 4.3  billion  (around  0.2%  of  GDP).  The 
situation is exacerbated by diffuse pollution of 
water from pesticides and nitrates in fertilisers 
and  the  intensive  use  of  water,  particularly in 
agriculture.  On  30 March  2023,  France 
adopted  53  measures  (the  Plan  Eau)  to 
treated 
increase  water  efficiency, 
waters,  increase  storage,  protect  and  restore 
water  ecosystems  and  improve  governance. 
However, the effectiveness of these measures 
has yet to be assessed (see Annex 6). The shift 
to decarbonised energy also partly depends on 
the  availability  of  water 
in 
particular  for  hydropower  and  nuclear  output. 
Moreover, France may miss its 2030 target set 
in  the  NECP  for  net  carbon  removals  through 
land  use, 
land-use  change  and  forestry 
(LULUCF).  This  is  due  to  higher  tree  mortality 
rates caused by droughts and pests as well as 
the  higher  projected  volume  of  harvested 
woods. 

resources, 

reuse 

energy 

sources 

in  energy  efficiency. 

Fossil  fuel  subsidies  discourage  the  shift 
or 
to  alternative 
investments 
In 
France,  the  fiscal  cost  of  supporting  fossil 
fuels  more  than  tripled  in  2022,  compared  to 
2021, almost reaching EUR 28 billion (1.1% of 
GDP).  This  was  mainly  due  to  exceptional 
direct transfers that started in 2022 to shield 
consumers  from  a  sudden  increase  in  energy 
prices (25)  (see  Economic  and  employment 
snapshot). Government support for fossil fuels 
went  mainly  to  petroleum  products  and 
natural  gas.  Significant 
long-standing  tax 
expenditures  are  still  in  place,  such  as  an 
excise  tax  refund  for  diesel  used  in  road 
freight 
in 
agriculture (26). This may compromise reaching 

transport  and  for  fuel  used 

(25)  Data by the European Environmental Agency, at 

https://www.eea.europa.eu/data-and-maps/daviz/fossil-
fuel-subsidy-as-a-1/#tab-chart_2  

(26)  OECD (2023), ‘France’, in OECD Inventory of Support 
Measures for Fossil Fuels: Country Notes, OECD 
Publishing, Paris, https://doi.org/10.1787/2bf5f063-en  
(accessed on 11 March 2024). 

(27)  J. Pisani-Ferry and S. Mahfouz (2023) find that the 
green transition could temporarily reduce labour 
productivity by a quarter of percentage point a year 
(Pisani-Ferry, J. and Mahfouz, S. (2023), Les incidences 
économiques de l’action pour le climat). 

(28)  National Productivity Board fourth report: 

https://www.strategie.gouv.fr/english-articles/national-
productivity-board-4th-report. 

14 

 
 
 
Box 4: 

The mid-term review of cohesion policy funds for France 

The  mid-term  review  of  cohesion  policy  funds  is  an  opportunity  to  assess  cohesion 
policy  programmes  and  tackle  emerging  needs  and  challenges  in  EU  Member  States 
and their regions. Member States are reviewing each programme, taking into account, among 
other things, the challenges identified in the European Semester, including in the 2024  country-
specific recommendations. This review  forms the  basis of a proposal by the  Member State for 
the definitive allocation of the 15% of the EU funding included in each programme. 

France has made progress in implementing cohesion policy programmes and the European Pillar 
of Social Rights, but challenges remain as outlined in this report, including Annexes 14 and 17. In 
particular,  France  continues  to  register  slow  growth  across  the  country,  with  even  negative 
growth in the north-eastern  and eastern regions. There are also significant  disparities between 
France’s  outermost  and  metropolitan  regions  as  well  as  between  urban  and  non-urban  areas. 
Against  this  background,  it  is  crucial  to  continue  implementing  planned  priorities,  paying 
particular attention to:  

(i)  making research, development and innovation activities at regional level more attractive, 
particularly  by  developing  regional  innovation  ecosystems  and  strategic  skills  and 
attracting talent;  

(ii)  boosting  businesses’  digitalisation  and  innovation  capacity,  especially  in  regions  ng  in 

development;  

(iii) moving  ahead  with  priorities  that  contribute  to  the  green  transition,  with  a  focus  on 
producing renewables, developing smart energy systems, implementing energy efficiency 
measures,  taking  action  on  climate  change  adaptation,  and  ensuring  the  supply  of 
drinking water, wastewater treatment and municipal waste collection and management 
in the outermost regions;  

(iv) actively including disadvantaged groups, such as people with a migrant background;  

(v)  investing  in  upskilling  and  reskilling  to  meet  labour  market  needs,  with  a  focus  on 

disadvantaged groups;  

(vi)  implementing  anti-poverty  and  social  inclusion  measures,  with  particular  attention  on 

children, access to housing and preventing housing evictions. 

France  could  benefit  from  the  opportunities  provided  by  the  Strategic  Technologies  for  Europe 
Platform  (STEP) (29) 
initiative  to  further  develop  the  required  skills,  technologies  and 
infrastructure  and  stimulate  industry’s  involvement  in  new  strategic  value  chains  (net-zero 
industry, critical raw materials, decarbonisation of energy-intensive industries).  

(29)  Regulation (EU) 2024/795. 

15 

 
 
 
in  services 

barriers 
to 
productivity;  by  further 
business  environment  with 
administrative  procedures  and 
production taxes. 

improve 
improving 

their 
the 
simplified 
reduced 

•  Taking  further  actions  to 

improve 
employment  while  addressing 
the 
shortages  and  mismatches  of  skills, 
strengthening  activation  measures  and 
providing labour market relevant trainings. 

in  education  and 

•  Improving  educational  outcomes  by 
strengthening  basic  skills  and  addressing 
inequalities 
training 
systems;  tackling  teacher  shortages  by 
making  the  profession  more  attractive,  in 
particular  by  improving  teachers’  working 
conditions  and  the  initial  and  continuous 
training. 

the 
energies 

deployment 
and 

•  Accelerating 
of 
related 
renewable 
storage 
technologies,  phasing  out 
subsidies  for  fossil  fuel  use  and 
ensuring continued investment in grids, 
simplifying 
procedures, 
permitting 
strengthening  relevant  skills  for  the  green 
further  energy 
transition  and 
taking 
sufficiency  measures 
change 
consumers’ behaviour). 

(to 

•  Removing barriers to implementing the 
Plan  Eau  through  further  measures  to 
promote  water  efficiency  and  reduce  the 
sustainable 
in 
investment 
management of water. 

gap 

the 

KEY FINDINGS 

With its wide policy scope and substantial 
financial envelope, France’s recovery and 
resilience  plan  (RRP)  includes  measures 
to  address  a  series  of  structural 
challenges,  in  synergy  with  other  EU 
funds, including cohesion policy funds, by: 

•  Supporting  investment  in  the  green 
transition by  promoting the renovation of 
buildings and the decarbonisation of energy 
consumption, 
in 
including  by 
sustainable daily mobility. 

investing 

•  Fostering 

the  green  and  digital 
transitions of industry by supporting the 
modernisation 
of 
operations  and  simplifying  administrative 
procedures. 

digitalisation 

and 

•  Supporting 

of 
disadvantaged  groups  in  the  labour 
market. 

participation 

Continued  efforts  are  key  for  a  successful 
implementation  of  all 
the  measures  of 
France’s  recovery  and  resilience  plan  by 
August 2026.  

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

•  Putting  public  debt  on  a  sustainable 
downward path by limiting the growth 
of primary  spending  and  improving its 
efficiency.  Spending  reviews  should  be 
complemented  by  an  in-depth  assessment 
of  the  complexity  of  the  tax  system, 
aiming, in particular, to raise the efficiency 
and reduce the cost of tax expenditures. 

•  Fostering 

competitiveness 

by 
strengthening  business  R&D  intensity  with 
better  targeted  support  schemes;  by  lifting 
regulatory,  entry  and  competition 
the 

16 

 
 
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 – implementation 

A4.  Other EU instruments for recovery and growth 

A5.  Resilience 

Environmental sustainability 

A6.  European Green Deal 

A7.  Energy transition and competitiveness 

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 

LIST OF TABLES 

A2.1. 
A3.1. 

Summary table on 2019-2023 CSRs 
Key facts of the French RRP 

19 

21 

21 

23 

27 

29 

32 

34 

34 

39 

45 

48 

48 

50 

53 

56 

62 

64 

64 

67 

69 

71 

75 

75 

78 

81 

82 

24 
27 

 
 
 
Support from EU instruments in France 
Resilience indices across dimensions for France and the EU-27 
Indicators tracking progress on the European Green Deal from a macroeconomic perspective 
Key Energy Indicators 
Key indicators for a fair transition in France 
Circularity indicators 

A3.2.  Measures in France's RRP 
A4.1. 
A5.1. 
A6.1. 
A7.1. 
A8.1. 
A9.1. 
A10.1.  Key Digital Decade targets monitored by the Digital Economy and Society Index 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 
A17.1.  Selected indicators at regional level in France 
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 

LIST OF GRAPHS 

Progress towards the SDGs in France 
France’s progress on the 2019-2023 CSRs (2024 European Semester) 
Total grants disbursed under the RRF 
Distribution of cohesion policy funding across policy objectives in France 
Distribution of RRF funding by pillar in France 
Greenhouse gas emissions from the effort sharing sectors in Mt CO2eq, 2005-2022 
Changes in livestock density and organic farming 
Environmental investment gap, annual average 
France´s energy retail prices for households and industry & service 
Trends in electricity prices for non-household consumers (EU and foreign partners) 
France's installed renewable capacity (left) and electricity generation mix (right) 
Fair transition challenges in France 
Job vacancy rate in transforming sectors and mining and quarrying 
ETS emissions by sector since 2013 
Treatment of municipal waste 

A1.1. 
A2.1. 
A3.1. 
A4.1. 
A4.2. 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2. 
A7.3. 
A8.1. 
A8.2. 
A9.1. 
A9.2. 
A11.1.  Business R&D expenditure (as % of GDP) 2010-2022 in top R&I performing countries 
A12.1.  Total factor productivity (index 100 in 2015) 
A13.1.  Government effectiveness 
A13.2.  Scope index of independent fiscal institutions 
A15.1.  Underachievement in mathematics in France by country of birth, PISA 2012, 2018 and 2022 
A16.1.  Life expectancy at birth, years 
A16.2.  Projected increase in public expenditure on healthcare over 2024-2070 
A17.1.  Average GDP per capita growth vs GDP per capita - France 
A17.2.  Labour productivity, EU-27, France NUTS 2 regions, 2000-2022 (Real GVA per worker) - France 
A19.1.  Tax revenues from different tax types, % of total revenue 
A19.2.  Tax wedge for single and second earners, % of total labour costs, 2023 

28 
31 
32 
38 
44 
45 
48 
52 
55 
61 
63 
64 
65 
68 
70 
72 
76 
78 
81 
84 
84 

21 
23 
28 
30 
30 
34 
36 
37 
39 
40 
41 
45 
46 
48 
48 
54 
57 
62 
63 
67 
69 
69 
71 
71 
79 
79 

20 

 
 
 
 
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. 

related 

France  is  improving  on  five  SDG  indicators 
to 
(SDGs 2,  7,  9,  12,  13) 
environmental  sustainability,  but  is  moving 
away  from  the  targets  on  three  other  SDGs 
(SDGs 6,  11,  14).  It  needs  to  catch  up  with 
the EU average on SDG 11 (Sustainable cities 
has  made 
and 
Graph A1.1: Progress towards the SDGs in France 

communities). 

France 

considerable  progress  on  SDG 12  (Responsible 
consumption  and  production)  and  on  SDG 13 
(Climate  action),  in  particular  by  reducing  its  net 
greenhouse gas emissions (from 6.8 tonnes of CO2 
equivalent  per  capita  in  2017  to  5.7  in  2022), 
reducing the generation of waste and reducing its 
material  and  consumption  footprint.  The  French 
recovery  and  resilience  plan  (RRP)  provides  for 
large-scale  investments  in  the  green  transition, 
such  as  the  energy  efficiency  of  buildings, 
sustainable  transport  and  the  circular  economy. 
However, France is moving away from the targets 
for 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 (up from 2.3% in 2015 
to  3.8%  in  2020)  and  the  proportion  of  the 
population  living  in  households  suffering  from 
noise (up from 16.4% in 2015 to 20.7% in 2020). 
France  is  also  moving  away  from  the  targets  for 
SDG 6 on Clean water and sanitation and SDG 14 
on  Life  below  water  but  remains  above  the  EU 
average.  Upcoming  investment  in  water  networks 
is  envisaged  in  the  RRP,  including  in  France’s 

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). 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 25 April 2024. Data refer mainly to the period 2017-2022 or 2018-2023. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

21 

SDG 1SDG 2SDG 3SDG 4SDG 5SDG 6SDG 7SDG 8SDG 9SDG 10SDG 11SDG 12SDG 13SDG 14SDG 16SDG 17-100%-75%-50%-25%0%25%50%75%100%-5-4-3-2-1012345Status rel. EUProgress scoreFrance is progressing towards these SDGs and status is better than EUFrance is moving away from these SDGs and status is worse than EUFrance is progressing towards these SDGs but status is worse than EUFrance is moving away from these SDGs but status is better than EU1. No poverty2. Zero hunger3. Good health and well-being4. Quality education5. Gender equality6. Clean water and sanitation7. Affordable and clean energy8. Decent work and economicgrowth9. Industry, innovation and infrastructure10. Reduced inequalities11. Sustainable cities and communities12. Responsible consumption and production13. Climate action14. Life below water15. Life on land16. Peace, justice and strong institutions17. Partnerships for the goals 
 
 
 
 
  
overseas departments. 

France  is  improving  on  most  SDG  indicators 
related to fairness (SDGs 3, 4, 5, 7, 8), but is 
moving  away  from  the  goals  on  SDG 1  (No 
poverty)  and  SDG 10  (Reduced  inequalities). 
In  addition,  France  needs  to  catch  up  with 
the  EU  average  on  SDGs 3,  7  and  10.  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 2023) 
and  the  higher  tertiary  educational  attainment 
(from 47% of the population aged 25-34 in 2018 
to  51.9% 
in  2023).  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  relating  to  some  vulnerable  groups 
(see  Further  priorities  ahead).  There  is  also  a 
worrying downward trend on some basic education 
indicators,  with  26.9%  of  15-year-old  students 
with  low  achievement  in  reading  in  2022  (in  line 
with the EU average, which is following the same 
trend)  compared  to  20.9%  in  2018.  France  is 
moving  away  from  the  targets  for  SDG 1  (No 
poverty),  with  more  people  at  risk  of  poverty  or 
social  exclusion 
(rising  from  17.8%  of  the 
population  in  2017  to  21%  in  2022)  or  living  in 
households  with  very  low  work  intensity  (from 
7.7%  in  2017  to  9.9%  in  2022).  Inequalities 
(SDG 10)  are  increasing,  and  France  needs  to 
catch up with the EU average on indicators such as 
the  urban-rural  gap  for  risk  of  poverty  or  social 
exclusion.  This indicator  has  risen  from  3.7  pp.  of 
difference in the percentage of population in 2017 
to  a  9.3  pp.  difference  in  2022  (EU  average  in 
2022:  0.4  pp.  difference).  While  France’s 
performance  on  SDG 3  (Good  health  and  well-
being)  slightly  improved  overall  in  the  5  years 
between 2017 and 2022, it needs to catch up with 
the EU average in this area. 

France is improving and performs well on all 
SDGs on productivity (SDGs 4, 8, 9). On SDG 8 
(Decent  work  and  economic  growth),  France 
increased  its  investment  rate  to  25.2%  of  GDP in 
2022, above the EU average of 22.9%. In addition, 
the  share  of  young  people  not  in  education, 
employment  or  training  decreased  between  2018 
and 2023 (from 12.9% of the population aged 15-
29 to 12.3%) as did the long-term unemployment 
rate (from 2.5% of the active population to 1.8%). 
Nevertheless,  the  number  of  fatal  accidents  at 

improvement 

work rose in 2021 to 3.32 accidents per 100 000 
workers, well above the EU average of 1.76. While 
close  to  the  EU  average,  the  SDG 9-related 
indicators are somewhat stagnating. These include 
gross  domestic  expenditure  on  R&D  and  R&D 
personnel  (2.2%  of  GDP  in  2017  vs  2.18%  in 
2022,  and  1.5%  of  the  active  population  in  2017 
vs  1.71%  in  2022).  A  notable  exception  is  the 
significant 
share  of 
households  with  high-speed  internet  connection 
(28.3% of households in 2017 vs 73.3% in 2022) 
in  line  with  the  EU  average.  The  French  RRP 
includes  several  measures  supporting  R&D 
investments  in  digital  technologies  and  green 
transition, 
of 
innovative  businesses,  and  preserving  R&D 
improve 
employment.  However,  barriers 
productivity  growth  in  France  remain  (see  Further 
priorities ahead). 

strengthening 

projects 

R&D 

the 

to 

in 

is 

and 

justice 

(Peace, 

indicators 
improving  on  SDG 
France 
related  to  macroeconomic  stability  (SDGs 8 
and  17) but moving  away  from the  goals on 
SDG 16 
strong 
institutions).  In  addition,  it  still  needs  to 
catch  up  with  the  EU  average  on  SDGs  16 
and  17. While  France made  progress  on  SDG 17, 
indicators relating to SDG 16 worsened, with both 
remaining  below  the  EU  average.  Victims  of 
human  trafficking  increased  to  3  per  100 000  in 
2022, above the EU average of 2.3. In 2023, while 
53% of the population (down from 58% in 2018) 
had  very  or  fairly  good  perception  of  the 
independence  of the  justice  system. Nevertheless, 
the  percentage  of  the  population  reporting  crime, 
violence or vandalism rose significantly, in contrast 
with  the  falling  EU  average  (in  France,  the  figure 
rose  from  14.2%  of  the  population  in  2015  to 
17.7% in 2020, vs a decline in the EU from 13.2% 
to  10.7%).  In  terms  of  global  partnership,  France 
increased  its  financing  to  developing  countries 
(EUR  21  847  mln  in  2017  vs  EUR  23  844  mln  in 
2022)  and  its  imports  from  these  countries  (EUR 
90  726  mln  in  2018  vs  EUR  122  685  mln  in 
2023).  However,  levels  remain  well  below  the  EU 
average.  The  general  government  gross  debt  has 
increased  to  110.6%  of  GDP  in  2023,  which  is 
significantly higher than the EU average of 81.6%.   

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

22 

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

Graph A2.1: France’s progress on the 2019-2023 
CSRs (2024 European Semester) 

Source: European Commission 

The Commission has assessed the 2019-2023 
country-specific  recommendations  (CSRs) (30) 
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 (31)  and  the 
commitments  in  its  recovery  and  resilience  plan 
(RRP) (32).  At  this  stage  of  RRP  implementation, 
84%  of  the  CSRs  focusing  on  structural  issues 
from  2019-2023  have  recorded  at  least  ‘some 
progress’,  while  14%  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. 

(30)  2023 CSRs : EUR-Lex - 32023H0901(10) - EN - EUR-Lex 

(europa.eu) 

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) 

(31)  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). 

(32)  Member States were asked to effectively address in their 
RRPs all or a significant subset of the relevant country-
specific recommendations issued by the Council. 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. 

23 

No progress2%Limited progress14%Some progress45%Substantial progress29%Full implementation10% 
 
 
 
   
 
  
 
Table A2.1:  Summary table on 2019-2023 CSRs 

(Continued on the next page) 

24 

FranceAssessment in May 2024*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, 16Usewindfallsgainstoacceleratethereductionofthegeneral government 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 implemented as of 2022 and 2023SDG 8, 16Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimes,withtheviewtoenhance their fairness and 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 and 2022SDG 8, 10and address skills shortages and mismatches.Some ProgressRelevant RRP measures being implemented as of 2021 and 2022SDG 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, 2022 and 2023SDG 9, 10, 11renewable energy, energy efficiency and interconnections with the rest of the Union, Some ProgressRelevant RRP measures being implemented as of 2021, 2022, 2023 and planned as of 2025SDG 7, 9, 10, 11, 13and on digital infrastructure, taking into account territorial disparities.Substantial ProgressRelevant RRP measures being implemented as of 2022SDG 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, 12Reduceregulatoryrestrictions,inparticularintheservices sector,Limited ProgressRelevant RRP measures being implemented as of 2022SDG 8, 9andfullyimplementthemeasurestofosterthegrowthoffirms.Full ImplementationNot applicableSDG 8, 92020 CSR 1Substantial ProgressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuring debt sustainability, while enhancing investment.Not relevant anymoreNot applicableSDG 8, 16Strengthentheresilienceofthehealthsystembyensuringadequatesuppliesofcriticalmedicalproductsandabalanceddistributionofhealthworkers,andbyinvesting in e-Health.Substantial ProgressRelevant RRP measures being implemented as of 2022, 2023 and planned as of 2024SDG 32020 CSR 2Substantial ProgressMitigate the employment and social impact of the crisis,Substantial progressRelevant RRP measures being implemented as of 2021 and 2022SDG 1, 2, 8, 10 including by promoting skills Substantial progressRelevant RRP measures being implemented as of 2021 and 2022SDG 4and active support for all jobseekers.Some progressRelevant RRP measures being implemented as of 2022SDG 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 and 2022SDG 8, 16andpromoteprivateinvestmenttofostertheeconomicrecovery.Substantial ProgressRelevant RRP measures being implemented as of 2021, 2022 and 2023SDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticular on sustainable transport,Substantial ProgressRelevant RRP measures being implemented as of 2021 and 2022SDG 11clean and efficient production and use of energy,Some ProgressRelevant RRP measures being implemented as of 2021, 2022 and 2023 and planned as of  2025SDG 7, 9, 13energy (infrastructures)Some ProgressRelevant RRP measures being implemented as of 2021 and planned as of 2023SDG 7, 9, 13and digital infrastructuresSubstantial ProgressRelevant RRP measures being planned as of 2022SDG 9as well as research and innovation.Substantial ProgressRelevant RRP measures being implemented as of 2021 and 2022SDG 9 
 
 
 
  
 
Table (continued) 

(Continued on the next page) 

25 

2020 CSR 4Some ProgressContinue to improve the regulatory environment,Limited ProgressRelevant RRP measures being implemented as of 2022SDG 8, 9reduce administrative burdens for firmsSome ProgressRelevant RRP measures being implemented as of 2022SDG 8, 9and simplify the tax system.Substantial ProgressSDG 8, 9, 10, 122021 CSR 1Not relevant anymoreIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudentfiscalpolicy.Preservenationally financed investment.Not relevant anymoreNot applicableSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsand ensuring fiscal sustainability in the medium term. Not relevant anymoreNot applicableSDG 8, 16Atthesametime,enhanceinvestmenttoboostgrowthpotential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigitaltransition.Not relevant anymoreNot applicableSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthandsocial protection systems for all.Not relevant anymoreNot applicableSDG 8, 162022 CSR 1Some ProgressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspendingtotheevolvingsituation.Full ImplementationNot applicableSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecovery and Resilience Facility and other Union funds.Substantial ProgressNot applicableSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringcredibleandgradualdebtreductionandfiscalsustainabilityinthemediumtermthroughgradualconsolidation, investment and reforms.Limited ProgressNot applicableSDG 8, 16Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimestoenhanceitsfairness while underpinning its sustainability.Substantial ProgressSDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementingDecisionof13July2021.SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesionpolicyprogrammingdocumentswith a view to starting their implementation.2022 CSR 3Some ProgressAddresstheshortageofskillsbyraisingtheshareofpeoplewithbasicskills,providingadditionalwork-basedlearning options andSome ProgressRelevant RRP measures being implemented as of 2021 and 2023SDG 4improvingthelearningoutcomesofallstudents,inparticularbyadaptingresourcesandmethodstotheneeds of disadvantaged students and schoolsLimited ProgressRelevant RRP measures being implemented as of 2022 and 2023SDG 4, 8, 10andbyimprovingtheworkingconditionsandcontinuoustraining of teachers.Some ProgressRelevant RRP measures being implemented as of 2022SDG 42022 CSR 4Limited ProgressReduce overall reliance on fossil fuels.Limited ProgressRelevant RRP measures being implemented as of 2021, 2022 and 2023 and planned as of  2025SDG 7, 9, 13Acceleratethedeploymentofutility-scaleanddecentralisedrenewableenergiesthroughincreasedpublicinvestmentandbyfacilitatingprivateinvestment,includingbyfurtherstreamliningpermittingproceduresandensuringadequatestaffingofauthorisingadministrations.Limited ProgressRelevant RRP measures being implemented as of 2022 and 2023SDG 7, 8, 9, 13Improvethepolicyframeworktoincentivisethedeeprenovation of buildings.Limited ProgressRelevant RRP measures being implemented as of 2022SDG 7, 8, 9Expand energy interconnection capacity.Some ProgressSDG 7, 9, 13RRP 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 (30).  
** 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 

26 

2023 CSR 1Substantial ProgressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable,andpreserveincentives for energy savings.Full ImplementationNot applicableSDG 8, 16Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimaryexpenditure in 2024 to not more than 2.3%.Full ImplementationNot applicableSDG 8, 16PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticulartofosterthegreenanddigitaltransitions.Full ImplementationNot applicableSDG 8, 16Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth,toachieveaprudent medium-term fiscal position.Limited ProgressRelevant RRP measures being implemented as of 2021SDG 8, 16Furtherimproveframeworkconditionstofacilitateinvestment and innovation.Some ProgressRelevant RRP measures being implemented as of 2022SDG 8, 162023 CSR 2Proceedwiththesteadyimplementationofitsrecoveryandresilienceplanand,followingtherecentsubmissionoftheaddendum,includingtheREPowerEUchapter,rapidlystarttheimplementationoftherelatedmeasures.Proceedwiththeswiftimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththe recovery and resilience plan.2023 CSR 3Some ProgressAddresstheshortageofskills,inparticularbyprovidingadditionalwork-basedlearningoptionsandraisingtheshare of people with basic skills.Some ProgressRelevant RRP measures being implemented as of 2021, 2022 and 2023SDG 4Adaptresourcesandmethodstotheneedsofdisadvantagedstudentsandschoolsinordertomaketheeducationandtrainingsystemmoreequitableandinclusive.Some ProgressRelevant RRP measures being implemented as of 2022 and 2023SDG 4, 8, 10Improvetheworkingconditionsandinitialandcontinuous training for teachers.Limited ProgressRelevant RRP measures being implemented as of 2022SDG 4, 8, 102023 CSR 4Some ProgressReduce overall reliance on fossil fuels.Some ProgressRelevant RRP measures being implemented as of 2021, 2022 and 2023 and planned as of  2025SDG 7, 9, 13Acceleratethedeploymentofrenewableenergies,focusinginparticularonwind,solarandgeothermalsourcesandbiogas,includingthroughsmall-scalerenewableenergyproductionandthepromotionofcollectiveself-consumption,andpromoterelatedstoragetechnologies,throughincreasedpublicinvestment,byfacilitatingprivateinvestment,andaddressingpermittingbottlenecks.Limited ProgressRelevant RRP measures being implemented as of 2022 and 2023 and planned as of 2025SDG 7, 9, 13Furtherupgradeelectricitytransmissionanddistributiongrids.Some ProgressRelevant RRP measures being implemented as of 2023SGD 7,9, 13Increase cross-border electricity interconnections.Some ProgressSGD 7,9, 13Furtherimprovethepolicyframeworktoincentivisethedeeprenovationofbuildingsandthedecarbonisationofheatingsystems,withaparticularfocusonlow-incomehouseholdsandonbuildingstockwiththelowestenergyperformance.Some ProgressRelevant RRP measures being implemented as of 2021 and 2022SGD 7,9, 13Buildasupportingregulatoryenvironmenttoincreaseinvestmentinclean-techmanufacturing,includingbysimplifying and speeding up permitting.Substantial ProgressRelevant RRP measures being implemented as of 2022SGD 7,9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionofskillsandcompetencesneededforthegreen transition.Some ProgressSGD 7,9, 13RRP 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. 
 
 
 
  
 
ANNEX 3: RECOVERY AND RESILIENCE PLAN – IMPLEMENTATION 

Table A3.1:  Key facts of the French RRP 

This  Annex  provides  a  snapshot  of  France’s 
implementation of its recovery and resilience 
plan  (RRP),  past  the  mid-way  point  of  the 
Recovery  and  Resilience  Facility’s 
(RRF) 
lifetime.  The  RRF  has  proven  central  to  the  EU’s 
recovery  from  the  COVID-19  pandemic,  helping 
speed  up  the  twin  green  and  digital  transition, 
while  adapting  to  geopolitical  and  economic 
resilience 
developments, 
against  future  shocks.  The  RRF  is  also  helping 
implement the UN Sustainable Development Goals 
and 
country-specific 
recommendations (see Annex 2).   

strengthening 

address 

and 

the 

The  RRP  paves  the  way  for  disbursing  up  to 
EUR 40.3 billion in grants under the RRF over 
the  2021-2026  period, representing  1.4% of 
France’s GDP (33). As of mid-May 2024, EUR 23.4 
billion  have  been  disbursed  to  France  under  the 
RRF. 

France  still  has  EUR  16.9  billion available in 
grants from the RRF. This will be disbursed after 
the  assessment  of  the  future  fulfilment  of  the 
remaining  93  milestones  and  targets (34)  included 
in  the  Council  Implementing  Decision (35)  (CID), 
ahead  of  the  2026  deadline  established  for  the 
RRF.  

France’s progress in implementing its plan is 
recorded  in  the  Recovery  and  Resilience 
Scoreboard (36).  The 
scoreboard  gives  an 
overview  of  the  progress  made  in  implementing 
the RRF as a whole. Graph A3.1 shows the current 
state of play as reflected on the Scoreboard. 

Source: RRF Scoreboard 

France’s  RRP  includes  a  REPowerEU  chapter 
to phase out its dependency on Russian fossil 
its  energy  supplies  and 
fuels,  diversify 
produce  more  clean  energy  in  the  coming 
years.  To  kick-start  the  REPowerEU  chapter’s 
implementation,  EUR  564.3  million  was  disbursed 
as  pre-financing  on  13  December  2023.  This 
helped  launch  relevant  reforms  like  accelerating 
the  deployment  of  renewable  energy  projects 
through streamlined permitting procedures.  

The  plan  has  a  strong  focus  on  the  green 
transition, dedicating 49.5% of the available 
funds  to  measures  that  support  climate 
objectives  and  21.6%  of  its  total  allocation 
to support the digital transition. It also retains 
a  strong  social  dimension  with  social  protection 
to  education, 
measures,  especially 
unemployment,  or  skills  mismatches.  Table  A3.2 
highlights  some  relevant  measures  achieved  so 
far,  and  some  that  will  be  implemented  before 
2026  to  keep  making  France’s  economy  greener, 
more digital, inclusive, and resilient. 

related 

(33)  GDP information is based on 2023 data. Source: 

https://ec.europa.eu/economy_finance/recovery-and-
resilience-scoreboard/index.html?lang=en   

(34)  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. 

(35)  https://data.consilium.europa.eu/doc/document/ST-10162-

2021-ADD-1/en/pdf  

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

resilience-scoreboard/country_overview.html 

27 

Initial plan CID adoption date13 July 2021Scope Revised plan with REPowerEU chapterLast major revision17 October 2023Total allocation EUR 40.3 billion in grants (1.4% of 2023 GDP)Investments and reforms 73 investments and 24 reforms Total number of milestones and targets181Fulfilled milestones and targets93 (51.4% of total) 
 
 
 
   
 
 
Table A3.2:  Measures in France's RRP 

Graph A3.1: Total grants disbursed under the RRF 

Note: This graph displays the amount of grants, including pre-
financing, 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 

including 

As  of  15  May  2024,  the  Commission  has 
adopted  a  preliminary  assessment  of 
France’s  third  payment  request,  with  a 
disbursement  of  EUR  7.5  billion  expected  in 
June.  The  third  payment  request  concerns  39 
milestones  and  targets,  among  which  REPowerEU 
the 
measures, 
acceleration  of  renewable  energy  production,  the 
implementation of the Research Programming Law 
and  the  setting  up  of  the  Secretariat  General  for 
Ecological  Planning.  The  payment  request  also 
covers  investments  in  the  energy  renovation  of 
public and private buildings, the decarbonisation of 
industry, 
supporting 
railways and the electrification of harbour docks. 

connectivity, 

improving 

reforms 

related 

to 

Source: FENIX 

With  two  payment  requests  completed, 
France’s  implementation  of  its  RRP  is  well 
underway.  The  Commission  gave  a  positive 
assessment  of  France’s  first  payment  request, 
taking  into  account  the  opinion  of  the  Economic 
and  Financial  Committee.  This  led  to  EUR  7.4 
billion  being  disbursed  in  financial  support  on  4 
March  2022 (37).  The 
related  38  milestones 
covered  reforms  and  investments  in  the  areas  of 
public  finance,  housing,  mobility,  unemployment 
insurance,  skills,  and  health,  as  well  as  France’s 
audit  and  control  system  for  the  implementation 
of the RRF. 

The most recent payment request, which the 
Commission  assessed  positively  on  17 
November  2023,  led  to  the  disbursement  of 
EUR  10.3  billion  on  22  December  2023.  The 
disbursement reflected the positive assessment of 
55  milestones  and 
the 
promulgation of the Law on climate and resilience 
and 
the  Decree 
implementing the anti-waste and circular economy 
Law, 
the  Research 
Programming  Law  as  well  as  the  adoption  of 
several legal measures aimed at strengthening the 
efficiency  of  public  services  and  ensuring  the 
quality and sustainability of public spending. 

implementation  of 

the  entry 

force  of 

covering 

targets 

into 

the 

(37)  When requested payments are disbursed, the pre-financing 
is cleared proportionally. The net amounts are quoted here.  

28 

Reforms and investments implemented• Reform of the unemployment insurance• Renovation of 800 healthcare institutions• Law on the acceleration of renewable energy productionUpcoming reforms and investments• Investment to increase governmental cybersecurity• Improving standards for digital health• Implementation of an Important Project of Common European Interest (IPCEI) on hydrogenEUR 23.39billion (58%)Total allocation: EUR 40.27billion 
 
   
 
 
   
ANNEX 4: OTHER EU INSTRUMENTS FOR RECOVERY AND GROWTH 

EU funding instruments provide considerable 
resources for recovery and growth to the EU 
Member  States.  In  addition  to  the  EUR 40.3 
billion  of  Recovery  and  Resilience  Facility  (RRF) 
funding  described  in  Annex  3,  EU  cohesion  policy 
funds (38) provide EUR 16.8 billion to France for the 
2021-2027 period (39).  Support  from  these  two 
instruments combined represents around 2.04% of 
the country’s 2023 GDP, less than the EU average 
of  5.38%  of  GDP (40).  Cohesion  policy  supports 
regional  development,  economic,  social  and 
territorial 
competitiveness 
through  long-term  investment  in  line  with  EU 
priorities and with national and regional strategies. 

convergence  and 

During  the  2014-2020  programming  period, 
cohesion  policy  funds  boosted  France’s 
competitiveness, with  tangible achievements 
notably  in  research  and  innovation,  energy 
efficiency and social inclusion. Over the whole 
period, which financed investments until December 
2023,  cohesion  policy  funds (41)  made  EUR 18.7 
billion  available  to  France (42),  of  which  EUR 10.6 
billion has been disbursed since March 2020, when 
the 
The 
achievements  of  cohesion  policy  funds  over  the 
programming  period  include  support  for  research 
and  innovation  infrastructure  and  projects,  with 
23 000  researchers  working  in  improved  research 
infrastructure  facilities  and  support  to  almost 
163 000  SMEs,  mainly  to  foster 
innovation, 
digitalisation  and  competitiveness.  The  European 
Regional Development Fund (ERDF) also supported 
a decrease of 58 899 169 kWh/year in the annual 
primary energy consumption of public buildings. By 

pandemic began (43). 

COVID-19 

(38)  In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. 

(39)  European territorial cooperation (ETC) programmes are 
excluded from the figure. In 2021-2027, the total 
investment, including national financing, amounts to 
EUR 29.0 billion. 

(40)  RRF funding includes both grants and loans, where 

applicable. The EU average is calculated for cohesion policy 
funds excluding ETC programmes. GDP figures are based on 
Eurostat data for 2022. 

(41)  In 2014-2020, cohesion policy funds included the European 
Regional Development Fund, the European Social Fund and 
the Youth Employment Initiative. REACT-EU allocations are 
included but ETC programmes are excluded. 

(42)  In 2014-2020, the total investment, including national 

financing, amounted to EUR  32.3 billion. 

(43) Cut-off date: 14 May 2024. 

29 

the  end  of  2022,  over  6.4  million  people  had 
received  support  under  the  European  Social  Fund 
(ESF)  and  the  Youth  Employment  Initiative  in 
metropolitan  France.  These  measures  provided 
support  for  the  most  vulnerable,  with  almost  one 
in  two  recipients  being  low-qualified  and  some 
30% having a migrant background.  

In  the  current  programming  period,  cohesion 
policy  will  provide  a  further  boost  to 
France’s  competitiveness,  to  the  green 
transition  and  to  social  cohesion,  improving 
the living and working conditions of France’s 
people.  In  2021-2027,  the  European  Regional 
Development  Fund  (ERDF)  will  boost  innovation 
and  digitalisation  by  supporting  over  11 700 
businesses.  Significant  investments  in  the  green 
transition will enable a 20% decrease in the final 
energy  consumption  of  public  buildings  by  2030 
compared to the 2012 benchmark. France will also 
reduce  greenhouse  emissions  by  263 314  tonnes 
CO2  eq.  a  year  thanks  to  support  from  the  Just 
Transition  Fund  (JTF).  The  JTF  will  also  fund 
human  capital  investments,  notably  by  upskilling 
and  reskilling  workers  and  jobseekers  for  work  in 
green  sectors.  The  European  Social  Fund  Plus 
(ESF+)  will  help  boost  skills  development  with  a 
budget  of  around  EUR 1.6  billion  in  France.  The 
main  areas  of  ESF+  support  in  this  field  will 
include  supporting  access  to  training  for  the 
unemployed,  supporting  career  transitions,  and 
promoting  life-long  learning  for  some  600 000 
recipients.  With 
this  work,  cohesion  policy 
substantially  contributes  to  achieving  the  UN 
Sustainable  Development  Goals  (SDGs)  in  France, 
in  particular  SDG  8  (Decent  work  and  economic 
growth),  SDG 1 (No poverty) and SDG 9 (Industry, 
innovation, infrastructure). 

Through combined action, cohesion policy and 
the recovery and resilience plan (RRP) have a 
mutually  reinforcing  impact  in  France.  For 
instance, the ERDF  allocates over EUR 830 million 
to support  the extensive nationwide plan to make 
energy  efficiency  renovations,  expected  to  fund 
energy  performance 
improvements  for  about 
social  housing  units.  The  ERDF 
100 000 
on 
interventions 
high 
environmental 
renovations, 
performance 
complementing  the  RRF  which  focuses  on  heavy 
renovation 
an 
restructuring  with 
component. Together, cohesion policy and the RRP 
also  support  the  development  of  sustainable 
mobility.  The  ERDF  co-finances  cycling  and 
pedestrian infrastructure, secure bike parking, bike 

primarily 

energy 

focus 

 
 
 
 
 
Graph A4.2: Distribution of RRF funding by pillar in 
France 

the 

self-service  stations,  as  well  as  actions  to  raise 
awareness  and  promote  soft  modes  of  transport, 
encourage  car  limitation  and  pooling.  The  RRP 
focuses  on  sustainable  transport  through  a  range 
of  investments,  including  major  investments  to 
infrastructure.  Regarding 
modernise 
investments in skills, the RRP supports projects to 
grant  subsidies  for  business  to  hire  apprentice 
workers  and  work-study  contracts  while  the  ESF+ 
supports  academic  and  career  guidance.  The 
contribution of cohesion policy and RRP funding by 
policy  objective  is  illustrated  by  Graphs  A4.1  and 
A4.2. 

rail 

Graph A4.1: Distribution of cohesion policy funding 
across policy objectives in France 

(1) Each RRP measure helps achieve the aims of two of the 
six policy pillars of the RRF. The primary contribution is shown 
in the outer circle while the secondary contribution is shown in 
the inner circle. Each contribution represents 100% of the RRF 
funds. Therefore, the total contribution to all pillars displayed 
on this chart amounts to 200% of the RRF funds allocated to 
France. 
Source: European Commission 

France  also  receives  funding  from  several  other 
EU  instruments,  including  those  listed  in  Table 
A4.1. 

Source: European Commission 

The Technical Support Instrument (TSI) helps 
France invest in its public administration and 
create a better enabling environment for EU 
and  national  investment.  The  TSI  has  funded 
projects  in  France  to  design  and 
implement 
growth-enhancing 
reforms  since  2017.  The 
support  provided  in  2023  included  action  to  roll 
out  programmes  under  direct  and 
indirect 
management in France's outermost regions, and to 
improve 
the  energy  performance  of  public 
buildings.  In  addition,  the  TSI  contributed  to 
reforms and investments planned in France's RRP, 
such  as  public  service  reforms.  It  also  supported 
general  implementation  of  the  plan  by  assisting 
with risk mapping and the design of tools to detect 
and prevent double-funding. 

30 

PO1 Smarter EuropePO2 Greener EuropePO3 Connected EuropePO4 Social EuropePO5 Europe closer to citizensPO8 JTF specific objectiveGreen transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generation 
   
   
Table A4.1:  Support from EU instruments in France 

(1) RRF implementation period is 2021-2026. 
(2) The public sector loan facility’s programming period is 2021-2025 and the amount reflects the national share in its grant 
component reserved until the end of the period.   
(3) Common agricultural policy programming periods are 2014-2022 and 2023-2027.  
(4) EMFF – European Maritime and Fisheries Fund, EMFAF – European Maritime, Fisheries and Aquaculture Fund. 
(5) Data on the Connecting Europe Facility covers transport and energy and has a cut-off date of 15 May 2024. 
(6) Data on Horizon Europe (2021-2027) has a cut-off date of 13 May 2024. 
(7) 2021-2027 data on the LIFE programme has a cut-off date of 15 May 2024. 
(8) The amount of the EU guarantee signed under the EFSI Infrastructure and Innovation Window was derived based on the 
signed amount of the operations and the average internal multiplier, as reported by the EIB (cut-off date is 31 December 2023). 
(9) The amount of the EU guarantee and of the volume of operations signed under InvestEU includes the EU compartment as well 
as the Member State compartments (cut-off date is 31 December 2023).   
Source: European Commission 

31 

Amount 2021-2027 (EUR million)Cohesion policy16 775.0RRF grants (1)40 269.9Public sector loan facility (grant component) (2)78.1Common agricultural policy (3)45 629.0EMFF/EMFAF (4)567.1Connecting Europe Facility (5)1 076.0Horizon 2020 / Horizon Europe (6)3 620.1LIFE programme (7) 204.6Volume of operations (EUR million)European Fund for Strategic Investment 2015-2020 (8)13 878.3InvestEU 2021-2027 (9)1 950.981 400.0EU grantsAmount 2014-2020 (EUR million)18 746.8--4 882.0 496.8588.02 492.17 443.1 223.8EU guaranteesEU Guarantee (EUR million) 
 
   
 
ANNEX 5: RESILIENCE 

Table A5.1:  Resilience indices across dimensions for France and the EU-27 

(1)  The synthetic indices aggregate the relative resilience situation of countries across all considered indicators. For an indicator, 
each country’s relative situation in the latest available year is compared with the collection of values of that indicator for all 
Member States and all years in the reference period. 
Source: Resilience Dashboards - version spring 2024, data up to 2022 

In the social and economic dimension, France 
has medium vulnerabilities and medium-high 
capacities.  Its  relatively  high  vulnerabilities  are 
its  relatively  high  government  debt, 
due  to 
resistance  and  more 
increased  antimicrobial 
people’s reporting unmet needs for medical care. It 
has 
relatively  strong  capacities,  with  well-
developed  early  childhood  care  for  children  under 
3,  and  relatively  high  government  expenditure  on 
education, health and social protection. 

In  the  green  dimension,  France  increased  its 
vulnerabilities  but  its  capacities  remained 
medium-high.  Fatalities  from  extreme  climate 
events  and  energy  use 
information  and 
communication  technology  (ICT)  remain  high.  On 
capacities, France performs particularly well on the 
use of circular materials and resource productivity, 
but CO2 absorption by forests remains low.  

in 

in 

the  digital 
France’s  vulnerabilities 
dimension  have  increased  to  medium-high, 
but  its  capacities  have  remained  medium-
high.  Vulnerabilities  of  particular  concern  are 
related to cybersecurity and the inadequacy of ICT 
training  for  teachers.  On  capacities,  the  use  of 
social networks remains the lowest in the EU.    

In  the  geopolitical  dimension,  France  has 
and  medium-low 
medium 
vulnerabilities. 
medium-high 
has 
vulnerabilities,  with  the  economy’s  borrowing 

capacities 
It 

resilience 

This  Annex  uses  the  Commission’s  resilience 
(RDB) (44)  to  show  France’s 
dashboards 
relative 
and 
vulnerabilities (45)  that  may  be  of  relevance 
for  societal,  economic,  digital,  and  green 
transformations, and for dealing with future 
shocks and geopolitical challenges (46). 

capacities 

According  to  the  RDB’s  set  of  resilience 
indicators,  France  has,  generally  speaking, 
medium vulnerabilities, similar to the rest of 
the  EU,  and  similar  –  medium-high  – 
capacities  overall.  This 
in  the 
distribution  of  indicators,  with  around  40%  of 
vulnerability  indicators  medium-low  and  low,  and 
over 50% of capacity indicators medium-high and 
high.  

is  reflected 

(44)  Https://ec.europa.eu/info/strategy/strategic-

planning/strategic-foresight/2020-strategic-foresight-
report/resilience-dashboards_en. Resilience is defined as the 
ability not only to withstand and cope with challenges but 
also to undergo transitions, in a sustainable, fair, and 
democratic manner. 2020 Strategic Foresight Report: 
Charting the course towards a more resilient Europe 
(COM(2020) 493). 

(45)  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, 
while capacities refer to enablers or abilities to cope with 
crises and structural changes and to manage transitions. 

(46)  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. 

32 

FRFREU-272023 RDB2024 RDB2024 RDBHighMedium-highMediumMedium-lowLowHighMedium-highMediumMedium-lowLowCapacitiesGeopoliticalVulnerabilities0.740.770.41Capacities0.600.580.65DigitalVulnerabilities0.410.290.52Capacities0.780.690.65GreenVulnerabilities0.490.340.44Capacities0.650.690.70Social and economicVulnerabilities0.530.480.47Capacities0.790.790.67DimensionDistribution of indicators by vulnerabilities and capacitiesOverall resilienceVulnerabilities0.560.480.50Capacities0.690.690.67Vulnerabilities0%20%40%60%80%100%Vulnerabilities(60 indicators)Capacities(64 indicators) 
 
 
 
   
 
 
needs  now  surpassing  its  lending (47)  and  the 
(EU  vs  non-EU  nationals) 
employment  gap 
widening.  It  has  lower  vulnerabilities  than  the  EU, 
in  fertility  rates  for  example.  It  would  do  well  to 
improve  its  trade  openness  (intra  and  extra  EU) 
capacities,  as  well  as  its  trade  in  energy  and 
recyclable raw materials. 

(47)  Net lending (lending-borrowing) over GDP decreased. 

33 

 
 
ENVIRONMENTAL SUSTAINABILITY 
ANNEX 6: EUROPEAN GREEN DEAL 

France  has  made  progress  in  the  green 
transition,  with  more  action  needed 
in 
several  areas,  such  as  on  sustainable  water 
management and increasing  its carbon  sinks 
in  the  land-use  sector.  This  Annex  provides  a 
snapshot  of  climate,  energy,  and  environmental 
aspects of the transition in France (48). 

plan 

lacks 

(NECP) 

France’s  draft  updated  national  energy  and 
climate 
sufficient 
information  on  the  investment  needs  to 
achieve its 2030 climate and energy targets. 
The  plan  estimates 
the  difference  between 
additional  green  investments  and  the  avoided 
investments in fossil fuel energy systems, but the 
information provided is insufficient. It also lacks a 
breakdown  by  Energy  Union  dimension  and  by 
sector.  The  draft  plan  provides  some  information 
on the sources of funding for some measures, but 
not  consistently  for  all  measures.  It  does  not 
distinguish  between  public  and  private-sector 
sources, nor specify the timespan of the measures 
or funding shares from the EU budget, in particular 
the  Recovery  and  Resilience  Facility  and Cohesion 
Fund contributions. The information provided does 
not  make  it  possible  to  identify  potential  funding 
gaps (49).  Additionally,  the  draft  updated  NECP  is 
not fully aligned with the coal power plants phase-
out  timeline  outlined 
in  the  Territorial  Just 
Transition  Plans  (TJTP).  The  final  updated  NECP 
should ensure such alignment. 

Even  including  the  planned  measures  that 
are  yet  to  be  adopted,  France  still  has  a 
small  gap  to  close  to  reach  its  2030  effort 
sharing  target (50).  France’s  2022  greenhouse 

(48)  This Annex is complemented by Annex 7 on energy transition 

and competitiveness, Annex 8 on the fair transition to 
climate neutrality, Annex 9 on resource efficiency, circularity, 
and productivity, and relevant topics in other annexes to this 
country report. 

(49)  See the Commission’s (2023) assessment of the draft 

national energy and climate plan of France. 

(50)  The national greenhouse gas emission reduction target is 
laid down in Regulation (EU) 2023/857 (the Effort Sharing 
Regulation). The aim is to align action in the sectors 
concerned with the objective to reach the EU-level economy- 
wide target of greenhouse gas reductions of at least 55% 
compared to 1990 levels. The target also applies to the 
sectors outside the current EU Emissions Trading System, 
notably buildings (heating and cooling), road transport, 
agriculture, waste, and small industry (known as the effort 
sharing sectors). 

34 

gas  emissions  from  its  effort  sharing  sectors  are 
expected to come in at 21.6% below 2005 levels. 
Current  policies  are  projected  to  reduce  France’s 
effort  sharing  emissions  by  24.4%  from  2005 
levels  by  2030.  The  additional  policies  planned  in 
France’s  draft  updated  NECP  are  projected  to 
reduce  these  emissions  by  46.4%  from  2005 
levels,  falling  1.1  percentage  points  short  of 
France’s  effort  sharing 
to  make  a 
47.5% reduction (51).  The  draft  updated  plan 
reiterates France’s commitment to achieve climate 
neutrality by 2050 and sets out specific pathways 
in line with its long-term strategies. 

target 

Graph A6.1: Greenhouse gas emissions from the 
effort sharing sectors in Mt CO2eq, 2005-2022 

Source: European Environment Agency. 

France’s  draft  updated  NECP  lacks  setting  a  
target for renewable energy, which will have 
to be reflected in its final updated NECP (52). 
France did not set a target for renewable sources 
in  gross  final  energy  consumption  by  2030  in  its 
draft  updated  NECP. 
Its  energy  efficiency 
contribution  of  158.56  Mtoe  in  primary  energy 
consumption  and  106.93  Mtoe  in  final  energy 
consumption  for  2030  set  in  the  draft  updated 

(51)  The effort sharing emissions for 2022 are based on 
approximated inventory data. The final data will be 
established in 2027 after a comprehensive review. 
Projections on the impact of current policies (‘with existing 
measures’, WEM) and additional policies (‘with additional 
measures’, WAM) as per France’s draft updated NECP. 

(52)  The EU target set out in the revised Renewable Energy 

Directive is to have 42.5% of gross final energy consumption 
coming from renewable energy sources by 2030, with the 
aspiration to reach 45%. The formula in Annex I to Directive 
(EU) 2023/1791 sets the indicative national contribution for 
France at 157.3-158.7 Mtoe for primary energy consumption 
and 106.93 Mtoe for final energy consumption. See the 
Commission Recommendation of 18.12.2023 to France 

05010015020025030035040045020052022MtCO2eWasteSmall industryAgricultureBuildings (under ESR)Domestic transport (excl. aviation) 
 
 
 
     
 
 
 
NECP  match  the  contribution  required  under  the 
Energy Efficiency Directive. 

The shift to sustainable transport is starting 
to gain ground in France (53). Cars are used for 
85%  of  distances  travelled,  close  to  the  EU 
average  of  87.5%.  At  9%,  the  share  of  rail 
passenger  transport  is  the  highest  in  the  EU.  For 
freight,  however,  road  is  the  dominant  form  of 
transport  at  85%,  with  only  10%  of  freight 
transported by  rail  (against  the  EU  average  share 
of 75% to 16%). The share of battery electric cars 
in  the  passenger  car  fleet  has  been  increasing 
rapidly, reaching 1.7% in 2022 (EU average: 1.2%). 
In  2023,  France  had  118 000  publicly  accessible 
charging  points,  or  one  for  every  10  electric 
vehicles, in line with the EU average. Besides, 59% 
of the rail network is electrified. 

France  is  projected  to  miss  its  2030  target 
for net carbon removals through land use, land-
use change and forestry (LULUCF) (54). In the land-
use  sector,  France's  forests  and  grasslands 
achieve a major share of net carbon removals; by 
contrast its croplands and settlements are sources 
of net greenhouse gas emissions. France increased 
its net carbon sink through land use between 1990 
and  2008,  after  which  it  plateaued  and  then  in 
2013  it  went  into  sharp  decline.  This  is  due  to 
higher tree mortality rates caused by droughts and 
pests,  and 
to  higher  projected  volumes  of 
harvested wood. To reach its 2030 LULUCF target, 
additional  carbon  removals  of  6 693 kt CO2eq are 
needed (55). To get back on track to meet the 2030 
target,  charting  a  clear  path  to  the  target  that 
specifies  additional  measures  with  timeframes, 
scopes  and  quantified  expected  impacts  would 
help. 

is  a  key  challenge 
Water  management 
regarding  adaptation  to  climate  change  in 
France,  also  given  the  risk  of  electricity 
disruption to hydro- and nuclear energy provision 
as  floods,  heat  and  drought  have  an  impact  on 
energy  production.  France’s  climate  protection 

(53)  Unless otherwise indicated, data in this section refer to 
2021. See European Commission, 2023, EU transport in 
figures, transport.ec.europa.eu. 

(54)  Projections submitted in France’s draft updated national 

energy and climate plan for 2023. 

gap (56)  remains  low  thanks  to  a  high  share  of 
insurance  coverage  across  risk  categories (57), 
though  half  of  France’s  forests  are  estimated  to 
be  at  risk  of  wildfires (58).  The  water  exploitation 
index  plus  (WEI+) measured  2.8%  in  2019,  below 
the EU average of 3.6% (59). On average, 3.5% of 
France’s  area  was  affected  by  droughts  between 
2000 and 2020. The 2022 severe drought caused 
water  supply  restrictions  in  93  departments.  By 
2050,  France  is  estimated  to  face  a  water 
shortage  of  two  billion  m3.  Water  supply  and 
sanitation  are  also particular  concerns  in  France's 
outermost  regions,  due  to  the  effects  of  climate 
change on rainfall.  

strong 

suitable 

in  place 

the  work  on 
responsibilities  across 

Putting 
institutional 
settings  is  crucial  for  climate  adaptation.  In 
legislation  and  governance 
France, 
climate 
structures  underpin 
adaptation,  but 
the 
respective institutions  must be  further clarified to 
integration (60). 
strengthen 
France’s  3rd  national  adaptation  plan  for  climate 
change  (PNACC-3)  is  scheduled  for  publication  in 
2024. The aim is to prepare France to cope with a 
temperature increase of 4°C by 2100. 

horizontal 

policy 

Pollution is driven by pressure on water and 
nature  from  intensive  agriculture,  including 
the use of pesticides and nutrients. The latest 
figures  for 
the  gross  nitrogen  balance  on 
agricultural  land  in  France  indicate  an  average 
surplus of 38 kg of nitrogen per hectare per year 
in 2019, lower than the previous year. The content 
of nitrates in groundwater is below the EU average 
at 19.3 versus 20.5 mg nitrates/l. In 2019, 13% of 
groundwater  monitoring  stations  recorded  levels 
above  the  maximum  50  mg  nitrates/l,  against  an 
EU average in 2020 of 5.8%. The chemical status 
levels  of 
of  waterbodies  is  subject  to  high 
In  2021,  18.6%  of 
pesticide  contamination. 

(56)  On the climate protection gap, see the annotations to Table 

A6.1. 

(57)  About 41% of economic losses caused by climate change 

were insured between 1980-2020. 

(58)  2 ème Plan National d’Adaptation au Changement 

Climatique, Ministère de la Transition Écologique et Solidaire, 
2018. 

(59)  WEI+ values above 20% are generally an index of water 

scarcity; values above 40% indicate that stress is severe and 
freshwater use unsuitable. 

(55)  National LULUCF targets of the Member States in line with 

(60)  See the Commission’s 2023 assessment and 

Regulation (EU) 2023/839. 

recommendation on France’s progress on climate adaptation. 

35 

 
 
 
monitoring  sites  were  reported  to  have  pesticide 
levels  exceeding  the  thresholds  set  by  the  Water 
Framework  Directive.  According 
to  national 
statistics, ‘Among the extraction points closed due 
to  water  quality  issues,  40.7%  were  due  to 
excessive  amounts  of  nitrates  and  pesticides’ (61). 
According to the 2nd river basin management plan 
data (62), 44% of all surface water bodies were in 
at least a good ecological status and 63% were in 
a  good  chemical  status.  France's  marine  waters 
are  not  yet  in  a  good  environmental  status  as 
tracked  by  the  descriptors  used  in  the  Marine 
Strategy Framework Directive (63). 

France  has  proposed  strategic  measures  to 
resolve  these  issues  but  faces  challenges  in 
implementing  them.  On  30 March  2023,  France 
adopted 53 measures under the ‘Plan Eau’ (17) to 
increase  water  efficiency,  reuse  treated  waters, 
increase  storage  through  nature-based  solutions 
and grey infrastructure, protect  and restore water 
ecosystems  and improve  governance.  But in  early 
December  2023,  the  authorities  decided  not  to 
bring  in  price-related  disincentives  for  irrigation 
and diffuse pollution (18), which signals a reduced 
ambition 
level.  France's  water  management 
measures  are  central  to  its  green  transition  and 
remain  to  be  assessed  in  light  of  the  April  2024 
stocktaking  of  the  Plan  Eau  and  proposed  law  on 
agriculture." 

France  has  scope  to  improve  biodiversity, 
nature protection and restoration.  By the end 
of  2021,  France  had  protected  27.6%  of  its  land 
and 37.6% of marine areas. 20% of habitats and 
28% of species reached good conservation status. 
exemptions  and 
The  widespread  use  of 
compensation 
authorise 
measures 
infrastructure projects at the expense of nature is 
a concern. On 27 November 2023, France adopted 
a  new  2030  biodiversity  strategy,  updating  the 
2020  strategy.  The  new  strategy  focuses  on 
climate change adaptation measures, on restoring 
degraded  and  artificial  ecosystems,  reducing  the 
pollution  of  air,  soil  and  oceans  and  reducing  the 

to 

(61)  La pollution des eaux superficielles et souterraines en France 
- Synthèse des connaissances en 2022 | Données et études 
statistiques (developpement-durable.gouv.fr) 

overexploitation  of  natural  resources.  It  does  not 
anticipate bringing in new and binding rules. 

Graph A6.2: Changes in livestock density and 
organic farming 

Livestock unit (LSU)/ha of UAA: it measures the stock of 
animals (cattle, sheep, goats, equidae, pigs, poultry and 
rabbits) converted in LSUs per hectare of UAA. 
Source: Eurostat 

and 

reducing 

France would benefit from investing more in 
in 
sustainable  water  management  and 
measures  protecting  biodiversity,  combating 
desertification 
pollution. 
According  to  the  latest  estimates,  the  overall 
environmental  investment  needs  for  2021-2027 
are  at  least  EUR 59.9  billion  a  year,  against  the 
financing baseline of EUR 40 billion. This leaves a 
total  financing  gap  equivalent  to  EUR 19.9  billion. 
The  annual  investment  gap  for  sustainable  water 
management  widened  to  EUR 4.3  billion,  and  the 
gap  for  pollution  prevention  and  control  widened 
to EUR 8.4 billion. However, the annual investment 
gaps for biodiversity and ecosystems, and circular 
economy  and  waste  narrowed  to  EUR 2.6  billion 
and EUR 4.6 billion respectively. Investing in nature 
restoration  would  bring  significant  economic 
benefits,  as  every  euro  invested  in  nature  is 
estimated 
in 
benefits (64).  Finally,  France’s  efforts  to  improve 
and  present  a  Green  Budget  for  government 
expenditure are best practice, as underlined by the 
OECD (65).  

to  generate  at 

least  EUR 8 

(62)  Data from the 3rd river basin management plan is not 

(64)  European Commission (2022), impact assessment 

available yet. 

(63)  EUR-Lex - 52022XC0314(01) - EN - EUR-Lex (europa.eu) ; 

The next reporting on the state of the marine environment is 
due in October 2024. See also France – Marine (europa.eu). 

accompanying the proposal for a Regulation of the European 
Parliament and the Council on nature restoration, SWD(2022) 
167 final. 

(65)  OECD (2023), Green Budgeting report. 

36 

01202468101220162020% LSU per hectare% of total utilised agricultural areaLivestock density index France (% LSU per ha)Livestock density index EU-27 (% LSU per ha)Organic farming France (% of total utilised agricultural area)Organic farming EU-27 (% of total utilised agricultural area) 
 
       
 
Graph A6.3: Environmental investment gap, annual 
average 

The numbers are computed by the European Commission 
based on the latest internal reports, Eurostat, EIB and national 
data sources. 
Source: European Commission 

37 

4,2881,2835,9283,7198,4334,2914,5982,56602,0004,0006,0008,00010,00012,000Pollution prevention &controlWater managementCircular economy andwasteBiodiversity andecosystemsmillion EUR2014-20202021-2027 
       
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Table A6.1:  Indicators tracking progress on the European Green Deal from a macroeconomic perspective 

Sources:  (1)  Member  States’  emission  data  for  2019  and  2020  are  in  global  warming  potential  (GWP)  values  from  the  4th 
Assessment Report (AR4) of the Intergovernmental Panel on Climate Change (IPCC). Member States’ 2005 base year emissions 
under  Regulation  (EU)  2018/842,  emissions  data  for  2021  and  2022,  and  2030  projections  are  in  GWP  values  from  the  5th 
Assessment Report (AR5) of the IPCC. 2021 data are based on the final inventory reports, 2022 data are based on approximated 
inventory reports and European Environmental Agency’s calculation of effort sharing emissions. The final data for 2021 and 2022 
will  be  established  after  a  comprehensive  review  in  2027.  The  2030  target  is  in  percentage  change  of  the  2005  base  year 
emissions. Distance to target is the gap between the 2030 target and projected effort sharing emissions with existing measures 
(WEM) and with additional measures (WAM), in percentage change from the 2005 base  year emissions. The measures included 
for  the  2030  emission  projections  reflect  the  state  of  play  as  reported  in  Member  States'  draft  updated  national  energy  and 
climate plans or, if unavailable, as reported by 15 March 2023 as per Regulation 2018/1999. (2) Net removals are expressed in 
negative figures, net emissions in positive figures. Reported data are from the 2024 greenhouse gas inventory submission. 2030 
value  of  net  greenhouse  gas  removals  as  in  Regulation  (EU)  2023/839  –  Annex  IIa.  (3)  The  2030  national  objectives  for 
renewable  energy  and  energy  efficiency  are  indicative  national  contributions,  in  line  with  Regulation  (EU)  2018/1999  (the 
Governance  Regulation),  the  EU-level  2030  renewable  energy  target  set  out  in  Directive  EU/2018/2001  amended  by  Directive 
EU/2023/2413 (the revised Renewable Energy Directive) – 42.5% of gross final energy consumption with the aspiration to reach 
45% –, and the formula in Annex I to Directive (EU) 2023/1791 (the Energy Efficiency Directive). (4) Passenger battery electric 
vehicles (BEV) and fuel cell electric vehicles (FCEV). (5) The climate protection gap refers to the share of non-insured economic 
losses caused by climate-related disasters, based on modelling of the risk from floods, wildfires, windstorms, and the insurance 
penetration rate. Scale: 0 (no protection gap) –4 (very high gap) (European Insurance and Occupational Pensions Authority, 2022). 
(6) Total water consumption in renewable freshwater resources available for a territory and period. (7) Material extractions for 
consumption and investment. (8) Years of potential life lost through premature death due to exposure to particulate matter with a 
diameter  of  less  than  2.5  micrometres.  (9)  Share  of  habitats  in  good  conservation  status  according  to  the  records  submitted 
under  Art.  17  of  the  Habitats  Directive  (Directive  92/43/EEC)  for  2013-2018.  (10)  Multi-species  index  measuring  changes  in 
population abundances of farmland bird species. (11) Source: annex 12 of the Commission’s proposal for a soil monitoring law, 
SWD (2023) 417 final. (12) Estimates of organic carbon content in arable land. (13) This value is indicative and will be updated in 
2025 (as mandated by Regulation (EU) 2023/839). 

38 

Target (13)200520192020202120222030WEMWAMProgress to climate and energy policy targetsGreenhouse gas emission reductions in effort sharing sectors (1)Mt CO2eq, %, pp401,113.7-16%-23%-19%-22%-48%-141.1Net greenhouse gas removals from LULUCF (2)Kt CO2eq-52 785-18 611-21 354-19 045-18 500 -34,046n/an/aShare of energy from renewable sources (1) (3)%9%17%19%19%20%0.44--Energy efficiency: primary energy consumption (3)Mtoe261.0235.5208.0224.8205.6157.3Energy efficiency: final energy consumption (3)Mtoe160.1145.5129.7143.0138.5106.9Projected20182019202020212022202120222030Green transition: mobility         Greenhouse gas emissions: road transportMt CO2e---120.0122.3769.0786.697.0Share of zero-emission vehicles in new registrations (4)% 1.526.79.813.3912.1n/aNumber of publicly accessible AC/DC charging points --05465383317299178446956n/aShare of electrified railways%58.2%58.5%58.8%59.3%-56.1%-n/aGreen transition: buildings         Greenhouse gas emissions: buildingsMt CO2e---77.567.4537.0486.756.4Final energy consumption in buildings2015=100100.6%99.6%95.7%102.7%91.8%104.0%104.0% Climate adaptation         Climate protection gap (5)score 1-4--0.51.31.11.51.5n/a20182019202020212022202020212022State of the environmentWater | Water exploitation index (WEI+) (1) (6)% of renewable freshwater1.72.8---3.6--Circular economy | Material footprint (7)tonnes per person13.713.812.713.612.914.214.814.9Pollution | Years of life lost due to air pollution by PM2.5 (8)per 100.000 inhabitants409334270327-545584-Biodiversity | Habitats in good conservation status (9)%20.214.7                       Common farmland bird index (10)2000=10064----78--Green transition: agri-food sectorOrganic farming% of total utilised agricultural area7.017.728.779.67-9.1--Nitrates in groundwatermg NO3/litre51.6648.1943.37--20.42--Food waste per capitaKg per capita129129-130131-Share of soil in poor health (11)%4441Soil organic matter in agricultural land (12)Mt per ha1,481----7,904--DistanceEU-27 
 
     
 
ANNEX 7: ENERGY TRANSITION AND COMPETITIVENESS 

energy-intensive  industries,  microenterprises  and 
SMEs, to help them face energy price increases. 

Graph A7.1: France´s energy retail prices for 
households and industry & service 

(1) For industry, consumption bands are I3 for gas and IC for 
electricity, which refer to medium-sized consumers and 
provide an insight into affordability 
(2) For households, the consumption bands are D2 for gas 
and DC for electricity 
(3) Industry prices are shown without VAT and other 
recoverable taxes/levies/fees as non-household consumers 
are usually able to recover VAT and some other taxes 
Source: Eurostat 

consumers 

In  relative  terms,  electricity  prices  for  non-
household 
increased 
significantly compared to the US, Japan, and the 
UK,  thus  potentially  affecting  the  international 
competitiveness  of  energy-intensive  industries  in 
France. 

have 

This Annex (66) sets out France’s progress and 
in  accelerating  the  net-zero 
challenges 
energy  transition  while  bolstering  the  EU’s 
competitiveness 
energy 
sector (67). It considers measures and targets put 
forward in the draft updated National Energy and 
Climate Plans (NECP) for 2030 (68). 

clean 

the 

in 

Unlike the prevailing trends witnessed across 
the  EU,  in  2023  only  gas  and  electricity 
prices  for  industry  and  services  declined 
slightly  while  prices  for  household  prices 
increased.  In  the  second  semester  of  2023,  gas 
and electricity prices for industry decreased by 5% 
and  15%  respectively.  On  the  opposite,  gas  and 
electricity  prices  for  households  increase  both  by 
around 13% on average during the same period. In 
the  second  semester  of  2023,  gas  and  electricity 
prices  were  close  to  the  EU  average,  with  the 
biggest  gap  being  electricity  prices  for  household, 
9% below EU averages.   

In  2023  France  maintained  their  measures 
protecting  households  and  businesses,  to 
address  rising  energy  prices.  The  tariff  shield 
applied to regulated tariffs in electricity increased 
by  15%  in  February  2023.  France  phased  out 
regulated prices for gas in July 2023, after a long 
transition  phase,  but  maintained  the  tariff  shield 
for gas consumers in 2023, with a rise limited also 
to 15%. In 2023, energy vouchers for low-income 
households,  to  cover  either  electricity,  gas  or 
heating  oil  bills,  were  back  to  their  normal 
application,  after  several  exceptional  energy 
vouchers were issued in 2022 and early 2023 (69).  
for 
France 

also  maintained 

support 

its 

(66)  It is complemented by Annex 6 as the European Green Deal 

focuses on the clean energy transition and by Annex 8 on the 
action taken to protect the most vulnerable groups, 
complementing ongoing efforts under the European Green 
Deal, REPowerEU and European Green Deal Industrial Plan. 

(67)  In line with the Green Deal Industrial Plan and the Net-Zero 

Industry Act 

(68)  France submitted its draft updated NECP in November 2023. 
The Commission issued an assessment and country-specific 
recommendations on 18 December 2023. Commission 
Recommendation, Assessment (SWD) and Factsheet of the 
draft updated National Energy and Climate Plan of France - 
European Commission (europa.eu) 

(69)  France estimates that the energy voucher therefore 

decreased the energy poverty indicator by 1.5 points and the 
exceptional energy voucher by an additional 1 point, with a 
total reduction of 2.5 points FR NECP – P. 78 

39 

0.000.050.100.150.200.250.300.35€/KWhGas (industry & service) - FRGas (industry & service) - EUGas (households) - FRGas (households) - EUElectricity (industry & service) - FRElectricity (industry & service) - EUElectricity (households) - FRElectricity (households) - EU 
 
 
   
 
Graph A7.2: Trends in electricity prices for non-
household consumers (EU and foreign partners) 

(1) For Eurostat data (EU and FR), the band consumption is ID 
referring to large-sized consumers with an annual 
consumption of between 2 000 MWh and 20 000 MWh, such 
as in electricity intensive manufacturing sectors, and gives an 
insight into international competitiveness 
(2) JP = Japan 
Source: Eurostat, IEA 

Consumer  empowerment  in  the  electricity 
and gas markets is at a good level. The share 
fixed-price  contracts  held  by  household 
of 
consumers in electricity increased from 30 to 40%.  
Variable  contracts  for  gas  increased  from  25  to 
60%,  probably  also  due  to  the  phase  out  of 
regulated  tariffs  for  gas,  which  was  rolled  out  in 
2023 (70).  92%  of  final  household  consumers  had 
smart meters in 2022 (EU average 80%). Average 
progress was reported with the implementation of 
renewable energy communities in France in 2022. 
France has fourteen storage facilities with a total 
capacity  of  11.2  bcm,  representing  30%  of  its 
annual  gas  consumption  in  2022.  France  fulfilled 
its  gas  storage  obligations  last  winter,  reaching 
99.8% by 1 November 2023, and ended the winter 
season with a storage filled  at 39.31% by 1 April 
2024. 

Due  to  its  nuclear  plants,  some  renewables 
and high level of electrification, France has a 
relatively  low  reliance  on  fossil  fuels  in  its 
electricity  mix (71),  which  limited  its  energy 

(70)  Switching rates in electricity decreased with the crisis, around 
10%, while in gas the rate stayed stable at around 15%. 

(71)  France's share of fossil fuels in its electricity mix in 2023 

was 8.4 % (compared to 33% at EU level), while its share of 
nuclear was 65% and of renewables 26.3%. However, in the 
energy mix, the share of fossil fuels increased from 46,5% in 
2021 to 50.3% in 2022 even if it was still below the EU 
share of 69% in 2022; France reached in its energy mix a 
low share of renewables of 14.6% while the share of nuclear 
was 35% (Eurostat data – Gross inland consumption).  

40 

fully 

imports dependency. In 2021, gas accounted for 
15%  of  the  energy  mix  and  6%  of  its  electricity 
mix  and  was 
imported.  France  has 
traditionally  had  a  diversified  supplier  portfolio.  It 
has  significant  LNG  import  capacity  with  its  4 
terminals, in Dunkerque, Montoir-de-Bretagne, two 
in  Fos-sur-Mer  and,  since  2023,  one  floating 
storage and regasification unit (FSRU) in Le Havre. 
France is also directly connected to Norwegian gas 
fields in the North Sea with the Franpipe pipeline, 
and  to  that  country’s  oversized  gas  storage 
capacity.  As  for  electricity  security  of  supply  for 
winter  2023/24,  ENTSO-E  analysis  shows  a  very 
low  expected  risk  of  adequacy  issues  but  higher 
than in the other Member States. France managed 
to  reduce  its  gas  demand  between  August  2022 
and  December  2023  by  20%  in  comparison  with 
the average of the previous five years. 

Despite  an  increase  by  8%  in  installed 
renewable  capacity  in  2022,  driven  by  the 
significant  increase  in  solar,  in  particular 
photovoltaics,  France  is  lagging  behind  in 
deploying  renewable  energy,  especially  for 
electricity  production  and  heating (72).  Total 
renewable  energy  capacity  in  France  in  2022 
stood at 65.4 GW (73). This showed a considerable 
increase  in  2022  for  solar  PV  (2.3  GW)  and  wind 
installations  (2  GW  including  0,5  GW  offshore).  
The total installed solar capacity in 2022 was 16.3 
GW.  The  total  wind  capacity  in  France  for  2022 
was  21.1  GW,  mostly  onshore  wind  but  with  the 
first  large  offshore  windfarm  now  deployed  (0.5 
GW) (74). France aims to reach 3.6 GW of offshore 
wind  by  2030 (75).  This  goal  is  below  the  one 
defined  in  the  non-binding  2023  EU  Sea  Basins 
agreements  to  which  France  is  a  party.  The 
absence of renewable energy targets in the 2024 
draft  law  on  energy  security  sends  mixed  signals 
in  terms  of  France’s  commitment  to  accelerating 
the installation of renewable energy. 

(72)  See Annex 6 and the assessment of the draft of the FR NECP 

update. 

(73)  IRENA report 2023 

(74)  IRENA Report 2023 

(75)  SWD assessment of the draft French updated NECP 

050100150200250Index ( 2018 S2 = 100)JPUKUSBEEU 
  
 
 
Graph A7.3: France's installed renewable capacity 
(left) and electricity generation mix (right) 

(1) "Other" includes solar thermal energy, marine energy, solid 
biofuels, renewable municipal waste, liquid biofuels, biogas, 
geothermal energy 
Source: IRENA, Ember 

law  on 

renewable 

energy 
The  new 
acceleration  makes  progress  on  granting 
permits  and  offshore  planning,  but  more  is 
needed to deliver the necessary acceleration. 
In  fact,  there  is  still  a  need  for  clear  and 
accelerated  deadlines  for  projects  outside  the 
acceleration  zones  introduced  in  the  new  law.    In 
addition,  France  is  still  lagging  behind  on  the 
introduction  of  a  one-stop  shop  for  renewable 
energy permitting (see Annex 12). The legal status 
of renewable energy communities was clarified in 
2023  but  there  remains  a  need  to  grant  them 
simplified grid connection procedures.  

France  has  set  ambitious 
targets  for 
renewable heating and cooling, but additional 
policies  and  measures  may  be  required  to 
deliver  them (76).  54%  of  the  renewable  energy 
used for heating and cooling comes from biomass, 
the  consumption  of  which  is  expected  to increase 
by 31% by 2030. Uptake of heat pumps is growing 
fast and expected to more than double within that 
time. However, it is not clear whether the tools to 
deliver  these  targets  are  sufficient,  as  renewable 
heat  is  largely  absent  from  the  new  renewables 
law.  

The existing nuclear fleet of 56 reactors (all 
PWR  design),  with  a  total  capacity  of  61.4 
GWe, is planned to continue operating for as 
long as safety requirements are met. In 2022 
nuclear electricity production accounted for around 
63%, which was a historically low level compared 

to the previous years (77), mainly due to unplanned 
outages and generic stress corrosion issues (78). In 
January 2023, the French government approved a 
bill  repealing  the  objective  to  reduce  the  nuclear 
share  to  50%  of  the  total  national  electricity  mix 
by  2035.  While  the  EPR  project  is  in  a  start-up 
phase  at  Flamanville  (initially  planned  for  the 
second  quarter  of  2023),  the  construction  and 
commissioning  of  new  nuclear  reactors  (three 
pairs  of  EPR2  reactors (79),  with  total  capacity  of 
9.9  GWe)  are  also  expected  and  pending  Final 
Investment Decision by the end of 2025.  

France  projects  an  acceleration  from  its 
current  levels  of  biogas  production,  which 
amounted  to  1.6  bcm  in  2021.  Biogases 
account  for  3.8%  of  the  country’s  natural  gas 
supply. By 2030 France plans to have 50 TWh (or 
5.12bcm) of annual biogas production, of which 44 
TWh  (4.5  bcm)  is  to  be  injected  into  the  gas 
network (80). A one-stop-shop has been established 
to support project planning and permitting. France 
to  develop  a  mandatory  blending 
intends 
trajectory  with 
Production 
other 
Certificates 
incentives (81).  It is  estimated  that if  the  objective 
of  producing  44  TWh  was  to  be  reached, 
biomethane  would  account  for  15%  of  gas 
consumption from natural gas grids. 

a  Biomethane 

mechanism, 

among 

in 

(i) 

grids 

allow 

investment 

its 
France  needs  further 
the 
to 
electricity 
electrification  of  new  consumption  sectors 
that still rely on fossil fuels and (ii) integrate 
increasing  volumes  of  renewable  energy, 
even  in  the  scenarios  that  see  a  resurgence 
of 
electricity 
interconnectivity,  measured  as  a  country’s  import 
capacity  over  its  installed  generation  capacity, 
stood  at  5.6%  in  2022  and  5.0%  in  2023  and  is 
expected  to  reach  5.6%  in  2024.  Interconnection 
availability increased by 1 GW from 2022 to 2023, 

nuclear 

France’s 

power. 

(77)  In 2021 nuclear production was 69% of overall electricity 

generation 

(78)  In July 2022, the French Nuclear Safety Authority (ASN) 
approved the EDF’s inspection strategy to address the 
generic stress corrosion phenomena by checking all reactors 
operated by the company by 2025. 

(79)  Penly, Gravelines and Bugey sites 

(80)  15% of gas in the distribution grids. 

(76)  France’s 2030 target for renewables in heating and cooling  

(45%) is in line with the new, increased targets in the 
Renewable Energy Directive.   

(81)  The mandatory purchase obligation scheme for biomethane 
injected into a natural gas network is intended to support 
projects with a production capacity exceeding 25 GWh/year. 

41 

 
 
 
 
but production capacities also increased (solar and 
wind).  An  additional  electricity  interconnector  with 
Italy  became  fully  operational 
in  2023  and 
construction  is  ongoing  for  interconnectors  with 
Ireland  and  Spain.  France  is  also  investing  in  grid 
connections  for  offshore  wind  parks  (approx.  EUR 
700 million in 2022 and 2023) (82).  

France  has  demonstrated  some  progress  on 
energy efficiency. In 2022, France’s final energy 
consumption  decreased  by  0.5% 
(climate-
corrected  data)  compared  to  2021.  In  this  last 
year,  good  results  came  from  the  residential 
sector,  which  decreased 
final  energy 
consumption  by  3.4%  and  the  worst  from  the 
transport  sector,  which  increased  its  final  energy 
consumption by 4.3% (real data) (83).  

its 

France  needs  to  step  up  its  efforts  in  the 
residential  sector  to  achieve  a  meaningful 
contribution to its 2030 reduction target for 
energy consumption by buildings.  Final energy 
consumption in the residential sector increased by 
2.8% (84)  between  2015  and  2022  while  the 
national Long Term Renovation Strategy envisages 
a 22% reduction of buildings’ energy consumption 
by  2030  compared  to  2015.    Building  renovation 
accounts for a significant share of the French RRP 
(over EUR 10 billion, out of which EUR 3 billion are 
allocated  to  energy  renovation  of  residential 
buildings).  The  national  scheme  for  renovating 
residential  buildings (85)  MaPrimeRénov  mostly 
consisted  of  single  measures  and  less  than  10% 
of  the  buildings  that  were  improved  underwent 
larger  use  of  financial 
major  renovation.  A 

(82)  Six offshore radial connections have recently received project 
of common interest (PCI) status in the new list of PCIs and 
projects of mutual interest (PMIs) in November 2023. 

(83)  The increase of the final energy consumption of the 

transportation sector in 2022 should be read in lines with the 
impact of the COVID-19 on this sector. Indeed, in 2022 the 
final energy consumption of transportation was 1,2% lower 
than in 2019. 

(84)  Final energy consumption in households from Eurostat (data-
tables from December 2023), climate-corrected by the Joint 
Research Centre with reference period 2005-2022 (FEC 
climate-corrected = FEC/ (HDD/HDD reference period) 

(85)  France allocates EUR 3 billion in its RRP to energy renovation 
of private housing (MaPrimeRenov’), in total supporting the 
renovation of 1.450.000 private households and supporting 
energy efficiency renovation in social housing by allocating 
grants to more than 40 000 social dwellings. So far it has 
helped more than 700 000  households and 20 000 social 
dwellings with their energy renovation work. 

42 

instruments  would  maximise  the  multiplier  effect 
of public investment.  

country’s 

Heating and cooling represent almost 82% of 
the 
final  energy 
residential 
from 
consumption,  of  which  26%  comes 
renewables.  Approximately  625  000  heat  pumps 
were sold in 2022, an increase of 16% compared 
year.  Regarding  market 
to 
surveillance  activities,  France  is  not  reporting  any 
checks  on  products  covered  by  ecodesign  and 
energy labelling. 

previous 

the 

hydrogen, 

prioritises 

On 
grid 
France 
development  in  specific  hydrogen  hubs  and 
their  connection  to  storages,  to  decarbonise 
industry, possible inter-hub grid development 
needs  will  be  assessed  in  a  second  phase.  It 
has  set  the  objective  of  installing  6.5  GW  in 
electrolyser capacity by 2030 and meeting a need 
for  10  GW  in  2035.  Together  with  Portugal  and 
Spain,  France  is  promoting  the  development  of  a 
green  energy  corridor  connecting  Portugal,  Spain 
and France with the EU’s energy network. The new 
list  of  PCIs  and  PMIs  that  was  adopted  in 
November  2023  includes  13  PCIs  in  France  or 
connecting to France in the hydrogen sector. 

of 

France  has  a  strong  manufacturing  base  in 
low-carbon  technologies  and  components 
(including  hydrogen  and  nuclear),  and  it  is 
expected  to  expand  it  to  other  decarbonised 
generation  technologies,  in  particular  new 
is  among  the 
offshore  windfarms.  France 
leading  worldwide 
nuclear 
exporters 
technologies  in  Europe.  The  French  recovery  and 
resilience  plan  focuses  heavily  on  hydrogen,  and 
France 
is  one  of  the  world’s  top  hydrogen 
providers.  France  is  well positioned  in  the  field  of 
hydrogen, with industry leaders in electrolysis and 
fuel cell 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  four  gigafactories  planned 
in France. In October 2021, France announced the 
‘France 2030’, a EUR 54 billion investment plan for 
2030.  This  targets  French  industrial  development 
in  the  energy,  automotive  and  space  sectors, 
including  EUR  8  billion  earmarked  for  energy 
technology  investment  in  the  decarbonisation  of 
industry, 
in  small  modular 
reactors,  and  EUR 4 billion  for  electric  and  plug-in 
hybrid  vehicles.  However,  public  investment  in 

in  hydrogen  and 

 
 
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  (25%  in  2023  compared  to  2.4%  in 
2020,  as  a  percentage  of  total  venture  capital 
invested  in  France),  with  France  representing 
nearly  11%  of  the  EU’s  total  venture  capital 
investment  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. 

set  up  a 

France  has 

Relying  mainly  on  the  schemes  implemented 
by  ADEME  and  BPIFrance,  as  well  as  the  PIA 
very 
funds, 
comprehensive  set  of  support  measures  for 
innovators to set up and scale up clean tech 
solutions.  This  set  of  financing  measures  is 
completed with a number of successive regulatory 
sandboxes setup by the French Energy Regulatory 
Commission  (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, 
schemes, 
dynamic 
retail  electricity  pricing 
into 
biomethane/synthetic  methane 
distribution  networks,  and  pooling  of  different 
types of renewable energy generation assets (e.g. 
solar  and  wind)  under  the  same  connection  point, 
to save on infrastructure costs.  

injection 

43 

 
Table A7.1:  Key Energy Indicators 

(1) The ranking of the main suppliers is based on the latest available figures (for 2022) 
(2) Venture Capital investment includes Venture Capital deals (all stages), Small M&A deals and Private Equity (PE) growth deals 
(for companies that have previously been part of the portfolio of a VC investment firm or have received Angel or Seed funding). 
Source: Eurostat, Gas Infrastructure Europe, JRC elaboration based on PitchBook data (03/2024), JRC SETIS (2024) 

44 

20192020202120222019202020212022Import Dependency [%] 47.5%44.4%44.1%51.9%60.5%57.5%55.5%62.5%of Solid fossil fuels 99.6%96.3%73.5%81.6%43.3%35.8%37.3%45.8%of Oil and petroleum products 98.4%98.5%97.1%98.7%96.7%96.8%91.7%97.7%of Natural Gas 104.5%94.7%96.1%109.0%89.7%83.6%83.6%97.6%Dependency from Russian Fossil Fuels [%]of Natural Gas 19.8%16.9%21.9%15.2%39.7%41.3%41.1%21.0%of Crude Oil12.7%8.7%8.8%5.2%28.8%26.7%26.4%19.5%of Hard Coal26.9%33.8%34.8%16.8%43.5%49.1%47.4%21.5%2016201720182019202020212022Gas Consumption (in bcm)43.2                 43.1                 41.1                 41.8               38.9               41.3               37.8               Gas Consumption year-on-year change [%]9.6%-0.2%-4.7%1.8%-6.9%6.1%-8.6%Gas Imports - by type (in bcm)44.4                 46.5                 47.1                 53.2               45.3               45.3               55.4               Gas imports - pipeline37.5                 37.3                 36.6                 32.9               28.3               29.4               23.1               Gas imports - LNG6.89.210.520.317.015.932.3               Gas Imports - by main source supplier (in bcm) (1)United States-                   -                   0.2                   1.8                 1.1                 2.7                 13.7               Russia8.9                   8.6                   9.3                   10.5               7.6                 9.9                 8.4                 Norway18.6                 19.2                 17.8                 18.5               16.1               14.5               12.4               Algeria4.7                   3.8                   3.4                   3.8                 3.6                 3.8                 4.5                 20192020202120222023LNG Terminals - storage capacity m3 LNGNumber of LNG Terminals4                      4                      4                      4                    4                 LNG Storage capacity (m3 LNG)1,370,000       1,370,000       1,370,000       1,370,000     1,227,000     Underground StorageNumber of storage facilities15                    15                    15                    15                  15               Technical Capacity (bcm)13.4                 13.2                 13.2                 13.7               11.5               20162017201820192020202120222023Gross Electricity Production (GWh) (2)564,056          561,943          581,685          570,775        532,255        555,082        474,744        -              Combustible Fuels63,969         72,878         57,647         62,148       56,864       58,149       70,176       -              Nuclear403,195       398,359       412,942       399,012     353,833     379,361     294,731     -              Hydro65,686         55,135         70,472         61,572       67,094       63,947       51,049       -              Wind21,381         24,609         28,599         34,722       40,045       37,119       38,004       -              Solar8,660           9,587           10,808         12,165       13,189       15,357       19,628       -              Geothermal98                 133               127               128             133             100             114             -              Other Sources1,068           1,241           1,091           1,028         1,096         1,049         1,043         -              Gross Electricity Production [%]Combustible Fuels11.3%13.0%9.9%10.9%10.7%10.5%14.8%-              Nuclear71.5%70.9%71.0%69.9%66.5%68.3%62.1%-              Hydro11.6%9.8%12.1%10.8%12.6%11.5%10.8%-              Wind3.8%4.4%4.9%6.1%7.5%6.7%8.0%-              Solar1.5%1.7%1.9%2.1%2.5%2.8%4.1%-              Geothermal0.0%0.0%0.0%0.0%0.0%0.0%0.0%-              Other Sources0.2%0.2%0.2%0.2%0.2%0.2%0.2%-              Net Imports of Electricity (GWh)41,501-            40,129-            62,967-            57,667-          45,039-          44,892-          14,945          -              As a % of electricity available for final consumption -9.1%-8.9%-14.0%-13.0%-10.7%-10.2%3.5%-              Electricity Interconnection [%]-                9.4%7.9%8.1%8.5%5.1%5.6%5.0%Share of renewable energy consumption - by sector [%]Electricity19.2%19.9%21.1%22.4%24.8%24.8%27.3%-              Heating/cooling20.1%20.6%21.2%22.4%23.4%23.9%26.3%-              Transport8.4%8.8%9.0%9.2%9.2%8.3%9.0%-              Overall15.5%15.8%16.4%17.2%19.1%19.2%20.3%-                 20192020202120222023VC investments in climate tech start-ups and scale-ups (EUR Mln)146.23         195.39         691.14         1,201.01       2,548.14       as a % of total VC investment (3) in France start-ups and scale-ups2.4%2.4%5.3%7.6%25.0%Research & Innovation spending in Energy Union R&i prioritesPublic R&I (EUR mln)1,410.9        1,605.7        1,822.2        -              -              Public R&I (% GDP)0.06%0.07%0.07%-                 -              Private R&I (EUR mln)3,032.8        3,281.4        -                -              -              Private R&I (% GDP)0.12%0.14%-                   -                 -                 ELECTRICITY/ENERGYCLEAN ENERGYFranceEUENERGY DEPENDNCEDIVERSIFICATION 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, 
particularly  for  workers  and  households  in 
vulnerable  situations.  Employment  in  France’s 
green  economy  continues  to  increase.  Between 
2015  and  2021,  total  jobs  in  the  environmental 
goods  and  services  sector  grew  by  24.6%  to 
around  1.1  million  (EU:  18.2%),  reaching  3.9%  of 
total  employment  (EU:  2.7%).  Between  2015  and 
2022,  the  greenhouse  gas  emission  intensity  of 
France’s  workforce  (see  Graph  A8.1  and  Table 
A8.1)  declined  from  13.5  to  11.7  tonnes  per 
worker,  below  the  EU  average  (14.3  tonnes  per 
worker  in  2022) (86),  indicating  a  positive  trend  in 
the  green 
transition  process.  Upskilling  and 
reskilling  are  key  to  achieving  a  fair  green 
transition in line with the Council Recommendation 
of  2022  on  ensuring  a  fair  transition  towards 
climate  neutrality (87)  and 
the 
REPowerEU  plan.  France’s  recovery  and  resilience 
plan  (RRP)  focuses  largely  on  supporting  a  fair 
green 
through  energy 
renovation  of  buildings,  including  social  housing. 
This  complements  the  territorial  just  transition 
plans  under  the  Just  Transition  Fund  and  actions 
supported  by  the  European  Social  Fund  Plus 
(ESF+). 

transition,  especially 

implementing 

Employment in energy-intensive industries is 
relatively low.  In  2023,  employment  in  France’s 
energy-intensive  industries  comprised  2.2%  of 
total employment (3.5% in the EU). Employment in 
mining  and  quarrying  has  risen  by  27.4%  since 
2015 (to around 34 900 workers in 2023), despite 
the  closure  of  the  remaining  coal  mines  and  the 
decline  of  petroleum  refineries.  The  job  vacancy 
rate in construction (see Graph A8.2), a key sector 
for  the  green  transition,  is  below  the  EU  average 
(2.6%  vs  3.6%  in  2023).  Nevertheless,  52%  of 
small and medium-sized enterprises (SMEs) in the 
sector  report  that  skills  shortages  are  holding 
in  general  business  activities (88). 
them  back 

(86)  Workforce-related calculations are based on the EU Labour 
Force Survey. Note, in the 2023 country report for France, 
such indicators were calculated based on the employment 
statistics in the national accounts. This may result in limited 
comparability across the two reports. 

(87)  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. 

(88)  Eurobarometer on skills shortages, recruitment, and retention 

According  to  the  European  Labour  Authority 
(ELA) (89), labour shortages were reported in 2023 
for a number of occupations that required specific 
skills  or  knowledge  for  the  green  transition (90), 
including  electrical  engineering  professionals, 
plumbers  and  pipe  fitters  and  power  production 
plant operators.  

Graph A8.1: Fair transition challenges in France 

Source: Eurostat, EU Labour Force Survey, EMPL-JRC GD-
AMEDI/AMEDI+ and DISCO(H) projects (see Table A8.1). 

including 

industries,  workers’  participation 

Upskilling  and  reskilling  actions  in  declining 
and  transforming  sectors  decreased,  in  an 
environment  where  there  are  already  skills 
in 
shortages  and  mismatches, 
sectors  of  the  green  economy.  In  energy-
intensive 
in 
education  and  training  decreased  from  20.5%  in 
2015  to  14.4%  in  2021.  However,  this  rate 
increased again to 15.6% in 2023, and it remains 
above the EU average (10.9%). In France, 49% of 
SMEs  think  that  the  skills  required  for  greening 
business  activities  are  becoming  more  important 
(EU:  42%) (88).  If  France  matches  its  projected 
contribution  to  the  EU’s  2030  renewable  energy 
target,  between  4  500  and  13 300  additional 
skilled workers will be needed for the deployment 
of  wind  and  solar  energy,  which  may  require  an 
investment 
skills  of  EUR  142.8-178.5 
million (91).  Developing  dedicated  cross-cutting 
strategies  for  green  skills  at  national  level  could 
be  beneficial  in this  context.  Despite  the  adoption 
of  some  measures,  such  as  the  design  and 

in 

(89)  Based on the European Labour Authority 2024 EURES Report 
on labour shortages and surpluses 2023, i.e., data submitted 
by the EURES National Coordination Offices. 

(90)  Skills and knowledge requirements are based on the 

European Skills Competences and Occupations (ESCO) 
taxonomy on skills for the green transition. 

strategies in small and medium-sized enterprises. 

(91)  EMPL-JRC AMEDI+ project. 

45 

0.00.51.01.52.0Greenhouse gasemissions per workerEmployment inEnergy-IntensiveIndustriesEducation & trainingin Energy-IntensiveIndsutriesEnergy povertyTransport poverty(proxy)Carbon inequalityFR Latest vs EU LatestEU LatestFR 2015 vs EU Latest 
 
 
  
 
 
Table A8.1:  Key indicators for a fair transition in France 

Source: Eurostat (env_ac_ainah_r2, lfsa_egan2d, ilc_mdes01), EU Labour Force Survey (break in time series in 2021), EMPL-JRC 
GD-AMEDI/AMEDI+ and DISCO(H) projects. 

implementation  of  local  contracts  for  the  success 
of  the  green  transition,  with  expected  limited 
impact,  identifying  specific  territories,  regions  and 
target  groups  could  help  in  providing  education 
and training more effectively. Social partners also 
play  a  key  role  as  stakeholders  in  organisations 
that  promote  training  and  skills  for  workers (92). 
Access for low-skilled people to training courses to 
gain more qualifications and a better coordination 
between  investments  at  national  and  regional 
level  seem  key  (see  Annex  14).  To  address  skills 
shortages 
the  green  economy,  specific 
investments  under  the  Just  Transition  Fund  are 
expected to support the upskilling and reskilling of 
workers  and  jobseekers  in  regions  most  affected 
by  the  climate  transition  and  help  them  seize 
emerging employment opportunities, particularly in 
the  sectors  supporting  economic  diversification, 
such  as  renewable  energy,  circular  economy  and 
waste  management.  In  addition,  5.8%  of  ESF+ 
funding  in  France  help  increase  green  skills  and 
jobs, 
in  particular  by  developing  academic 
guidance and educational content promoting green 
jobs. 

in 

Energy  poverty  indicators  have  significantly 
worsened  in  recent  years  due  to  higher 
energy costs. The share of the population unable 
to  keep  their  homes  adequately  warm  increased 
significantly from 6.0% in 2021 to 10.7% in 2022 
(above the EU average of 9.3%) (93). The indicator 
increased by 4.7 percentage points between 2021 
and  2022  on  the  back  of  energy  price  increases 
due to supply constraints caused by the COVID-19 
pandemic  and  Russia’s  war  of  aggression  against 
Ukraine,  despite 
the  emergency  measures 
implemented  in  France.  In  2022,  23.5%  of  the 
population  at  risk  of  poverty  (AROP)  (EU:  20.1%) 

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

la transition écologique, July 2022. 

(93)  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.   

and 11.2% of lower middle-income households (in 
deciles 4-5) were affected (EU: 11.6%). Moreover, 
in  January  2023,  25.5%  of  the  population  at  risk 
of poverty spent more than 6% of their budget on 
private transport fuels (EU: 37.1%) (94). 

Graph A8.2: Job vacancy rate in transforming 
sectors and mining and quarrying 

B - Mining and quarrying 
C - Manufacturing 
D - Electricity, gas, steam and air conditioning supply 
E - Water supply; sewerage, waste management and 
remediation activities 
F - Construction 
H - Transportation and storage 
Source: Eurostat jvs_a_rate_r2. 

issue 

leading 
in  France. 

Consumption  footprint  inequality  remains  a 
to  environmental 
critical 
inequalities 
the 
In  2021, 
consumption  footprint  for  20%  of  the  population 
with the highest income was 2.0 times higher than 
the footprint of the poorest 20% (95) (EU: 1.8). For 
both  groups,  the  consumption  footprint  is  highest 
for  food  and  mobility.  The  average  levels  of  air 

(94)  Affordability of private transport fuels is one key dimension 

of transport poverty. The indicator has been developed in the 
context of the EMPL-JRC GD-AMEDI/AMEDI+ projects. 
Methodology explained in Economic and distributional effects 
of higher energy prices on households in the EU. 

(95)  Developed in the context of the EMPL-JRC DISCO(H) project. 
Methodology explained in Joint Research Centre, 2024. 
Carbon and environmental footprint inequality of household 
consumption in the EU. JRC137520. The EU average refers to 
EU27 without Italy (household income data not available for 
IT in the HBS) 

46 

0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%4.0%BCDEFHEU 2023FR 2023FR 2015IndicatorDescriptionFR 2015FREUGHG per workerGreenhouse gas emissions per worker – CO2 equivalent tonnes13.511.7 (2022)14.3 (2022)Employment EIIEmployment share in energy-intensive industries, including mining and quarrying (NACE B), chemicals (C20), minerals (C23), metals (C24) and automotive (C29)2.5%2.2% (2023)3.5% (2023)Education & training EIIAdult participation in education and training (last 4 weeks) in energy-intensive industries20.3%15.6% (2023)10.9% (2023)Energy povertyShare of the total population living in a household unable to keep its home adequately warm5.5%10.7% (2022)9.3% (2022)Transport poverty (proxy)Estimated share of the AROP population that spends over 6% of expenditure on fuels for personal transport23.5%25.5% (2023)37.1% (2023)Carbon inequalityRatio between the consumption footprint of the top 20% vs bottom 20% of the income distribution2.02.0 (2021)2.7 (2021) 
 
       
 
 
 
  
 
pollution in 2021 stood below the EU average (9.4 
vs  11.4  µg/m3  PM2.5).  However,  34%  of  the 
population  lives  in  regions  exposed  to  critical 
levels  of  air  pollution,  leading  to  a  significant 
impact  on  health,  affecting  vulnerable  groups  in 
particular,  and  around  20 100  premature  deaths 
annually (96). 

is  already 

implementing  policy 
France 
measures  to  support  a  fair  transition 
towards  climate  neutrality  in  line  with  the 
Council  Recommendation  of  2022 (87)  but 
more  could  be  done.  Investments  in  skills  are 
already in place, including those helping to set up 
the  ROME  4.0  skills  directory  to  improve  the 
mapping of green skills. Further steps are needed 
to  improve  the  attractiveness,  working  conditions 
and  wages  in  green  jobs,  across  all  skills  levels. 
France  has  put  in  place  several  instruments  to 
promote  entrepreneurship  and  access  to  finance 
for businesses. However, specific incentives for the 
sectors of the green economy could help speed up 
the fair transition (97). 

(96)  EEA- Air Quality Health Risk Assessment 

(97)  Based on the monitoring review of the Council 

Recommendation on ensuring a fair transition towards 
climate neutrality, which took place in October 2023. 

47 

 
 
PRODUCTIVITY 
ANNEX 9: RESOURCE PRODUCTIVITY, EFFICIENCY AND CIRCULARITY 

The green transition of industry and the built 
environment,  in  particular  decarbonisation, 
resource  efficiency  and 
is 
France’s 
essential 
competitiveness (98).  In  this  regard,  the  priority 
for France lies in promoting the circular economy, 
in particular waste reuse and recycling. 

circularity, 

boost 

to 

Graph A9.1: ETS emissions by sector since 2013 

Source: European Commission 

In  2023,  the  sectors  covered  by  the  EU 
emissions  trading  system  (ETS)  in  France (99) 
emitted  27%  less  greenhouse  gases  than  in 
2019. In 2023, power generation in France caused 
24%  of  all  ETS-covered  emissions,  less  than  half 
(57%).  Of  the  total 
the  EU  average  share 
greenhouse  gas  emissions  from  all 
industry 
sectors, 26% came from the metals industry, 20% 
from  cement  and  lime  production,  19%  from  the 
chemical  industry,  and  15%  from  refineries.  A 
diverse  group  of  other  industries  accounted  for 
20%  of  France’s 
industry  greenhouse  gas 
emissions (100).  Between  2019  and  2023,  France 
reduced  greenhouse  gas  emissions  of  its  ETS 
installations  by  27%.  This  is  composed  by  a  25% 
greenhouse  gas  emissions  reduction  in  the  power 
sector  and  an  32%  reduction  in  the  industry 
sectors.  In  the  decade  up  until  2022,  France’s 
emissions  reduction  rate  reached  an  early  peak, 
with a 12% reduction between 2013 and 2014. 

There is still room to make better use of the 
potential  of  the  circular  economy  transition 

(98)  See also Annexes 6, 7 and 12. 

(99)  This analysis excludes air travel. For more details and the 
data sources, see Weitzel, M; van der Vorst, C. (2024), 
Uneven progress in reducing emissions in the EU ETS, JRC 
Science for policy brief, JRC138215, Joint Research Centre. 

(100) Greenhouse gas emissions classified as coming from ‘other’ 
sources appear to relate to steel production (20%), the 
chemical industry (5%), and power generation (6%).  

increased 

to  improve  the  efficiency  of  the  French 
industry.  France  is  third  in  the  EU  for  circular 
material  use  rate,  which  reached  19.3%  in  2022. 
from  2.70 
Resource  productivity 
purchasing power standards per kilogram in 2018 
to 3.2 in 2022, well above the EU average. France 
was dependent on imports for 36.1% of materials 
used  in  2022,  compared  with  an  EU  average  of 
22.4%,  making  the  country  comparatively  more 
vulnerable 
disruptions. 
Furthermore,  water  abstraction  for  manufacturing 
purposes  accounted  for  6.2%  of  total  water 
abstracted in 2019, under the EU average of 9,2%. 

supply 

chain 

to 

Graph A9.2: Treatment of municipal waste 

Source: Eurostat 

Strong  eco-innovation  performance  has 
helped  to  develop  a  highly  competitive 
environmental  goods  industry.  France  is  an 
eco-innovation  leader  according  to  the  2022 
Eco-Innovation.  As  of  September  2023,  France 
totalled  386  awarded  EU  Ecolabel  licences  and 
11 862  products  with  the  EU  Ecolabel,  which 
makes France the third-best performer in the EU. 

Although  France  is  improving  its  recycling 
and  composting  activities,  municipal  waste 
generation  remains  above  the  EU  average. 
Total  waste  production  reached  4.6  tonnes  per 
capita  in  2020,  slightly  below  the  EU  average  of 
4.8  tonnes. Municipal  waste  generation  remained 
rather  stable  over  the  last  4  years.  It  was 
539 kg/capita in  2022,  5%  above  the  EU  average 
(513 kg/capita).  On  waste  management,  as 
underlined  in  the  Commission’s  early  warning 

48 

00.20.40.60.8102040608010020132014201520162017201820192020202120222023Emissions relative to 2013Mt CO2eCement & LimeChemicalsMetalsRefineriesPower generationOtherFrance (both axes)557555538565539010020030040050060020182019202020212022Kg per capita Waste treatment to be determinedLandfill/disposalTotal incineration (including energy recovery)Composting and digestionMaterial recyclingEU-27 
 
 
  
 
          
 
Table A9.1:  Circularity indicators 

Source: Eurostat, European Environment Agency 

report  on  waste  published  on  8 June 2023 (101), 
France is at risk of missing the target of preparing 
55% of municipal waste for reuse and recycling by 
2025.  France  is  also  at  risk  of  missing the target 
of  recycling  65%  of  plastics  packaging  waste  by 
2025. 

industry.  The 

Government  measures  have  helped  reducing 
pollution  from 
impact  of 
particulate  matter  emissions  from  industry  on  air 
quality is lower than the EU average. The grams of 
PM10  emitted  per  economic  output  (EUR’10) (102) 
remained  stable  at  0.08  in  2021,  versus  an  EU 
average  of  0.09.  In  2010-2021,  the  industrial 
sector  reduced  its  emissions  of  main  pollutants 
into the air. Positive results have been reported for 
industrial  emissions 
into  water  as  well,  and 
nitrogen releases have decreased by 26%. 

Despite  some  positive  trends,  France  would 
benefit  from  improving  construction  and 
demolition  waste  management.  Waste 
generated  from  construction  and  demolition 
activities  per  capita  fluctuated  well  above  the  EU 
average  between  2010  and  2020.  The  proportion 
of backfilling has remained stable since 2014 and 
stood  at  6.5% 
in  2020.  The  recovery  rate 
increased  to  74%  in  2020,  achieving  the  Waste 
Framework Directive’s target for 2020 (70%). 

France  has  taken measures  to optimise  land 
artificialisation. 
the  soil  sealing 
In  2018, 
index (103)  stood  above  the  EU  average,  109.2 
versus 108.3. Land take mostly occurs in cities and 

(101) France — European Environment Agency (europa.eu). 

(102) In 2010 prices. 

their  commuting  zones.  Arable  land  is  the  most 
affected  ecosystem.  To  address  this  challenge, 
France  adopted  the  ambitious  but  contested  Zéro 
Artificialisation Nette Law on 20 July 2023. It aims 
to cut by half the consumption of agri and forest 
lands 
implementation 
arrangements have yet to be determined. 

2030.  Detailed 

by 

The  building  stock  could  be  used  more 
efficiently.  In  2023,  France’s  building  permits 
index, based on useful floor area, stood at 96.7 on 
average, a reduction by 5% compared to previous 
year (104), while the population increased by 2.4%. 
In 2020, France’s residential  floor area per capita 
increased to 53.8 m2, close to the EU average of 
54.4 m2.  At  18.2 m2  per  capita,  France’s  non-
residential  floor  area  is  also  close  to  the  EU 
average 18 m².  

France  is  taking  steps  to  adapt  its  built 
environment to climate change. The country is 
a  frontrunner  when  it  comes  to  whole-life  carbon 
approaches.  A  national  simplified 
life  cycle 
approach  methodology  for  energy  and  whole-life 
carbon  emissions  of  buildings (105)  was  integrated 
into  France’s  2020  buildings  regulation  (RE2020), 
which  aims  to  reduce  new  buildings’  climate 
impact. 

(103) It measures the variation of soil sealing over the years, with 

(104) 2015=100. 

2006 as base (2006=100). 

(105) Developed together with the industry. 

49 

201820192020202120222023EU-27Latest yearIndustryResource productivity (purchasing power standard (PPS) per kilogram)2.72.83.02.93.2-2.52022Circular material use rate (%)19.518.118.718.719.3-11.52022Eco-innovation index (2013=100)116.1122.3125.1124.6130.7-121.52022Recycling of plastic packaging (%)26.926.921.423.1--40.72021Cost of air emissions from industry (EUR bn)29.224.722.826.7--352.72021Built environmentRecovery rate from construction and demolition waste (%)73.0-74.0---89.02020Soil sealing index (base year = 2006)103.5-----103.42018Non-residential floor area (m2 per capita)17.818.018.2---18.02020Waste backfilled (%)6.5-6.5---9.92020 
 
 
 
 
          
 
ANNEX 10: DIGITAL TRANSFORMATION 

infrastructure/connectivity 

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  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 21.6% of its total Recovery 
and  Resilience  Facility  budget  to  digital  (EUR  8.7 
billion) (106).  Under  Cohesion  Policy,  an  additional 
EUR  1.9  billion  (11%  of  the  country’s  total 
Cohesion  Policy  funding) 
is  allocated  to  the 
country’s digital transformation (107).  

and 

The  Digital  Decade  Policy  Programme  sets 
out  a  pathway  for  EU’s  successful  digital 
transformation  by  2030.  France's  national 
roadmap outlines the actions it intends to take to 
reach the objectives and targets at national  level. 
The first Report on the State of the Digital Decade 
highlighted the need to accelerate and deepen the 
collective efforts to reach the EU-wide targets and 
objectives (108).  Among  others,  a  digitally  skilled 
population 
the  development  and 
adoption  of  digital  technologies  and  leads  to 
productivity  gains  and  new  business  models.  It 
also  leads  to  higher  inclusion  and  participation  in 
an environment increasingly shaped by the digital 
transformation (109). 
technologies, 
infrastructure  and  tools  all  play  a  role 
in 
addressing 
the  current  structural  challenges, 
including  strategic  dependencies,  cybersecurity 
and climate change. 

increases 

Digital 

(106) The share of financial allocations that contribute to digital 
objectives has been calculated using Annex VII to the 
Recovery and Resilience Facility Regulation. 

(107) This amount includes all investment specifically aimed at or 
substantially contributing to digital transformation in the 
2021-2027 cohesion policy programming period. The source 
funds are the European Regional Development Fund, the 
Cohesion Fund, the European Social Fund Plus, and the Just 
Transition Fund. 

(108) European Commission (2023): Report on the state of the 

Digital Decade 2023, 2023 Report on the state of the Digital 
Decade | Shaping Europe’s digital future (europa.eu). 

(109) 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) and OECD (2019): Going Digital: 
Shaping Policies, Improving Lives – Summary, 
https://www.oecd.org/digital/going-digital-synthesis-
summary.pdf. 

50 

France is in line with the EU average in terms 
of  digital  skills, but  it is  still far  from being 
among  the  EU  front  runners.  It  scores  above 
the  EU  average  for  basic  digital  skills  (60%  for 
France,  56%  for  the  EU)  and  matches  the  EU 
average  for  ICT  specialists.  An  RRP  measure 
supporting  the  acquisition  of  digital  skills  across 
the workforce is expected to help address some of 
increasing 
the 
personal  training  budgets  to  develop  digital  skills 
for 20 500 employees. 

challenges,  by 

skills-related 

France made considerable progress in digital 
infrastructure/connectivity.  Coverage  of  fibre 
to  the  premises (FTTP)  increased  substantially,  by 
8  percentage  points,  standing  at  81%  in  2023 
(compared  to  64%  in  the  EU).  Coverage  in  rural 
areas  also  increased  considerably,  with  an  FTTP 
coverage  at  65%  against an  EU  average  of  53%. 
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),  by  the  end  of  2025,  to  be  able  to  access 
digital  connectivity  of  more  than  100 Mbit/s  at 
home and at work. As regards mobile connections, 
overall 5G coverage increased to 93% (above the 
EU average of 89%), 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 65% (above the EU 
average of 51%). 

Overall,  French  companies  are  stalling  in 
their  use  of  digital  technologies  in  business 
operations,  and  SMEs  are  lagging  behind. 
Regarding the adoption of advanced technologies, 
as monitored in the Digital Decade, 45% of French 
enterprises  adopted  at  least  one  of  artificial 
intelligence,  cloud  or  big  data  technologies,  which 
is  significantly  below  the  EU  average  of  55%, 
notably for cloud. The share of small and medium-
sized enterprises (SMEs) with at least basic digital 
intensity levels is also below the EU average (52% 
in  France,  58%  for  the  EU).  In  particular,  only 
12.7%  of  French  SMEs  sell  online  (at  least  1% 
turnover), compared with an EU average of 19.1%. 
As  part  of  its  RRP,  France  plans  to  help  small, 
medium  and  mid-tier  companies  to  finance  their 
digitalisation strategies. This includes an increased 
budget allocation for ‘France Num’ and support for 
digital investments. 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 

 
 
 
 
computing, 

ecosystem.  These  are  focused  on  strategic 
technologies  in  key  markets  in  which  France 
considers  it  essential  to  be  a  global  player 
cybersecurity,  artificial 
(quantum 
intelligence,  cloud,  etc.).  France  started 
to 
implement  these  innovation  support  programmes 
by publishing strategies in key areas and launching 
calls  for  projects  and  calls  for  interest.  Regarding 
cybersecurity,  in  2022,  2.4%  of  enterprises  in 
ICT  service  outage  due  to 
France  reported 
cyberattacks  (e.g.  ransomware  attacks,  denial  of 
service  attacks).  Over  the  same  year,  12.1%  of 
ICT 
enterprises  developed  or  reviewed  their 
security policy within the previous 12 months. 

France scores moderately 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  (91%).  The  French  Government  has 
put  forward  a  draft  law  that  aims  at  improving 
digital  public  services  (law  for  simplification  and 
growth).  This  legislation  would  reinforce  the  ‘tell-
us-only-once  principle’  and  will  create  a  digital 
safe  where  companies  will  have  access  to  their 
main  administrative  documents.  Moreover,  France 
has  one  electronic  identification  (eID)  scheme 
notified under the eIDAS Regulation. France made 
good  progress  on  the  access  to  electronic  health 
records,  where  it  caught  up  with  the  EU  average 
(score  of  79),  partly  due  to  the  new  features  of 
‘Mon Espace santé’, introduced in 2023. 

51 

 
Table A10.1:Key Digital Decade targets monitored by the Digital Economy and Society Index 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 evolution will also be monitored separately and taken 
into consideration when interpreting VHCN coverage data in the Digital Decade. 
(3) At least 75% of EU 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 

52 

EUDigital Decade target by 2030 2022202320242024(EU)Digital skillsAt least basic digital skills62%62%60%56%80%% individuals20212021202320232030ICT specialists (1)4.5%4.3%4.7%4.8%20 million% individuals in employment aged 15-7420212022202320232030Digital infrastructure/connectivityFixed very high capacity network (VHCN) coverage63%73%81%79%100%% households20212022202320232030Fibre to the premises (FTTP) coverage (2)63%73%81%64%-% households2021202220232023Overall 5G coverage74%89%93%89%100%% populated areas20212022202320232030Digitalisation of businessesSMEs with at least a basic level of digital intensity47%NA52%58%90%% SMEs2021202320232030Data analyticsNANA34%33%-% enterprises20232023Cloud25%25%23%39%-% enterprises2021202120232023Artificial intelligence7%7%6%8%-% enterprises2021202120232023AI or cloud or data analytics (3)NANA45%55%75%% enterprises202320232030Digitalisation of public servicesDigital public services for citizens69717279100Score (0 to 100)20212022202320232030Digital public services for businesses80797985100Score (0 to 100)20212022202320232030Access to e-health recordsNA547979100Score (0 to 100)2022202320232030France 
 
  
 
 
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  transition  and  ensuring  long-
term competitiveness. 

is  a 

‘strong 

innovator’,  but 

France 
its 
performance  lead  over  the  EU  average  is 
narrowing.  According  to  the  2023  edition  of  the 
Innovation  Scoreboard (110), France’s 
European 
innovation  performance  is  below  the  average  of 
the  EU’s  strong  innovators  (105.3%  compared  to 
111.6%)  and  is  decreasing  over  time  (-1.6% 
between 2016 and 2023). Total R&D intensity fell 
to  2.18%  in  2022,  slightly  below  the  EU  average 
and  moving  further  away  from  the  target  of  3% 
initially set for 2020. 

After  more  than  a  decade  of  subdued  public 
R&D  investment,  the  Research  Programming 
Law  is  expected  to  give  fresh  impetus  to 
French  research,  but  its  effects  will  take 
time  to  accrue  and  may  not  be  sufficient  to 
reverse  the  trend.  Between  2009  and  2022 
there has been a slight but steady decline in public 
R&D  intensity (111),  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  8.89%  in  2020,  below  the  EU  average  of 
9.6%.  To  counteract  this  trend,  the  Research  Law 
is  a  key 
2021-2030,  whose 
deliverable  under 
recovery  and 
resilience plan  (RRP),  has set  a  budgetary  path  to 
gradually  enhance  public  R&D  funding  until 
2030 (112). While acknowledging that the trajectory 
embedded  in  the  law  is  a  good  start  for  public 
reinvestment in  research, the  Senate  warns,  in  its 
report  on  the  research  law’s  implementation,  that 
the  investment  efforts  undertaken  in  2021-2022 
have  been  largely  absorbed  by  inflation (113).  In 
addition, recent cuts to the 2024 budget for higher 

implementation 

the  French 

(110) 2023, European Innovation Scoreboard (EIS). The EIS 

provides a comparative analysis of innovation performance 
in EU countries, including the relative strengths and 
weaknesses of their national innovation systems. 

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

percentage of GDP. 

(112) https://www.vie-publique.fr/loi/275347-loi-de-

programmation-de-la-recherche-2021-2030-lppr  

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

53 

education  and  research  risk  weakening  the  law’s 
ambition and impact.  

(the 

country  has 

Restoring  the  attractiveness  of  research 
careers remains a challenge. The proportion of 
public  researchers  in  the  population (114),  which  is 
at  the  level  of  the  EU  average,  may  seem 
somewhat  modest  in  comparison  to  France's 
seemingly  abundant  pool  of  human  resources  for 
R&I 
second-highest 
proportion  of  new  science  graduates  in  the  EU). 
This 
deteriorating 
part, 
attractiveness  of  academic  careers,  which  have 
become  increasingly  precarious  over  the  last 
decade (115).  Under  the  Research  Law,  important 
measures  are  being  deployed  with  the  aim  of 
making  research  careers  more  attractive,  notably 
through better remuneration and new recruitment 
channels, but it is too early to assess their impact. 

reflects, 

the 

the 

in 

recently 

announced 

Beyond  the  Research  Programming  Law, 
France 
additional 
measures  aimed  at  clarifying  and  enhancing 
the  efficiency  of  its  public  research  system. 
To  address  the  recommendations  of  the  ‘Gillet 
the  French  R&I  ecosystem (116), 
report’  on 
commissioned  by 
the  Higher  Education  and 
Research  minister  and  delivered  in  June  2023, 
France  announced  in  December  2023  that  its 
research system will undergo a series of structural 
changes  within  the  next  18  months.  Notably, 
national  research  organisations  will  be  given  a 
stronger role in steering research programmes and 
structuring  thematic  research  communities  across 
the  country,  while  universities  will  be  granted 
greater  autonomy.  In  addition,  a  Science  Council 
has  been  set  up  to  advise  the  President  on  R&I-
related issues, thus placing science at the heart of 
decision-making. 

Business R&D intensity remains stagnant and 
France’s  innovation  performance  is  not  on  a 
par with  the  high level  of  public  support for 

(114) 4.2 researchers (FTE) employed by the public sector per 

thousand active population. Source: Eurostat. 

(115) The age at which young researchers secure a stable position 
as researcher or lecturer has increased by more than 2 years 
over the last 13 years, while the age at which the doctoral 
degree is obtained has remained stable. (Source: L’état de 
l’emploi scientifique en France, rapport 2023, Ministère de 
l’Enseignement Supérieur et de la Recherche). 

(116) https://www.enseignementsup-recherche.gouv.fr/fr/remise-
du-rapport-de-la-mission-gillet-sur-l-ecosysteme-de-la-
recherche-et-de-l-innovation-91274. 

 
 
 
 
 
business  innovation.  Between  2012  and  2022, 
business R&D intensity remained stable at around 
1.44%. 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 
impôt 
on  a  tax  credit  scheme  called  crédit 
recherche (CIR) – has not had a tangible effect on 
innovation  output,  as  measured  for  example  by 
patents.  Instead,  France’s  international  patenting 
activity has steadily declined over the last decade 
and  is  now  below  the  EU average.  The  evaluation 
of the CIR conducted by the National Commission 
for  the  Evaluation  of  Innovation  Policies  in  2021 
showed  that  the  scheme  had  positive  effects  on 
SMEs (both in terms of R&D activity and economic 
performance)  but  no  significant  effects  on  larger 
firms (117).  Notwithstanding  this,  the  CIR  remains 
the  support  tool  for  business  R&D  which  is  the 
most  popular  among  French  firms (118)  and  no 
adjustments of its design seem to be envisaged. 

Graph A11.1: Business R&D expenditure (as % of 
GDP) 2010-2022 in top R&I performing countries 

Source: Eurostat 

France  is  nurturing  its  dynamic  start-up 
ecosystem, with an increasing focus on deep 
tech.  France’s  favourable  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 quadrupled over the last 10 years). According 
to a joint study by the EPO and the EUIPO, France 
is,  together  with  Finland,  the  country  with  the 
highest share of start-ups filing IP rights (patents 
and trademarks), which, as the study argues, play 
an  important  role  in  facilitating  access  to  finance 

for  innovative  start-ups (119).  As  part  of  France 
2030,  France  is  stepping  up  its  efforts  aimed  at 
boosting the deep tech sector through the creation 
of  29  'pôles  universitaires  d’innovation'  (to  foster 
the transfer of research results between academia 
and  industry)  and  a  dedicated  deep  tech  fund 
which  will  provide  equity  support  to  young 
innovative  companies  at  different  stages  of  their 
development. 

Through France 2030, France is mobilising its 
R&I system to accelerate the twin transition 
and  renew  its  economic  fabric.  The  challenge-
oriented  investment  plan  ‘France  2030’,  launched 
in 2021, will provide EUR 54 billion (120) to support 
the  whole  research-innovation  continuum  (from 
basic  research  to  industrial  deployment)  and  help 
new  technology  leaders  emerge  in  key  sectors. 
Part  of  the  investments  undertaken  under  France 
2030 are included in the French RRP. Importantly, 
France 2030’s investment logic is to spend 50% of 
its expenditure on decarbonising the economy and 
50%  on  ‘emerging’  innovators,  understood  as 
companies  with  less  than  12  years  of  activity  or 
which are doing a radical turnabout, likely to foster 
disruptive  innovation  and  the  renewal  of  the 
productive fabric. The interim evaluation of France 
2030,  published  in  June  2023,  highlights  the 
major macroeconomic effects that this investment 
plan is expected to have (on GDP and employment 
notably) but recommends stronger prioritisation of 
the investments to maximise their impact (121). 

(119) https://www.euipo.europa.eu/fr/publications/2023-startup-

finance. 

(120) Including EUR 20 billion from the fourth Investments for the 

(117)https://www.strategie.gouv.fr/sites/strategie.gouv.fr/files/ato

Future programme, merged with France 2030. 

ms/files/fs-2021-rapport-cnepi-cir-juin.pdf. 

(118) https://www.comite-richelieu.org/wp-

content/uploads/2023/11/231120_ObservInnov.pdf. 

(121)Le Comité de surveillance des investissements d'avenir 

présidé par Patricia Barbizet a rendu au Gouvernement son 
rapport sur France 2030 | info.gouv.fr. 

54 

00.511.522.53BelgiumSwedenAustriaGermanyFrance20102022 
   
 
 
Table A11.1:Key innovation indicators 

(1) EU average for the last 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 EU 

55 

R&D intensity (Gross domestic expenditure on R&D as % of GDP)2.182.232.272.222.182.24Public expenditure on R&D as % of GDP0.780.750.740.710.700.73Business enterprise expenditure on R&D (BERD) as % of GDP1.381.441.491.461.431.48Scientific publications within the top 10% most cited publications worldwide as % of total publications 10.29.78.89::9.6Patent Cooperation Treaty (PCT) patent applications per billion GDP (in PPS)4,14.23.3::3.4Public-private scientific co-publications as % of total publications7.78.48.7997.6Public expenditure on R&D financed by business enterprise (national) as % of GDP0.034:0.0340.032:0.054New graduates in science & engineering per thousand pop. aged 25-34:20.924.125:16.9Total public sector support for BERD as % of GDP0.42:0.4510.446:0.204R&D tax incentives: foregone revenues as % of GDP0.2780.2820.2940.284 :0.104Share of environment-related patents in total patent applications filed under PCT (%)15.2 15.0 : : :14.7Venture capital (market statistics) as % of GDP0.0290.0330.0750.0940.1140.085Employment share of high growth enterprises measured in employment (%):9.527.29::12.51EUaverage (1)Finance for innovation and economic renewalSource: Eurostat, OECD, DG JRC, Science-Metrix (Scopus database and EPO’s Patent Statistical database), Invest EuropeKey indicators Quality of the R&I systemAcademia-business cooperationHuman capital and skills availabilityPublic support for business enterprise expenditure on R&D (BERD)Green innovation 2022France2010201520202021 
 
   
 
ANNEX 12: INDUSTRY AND SINGLE MARKET 

compared  to  35%  in  Germany,  27%  in  Italy  and 
10% in Spain.  

social 

reduced 

Over  the  last  few  years,  France  has  taken 
measures to rein in production costs. To keep 
labour costs down and boost  employment, France 
has 
security 
employers’ 
contributions  on  low  wages.  However,  although 
France’s hourly labour costs increased less than in 
the  euro  area  between  2013  and  2019,  they  are 
still  among  the  highest  in  the  EU  (EUR  40.8  per 
hour  in  France  against  EUR  30.5  in  the  EU  in 
2022) (126),  especially  in  the  construction  and 
service sectors. France also lowered the corporate 
tax rate and taxes on production. Nevertheless, the 
combined  (central  and  sub-central  government) 
statutory  corporate  income  tax  rate,  now  at 
25.8%,  is  higher  than  in  most  EU  countries (127) 
and  the  production  taxes  are  still  much  higher  in 
France than in neighbouring countries.  

While  France’s  labour  productivity  remains 
higher than the EU aggregate productivity, it 
has  grown  at  a  slower  pace  than  the  latter 
since the 2000s and has dropped since 2019. 
Over the last two decades and until 2019, France’s 
real  labour  productivity  grew  in  line  or  slightly 
faster than that of peer countries, but more slowly 
than  the  EU  aggregate  labour  productivity.  It 
decreased from around 135% of the EU aggregate 
in the early 2000s to 126% in 2019 (128). After the 
outbreak  of  the  COVID-19  crisis,  France’s  labour 
productivity  declined  and  fell  to  around  117%  of 
the EU aggregate in 2023. This evolution of labour 
productivity  took place  amid  very  low total  factor 
productivity  growth  on  average,  which  started  to 
diverge  from  the  euro  area  aggregate  in  2019 
(see Graph A.12.1).  

for 

Institute 

French  competitiveness  remains  fragile.  The 
Management 
International 
Development (122)  ranks  France  33rd  out  of  64 
economies in its competitiveness ranking, which is 
five places below last year. According to the same 
source, France’s main weaknesses are in tax policy 
and  public  finances.  Its  strengths  are  high  direct 
investment  flows  and 
infrastructure.  France’s 
position on infrastructure is nevertheless declining, 
which  might  be  explained  by  the  low  level  of  net 
public 
public 
investment  is  high  in  France  compared  to  the  EU 
average  (4.3%  of  GDP  in  2023  vs.  3.5  %  in  the 
EU),  net  public  investment  represented  only  0.6% 
of France’s GDP in 2023, far below the EU average 
(1.2%) (see Table A12.1).  

investment. 

Although 

gross 

Compared to the Euro Area average, France’s 
relatively worse export performance over the 
last  two  decades  has  widened  since  the 
Covid-19 crisis. This is partly due to a temporary 
drop  in the production of France’s export-oriented 
sectors (e.g. aeronautics, shipbuilding and tourism) 
because  of  the  pandemic  crisis.  However,  despite 
the recent recovery of these sectors, and although 
price competitiveness indicators following both the 
COVID-19  and  the  energy  crises  have  not  shown 
to 
any 
European  peers (123),  France  has  not  regained  its 
2019  export  market  shares.  Since  2019,  France’s 
share  in  euro  area  exports  decreased  by  0.9 
percentage points for goods and services (-1 point 
for goods, and -0.6 points for services) (124).  

substantial  deterioration 

compared 

Containing  production  costs 
is  key  to 
maintaining  France’s  price  competitiveness. 
According 
to  France’s  national  productivity 
board (125), over the last few decades France’s low 
competitiveness  has  been  mainly  due  to  rising 
than  unfavourable 
rather 
production 
specialisation. Faced with rising costs, many firms 
have  moved 
their  production  sites  abroad. 
Employment  in  the  foreign  industrial  subsidiaries 
to  68%  of 
of  French  groups  corresponds 
employment  in  the  industrial  sector  in  France, 

costs 

(122) IMD, World Competitiveness Ranking – France, 6/2023. 

(123) See in-depth review for France, European Commission, 

SWD(2024) 100 final 

(126) Eurostat, labour cost levels by NACE  

(124) Rexecode, bilan compétitivité France 2023, 1/2024. 

(127) OECD, tax database, Table II.1 statutory corporate income 

(125) Conseil national de productivité, Productivité et compétitivité, 

tax. 

5/2022. 

(128) Eurostat, GDP per hour worked in purchasing power standard. 

56 

 
 
 
 
 
Graph A12.1: Total factor productivity (index 100 
in 2015) 

Source: EC, Ameco. 

labour 

productivity 

structural  weaknesses 

have 
France’s 
dampened 
growth. 
Structural  weaknesses  include  the  lack  of  skills 
and skills mismatches (see Annex 14), the lack of 
digitalisation  among  small  and  medium-sized 
enterprises  (SMEs)  (see  Annex  10),  stagnating 
business  R&D  intensity  (see  Annex  11)  and  a 
regulatory framework that impedes competition in 
services (see below).  

Since  2019,  factors  that  contributed  to 
dynamic  employment  growth  have  also 
weighed  on  productivity.  They  include  less 
qualified  employees  entering  the  job  market,  the 
development  of  apprenticeships,  labour  hoarding 
in  sectors  hit  by  recent  crises  and  the  effect  of 
COVID  support  policies,  such  as  the  partial 
unemployment  schemes  and  measures  to  avoid 
bankruptcies.  According  to  Banque  de  France (129), 
some  of  these  factors  will  have  long-lasting 
effects on labour productivity. However, Banque de 
France  and  the  National  Productivity  Board (130) 
highlight  that  less  qualified  employees  entering 
the  development  of 
the 
apprenticeships,  even  though  they  weigh  on 
productivity, increase the employment rate and are 
likely  to  increase  potential  output  in  the  medium 
term.  

job  market  and 

Firms are less exposed to global shocks than 
in  2022.  Energy  prices  are  falling,  and  supply 
chain disruptions are becoming less frequent, even 
though  the  situation  has  not  returned  to  pre-
COVID times. The share of firms facing constraints 

(129) Banque de France, projections économiques, encadré 2, 

12/2023. 

linked  to  material  shortages  fell  from  42.6%  in 
2022 to 26.5% in 2023 (EU  average 17.2%) (see 
Table  A12.1).  These  shortages  harm  industries 
with  a  high  share  of  material  inputs  such  as 
automotive,  aerospace,  defence  and  consumer 
goods (131).  On  critical  raw  materials,  France’s 
import  concentration  index  is  in  line  with  the  EU 
average  (see  Table  A12.1).  France  has  adopted  a 
national  strategy  to  reduce  its  dependency  on 
critical raw materials. In addition, the France 2030 
investment  plan  comprises  various  calls  for 
projects  targeting  critical  raw  materials  with  a 
budget of EUR 1 billion.  

France  attracts  the  highest  number  of 
foreign  direct  investment  projects in the  EU. 
With  1 259  locations  or  extensions  announced  in 
2022,  France  maintained  first  place 
in  the 
European  ranking  of  EY (132)  for  the  fourth  year 
running. In 2022, 4 out of 10 projects were a plant 
industrial 
location  or  extension.  According  to 
leaders,  the  availability  of  decarbonised  energy 
and  a  skilled  workforce  are  France’s  main  assets, 
while  the  lack  of  industrial  land  and  flexibility  in 
environmental and urban planning regulations are 
the main weakness.  

Business investment is holding up, but SMEs’ 
investments  in  innovation  and  in  the  twin 
transition  are  still  insufficient.  In  2023,  net 
private  investment  represented  4.2%  of  France’s 
GDP, which was above the EU average (3.8%) (see 
Table  A12.1),  but  business  expenditure  on  R&D 
only  reached  1.43%  of  GDP  in  2022,  which  is 
slightly below the EU  average (1.48%) (see Annex 
Investment 
11).  According  to  the  2023  EIB 
Survey (133),  83%  of  French  firms  invested  in  the 
last  financial  year,  a  share  in  line  with  the  EU 
average  (85%).  However,  only  30%  of  French 
firms  (99.8%  of  which  are  SMEs)  invested  to 
develop  new  products,  processes  and  services, 
which  is  one  of  the  lowest  shares  in  the  EU.    In 
addition,  only  around  40%  of  them  invested  in 
measures to improve energy efficiency. This share 
is  much  higher  than  the  year  before,  but  still 
smaller than in most other EU Member States. On 
digitalisation, French SMEs are still lagging behind 
the EU average (see Annex 10).  

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

stratégiques des opérations en 2021, 2021. 

(132) EY, Baromètre EY de l’attractivité de la France, May 2023. 

(130) Conseil national de productivité, Bilan des crises, 10/2023.  

(133) EIB Investment Survey 2023, EU overview, 10/2023. 

57 

9899100101102103104105106FRDEESITEuro Area 
     
 
 
SMEs  could  better  exploit  the  single  market 
opportunities  to  grow.  Intra-EU  imports  and 
exports  as  a  share  of  GDP  have  been  declining 
slightly  for  several  years.  This  share  is  now  the 
lowest  in  the  EU  with  18.5%  of  GDP  (against 
42.9%  on  average  for  EU  Member  States)  (see 
Table  12.1).  In  the  industry,  only  6.2%  of  French 
SMEs export goods to other EU Member States (EU 
average:  15.9%) (134).  Only  7%  of  French  SMEs 
have  tried  to  hire  people  from  other  Member 
States,  a  share  twice  as  small  as  the  EU 
average (135).  In  August  2023,  France  launched  a 
plan to help businesses export (136).  

to 

investment 

long-term  barriers 

Labour  and  skills  shortage  are  one  of  the 
main  barriers  to  investment.  When  asked 
in 
about 
2023 (137),  French  firms  pointed  to  the  lack  of 
available  staff  (83%  vs  81%  in  the  EU).  While 
skills and labour shortages persist in most sectors 
of  the  economy  (see  Annex  14),  difficulties  in 
finding  employees  with  the  right  skills  is  the 
biggest  problem  for  French  SMEs (138).  45%  of 
them  find  it  very  difficult  to  find  and  hire  staff 
with  the  right  skills  (against  38%  in  the  EU).  In 
industry,  the  lack  of  staff  is  cited  as  the  main 
barrier 
decarbonisation 
products (139).  The  massive  investments  in  battery 
manufacturing  will  further  increase  the  skills 
needed. 

investing 

to 

in 

Access  to  finance  remains  satisfactory, 
although  businesses  suffer  from  the  rise  in 
interest rates. On loans, France’s EIF SME Access 
to  Finance  Index  remains  well  above  the  EU 
average (0.72  against  0.49) (140).  However,  French 
businesses have suffered from the rise in interest 
rates  (see  Annex  18).  In  October  2023,  10.6%  of 
SMEs  said  that  they  did  not  access  the  loan 
requested  either  because  it  was  rejected  by  the 
bank  or  because  they  withdrew  their  request  due 

(134) European Commission, 2023 SME factsheet- France. 

(135) European Commission, Eurobarometer 537, SMEs and skills 

shortages, country factsheet France,  

(136) France diplomatie, lancement du plan « Osez l’export », 

31/08/2023 

(137) EIB Investment Survey 2023, EU overview, 10/2023. 

(138) European Commission, Flash Eurobarometer 537, SMEs, and 

skills shortages, 11/2023. 

(139) Wavestone, Baromètre de l’industrie 4.0, 26/10/2023. 

to too high interest rates. This represents a share 
much higher than in 2021 (2.7%) and 2022 (6.1%) 
and is higher than the EU average (10.2%) (141). On 
equity, France is now above the EU average (0.24 
against  0.17).  Venture 
investment 
represented a higher share of GDP in France than 
in the EU in 2022 (0.114% against 0.085%). It has 
allowed  France  to  develop  a  dynamic  start-up 
system (see Annex 11).  

capital 

Late payments continue to disrupt SME cash 
flows  and  hinder  their  ability  to  invest.  The 
share of SMEs experiencing late payment is higher 
in France than in the rest of the EU (57.4% against 
48.9%) (142).  The  business-to-business  payment 
gap  in  2023  remained  the  same  as  in  2022  (17 
days), above the EU  average of 15 days (143)  (see 
Table  A12.1).  The  payment  gap  from  the  public 
sector dropped from 23 days in 2022 to 18 days 
in  2023,  but  is  still  above  the  EU  average  (16 
days).  Despite  the  reduction  in  the  payment  gap 
from  the  public  sector,  the  payment  gaps  from 
public  health  bodies  and  from  local  authorities 
tend to increase (144), significantly affecting SMEs.  

in  2021,  4%  of 

France  provides  substantial  funding  to 
support  business  investment  and innovation. 
According  to  the  OECD (145),  France’s  industrial 
policy  expenditure  amounted  to  EUR  99.4  billion 
(bn) 
It  was 
significantly  higher  than  in  comparable  countries. 
France  is  the  Member  State  that  devotes  the 
highest  share  of  its  GDP  to  support  business 
innovation  (see  Annex  11).  In  addition,  France  is 
implementing  France  2030,  an 
investment 
program  worth  EUR  54bn (147)  over  5  years,  to 
support investment in key sectors of the economy.  

its  GDP (146). 

(141) European Commission and European Central Bank, 2023 
SAFE survey, question Q7Ba) Survey conducted between 
September and October 2023. 

(142) European Commission and European Central Bank, 2023 

SAFE survey.  

(143) Intrum, European payment report 2023 

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

paiements 2022, 6/2023. 

(145) OECD, Quantifying Industrial strategy, France factsheet. 

(146) This includes the tax credit for competitiveness and 

employment (Crédit d’Impôt compétitivité et emploi) (0.29% 
of GDP), which has been replaced by a reduction in 
employers’ social security contributions.  

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

(147) including  EUR 20bn from “Programme d’investissements 

2023, 2023.  

d’avenir” 

58 

 
 
 
and 

permitting 

the  green 

France  helps 
industry  by 
unlocking 
simplifying 
investments. In October 2023, France adopted a 
law  for  green industry.  The  law  aims  to  speed  up 
the  permitting  procedures  to  build  factories, 
for 
improve 
land 
the  procedures 
industrial 
planning  and  brownfield 
regeneration,  boost 
private  financing  for  low-carbon  projects  and 
better  consider  environmental  criteria  in  public 
procurement  procedures.  In  addition,  France  has 
set  up  a  EUR 2.9 bn  tax  credit  scheme  to  support 
the manufacturing of clean tech industries. France 
is ranked 6th out of 32 countries in the world for 
its net zero readiness (148). 

France  is  accelerating  the  deployment  of 
renewable energy sources, but more needs to 
be done. On 10 March 2023, the country adopted 
a  law  to  accelerate  the  deployment  of  renewable 
energy  sources.  This  law  simplifies  the  permitting 
procedures  with  the  objective  of  halving  the  time 
needed  by 
to  authorise 
the  administration 
renewable energy projects. However, there is still a 
need  for  clear  and  accelerated  deadlines  for 
projects outside the acceleration zones introduced 
in the new law (see Annex 7). In addition, France is 
still  lagging  behind  on  the  introduction  of  a  one-
stop shop for renewable energy permitting.  

France  strives  to  reduce  the  administrative 
burden on businesses, which is still perceived 
as heavy. Despite the ESSOC (149), PACTE (150) and 
ASAP (151)  laws,  49%  of  businesses  find  that  the 
complexity  of  administrative  procedures  is  a  very 
serious problem (against 33% in the EU) (152).  One 
of  the  reasons  for  this  perception  is  that,  despite 
simplification of the body of rules and procedures, 
new rules and procedures are added. Furthermore, 
the  change  of  procedure 
the 
can 
badly 
simplification, 
temporarily complicate the lives of businesses. For 
instance, 
for  businesses’ 
administrative  procedures,  created  in  early  2023 
under  the  PACTE Law,  has  not  worked  properly in 
its  first  few  months  and  has  caused  serious 

required  by 
implemented, 

the  single  point 

if 

(148) KPMG, Net zero readiness index. 

(149) Law n° 2018-727 of 10 August 2018. 

(150) Law n° 2019-486 of 22 May 2019. 

problems  for  businesses.  On  24  April  2024,  the 
the 
government 
simplification of economic life.  

tabled  a  bill  of 

law  for 

of 

the 

form 

restrictions 

remain  high 

Regulatory 
in 
several regulated professions. This is the case 
for  accountants  and  tax  advisers,  patent  agents, 
estate  agents  and  architects.  These  restrictions 
shareholding 
take  mostly 
requirements  and  company  form  restrictions. 
Exclusive  rights  for  accountants  and  tax  advisers 
remain  broad,  harming 
the  development  of 
innovative  services.  The  long  duration  of  the 
mandatory qualification for estate agents could be 
an obstacle for new market entrants. For lawyers – 
the  most  regulated  profession 
the  EU–, 
regulatory  restrictions  are  only  slightly  below  the 
EU  average (153).  On  8  February  2023,  France 
adopted  an  ordinance (154)  to  clarify  and  simplify 
provisions applicable to professional companies. 

in 

it  comes 

In the retail sector, as reflected in the Retail 
Indicator (155),  France  has 
Restrictiveness 
higher restrictions on the operations and the 
in  2022 
establishment  of  retail  shops 
compared to 2018.  Such restrictions have been 
introduced  by  certain  provisions  of  ELAN (156), 
PACTE,  climate  and  resilience (157)  and  EGalim 
laws.  According  to  the  recent  update  of  the 
indicator,  France  is  the  most  restrictive  Member 
State  when 
regulatory 
frameworks.  The  main  objective  of  the  EGalim 
laws (EGalim 1 in 2018, EGalim 2 in 2021, EGalim 
3  in  2023  and  the  law  of  17  November  2023 
against  inflation  of  consumer  products)  is  to 
rebalance negotiating power along the food supply 
chain  to  provide  a  fair  remuneration  to  farmers. 
EGalim  3  seems 
the 
operations  of  European  retail  alliances,  which  are 
an  important  element  of  competition  along  the 
supply  chain,  in  particular  in  terms  of  their 
capability to lead to lower retail prices for products 
that consumers buy daily.    

to  negatively 

impact 

retail 

to 

(153) European Commission, Communication on updating the 
reform recommendations for regulation in professional 
services, COM(2021)385. 9/7/2021. 

(154) Ordonnance n° 2023-77 du 8 février 2023 relative à 

l'exercice en société des professions libérales réglementées. 

(155) European Commission, Retail restrictiveness indicator (2022 

(151) Law n° 2020-1525 of 7 December 2020. 

update). 

(152) European Commission, Flash eurobarometer 507, report 

p.58, Fieldwork: April 2022. 

(156) Law n° 2018-1021 of 23 November 2018.  

(157) Law n° 2021-1104 of 22 August 2021. 

59 

 
 
 
results 

has  mixed 

France 
regarding 
It 
compliance  with  single  market  rules. 
implements directives on time, but the percentage 
of  directives  transposed  incorrectly  is  slightly 
above  the  EU  average.  The  duration  of  the 
infringement  procedures  is  increasing  and  is  one 
of the longest in the EU (158). Regarding SOLVIT, an 
informal problem-solving network of the European 
Commission  and  the  Member  States,  France 
solved 85.8% of the 432 cases it handled as lead 
centre,  below  the  EU  average  of  88.3%.  The  time 
necessary  to  handle  the  cases  is  extremely  long 
and  shows  the  need  for  more  staff  in  France’s 
SOLVIT centre. 

is 

the  system  will  enable 

France 
in  the  preliminary  stage  of 
implementing  the  components  needed  to 
connect to the  ‘Once-Only’  Technical  System 
(OOTS) (159). As part of the Single Digital Gateway 
Regulation (160), 
the 
automated  exchange  of  evidence  between 
competent  authorities,  improving  online  access  to 
information, 
and 
assistance within the EU. The onboarding of French 
competent  authorities is  crucial  for  the  system  to 
function  smoothly  and  to  reduce  administrative 
burden. 

administrative 

procedures 

(158) European Commission, Single Market Scoreboard 

(159) Implementing Regulation (EU) 2022/1463. 

(160) Regulation (EU) 2018/1724. 

60 

 
 
Table A12.1:Industry and the Single Market 

Source: (1) AMECO, (2) Eurostat, (3) Single Market Scoreboard, (5) ECFIN BCS, (6) COMEXT and Commission calculations, (7) EIB 
Investment Survey, (8) Intrum Payment Report, (9) SAFE survey, (10) EIF SME Access to Finance Index 
* Own Commission calculations for the EU27 average 

61 

POLICY AREAINDICATOR NAME20192020202120222023EU27 average*Net Private investment, level of private capital stock, net of depreciation, % GDP14,63,14,74,84,23,8Net Public investment, level of public capital stock, net of depreciation, % GDP10,40,20,30,30,61,2Real labour productivity per person in industry (% yoy)2-1,3-8,22,9-30,3-1,24Cost competitivenessNominal unit labour cost in industry (% yoy)2-2,532,46,94,19,83Single Market integrationEU Trade integration, % (Average intra-EU imports + average intra EU exports)/GDP216,815,216,819,818,542,9Transposition deficit, % of all directives not transposed30,30,30,60,30,10,7Conformity deficit, % of all directives transposed incorrectly31,41,71,51,41,31,1SOLVIT, % resolution rate per country395,789,282,588,086,088,3Number of pending infringement proceedings3323439393125,9RestrictionsEEA Services Trade Restrictiveness Index40,070,070,070,070,070,05Single bids, % of total contractors3191819222228,6Direct Awards, %3232228,1Material Shortage (industry), firms facing constraints, %518,115,531,342,626,517,2Labour Shortage using survey data (industry), firms facing constraints, %513,69,710,719,319,823,3Vacancy rate, % of vacant posts to all available ones (vacant + occupied)2-----2,5Concentration in selected raw materials, Import concentration index based on a basket of critical raw materials60,170,160,170,190,220,22Installed renewables electricity capacity, % of total electricity produced20,40,40,40,450Investment obstaclesImpact of regulation on long-term investment, % of firms reporting business regulation as major obstacle724,921,921,316,018,022,2Bankruptcies, Index (2015=100)280,748,943,165,889,3105,6Business registrations, Index (2015=100)2153,2160,2185,9188,2186,6120,2Payment gap - corporates B2B, difference in days between offered and actual payment8-1511171715Payment gap - public sector, difference in days between offered and actual payment8-139231816Share of SMEs experiencing late payments in past 6 months, %950,843,943,547,357,348,7EIF Access to finance index - Loan, Composite: SME external financing over last 6 months, index values between 0 and 1100,760,830,850,72-0,49EIF Access to finance index - Equity, Composite: VC/GDP, IPO/GDP, SMEs using equity, index values between 0 and 110 0,360,130,200,24-0,17ECONOMIC STRUCTUREShortagesStrategic dependenciesBUSINESS ENVIRONMENT - SMEsBusiness demographyLate paymentsAccess to financeFranceHEADLINE INDICATORSEconomic StructureSINGLE MARKETCompliancePublic procurement  
 
     
 
ANNEX 13: PUBLIC ADMINISTRATION 

France’s  public  administration  is  essential 
for  the  economy’s  competitiveness  by,  in 
particular,  shaping  the  conditions  for  the 
twin  transitions  and  creating  a  favourable 
business  environment. Despite the  falling trend 
in  recent  years,  France  ranks  above  the  EU 
average 
the  perception  of  government 
effectiveness (Graph  A13.1).  The  government  has 
implemented several measures to reform the civil 
service,  improve  the  digitalisation  of  its  public 
services  and  prepare  the  public  administration  to 
lead and drive the green transition. 

for 

Graph A13.1: Government effectiveness 

Some  progress  has  been  made  on  gender 
parity  in  senior  civil  service  positions  (Table 
A13.1).  France  adopted  a  law  to  increase  the 
quota  of  women  in  senior  positions  to  50%, 
previously  set  at  40%  in  the  Sauvadet  Law.  The 
law  will  enter  into  force  in  state  and  hospital 
administrations  on  1 January 2026  and  in  local 
administrations 
in  2026  and  2028.  Despite 
narrowing  over  the  past  10  years,  in  2021  the 
gender  gross  pay  gap  for  civil  servants  was 
14% (161).  The  government  has  set  up  an 
occupational  equality  index  between  men  and 
women in the national civil service to monitor and 
reduce this gap. 

France  has  taken  further  action  to  equip  its 
public  administration  with  the  tools  and 
skills to tackle the green transition. Measures 
to  improve  the  energy  performance  of  public 
buildings  are  accompanied  by  a  plan  to  train 
25 000  senior  government  officials  on  topics 
related  to  green  transition  by  the  end  of  2025. 
Training  will 
causes  and 
consequences of the three crises (climate, natural 
resources  and biodiversity)  and  how  civil  servants 
can act individually and collectively to address the 
green transition challenges. 

focus  on 

the 

The  maturity  of  France’s  digital  public 
services  is  slightly  below  the  EU  average 
(Table  A13.1  and  Annex  10).  However,  it  scores 
individual’s 
well  above  the  EU  average  for 
interaction with the government through websites. 
To improve access to digital services, including the 
France  Connect  platform,  the  government  has 
deployed digital identity cards, as part of its (RRP). 

The  mandate  of  France’s  independent  fiscal 
institution, as measured by the Commission’s 
scope index of fiscal institutions’ (SIFI) index, 
is narrower than in most other EU countries. 
Areas  for  improvement  include  the  capacity  to 
monitor  all  the  fiscal  rules  for  the  general 
long-term 
a 
and 
government 
sustainability analysis (Graph A13.2). 

perform 

The  efficiency  of  the  justice  system  still 
faces  challenges.  However,  after  a  significant 

(161) See the annual report on the status of civil service, published 

by DGAFP, available at https://www.fonction-
publique.gouv.fr/toutes-les-publications/ecart-de-
remuneration-entre-les-femmes-et-les-hommes-
fonctionnaires-dans-la-fonction-publique-de-letat-en-2021   

62 

Average value over 2018-2022 and change over 2018-2022. 
The GDP per head bar shows the mean value of the 
government effectiveness indicator for the group of EU 
countries belonging to the same GDP per head cluster as 
France (EU countries are ranked in terms of their GDP per 
head and grouped into three equally sized clusters). 
Source: Worldwide Governance Indicators. 

to 

increase 

is  working 

France  has  taken  measures  to  tackle  the 
its  civil  service.  The 
challenges  facing 
government 
the 
attractiveness  of  the  civil  service  through  the 
development  of  a  state  employer  brand,  the 
overhaul of the single recruitment portal (Place de 
l’emploi  public), 
recruitment 
changing 
modalities to access civil service positions through 
new competitions, increasing the number of young 
apprentices,  developing  coaching  and  mentoring 
for  equal  opportunities  and  supporting  young 
talent across the country. The cross-cutting reform 
of  the  senior  civil  service,  set  out  in  the  recovery 
and  resilience  plan  (RRP),  is  ongoing  and  covers 
recruitment  methods  and 
senior 
government officials’ career pathways. 

changing 

the 

-0.20.00.20.40.60.81.01.21.4FREU-27GDP perhead clusterChange 2018-2022Average 2018-2022 
 
   
 
 
Table A13.1:Public administration indicators 

(1) High values denote a good performance, except for indicator # 6. (2) 2023 value. If unavailable, the latest value available 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: E-government activities of individuals via websites, 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 A13.2: Scope index of independent fiscal 
institutions 

increase  in  2020,  the  estimated  time  needed  to 
resolve  cases  decreased  in  2022,  in  particular  at 
first  instance  (297  days  for  civil,  commercial, 
administrative  and  other  cases  and  333  days  for 
litigious civil and commercial cases). The quality of 
the justice system is good overall. The lack of staff 
does 
significant 
investments  and  initiatives  aim  to  tackle  this  (a 
recently adopted law provides for additional posts 
in  the  judiciary).  The  level  of  digitalisation  needs 
improvement,  but  investments  are  being  made  to 
address this. On judicial independence, no systemic 
deficiencies have been reported (162). 

challenge,  but 

remain  a 

(1) 2022 data. Rhs: right hand side.  
Source: European Commission 

(162) For a more detailed analysis of the performance of the 

French justice system, see the 2024 EU Justice Scoreboard 
(forthcoming) and the country chapter on France in the 
Commission’s 2024 Rule of Law Report (forthcoming). 

63 

01020304050607005101520253035MonitoringcomplianceMacro forecastBudget forecastSustainabilityassessmentFiscaltransparencyNormativeassessmentsTotalSubcomponentsTotal(rhs)HREU-27FR20192020202120222023EU-27(2)1n/an/an/a90.090.875.02n/a71.669.769.773.675.830.90.91.01.01.00.8441.142.245.1 (b)48.148.652.9525.515.313.6 (b)17.018.117.9642.838.637.837.829.09.271.61.61.5 (bd)1.6 (d)1.51.580.80.80.80.8n/a0.790.80.80.81.4n/a1.410n/an/a1.89n/an/a1.7Medium-term budgetary framework indexIndicator (1)E-government and open government dataShare of internet users within the last year that used a public authority website or appE-government benchmark overall score (3) Open data and portal maturity indexEducational attainment level, adult learning, gender parity and ageingShare of public administration employees with higher 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 the EU headline and national targets for 2030 
on employment, skills and poverty reduction. 

Table A14.1:Social Scoreboard for FRANCE 

the  EU  average,  although  they  are  significantly 
higher in the outermost regions.  

of 

situation 

employment 

The 
under-
represented  groups  remains  a  structural 
challenge.  The  employment  gap  is  significantly 
higher  than  the  EU  average  for  the  low-skilled 
(21 percentage  points  (pps)  vs  17  pps  in  2023) 
and  for  people  born  outside  the  EU  (12.1  pps  vs 
7.6  pps).  Among  the  latter,  women  are  at  a 
particular  disadvantage,  with  a  high  employment 
gap  compared  to  French-born  women  (18.3 pps). 
Some  of  the  difficulties  faced  by  those  born 
outside  the  EU  also  affect  second  and  third 
generations.  Persons  with  a  migrant  background 
tend  to  be  over-represented  among  workers  with 
fixed-term  contracts  (17.2%  compared  to  14.2% 
for  people  without  a  migrant  background  in 
2021) (163). The labour market challenges faced by 
under-represented  groups  are  also  fuelled  by 
inequalities  in  the  education  system (164).  The 
socio-economic  and  migrant  backgrounds  on 
educational  outcomes  continue 
to  have  a 
significant impact (165) (see Annex 15).  

To  address  these  challenges,  reforms  have 
been  introduced  to  increase  labour  market 
participation  and  to  improve  the  quality  of 
jobs.  To  reduce  the  comparatively  high  share  of 
fixed term contracts (14.5% vs. 12.9% at EU level 
in  2022),  a  first  reform  of  the  unemployment 
insurance  was  implemented  between  2019  and 
2021.  The  reform  changed  the  calculation  of 
unemployment  benefits  to  discourage  series  of 
introduced  a 
very  short-term  contracts  and 
modulation 
employer's 
of 
contributions  to  disincentivise  the  abuse  of  very 
short-term contracts in sectors most affected. The 
impact  of  these  measures  is  currently  being 
assessed  and  requires  close  monitoring (166).  In 

unemployment 

(163) DARES, “Quelles situations sur le marché du travail des 
immigrés et des descendants d’immigrés en 2021?”, 
Analyses, n°15, mars 2023. 

(164) DARES, Quels sont les métiers des immigrés ?,Analyses n°36, 

July 2021. 

(165) OECD, PISA 2022 Results (Volume I): The State of Learning 
and Equity in Education, PISA, OECD Publishing, 2023. 

(166) DARES, “Rapport intermédiaire du comité d’évaluation de la 
réforme de l’assurance chômage initiée en 2019”, février 
2024.  

Update of 25 April 2024. Members States are categorised 
based on the Social Scoreboard according to a methodology 
agreed with the EMCO and SPC Committees. Please consult 
the Annex of the Joint Employment Report 2024 for details on 
the methodology. 
Source: Eurostat 

In  a  context  of  high  inflation,  economic 
activity  in  France  slowed  down  in  2023. 
Following  the  strong  recovery  after the COVID-19 
pandemic,  the  French  employment  rate  (20-64 
age group) has reached a plateau (74.4%, close to 
the  EU  average  of  75,3%  in  2023),  including  for 
young people (aged 15-24; 35,2% on par with the 
the  overall 
in  2023’.  Despite 
EU  average 
improvement,  the  unemployment  rate  and  labour 
market  slack  were  both  above  the  EU  average 
(respectively 7.6% vs 6.1% in Q4-2023 and 14.7% 
vs  11.9%%  in  Q4-2023).  At  the  same  time,  the 
rates for both youth unemployment and for those 
not  in  employment,  education  or  training  (NEETs) 
have continued to improve, while remaining above 

64 

49.27.659.712.35.54.674.47.31.8108.82127.542.0120.86.556.23.2Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic labour markets and fair working conditionsEmployment rate(% of the population aged 20-64, 2023)Unemployment rate(% of the active population aged 15-74, 2023)Long term unemployment(% of the active population aged 15-74, 2023)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2022)Social protection and inclusionAt risk of poverty or social exclusion (AROPE) rate (% of the total population, 2022)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2022)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2022)Disability employment gap (percentage points, population aged 20-64, 2022)Housing cost overburden (% of the total population, 2022)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2022)Self-reported unmet need for medical care (% of the population aged 16+, 2022)Better than averageBest performersPolicy areaHeadline indicatorEqual opportunities and access to the labour marketAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Early leavers from education and training(% of  the population aged 18-24, 2023)Share of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Young people not in employment, education or training(% of the population aged 15-29, 2023)Gender employment gap(percentage points, population aged 20-64, 2023)Income quintile ratio (S80/S20, 2022) 
 
 
 
   
 
 
 
parallel,  eligibility  conditions  have  been  made 
stricter.  Since  February  2023,  new  rules  adjusted 
the  duration  of  unemployment  benefits  to  the 
economic  cycle  (labour  market  outcomes)  to 
incentivise  a  faster  return  to  work  when  vacancy 
rates  are  high.  A  comprehensive  reform,  "France 
Travail",  has  been  implemented  since  1  January 
2024  to  improve  the  functioning  of  the  French 
public  employment  service,  including  the  creation 
of  an  employment  network  providing  a  better 
integration of employment and social services.  

Skills  and  labour  shortages  persist  in  most 
sectors of the French economy.  While the lack 
of  skilled  workers  is  one  of  the  main  barriers  to 
recruitment, especially in the ICT sector, in others, 
such  as  the  home  care,  catering  and  construction 
sectors, labour shortages also appear to be linked 
to  working  conditions (167).  In  the  green  economy, 
labour  shortages  are  especially  strong  in  the 
building  and  transport  sectors  (see  Annex  8). 
Together  with  the  low  levels  of  employment  of 
some  groups  and  other  challenges,  skills  and 
labour  shortages  undermine  France’s  potential  to 
improve its economic competitiveness. Indeed, one 
of  the  main  barriers  to  business  investment  has 
been  the  lack  of  available  staff  (see  Annex  12). 
The  skills  investment  plan  and  the plan  to  reduce 
the 
recruitment  pressures  are 
upskilling  and 
the  workforce, 
reskilling  of 
complemented  by  training  measures  co-financed 
by the ESF+ and the recovery and resilience plan. 
While participation in adult learning remains above 
the EU average, there is scope for further targeted 
investments 
in  the  vocational  education  and 
training system. 

investing 

in 

has 

France 

Poverty  risks  have  been  increasing,  bringing 
France  further  away  from  its  2030  national 
poverty reduction target. The number of people 
at  risk  of  poverty  or  social  exclusion  (AROPE)  in 
metropolitan 
increased by 
831 000 (168) in one year, and by 1.45 million since 
2019,  reference  year  for  the  2030  target.  The 
AROPE  rate  remained  slightly  below  the  EU 
average  (21%  vs.  21.6%  in  the  EU)  in  2022. 
Children  are  more  impacted,  with  an  overall 
increase of 4.7 pps over the same period, pushing 
the  figure  well  above  the  EU  average,  also  for 
severe  material  and  social  deprivation.  The 

Indeed, 

regions (169). 

increase in the AROPE rate can be  explained by a 
deterioration in the social situation in metropolitan 
France  and  the  extension  of  the  geographic  area 
covered by the indicator to include four of France’s 
outermost 
the  French 
outermost  regions  have  AROPE  rates  significantly 
above  the  EU  average,  with  Guyane  and  La 
Réunion scoring the highest  (49.5% and 43.2% in 
2022).  This  points  to  the  need  for  additional 
these 
anti-poverty  measures 
targeted 
territories.  In  metropolitan  France,  the  low-skilled 
and  those  born  outside  the  EU  are  significantly 
more  at  risk,  with  AROPE  rates  of  31.3%  and 
44.7%  in  2022.  A  significant  share  of  ESF  and 
ESF+  resources  are  dedicated  to  social  inclusion 
measures  to  bring  those  who  are  furthest  away 
from the labour market closer to employment and 
to address the causes of poverty indirectly. 

in 

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, special extraction excl. guided on-the-job training.  
(2) Change in the number of persons at risk of poverty or 
social exclusion (AROPE), reference year 2019.  
(3) FR set its national target in reference only to metropolitan 
France; the monitoring is aligned to this geographical scope. 
Source: Eurostat, DG EMPL 

the 

Access  to  affordable  housing  remains  a 
challenge,  especially  for  people  in  the  most 
vulnerable  groups.  While 
share  of 
households  overburdened  by  housing  costs 
remains below the EU average (6.5% vs 8.7% for 
the EU in 2022), around 330 000 people in France 
are  homeless (170)  and  there  is  a  high  level  of 
unmet demand for social housing (171). In 2022, for 
tenants renting at a market price, the material and 
social deprivation rate of 22.5% is higher than the 
EU  average  (19.2%),  and  similar  to  the  severe 
housing  deprivation  rate  (8.0%  vs.  5.8%  in  2020, 

(169) Four overseas departments (Guadeloupe, Martinique, 
Guyane, la Réunion) have been included as of 2022. 

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

(167) DARES, “Les tensions sur le marché du travail en 2022”, 

2024, 2024. 

Dares Resultats n°59, November 2023. 

(171) Fondation Abbé Pierre, Palmarès de la loi SR, 2020-2022, 

(168) EC own calculation based on ESTAT data. 

Décembre 2023. 

65 

IndicatorsLatest dataTrend            (2016-2023)2030 targetEU target 74.4(2023)49.2(2022)1,454(2022)Poverty reduction2,3 (thousands)-1,100-15,000Employment (%)7878Adult learning1 (%)6560 
 
 
   
 
 
level 

is  a  challenge 

most  recent  available  data).  Lack  of  access  to 
for  an 
emergency  housing 
increasing  number  of  people  (up  40%  between 
2022 and 2023), including a significant number of 
children.  Housing  evictions  escalated  to  a  record 
level  in  2023  (17 500),  higher  than  the  pre-
pandemic 
French 
authorities introduced several  measures, including 
the  renewal  of  both  the  anti-poverty  and housing 
strategies  and  reform  of  the  minimum  income. 
The  latter  aims  to  address  previously  identified 
challenges,  such  as  the  lack  of  guidance  and 
support  provided  to  beneficiaries.  The  revision  of 
the  eligibility  criteria  and  its  potential  social 
impact, however, call for close monitoring.  

(16 700) (170). 

The 

66 

 
 
ANNEX 15: EDUCATION AND TRAINING 

This  Annex  outlines  the  main  challenges  of 
France’s education and training system based 
on  the  2023  Education  and  Training  Monitor  and 
the  2022  OECD  Programme  for  International 
Student Assessment (PISA) results. 

The  French  education  system  faces  a 
worrying decline in basic skills; this hampers 
skills development and thus competitiveness. 
The  PISA  2022  survey (172)  showed  a  significant 
increase of underachievement rates since 2018 in 
mathematics, 
reading  and  science,  standing 
the  EU  averages,  which  have  also 
around 
worsened substantially. A gradual downward trend 
in performance in reading and science can even be 
observed  since  2012.  The  underachievement  rate 
in  mathematics 
increased  particularly  sharply 
(7.6 pps  vs  EU  6.6 pps)  and  in  reading (5.9 pps vs 
EU 3.7 pps) since 2018. Simultaneously, the share 
of 
in 
mathematics  and  reading,  dropping by more  than 
5 pps since 2012 to 7.4% and 7.1% respectively. 

top-performing 

decreased 

students 

Graph A15.1: Underachievement in mathematics in 
France by country of birth, PISA 2012, 2018 and 
2022 

Source: OECD (2023). 

The  negative  trend  observed  across  all 
quarters  of  socio-economic  distribution  is 
most  pronounced  among  disadvantaged 
students.  About  half  of  all  disadvantaged 
students do not reach a minimum proficiency level 
in  mathematics  (49.4%  vs  39.1%  in  2018).  A 
similarly 
large  socio-economic  gap  can  be 
observed for students with a migrant background: 
foreign-born students are twice as likely (50%) to 
underachieve than their native-born peers without 
a  migrant  background  (24.3%),  while  native-born 

(172) OECD (2023), PISA 2022 Results (Volume I): The State of 

Learning and Equity in Education. 

67 

students  with  parents  born  abroad  have  only  a 
slightly better underachievement rate (43%). 

Shortages  of  qualified  teachers  and  the 
attractiveness  of  the  teaching  profession 
remain  major  challenges.  The  number  of 
applicants  for  teacher  entry  exams  is  falling, 
coupled with acute needs of additional teachers in 
science, technology, engineering and mathematics 
(STEM) and foreign languages as well as in certain 
geographical  areas, 
including  some  overseas 
territories. More and more temporary teachers are 
hired without the same level of qualifications and 
experience  as  permanent  teachers,  leading  to 
inequalities  in  working  conditions,  pay  and  career 
opportunities. In 2022-2023, 2.1% of pre-primary 
and  primary  schoolteachers  and  9.5%  of 
secondary  schoolteachers  worked  on  contract 
(71.5% temporary and 28.5% permanent) in public 
education. Teacher salaries are below the salaries 
of  other tertiary-educated  employees  at  all  levels 
of education (26% lower in primary, 17% lower in 
secondary  and  8%  in  upper  secondary  vs  EU-25 
14%/11%/6%  in  2020).  As  of  the  school  year 
teachers’  minimum  net  monthly 
2023-2024, 
salary 
increased  to  EUR  2100.  Top-ups  are 
planned for new tasks such as supporting students 
with difficulties, replacing teachers or carrying out 
innovative projects. 

Strengthening  basic  skills  and  addressing 
socio-economic  inequalities  in  the  education 
system  is  a  national  political  priority,  in  line 
with  the  2023  country-specific  recommendation 
addressed  to  France  by  the  Council  of  the  EU.  As 
of the school year 2023-2024, one weekly hour of 
differentiated teaching in French and mathematics 
is  in  place  for  all  students  and  the  ‘Homework 
done’ scheme is expanded to all schools. Measures 
under  the  ‘early  years  plan’  refocus  teaching  on 
mathematics  and 
in  early 
language 
childhood  education.  Schools  are  also  encouraged 
to  increase  their  social  mix:  in  2023,  the  Ministry 
of  Education  set  a  non-binding  target  to  reduce 
social  segregation  in  public  schools  by  20%  by 
2027. Other policies continue in 2023-2024, such 
as  the  reform  of  halving  class  sizes  in  priority 
education areas or a reinforced anti-bullying plan, 
while teacher training could be further developed. 

learning 

While  France  has  achieved  the  EU-level 
targets  on  participation  in  early  childhood 
education  and  care  (ECEC)  and  early  school 
leaving,  disparities  persist.  In  2022,  56.2%  of 
children  below  the  age  of  3  attended  formal 

0102030405060TotalNative-bornstudentsNative-born students withforeign-bornparentsForeign-bornstudents%2012201820222030 EU target 
 
  
 
 
 
Table A15.1:EU-level targets and other contextual indicators under the European Education Area 
strategic framework 

Notes: b = break in time series; d = definition differs; e = estimated; p = provisional; u = low reliability; : = data not available. 
Source: 1,3,4,5,7,8,9,10,12=Eurostat; 11= Eurostat, Adult Education Survey; 2,6=OECD, PISA. 

While  inclusion  of  children  with  disabilities 
has  progressed,  the  shortage  of  support 
specialists and low accessibility still hamper 
further  progress.  In  2022-2023,  an  additional 
114 600  children  with  a  disability  attended 
mainstream  schools  compared  with  5  years  ago. 
However,  only  1.4%  of  primary  school  students 
with  disabilities  had  a  specialist  teacher  and  only 
3.7% had access to adapted teaching equipment. 

is 

tertiary 

attainment 

While 
high, 
participation  depends  on  regional  and  socio-
economic  factors.  In  2023,  51.9%  of  25-34-
year-olds  held  a  higher  education  diploma  (EU 
43.1%),  with  a  proportion  of  STEM  entrants 
(27.4%  in  2021)  in  line  with  the  EU  average. 
However, territorial and socio-economic disparities 
persist:  young  people  aged  20-24  with  less-
educated  parents  are 
to  study 
(difference  of  25 pps  with  those  with  highly 
educated parents), and the tertiary attainment rate 
drops the further away they live from a major city. 

likely 

less 

childcare  and  education 
(EU  35.7%),  but 
participation is much  lower  among disadvantaged 
children  (71%  of  them  are  not  enrolled  in  any 
form of childcare). All children above the age of 3 
attend pre-primary school (100% vs 92.5% in the 
EU in 2021). After a downward trend over the last 
decade,  the  early  school  leaving  rate  remains 
below the EU-target (7.6% in 2023 vs 9.5% in the 
EU),  but  hides  some  disparities  linked  to  the 
school’s location (13.2% in the outermost regions) 
as  well  as  to  the  students’  origin  and  gender 
(12.7% for students born outside the EU and 9.5% 
for boys). 

Environmental 

competences. 

France  helps  students  and  teachers  attain 
green 
and 
sustainability  education  is  ensured  from  pre-
primary  to  upper  secondary  school,  but  unevenly 
implemented  across  schools.  In  2023,  a  new 
launched  20  measures  for  the 
action  plan 
ecological 
including  a 
competency  framework,  inspired  by  the  European 
sustainability 
and 
guidance for the education community. 

transition  at  school, 

competence 

framework, 

68 

96%100.0%201391.8%2013100.0%p92.2%100.0%2021,p92.5%2021,dReading< 15%18.9% 18.0%20.9% 22.5%26.9%202226.2%2022Mathematics< 15%22.4% 22.1%21.3%22.9%28.8%202229.5%2022Science< 15%18.7% 16.8%20.5%22.3%23.8%202224.2%2022< 9 %11.8%12.6%8.7%10.5%7.6%9.5%Men13.7%14.5%10.6%12.1%9.5%11.3%Women10.0%10.6%6.8%8.7%5.6%7.7%Cities10.5%b11.2%8.6%9.4%6.7%8.6%Rural areas11.4%b14.0%8.7%11.0%7.3%9.9%5By country of birthNative11.0%11.3%8.2%9.2%7.2%8.2%EU-born25.1%26.2%13.0%u22.4%10.2%u21.0%Non EU-born22.8%30.1%15.2%23.0%12.7%21.6%6Socio-economic gap (percentage points)36.2:32.729.540.7202237.220227Exposure of VET graduates to work-based learning≥ 60% (2025) ::: :68.3% 64.5%45%42.6%34.1%47.0%38.7%51.9%43.1%Men38.1%29.1%42.8%33.3%47.8%37.6%Women47.0%39.2%51.0%44.2%55.8%48.8%Cities50.4%b43.5%56.6%49.0%61.1%53.3%Rural areas33.6%b24.8%35.5%27.7%38.9%31.7%Native43.6%35.4%47.7%39.7%52.2%44.2%EU-born37.0%29.3%49.8%36.7%43.8%40.2%Non EU-born35.7%24.2%41.2%31.0%49.7%37.1%11Participation in adult learning (age 25-64)≥ 47% (2025) ::48.4%201637.4%201649.2%202239.5%202214.5%201322.7%201315.1%23.8%16.9%202124.5%2021Tertiary educational attainment (age 25-34)8Total8By gender9By degree of urbanisation10By country of birth12Share of school teachers (ISCED 1-3) who are 55 years or over1Participation 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 urbanisation201220182023IndicatorTargetFranceEU-27FranceEU-27FranceEU-27 
 
  
 
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;  but  has  not  rebounded  after  it  fell 
in  2020  at  the  onset  of  the  COVID-19 
pandemic.  France  fares  comparatively  well  in 
avoiding  deaths  from  treatable  causes.  In  2021, 
cancers  and  diseases  of  the  circulatory  system 
were  the  leading  causes  of  death,  followed  by 
COVID-19. 

Graph A16.1: Life expectancy at birth, years 

Source: Eurostat 

Health  spending  relative  to  GDP  in  France 
was  above  the  EU  average  in  2021.  In  2021, 
total  health  spending  increased  to  12.3%  of  GDP 
and provisional OECD data suggests that it fell to 
12.1% of GDP in 2022. Public spending on health 
grew by around 9% in real terms in 2021, largely 
the 
driven  by  a  catch-up  effect  following 
disruption  in  healthcare  activities  caused  by  the 
lockdown measures in 2020, as well as the cost of 
the  COVID-19  testing  and  vaccination  campaigns. 
Public  health  spending  as  a  proportion  of  total 
health  spending  (84.8%  in  2021)  was  above  the 
EU  average  (81.1%).  Based  on  the  age  profile  of 
the French population, public spending on health is 
projected  to  increase  by  0.7  percentage  points 
(pps) of GDP by 2070, compared to 0.6 pps for the 
EU  overall  (see  Graph  16.2  and  Annex  21).  More 
systemic evaluation of performance of the health 
system,  especially  of  hospital  care,  would  help 
improve cost-efficiency. 

Graph A16.2: Projected increase in public 
expenditure on healthcare over 2024-2070 

Baseline scenario 
Source: European Commission / EPC (2024) 

shares 

budget 

Proportionally, 

Spending  on  prevention  increased  during  the 
pandemic  and  accounted  for  5.5%  of  all 
health expenditure in 2021, compared to 6% 
for  the  EU  overall.  Between  2019  and  2021, 
spending  on  prevention  in  France  increased  by 
169%,  exceeding  a  105.5%  increase  for  the  EU 
overall. 
for 
prevention  across  the  EU  increased  most  for 
response,  disease  detection  and 
emergency 
immunisation  programmes.  Between  2019  and 
2021, a proportional increase in reported spending 
was  noted  in  France  for  these  areas  too.  Total 
consumption  of  antibiotics  for  systemic  use  is 
among  the  highest  in  the  EU  in  both  community 
and  hospital  settings.  Despite  the  slight  decrease 
in the use of antibiotics between 2019 and 2022, 
France is not on course to meet the national target 
of  a  27%  reduction  by  2030  in  relation  to  2019 
level,  set  by  the  Council  Recommendation  on 
stepping  up  EU  actions  to  combat  antimicrobial 
resistance in a One Health approach. 

France  continues  to  face  a  shortage  of 
doctors  despite  the  policy  measures  taken. 
There  were  3.2  practising  doctors  per  1 000 
population in 2021 (against an EU average of 4.1). 
The increase in the density of doctors since 2010, 
against  a  backdrop  of  an  ageing  population,  is 
lower  than  in  the  EU  overall.  Furthermore,  44.6% 
of  doctors  are  aged  55  or  over,  which  may 
exacerbate  the  shortage  in  the  longer  term. 
Another  challenge  is  the  territorial  distribution  of 
doctors, with no progress observed in closing gaps 
between  regions 
last  10  years.  The 
proportion of doctors who are general practitioners 
(GPs)  has  reduced  over  time,  resulting  in  growing 
shortages  of  GPs  in  certain  regions,  especially 
those  surrounding  Paris  and  in  the  west  of  the 
country.  Doctors’  pay  seems  to  be  comparatively 
high, but the pay gap between self-employed and 

in  the 

69 

82.782.883.082.382.482.380.981.081.380.480.180.6201720182019202020212022FranceEU6,68,40,60,70246810EUFrance% of GDP20242070increase 
 
   
  
 
Table A16.1:Key health indicators 

Note: The EU average is weighted for all indicators except for doctors and nurses per 1 000 population, for which the EU simple 
average is used. Doctors’ density data refer to practising doctors in all countries except Greece, Portugal (licensed to practise) and 
Slovakia (professionally active). Nurses’ density data refer to practising nurses in all countries except Ireland, France, Portugal, 
Slovakia (professionally active) and Greece (hospital only). 
Source: Eurostat Database; except: * OECD, ** Joint Questionnaire on non-monetary healthcare statistics, *** ECDC, **** Council 
Recommendation on stepping up EU actions to combat antimicrobial resistance in a One Health approach. 

salaried  specialists  is  substantial.  The  limited  pay 
increase  for  salaried  doctors  since  2010  may 
make  it  less  attractive  for  students  to  enter 
medical  professions  in  the  future.  Several  policy 
measures were taken to address health workforce 
shortages, including in particular  increased quotas 
of  medical  students,  measures  promoting  local 
professionals,  GP 
health 
communities 
internships 
in  underserved  areas,  grants  and 
setting-up  support,  support  for  new  working 
solutions,  task-shifting.  The 
impact  of  these 
measures remains to be seen.  

of 

France  may  find  it  difficult  to  maintain 
current  nursing  care  provision  levels  in  the 
longer term. The density of nurses (9.7 per 1 000 
population  in  2021)  is  above  the  EU  average, but 
hospital nurses’ pay is below the average national 
wage,  and low  compared to  other  EU  countries.  A 
salary upgrade is planned for hospital nurses and 
nurse  assistants  working  night  shifts  on  Sundays 
and holidays, starting in 2024. The impact of this 
measure  on  the  well-being  of  nurses  will  need  to 
be assessed.   

Through  its  recovery  and  resilience  plan, 
France plans to invest EUR 4.5 billion (11.2% 
of the plan’s total value) in strengthening its 
health  system.  This  concerns  the  construction 
and  refurbishment  of  facilities,  investments  in 
nursing  homes  and  the  further  digitalisation  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 
supports  the  independence  of  older  people  and 
people  with  disabilities.  Work  has  progressed  on 

investments  in  health  facilities  and  the  suicide 
prevention line. Substantial  planned investment in 
digitalisation will  help address the slow uptake of 
e-health,  as  exemplified  by  the  relatively  low 
number  of  people  accessing  personal  health 
records  online  (see  Annex  11).  To  supplement 
investment 
in  digital  health,  the  government 
launched the digital health acceleration strategy in 
2021  with  a  budget  of  EUR 734 million. 
Complementary 
in  health  worth 
investments 
around  EUR 428 million  are  planned  in  2021-
2027,  from  the  cohesion  policy  funds.  These  will 
focus  on  health  infrastructure,  e-health  services, 
health  workforce  development  and 
improving 
access  to  healthcare,  especially  for  vulnerable 
groups (173). 

(173) The EU cohesion policy data reflect the status as of 13 May 

2024. 

70 

20182019202020212022EU average (latest year) Treatable mortality per 100 000 population (mortality avoidable through optimal quality healthcare)61.260.359.058.8NA93.3 (2021)Cancer mortality per 100 000 population233.4230.7226.6222.6NA235.4 (2021)Current expenditure on health, % GDP 11.211.112.112.3NA10.9 (2021)Public share of health expenditure, % of current health expenditure83.483.684.884.8NA81.1 (2021)Spending on prevention, % of current health expenditure 2.12.03.15.5NA6.0 (2021)Available hospital beds per 100 000 population589583573565NA525 (2021)Doctors per 1 000 population3.13.23.23.2NA4.1 (2021)*Nurses per 1 000 population9.39.49.49.7NA7.9 (2021)Total consumption of antibacterials for systemic use, daily defined dose per       1 000 inhabitants per day ***25.325.120.321.524.319.4 (2022) 
 
 
   
 
ANNEX 17: ECONOMIC AND SOCIAL PERFORMANCE AT REGIONAL LEVEL 

Annex 17 showcases the economic and social 
regional  dynamics  in  France.  It  provides  an 
analysis  of  economic,  social  and 
territorial 
cohesion  in  the  French  regions  and  assesses 
investment  and  subnational  reform 
emerging 
social 
needs 
development and competitiveness in the country. 

foster  economic  growth, 

to 

of 
Overview 
performance at regional level 

economic 

and 

social 

Graph A17.1: Average GDP per capita growth vs 
GDP per capita - France 

Source: DG REGIO calculations based on JRC (ARDECO) and 
Eurostat data 

d’Azur, 

Economic growth has been subdued in almost 
all  French  regions  during  the  last  decade, 
with  regional  disparities  further  increasing. 
Between  2013  and  2022,  real  GDP  growth  was 
low  (and  even  negative)  in  most  French  regions 
(Graph  17.1),  with  only  4  NUTS  2  regions 
Guadeloupe, 
(Provence-Alpes-Côte 
Martinique, La Réunion) performing better than the 
EU  average  of  +1.4%.  As  growth  has  been  on 
average higher in more developed regions (i.e. the 
capital  region  and  Rhône-Alpes)  and  particularly 
low  or  negative  in  a  few  moderately  developed 
regions  of  metropolitan  France  (e.g.  Lorraine, 
regional 
Languedoc-Roussillon), 
Picardie, 
disparities  have  further  increased.  At  the  highest 
end  of  the  spectrum  are  two  regions  with  a  GDP 
per  capita  greater  than  the  EU  average  (Île-de-
France  at  163%,  Rhône-Alpes  at  103%),  with  at 
the  lowest  end  in  metropolitan  France  Limousin, 
Lorraine and Picardie (around 75%). While most of 
the French outermost regions are catching up with 
the  EU  and  the  national  average  in  terms  of  GDP 
per  capita  (except  for  Guyane  and,  partially, 
Mayotte),  they  remain  well  below  the  EU  and 
French averages (ranging from Mayotte at 30% to 

71 

Martinique  at  70%).  GDP  per  capita  is  also 
substantially  lower  in  France's  non-urban  areas 
than in urban areas. 

in 

from  wide  variations 

Regional  disparities  in GDP  per  capita partly 
labour 
stem 
productivity. During the last two decades, labour 
productivity has been higher than the EU average 
is 
in  all  French  regions,  except  Mayotte. 
generally much lower in the less developed regions 
of the country, such as the outermost regions, but 
also  in  Limousin  or  Basse-Normandie.  In  2022, 
productivity in Île-de-France was 1.6 times higher 
than in Limousin, 1.7 times higher than in Mayotte.  

It 

As  a  result  of  frequent  or  long  periods  of 
below-average  growth  in  GDP,  productivity 
and  employment  since  2003,  most  French 
metropolitan  regions  (14  out  of  22)  are 
in  a  development  trap  (174).  The 
caught 
intensity of the trap is higher in the north-eastern 
and eastern French regions, as well as in Limousin, 
and  Languedoc-Roussillon,  which  have  suffered 
the decline of industries that had once been their 
main  source  of  wealth  and  are  now  struggling  to 
keep  pace  with  the  rest  of  Europe  in  terms  of 
income, employment prospects and productivity.  

Graph A17.2: Labour productivity, EU-27, France 
NUTS 2 regions, 2000-2022 (Real GVA per 
worker) - France 

Source: ARDECO, DG REGIO elaboration 

While most French regions are around the EU 
competitiveness (175), 
average 
considerable  differences  persist  in  regional 

on 

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

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

(175) 2022 regional competitiveness index. 

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

Source: Eurostat, EDGAR database 

innovation performance, with innovation and 
technology-related activities concentrated in 
the  most  developed  regions  of  the  country. 
Only  4  regions  have  a  share  of  employment  in 
such activities above the national average of 4.4% 
(Île-de-France,  Franche-Comté,  Midi-Pyrénées  and 
Rhône-Alpes) (176).  The  uptake  of  information  and 
communications  technology  (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%). Despite that, the percentage of 
households  with  broadband  connection  in  2021 
was  below  the  EU  average  in  most  regions,  with 
the lowest levels observed in Corse, Limousin, and 
Guadeloupe (75% in each). 

(51.5%) 

The share of the population aged 30-34 with 
high  educational  attainment 
is 
above  the  EU  average  (43.9%),  but  some  of 
the less developed regions in the country still 
lag behind in terms of human capital. In 2022, 
the highest share of the population with a tertiary 
education  was  in  Île-de-France  (65.9%)  and  was 
much 
(34.2%), 
Picardie (39.3%)  and Corse (40.3%), as well as in 
the outermost regions, such as La Réunion (29.4%) 
and  Guyane  (31.5%).  While  the  share  of  early 

in  Champagne-Ardenne 

lower 

school leavers (7.6%) is well below the EU average 
(9.5%  in  2023),  there  are  considerable  regional 
disparities  (21.5%  in  Corse,  13.2%  in  Picardie, 
4.1%  in  Aquitaine  with  the  rate  of  early  school 
leavers being significantly higher in the outermost 
regions  (in  Guyane  21.7%  of  the  population  aged 
18-24 dropped out of school). The highly educated 
segment of the population tends to concentrate in 
cities, where 50% aged 25-64 has a high level of 
educational  attainment  (compared  with  33%  in 
rural areas). 

regions  are  affected  by  major 
Most 
demographic  changes,  with  the  population 
shrinking  in  12  regions,  which  significantly 
impacts  their  development  prospects.  As  a 
result of the shrinking working-age population and 
lagging  levels  of  tertiary  education,  5  regions 
(Haute-Normandie,  Champagne-Ardenne,  Lorraine, 
Guadeloupe,  Martinique)  are 
talent 
development trap (177), and 10 more are at risk of 
being  in  a  talent  development  trap.  At  the  same 
time,  Guyane  and  Mayotte  are  experiencing  an 
exponential population growth, with the population 

in  a 

(176) Source: regional innovation scoreboard, 2022. 

(177) A region is deemed to be in a talent development trap if it 

has a shrinking working-age population and lagging level of 
tertiary education. 

72 

GDP per head (PPS)Productivity (GVA (PPS) per person employed)Real productivity growthGDP growthGDP per head growthUnemployment rateR&D expenditureEmployment in high-technology sectorsGreenhouse Gas EmissionsEU Regional Competitiveness Index 2.0 - 2022 editionIndex, EU27 = 100 (2022)Index, EU27 = 100 (2022)Average % change on the preceding year (2013-2022)Average % change on the preceding year (2013-2022)Average % change on the preceding year (2013-2022)% of labour force (2023)% of GDP (2021)% of total employment (2022)tCO2 equivalent per head (2022)Index, EU27 = 100European Union (27 MS)1001000.71.61.446.12.34.98100France100108.101.050.697.32.24.46.3108.6Ile-de-France163139.9-0.20.870.517.62.87.43142Centre — Val de Loire8093-0.10.240.225.71.53.57.3100.4Bourgogne8495.80.40.630.797.30.92.27.396.2Franche-Comté7692.90.40.770.755.72.96.25.996.1Basse-Normandie7888.2-0.40.350.461.22.87.194.6Haute-Normandie87104.300.490.466.91.52.78.8101.4Nord-Pas de Calais8296.10.10.90.889.80.93.112.4102.1Picardie7599.30.10.460.499.11.527.6101.1Alsace91100.50.10.860.55.91.94.35.7108.7Champagne-Ardenne891030.70.811.027.10.81.18.594.1Lorraine7393.90.20.350.477.41.31.6996.3Pays de la Loire9197.60.31.650.996.11.33.38.5103.9Bretagne8796.30.51.71.175.41.84.19.6100.4Aquitaine8896-0.31.280.557.21.845.3101.8Limousin7487.20.20.490.76.31.37.997.4Poitou-Charentes8295.10.21.010.767.30.91.87.694.6Languedoc-Roussillon7695.1-0.31.30.539.22.63.75.499.1Midi-Pyrénées8895.2-0.11.190.486.14.45.95.7107.3Auvergne8194.70.51.117.12.22.27.796.4Rhône-Alpes99105.1-0.11.230.576.535.74.6110.5Provence-Alpes-Côte d’Azur103111.90.71.921.497.12.23.96.1106.7Corse7689.9-0.71.130.146.90.44.977.3Guadeloupe6696.50.40.871.5718.63.175.8Martinique7086.80.30.621.5610.8388.7Guyane4092.7-3.20.07-2.0114262.8La Réunion6486.80.51.991.55191.33.577.8Mayotte3081.32.65.131.3827.80.166.8NUTS region name 
 
 
 
  
 
expected  to  double  (Guyane)  and  multiply  by  2.5 
(Mayotte) by 2100 (178).  

The unemployment rate has steadily declined 
in recent years (7.3%) but remains above EU 
average  of  6.1%  in  most  French  regions  in 
2022.  The  unemployment  rate  is  highest  in  the 
outermost  regions  (particularly  Mayotte,  close  to 
28%),  but  there  were  significant  differences  also 
in metropolitan France (it is highest in Nord-Pas de 
Calais, 9.8%, in Languedoc-Roussillon, 9.2% and in 
Picardie,  9.1%,  and  lowest  in  Bretagne,  5.4%  and 
Franche-Comté Centre – Val de Loire at 5.7%). It is 
generally higher in cities (8.2%) than in rural areas 
(5.8%).  Similarly,  poverty  is  much  higher  in  cities 
(more  than  24%)  and  in  towns  and  suburbs 
(23.5%)  than  in  rural  areas  (15.1%),  with  an 
increase  across  all  territorial  typologies  in  recent 
years.  The  share  of  population  at-risk-of-poverty 
or social exclusion in France's outermost regions is 
significantly  above  the  EU  average,  with  Guyane 
and  La  Réunion  scoring  the  highest  (49.5%  and 
43.2% in 2022) (Annex 14). 

Access  to  healthcare  services  is  a  challenge 
for  part  of  the  population,  in  particular  in 
non-urban territories,  some  urban  areas  and 
in the outermost regions (Annex  16). The most 
affected regions are Mayotte, Guyane and Picardie 
(in 2021, respectively 85, 223 and 241 physicians 
per  100 000  inhabitants  while  in  Île-de-France 
359  and  in  Provence-Alpes-Côte  d’Azur  384). 
Intra-regional disparities add to this challenge.  

Investment  and  subnational  reform  needs 
ahead  

investment  strategy  agreed 

The 
in  the 
cohesion policy programmes adopted in 2022 
remains  still  valid  for  the  current  economic 
and  social  situation  in  France.  Considering 
recent  developments,  France  is  invited  to  reflect 
on the following issues. 

and 

development 

Increasing  the  attractiveness  of  French 
research 
innovation 
activities  at  regional  level  remains  key, 
including  by  recruiting  highly  qualified  and  skilled 
researchers.  Updated  regional  innovation  smart 
specialisation  strategies  underpinning  the  2021-
27  cohesion  policy  programmes  could  be 

(178) Source: Eurostat. 

the 

supported  meaningfully  by  actions  aiming  at 
innovation  eco-
regional 
strengthening 
systems,  developing  strategic  skills,  and  retaining 
and  attracting  talent.  This  would  help  several 
regions  counter  demographic  shrinking  and 
economic disparities within, as well as move away 
from the talent development trap they are facing.  

Supporting  growth  and  competitiveness  of 
enterprises  by  increasing  their  digitalisation 
and their capacity to innovate also remains a 
high  priority.  This  is  particularly  important  in 
development-trapped  regions  to  reduce  the  high 
internal  disparities  in  regional  competitiveness. 
Encouraging  the  creation  of  new  start-ups  by 
better 
integrating  Research  Development  & 
Innovation  outcomes  into  the  economic  activities 
of new SMEs in the production and service sectors, 
facilitating  the  upscaling  of  newly  created  start-
ups, assisting young entrepreneurs of SMEs in the 
early  stages  and  contributing  to  improve  the 
position  of  French  SMEs  within  EU  internal  and 
external markets. 

On  the  green  transition,  effective  schemes 
have  been  put  in  place  to  improve  energy 
efficiency  and  to  strengthen  biodiversity 
protection. Further efforts are needed to step up 
the  production  of  renewables  across  all  the 
country.  This  need  is  even  more  acute  in  the 
outermost  regions,  as  well  as  in  metropolitan 
regions  with  significant  untapped  potential  for 
solar,  wind  and  hydro  power  (notably  Aquitaine, 
Centre). 
Champagne-Ardenne, 
Increased  efforts  are  also  needed 
the 
in 
development of smart energy systems and climate 
change  adaptation.  In  the  outermost  regions, 
particular  focus  is  to  be  placed  on  promoting  the 
supply  of  drinking  water,  wastewater  treatment 
and municipal waste collection and management.  

Bourgogne, 

from 

could  also  benefit 

France 
the 
investment  opportunities  of  the  Strategic 
Technologies  for  Europe  Platform  (STEP). 
France  could  notably  further  develop  the  skills, 
technologies, infrastructures needed and stimulate 
the  involvement  in  new  strategic  value  chains 
(net-zero 
raw  material, 
decarbonisation of energy-intensive industries).  

industry, 

critical 

Targeted  simplifications  of  the  regulatory 
framework  would  facilitate 
investments 
linked  to  the  STEP  initiative,  together  with 
the  reform  areas  identified  in  the  National 

73 

 
 
the 

authorities  to  implement  the  funds  and,  more 
to  deploy  development  strategies 
generally, 
impact  of  EU  policies  and 
maximising 
programmes.  Reforms 
strengthen  data 
collection  are  also  needed  in  certain  regions.  This 
is  notably  true  for  Mayotte  and  Saint  Martin, 
where  the  lack  of  statistical  data  in  key  areas 
makes it challenging to obtain an accurate picture 
of 
tailored 
regions’  needs  and  design 
responses and projects. 

the 

to 

could 

focus  on: 

streamlining 

Recovery  and  Resilience  Plan  (NRRP).  On  net-
zero technologies in particular, in line with the law 
on  green  industry  adopted  in  October  2023,  such 
actions 
the 
administrative  framework  for  permitting  (cutting 
of  red  tape,  acceleration  of  permitting  and 
administration); 
skills 
enhancement 
of 
including 
facilitating  access 
(by 
to  markets 
in  public 
sustainability  and  resilience  criteria 
procurement);  setting  up  specific 
regulatory 
frameworks  (to  help  develop  and  test  net-zero 
technologies  and  create  a  level  playing  field  for 
innovation).  

in 

in  particular 

Supporting  access  to  healthcare  services 
remains  a  priority, 
in 
underserved  areas,  including  in  non-urban, 
some  urban  and  outermost  regions,  where 
medical professionals are lacking and the situation 
risks  getting  worse  due  to  demographic  trends 
(Annex 16). 

Strengthening public and private investments 
in  the  renovation  of  dwellings,  focusing  on 
social  and  affordable  housing.  This  approach 
could provide an answer to the high level of unmet 
needs, notably in the outermost regions. This is of 
particular  importance  considering  the  increasing 
number  of  people  exposed  to  poverty  or  social 
exclusion (Annex 14). 

Encouraging  a  more  effective  use  of  the 
budget process, including at regional level, to 
support  the  achievement  of  policy  goals 
could also help strengthen local governance, 
leading to more effective design and delivery 
of  regional  development  strategies.  These 
approaches  are  starting 
tested  at 
national (179)  and  regional  level  as  regards  “green 
budgeting”,  with  the  help  of  modern  budget 
frameworks 
strategic  planning  and 
budgeting.  These initiatives  should  be  encouraged 
and  expanded,  as  budgets  play  a  core  role  in 
prioritising and resourcing government action, they 
can  have  significant  impact  on  progress  towards 
these objectives. 

to  be 

linking 

More  broadly,  further  efforts  are  needed  on 
in  the 
administrative  capacity  building 
local 
outermost  regions.  This  would  help 

(179) France presented its first comprehensive green budget 

(Rapport sur le budget vert) in 2020. 

74 

 
 
MACROECONOMIC STABILITY 
ANNEX 18: KEY FINANCIAL SECTOR DEVELOPMENTS 

In  an  environment  of  higher  inflation  and 
interest  rates,  the  French  banking  sector’s 
profitability  and  solvency  have  remained 
relatively  stable.  With  annualised  return-on-
equity  of  6.1%  in  2022  and  6.9%  in  the  first  9 
months  of  2023  (vs  9.9%  in  the  EU),  profitability 
has  remained  stable  but  lower  than  elsewhere. 
This is due to: (i) the high interest rate on the so-
called  Livret  A  savings  products  offered  to  retail 
investors; (ii) the predominance of fixed-rate loans 
on  the  asset  side;  and  (iii)  the  worst  cost-to-
income  ratio  within  the  EU.  Despite  the  difficult 
macroeconomic environment, the capital adequacy 
ratio of French banks has remained broadly stable 
over  the  years  and  reached  19.7%  in  September 
2023 (vs 19.6% in the EU). Credit quality remains 
strong, with the non-performing loan ratio (1.9% in 
September 2023 vs 1.8% in the EU) barely moving 
from  its  all-time  low  of  1.8%  observed  from 
March 2022 to March 2023. These relatively good 
results  may  be  partly  due  to  temporary  support 
measures by the ECB and the French government, 
such  as  the  sizeable  public-loans  guarantee 
scheme.  Banks  have  ample  liquidity,  even  though 
funding  from  the  ECB  dropped  significantly  (as  it 
did elsewhere in the euro area) from a record high 
of 5.6% in June 2021 to reach 1.2% in December 
2023  due 
their  cheap 
pandemic-era  funding  under  the  ECB’s  targeted 
longer-term  refinancing  operations.  The  loan-to-
deposit ratio increased to 99.5% by June 2023 (vs 
93.0% in the EU). 

to  banks 

repaying 

French  banks  face  a  particular  challenge  on 
the funding side of their balance sheet. Unlike 
their  peers  in  most  other  Member  States,  French 
banks have no control on the interest rates applied 
to regulated savings products like the Livret A, the 
interest  rates  of  which  are  laid  down  by  law  and 
closely  follow  changes  in  inflation  and  interbank 
interest  rates.  The  interest  rate  on  the  Livret  A 
(and  other  regulated  savings  accounts)  increased 
to  3%  on  1 February 2023.  On 
from  2% 
13 July 2023, 
a 
recommendation  from  the  Banque  de  France  and 
decided to keep the rate at 3% until January 2025. 
By doing so, the Treasury refrained from a stricter 
application  of  the  Livret  A  interest-rate  formula 
which  would  have  taken  the  rate  to  4.1%  as  of 
1 August 2023. This relatively high interest rate on 
regulated  deposits  has  to  be  compared  to  the 
relatively  low  ‘usury’  rate,  which  is  the  maximum 
rate  banks  can  charge  on  loans.  The  relatively 

Treasury 

followed 

the 

small  spread  between  interest  rates  for  deposits 
and  interest  rates  for  lending  has  combined  with 
the  faster  repricing  of  deposits  than  loans  to  put 
banks’ margins under pressure.  

French non-financial corporations (NFCs) are 
suffering  from  a  rise  in  interest  rates  on 
their  loans.  French  NFCs  are  on  average  more 
indebted  than  their  European  peers,  which  makes 
them  more  vulnerable  to  any  significant  and 
persistent  increase  in  interest  rates.  The  share  of 
SMEs that did not obtain the loan they sought has 
been soaring since 2021, and this has weighed on 
investment (see Annex 12). However, according to 
the  Banque  de  France,  French  NFCs  benefit  from 
relatively  stable  earnings  and  from  the  fact  that 
their  debt  is  mostly  held  at  fixed  rates  and  over 
relatively  long  maturities,  which  insulates  them 
from  sudden  interest-rate  shocks (180).  Still,  the 
non-performing loan ratio has gradually increased 
from a record low of 3.3% in Q3-2022 to 3.6% in 
Q3-2023. There is growing evidence that the most 
heavily leveraged firms are failing to deal with the 
gradual  pass-through  of  higher  interest  rates  to 
their  funding  costs,  against  the  backdrop  of  a 
slowing  economy.  Some  large  corporations  have 
their 
entered 
creditors (mainly banks) to preserve their solvency. 
This  could  ultimately  result  in  some  credit  losses 
for the banks and a further tightening of financing 
conditions.  In  this  context,  the  High  Council  for 
Financial Stability (HCSF) replaced in August 2023 
the  ‘large  exposures’  measure  with  a  new  3% 
sector-specific  systemic  risk  capital  buffer.  This 
new sector-specific buffer applies to the exposures 
of systemically important French banks to heavily 
indebted  large  French  companies  where  such 
exposures  exceed  5%  of  tier  1  capital.  This  new 
measure  is  considerably  milder  than  the  previous 
‘large exposures’ measure and aims at avoiding an 
abrupt  credit  constraint  for  overindebted  large 
corporations in breach of the leverage thresholds. 

restructuring  agreements  with 

French  banks  continue  to  finance  the 
economy  on  relatively  attractive  terms 
despite  the  rise  in  interest  rates.  Due  to  the 
rise  in  interest  rates,  year-on-year  credit  growth 
has  plunged  since  its  peak  of  August  2022  to 
reach 2.4% (vs 0.5% in the euro area) for lending 
to  NFCs  and  1.4%  (vs  0.3%  in  the  euro  area)  for 

(180) Banque de France, ERS December 2023. 

75 

 
 
 
 
 
Table A18.1:Financial soundness indicators 

(1) Last data: Q3-2023. 
(2) Data are annualised. 
(3) Data available for EA countries only, EU average refers to EA area. 
Source: ECB, Eurostat. 

lending to households in December 2023. Interest 
rates on new loans to SMEs have soared to levels 
unseen  since  the  global  financial  crisis.  They 
reached 4.24% in October 2023 (vs 5.65% in the 
euro  area)  but  they  remain  among  the  lowest  in 
the  euro  area.  Interest  rates  on  new  loans  to 
households  for  house  purchases  at  floating  rates 
have  also  significantly  increased,  but  remain 
among  the  lowest  in  the  EU  at  3.58%  in  October 
2023 (vs 4.87% in the euro area). 

Real-estate  markets  are  showing  signs  of 
cooling,  especially  the  commercial  segment. 
New lending for house purchases has significantly 
contracted due to the rise in interest rates. Despite 
some  improvement,  loan-to-value  ratios  remain 
high.  However,  households’  repayment  capacity  is 
protected  by  the  high  share  of  fixed-rate  loans 
and  guaranteed  loans,  and  the  improvement  in 
credit  standards  following  the  introduction  of  a 
borrower-based  measure  by  the  HCSF  in  late 
2020.  This  borrower-based  measure  set  a  ceiling 
on  the  debt  service-to-income  ratio  and  on  the 
maturity of the loans. In addition to this borrower-
based  measure,  the  HCSF  decided  in  December 
2022  to  raise  the  countercyclical  bank  capital 
buffer  from  0.5%  to  1%  as  of  2 January 2024, 
and  said  that  it  was  not  planning  additional 
increases  to  this  buffer  in  2023.  Finally,  in  the 
commercial  real  estate  market,  the  prices  and 
volume  of  transactions  have  slumped  since  the 
fourth  quarter  of  2022,  following  a  decade  of 
strong growth and a marked slowdown due to the 
COVID-19 crisis. 

their 

transition 

lending  and 

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 
joined  the  Net-Zero  Banking  Alliance  launched  in 
April  2021  by  the  Finance  Initiative  of  the  UN 
Environment  Programme.  These  banks  committed 
to 
investment 
portfolios to align with pathways to net-zero GHG 
emissions by 2050 or sooner. The stock of loans to 
the renewables sector increased by 22% between 
2021  and  2022  to  reach  EUR 51 billion  in  2022. 
their 
French  banks  have  also  accelerated 
withdrawal  from  lending  to  the  coal  industry, 
which  only  represented  EUR 2.3 billion  of  their 
portfolio  in  2022.  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. 

Insurers’  solvency  has  slightly  worsened  but 
remains  broadly  satisfactory.  French  insurers’ 
average  solvency  ratio  has  decreased  from 
252.8%  in  2021 to  248.9%  in  2022.  This  change 
was  driven  by  a  combination  of  higher  interest 
rates,  higher  inflation,  greater  frequency  and 
severity  of  natural  catastrophes  (for  non-life 
insurers),  and  higher  surrender  risk  (for 
life 
insurers).  Inflation  and  climate  risk  are  the  main 
challenge for non-life insurers, while surrender risk 
represents the main challenge for life insurers. 

76 

2017201820192020202120222023EUMedianTotal assets of the banking sector (% of GDP)368.0372.8382.4452.6442.1436.2421.7257.0184.6Share (total assets) of the five largest banks (%)45.447.748.749.249.346.6--69.6Share (total assets) of domestic credit institutions (%)195.295.395.295.896.394.794.7-62.9NFC credit growth (year-on-year % change)6.66.45.612.24.58.62.4-2.4HH credit growth (year-on-year % change)6.05.66.44.95.65.31.4-1.4Financial soundness indicators:1        - non-performing loans (% of total loans)3.12.72.52.21.91.81.91.81.8- capital adequacy ratio (%)17.818.018.619.519.719.419.719.620.1- return on equity (%)26.46.56.04.17.16.16.99.913.2Cost-to-income ratio (%)171.674.172.370.465.565.967.552.844.9Loan-to-deposit ratio (%)1105.1109.1107.395.492.596.799.893.380.2Central bank liquidity as % of liabilities2.31.91.65.15.63.61.2-0.7Private sector debt (% of GDP)145.0148.4153.1173.9167.5163.9-133.0118.4Long-term interest rate spread versus Bund (basis points)49.238.738.336.638.055.856.0107.7104.2Market funding ratio (%)59.058.157.756.055.753.7-50.839.8Green bonds outstanding to all bonds (%)3---2.33.13.63.94.02.71-34-1011-1718-2424-27Colours indicate performance ranking among 27 EU Member States. 
 
  
 
Investment  fund  activity  has  continued  to 
grow. After 3 years of growth, French investment 
funds saw a sharp decrease in their assets under 
management 
to 
EUR 4 570 billion)  in  2022  because  of  tighter 
monetary  policy  and  the  war  in  Ukraine.  In  terms 
of  market  share,  most  investment  funds  continue 
to  be  organised  as  subsidiaries  of  banks  and 
insurers. 

declining 

(-11%, 

77 

 
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  still  among  the 
highest  in  the  EU  as  a  proportion  of  GDP. 
Table A19.1 shows that France’s tax revenues as a 
percentage  of  GDP  were  still  significantly  higher 
than the EU average in 2022, especially for labour 
and capital taxes. Revenue from property taxes (as 
a  percentage  of  GDP  and  as  percentage  of  total 
taxation)  was  relatively  high  by  comparison  with 
the  EU  as  a  whole.  This  was  particularly  so  for 
recurrent  property  taxes,  which  are  among  the 
taxes  least  detrimental  to  growth  (see  Graph 
rate  on 
A19.1).  The  average  effective 
corporate 
is  above  the  EU  average. 
Production  taxes  have  been  reduced  but  are  still 
much  higher  in  France  than  in  neighbouring 
countries  (see  Annex  12).  The  repeal  of  the 
Business  Contribution  on  Added  Value  (CVAE),  a 
local  tax  payable  by  any  person  carrying  on  a 
trade  or  business  in  France  and  levied  on  the 
added value that the trade or business generates, 
has  been  postponed. 
Instead  of  being  fully 
abolished in 2024, as initially scheduled, the BCAV 
will  be  gradually  phased  out  under  the  2024  Tax 

income 

tax 

Law  (i.e. the  maximum  tax  rate  will  be  0.28%  in 
2024,  0.19%  in  2025,  0.09%  in  2026  and 
completely abolished in 2027). 

to 

parallel 

Revenue  from  environmental  taxes  as  a 
percentage  of  GDP  is  close  to  the  EU 
aggregate. In 2024, France introduced additional 
tax  credits  for  green  investments  in  strategic 
sectors  (batteries,  solar  panels,  wind turbines  and 
heat pumps) and reformed the vehicle tax scheme 
in support of greening the fleet. The government is 
in 
reduce 
taking  measures 
environmentally  harmful  subsidies.  However,  the 
existing excise rate reductions for commercial road 
transport  and  non-road  uses  of  fuels  are  still  in 
place.  They 
represent  an  expenditure  of 
respectively  EUR  1.4  billion  and  EUR  2.4  billion. 
Pollution  and  resources  taxes  only  account  for 
6.7%  of  environmental  taxes  and,  while  they  are 
above  the  EU  average,  there  is  still  potential  to 
strengthen  the  application  of  the  ‘polluter  pays’ 
principle. France has already implemented four of 
the six main types of pollution and resources taxes 
(i.e. taxes  on  NOx  emissions, 
landfilling  and 
incineration,  discharge  of  waste  into  water,  and 
plastic  products).  There 
to 
implement  the  two  other  types  (i.e.  taxes  on 
fertilisers and pesticides). 

remains  scope 

Table A19.1:Taxation indicators 

(1) Forward-looking effective tax rate (OECD). 
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2022, if available. For more details on the VAT gap, see European Commission, Directorate-General for 
Taxation and Customs Union, 2023, VAT gap in the EU, https://data.europa.eu/doi/10.2778/911698. 
For more data on tax revenues as well as the methodology applied, see the Data on Taxation webpage, 
https://ec.europa.eu/taxation_customs/taxation-1/economic-analysis-taxation/data-taxation_en. 
Source: European Commission and OECD 

78 

FR2010202020212022202320102020202120222023Total taxes (including compulsory actual social contributions) (% of GDP)42.345.445.146.237.940.040.440.2Labour taxes (as % of GDP)22.223.322.923.420.021.320.720.3Consumption taxes (as % of GDP)10.711.411.711.510.810.711.211.0Capital taxes (as % of GDP)9.410.710.511.27.18.08.68.9Of which, on income of corporations (as % of GDP)2.52.93.03.42.42.53.03.4Total property taxes (as % of GDP)4.04.74.24.11.92.32.22.1Recurrent taxes on immovable property (as % of GDP)2.93.02.32.21.11.21.11.0Environmental taxes as % of GDP1.92.22.22.12.42.22.32.0Tax wedge at 50% of average wage (Single person) (*)34.115.119.219.619.833.931.732.131.831.7Tax wedge at 100% of average wage (Single person) (*)49.946.546.947.046.841.040.139.940.040.2Corporate income tax - effective average tax rates (1) (*)29.526.023.719.519.019.0Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)7.910.410.810.88.68.18.27.9Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)4.34.340.935.5VAT Gap (% of VAT total tax liability, VTTL)(**)8.78.54.94.89.75.4FranceEU-27Tax structureProgressivity & fairnessTax administration & compliance 
 
  
 
 
        
 
Graph A19.1: Tax revenues from different tax types, % of total revenue 

Source: European Commission 

to 

low  earners 

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  2023  was  clearly  below  the 
EU  average  for  single  people  earning  50%  of  the 
average wage. France implemented tax reforms in 
the last 10 years aiming at cutting the tax wedge 
for 
reduce  work 
in  order 
disincentives.  It  becomes  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.  Second  earners, at  a  wage  level  of  67% 
of the average wage and whose spouses earn the 
average  wage,  face  a  tax  wedge  which  is  higher 
than the one for single persons at the same wage 
level and which exceeds the EU average tax wedge 
for  second  earners  by  around  7.0 pps.  This  is 
explained by the joint taxation of personal income 
for  couples.  Past  reforms increased  incentives  for 

Graph A19.2: Tax wedge for single and second 
earners, % of total labour costs, 2023 

The second earner tax wedge assumes a first earner at 100% 
of the average wage and no children. For the methodology of 
the tax wedge for second earners, see OECD, 2016, Taxing 
Wages 2014-2015. 
Source: European Commission 

79 

employment  at  lower  earnings  levels.  They  also 
increased the ability of the tax and benefit system 
to  reduce  income  inequality.  The  tax  and  benefit 
system reduces the Gini coefficient (a measure of 
income inequality) in 2022 by 10.8 pps, which was 
above  the  EU  average  of  7.9 pps  (see  Table 
A19.1). The tax-benefit system in France therefore 
contributes  to  reducing  income  inequality  more 
than in the EU as a whole. 

France has improved tax compliance through 
increased digitalisation. Since 2015, France has 
been  increasing  the  level  of  on-time  filing  for 
corporate income tax (CIT) to 95% in 2020 (France 
is one of the best performers in the EU). Pre-filing 
is  proposed  for personal  income  tax  (PIT)  and  CIT 
declarations. E-filing is generalised, at 99% for CIT 
and  88%  for  PIT.  France  has  developed  a  digital 
transformation strategy,  as well as a strategy for 
identifying  skills  required  for  a  successful  digital 
transformation and a strategy for building a digital 
culture within the administration. However, France 
has postponed to 2026-2027 the entry into force 
of  new  e-invoicing  and  e-reporting  rules  for  VAT 
purposes,  which  was  originally  scheduled  for  1 
July  2024  for  large  enterprises.  Tax  arrears  were 
stable  at  4.3%  of  total  net  revenue in  2022.  This 
remained significantly below the EU-27 average of 
35.5%, though that average was distorted by very 
large values in a few Member States. The VAT gap 
(an 
the  effectiveness  of  VAT 
enforcement  and  compliance,  where  a  low  gap 
means  high  effectiveness)  was  4.9%  in  2021 
(below the EU-wide gap of 5.3%), which represents 
approximately EUR 9.5 billion. However, France has 
the  fifth  highest  VAT  policy  gap  in  the  EU  in 
relative  terms,  at  52.5%  of  the  notional  ideal 
revenue,  mainly  due  to  the  large  number  of  VAT 
exemptions in place. After a fairly large decline in 

indicator  of 

19.840.446.853.347.31520253035404550556050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - FRSingle earner - EU averageSecond earner -  FRSecond earner -  EU average50.627.322.150.725.024.3Tax revenue shares in 2022, France (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital3.73.90.50.90.30.24.82.54.12.70246810France -environmentaltaxationEU -environmentaltaxationFrance - propertytaxationEU - propertytaxationEnvironmental and property taxation as % of total tax revenue, France and the EUEnergy taxesTransport taxesResource/pollution taxesRecurrent property taxesOther property taxes 
 
       
       
the  collection  efficiency  ratio  in  2020  (to  48.7%), 
this  indicator  improved  significantly  in  2021  (to 
52.5%)  –  mostly  as  a  result  of 
improved 
compliance. 

for 

fine 

(EUR 2.5 million 

Sanctions  against  tax  evasion  enablers  and 
fraudsters have been strengthened. A new bill 
has  criminalised  the  provision  of  instruments 
supporting tax fraud, with an autonomous criminal 
offence  charge  to  be  brought  against  individuals 
and  companies  that  provide  their  clients  with 
instruments  that  facilitate  tax  fraud.  The  criminal 
penalty  could  be  5  years  imprisonment  and  a 
EUR 500,000 
legal 
entities).  The  French  tax  authorities’  resources  to 
detect  and  take  action  against  breaches  of 
transfer  pricing  rules  have  also  been  reinforced. 
The  French  Tax  Procedure  Code  (FTPC)  has  been 
amended  to  reduce  from  EUR 400  million  to 
EUR 150 million the revenue/gross-asset threshold 
that  triggers  the  obligation  to  provide  transfer 
pricing documentation to the tax authority upon its 
request  during  a  tax  audit.  The  minimum  amount 
of  the  fine  for  non-  or  partial  submission  of 
documentation will be increased from EUR 10 000 
to  EUR 50 000.  Similarly,  the  capacity  of  the  tax 
administration  in  relation  to  the  detection  and 
sanction of VAT fraud has been reinforced, notably 
in response to the challenge of e-commerce. 

80 

 
 
 
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) NIIP excluding direct investment and portfolio equity shares. 
Source: Eurostat and ECB as of 2024-5-17, where available; European Commission for forecast figures (Spring forecast 2024). 

81 

2004-072008-122013-2020212022202320242025Real GDP (y-o-y)2.30.40.26.42.50.70.71.3Potential growth (y-o-y).1.20.81.11.11.11.11.0Private consumption (y-o-y)2.30.60.25.12.30.61.21.4Public consumption (y-o-y)1.71.50.46.62.50.50.90.8Gross fixed capital formation (y-o-y)3.9-0.91.210.32.20.8-0.51.1Exports of goods and services (y-o-y)4.51.20.211.07.11.22.43.3Imports of goods and services (y-o-y) 6.01.21.49.48.6-0.41.83.2Contribution to GDP growth:Domestic demand (y-o-y)2.50.50.56.82.30.60.71.2Inventories (y-o-y)0.2-0.10.1-0.60.7-0.5-0.20.1Net exports (y-o-y)-0.40.0-0.40.2-0.60.60.20.0Contribution to potential GDP growth:Total Labour (hours) (y-o-y).0.40.30.80.80.80.80.7Capital accumulation (y-o-y).0.60.50.50.50.50.50.5Total factor productivity (y-o-y).0.30.0-0.2-0.3-0.2-0.2-0.2Output gap1.8-1.1-0.9-1.00.3-0.1-0.4-0.2Unemployment rate8.79.09.47.97.37.37.77.8GDP deflator (y-o-y)2.11.11.11.42.95.52.82.0Harmonised index of consumer prices (HICP, y-o-y)1.91.90.92.15.95.72.52.0HICP excluding energy and unprocessed food (y-o-y)1.61.50.81.23.85.52.52.2Nominal compensation per employee (y-o-y)3.02.30.54.94.94.13.02.4Labour productivity (real, hours worked, y-o-y)1.00.20.7-1.7-1.9-0.30.10.5Unit labour costs (ULC, whole economy, y-o-y)1.52.11.01.35.14.52.51.4Real unit labour costs (y-o-y)-0.50.9-0.1-0.12.1-0.9-0.3-0.6Real effective exchange rate (ULC, y-o-y)0.20.0-0.71.31.6-2.5-2.2-1.0Real effective exchange rate (HICP, y-o-y)0.4-0.80.0-0.2-4.01.7..Net savings rate of households (net saving as percentage of net disposable income)9.210.09.513.111.2...Private credit flow, consolidated (% of GDP)8.65.67.36.78.91.8..Private sector debt, consolidated (% of GDP)110.9131.7149.7167.5163.7155.4..of which household debt, consolidated (% of GDP)42.953.059.766.666.263.1..of which non-financial corporate debt, consolidated (% of GDP)68.078.890.0100.997.492.4..Gross non-performing debt (% of total debt instruments and total loans and advances) (1)2.64.22.81.71.7...Corporations, net lending (+) or net borrowing (-) (% of GDP)0.90.9-0.50.3-2.8-2.3-2.0-1.8Corporations, gross operating surplus (% of GDP)18.017.417.618.517.418.618.318.4Households, net lending (+) or net borrowing (-) (% of GDP)2.33.73.44.93.95.05.34.8Deflated house price index (y-o-y)9.7-0.31.14.81.5-6.3..Residential investment (% of GDP)6.36.46.27.07.16.7..Current account balance (% of GDP), balance of payments0.2-0.7-0.60.4-2.0-0.70.40.4Trade balance (% of GDP), balance of payments0.1-1.3-0.9-1.3-3.2-1.6..Terms of trade of goods and services (y-o-y)-0.7-0.40.7-0.1-3.12.41.0-0.1Capital account balance (% of GDP)0.00.00.00.40.40.3..Net international investment position (% of GDP)-4.8-11.9-19.3-30.9-23.8-29.4..NENDI - NIIP excluding non-defaultable instruments (% of GDP) (2)-6.7-23.8-33.7-39.3-33.4-36.6..IIP liabilities excluding non-defaultable instruments (% of GDP) (2)175.3239.1251.8288.7279.1285.5..Export performance vs. advanced countries (% change over 5 years)..-3.5-8.1-7.6-6.0..Export market share, goods and services (y-o-y)-4.4-4.0-1.1-1.4-1.90.1-1.1-0.4Net FDI flows (% of GDP)1.71.51.10.50.41.5..General government balance (% of GDP)-3.2-5.7-4.2-6.6-4.8-5.5-5.3-5.0Structural budget balance (% of GDP)..-3.4-5.9-4.9-5.4-5.0-4.9General government gross debt (% of GDP)66.384.1100.1113.0111.9110.6112.4113.8forecast 
 
 
 
  
 
 
ANNEX 21: DEBT SUSTAINABILITY ANALYSIS 

This  annex  assesses  fiscal  sustainability 
risks  for  France  over  the  short,  medium  and 
long  term. 
It  follows  the  multi-dimensional 
approach  of  the  European  Commission’s  2023 
Debt Sustainability Monitor, updated based on the 
Commission 2024 spring forecast. 

for  corrective  action  (Table A21.2) (183).  Up  to 
2029, the baseline projection benefits from a still 
favourable  (although  declining)  snowball  effect. 
Government gross financing needs are expected to 
remain  large  and  increase  over  the  projection 
period, reaching around 28% of GDP in 2034. 

fiscal 

1  –  Short-term  risks  to  fiscal  sustainability 
low  overall.  The  Commission’s  early-
are 
detection  indicator  (S0)  does  not  signal  major 
(Table A21.2) (181). 
short-term 
risks 
Government gross financing needs are expected to 
remain  large,  at  more  than  22%  of  GDP  over 
2024-2025 
Financial 
markets’  perceptions  of  sovereign  risk  remain 
overall  positive.  Despite  the  deficit  increase  in 
2023,  in  April  2024  Fitch  and  Moody’s  kept  their 
ratings  unchanged  at  AA-  and  Aa2,  respectively, 
with  a  stable  outlook.  Meanwhile,  Standard  & 
Poor's downgraded credit rating for France to AA- 
with stable outlook, from AA with negative outlook. 

(Table A21.1, Table 1). 

2  –  Medium-term  fiscal  sustainability  risks 
are high.   

is  projected  to 

Under the DSA baseline, the government debt 
ratio 
increase  over  the 
medium term, reaching around 139% of GDP 
in  2034  (Graph 1  and  Table  1) (182).  The  debt 
increase  is  driven  by  the  assumed  structural 
primary  deficit  (excluding  changes  in  cost  of 
ageing)  of  3.0%  of  GDP  as  of  2024.  This  level 
appears  plausible  compared  with  past  fiscal 
performance, indicating that the country has room 

(181) The S0 is a composite indicator of short-term risk of fiscal 
stress. It is based on a wide range of fiscal and financial-
competitiveness indicators that have proven to be a good 
predictor of emerging fiscal stress in the past.  

(182) The assumptions underlying the Commission’s ‘no-fiscal 

policy change’ baseline include in particular: (i) a structural 
primary balance, before changes in ageing costs, of -3.0% of 
GDP from 2024 onwards; (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 ahead); (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; (iv) real GDP growth rates 
from the Commission 2024 spring forecast, followed by the 
EPC/OGWG ‘T+10 methodology projections between T+3 and 
T+10 (average of 0.4%); (v) ageing costs in line with the 
2024 Ageing Report (European Commission, Institutional 
Paper 279, April 2024). For information on the methodology, 
see the 2023 Debt Sustainability Monitor (European 
Commission, Institutional Paper 271, March 2024). 

is  stress-tested 
The  baseline  projection 
deterministic 
alternative 
four 
against 
scenarios to assess the impact of changes in 
key  assumptions  (Graph 1).  Under  the  historical 
structural primary balance (SPB) scenario (in which 
the  SPB  returns  to  its  historical  15-year  average 
of  -2.1%  of  GDP)  the  debt  ratio  would  be  lower 
than  under  the  baseline  by  6.5 pps.  by  2034. 
However,  the  three  other scenarios  lead  to  higher 
debt  levels  than  the  baseline.  Under  the  adverse 
interest-growth rate differential scenario (in which 
the  interest-growth  rate  differential  deteriorates 
by  1.0 pp.  compared  with  the  baseline),  the  debt 
ratio  would  be  higher  than  under  the  baseline  by 
10.9 pps.  by  2034.  Under  the  lower  SPB  scenario 
(in which the improvement in the SPB forecast for 
2024  is  halved)  the  debt  ratio  would  be  higher 
than  under  the  baseline  by  3.5  pps.  by  2034. 
Finally,  under  the  financial  stress  scenario  (in 
increase  by 
which 
2.2 pps.  compared  with 
the 
government debt ratio would be higher by 2.1 pps. 
by 2034. 

interest  rates  temporarily 

the  baseline), 

The  stochastic  projections  indicate  high  risk 
due to the high probability of debt increasing 
over  the  next  five  years (184).  These  stochastic 
simulations  indicate  that  the  debt  ratio  will  be 
higher in 2028 than in 2023 with a probability of 
93%.  The  uncertainty  surrounding  the  baseline 
debt projection is however limited, as measured by 
the  difference  of  around 20 pps.  of  GDP  between 
the  10th  and  90th  debt  distribution  percentiles  in 
five years’ time (Graph 2).  

(183) This assessment is based on the fiscal consolidation space 

indicator, which measures the frequency with which a tighter 
fiscal position than assumed in a given scenario has been 
observed in the past. Technically, this consists in looking at 
the percentile rank of the projected SPB within the 
distribution of SPBs observed in the past in the country, 
taking into account all available data from 1980 to 2023. 

(184) The stochastic projections show the joint impact on debt of 

10,000 different shocks affecting the government’s 
budgetary position, economic growth, interest rates and 
exchange rates. This covers 80% of all the simulated debt 
paths and therefore excludes tail events. 

82 

 
 
 
 
 
 
3  –  Long-term  fiscal  sustainability  risks  are 
is  based  on  the 
medium.  This  assessment 
combination of two fiscal gap indicators, capturing 
the  required  fiscal  effort  to  stabilise  debt  (S2 
indicator)  and  to  bring  it  to  60%  of  GDP  (S1 
indicator) over the long term (185). This assessment 
is  driven  by  the  unfavourable  initial  deficit  and 
debt  levels,  while  the  projected  ageing-related 
costs have a neutral impact.  

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.  

The  S2  indicator  points  to  medium  risk.  It 
signals  that  France  would  need  to  improve  its 
structural  primary  balance  by  3.6 pps.  of  GDP  to 
ensure  debt  stabilisation  over  the  long  term.  This 
result  matches  the  contribution  of  the  high  initial 
deficit 
(Table A21.1,  Table 2).  Overall  ageing-
related costs are not projected to affect long-term 
sustainability (contribution of 0 pp. of GDP), as the 
projected  decrease  in  public  pension  expenditure 
and 
-0.6 pp. 
and  -0.7 pp. of GDP, respectively)  is offset by the 
projected  increase  in  health  care  and  long-term 
care  expenditure  (each  contributing  0.6 pp.  of 
GDP).  

(contributions 

education 

of 

The  S1  indicator  also  points  to  medium  risk. 
This indicator shows that a significant fiscal effort 
of 4.0 pps. of GDP would be needed for France to 
reduce its debt to 60% of GDP by 2070. This result 
is  driven  by  the  high 
level  of  the  French 
government deficit and debt (contributing 3.0 pps. 
and 1.1 pps. of GDP, respectively) (Table 2).  

4  –  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 

(185)The S2 fiscal sustainability indicator measures the 

permanent SPB adjustment in 2025 that would be required 
to stabilise public debt over an infinite horizon. It is 
complemented by the S1 indicator, which measures the 
permanent SPB adjustment in 2025 needed to bring the debt 
ratio to 60% by 2070. The impact of the drivers of S1 and 
S2 may differ due to the infinite horizon component 
considered in the S2 indicator. 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 % of GDP, ‘medium risk’ if it is between 2% and 
6% of GDP, and ‘low risk’ if the effort is negative or below 
2% of GDP. The overall long-term risk classification 
combines the risk categories derived from S1 and S2. S1 
may notch up the risk category derived from S2 if it signals a 
higher risk than S2. See the 2023 Debt Sustainability Monitor 
for further details. 

83 

 
 
Table A21.1:Debt sustainability analysis - France 

Source: Commission services 

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

Source: Commission services 

84 

Table 1. Baseline debt projections20212022202320242025202620272028202920302031203220332034Gross debt ratio (% of GDP)113.0111.9110.6112.4113.6116.0118.8121.7124.6127.5130.4133.3136.3139.2Changes in the ratio-1.9-1.1-1.31.81.22.42.82.92.92.92.92.93.02.9of whichPrimary deficit5.22.83.83.32.82.93.03.03.03.02.92.93.03.0Snowball effect-7.1-3.9-4.8-1.7-1.6-0.5-0.2-0.1-0.10.00.00.00.0-0.1Stock-flow adjustments0.00.0-0.20.20.00.00.00.00.00.00.00.00.00.0Gross financing needs (% of GDP)24.921.922.122.522.523.023.724.425.025.726.327.027.728.3S1S2Overall index  (pps. of GDP)4.03.6of which Initial budgetary position3.03.6Debt requirement1.1Ageing costs0.00.0of which    Pensions-0.4-0.6     Health care0.50.6     Long-term care0.40.6Education-0.5-0.7Table 2. Breakdown of the S1 and S2 sustainability gap indicators70809010011012013014015016020212022202320242025202620272028202920302031203220332034Graph 1. Deterministic debt projections Historical SPB scenarioLower SPB scenarioFinancial stress scenarioAdverse 'r-g' scenarioBaseline% of GDPp10p20p40p60p80p909010011012013014020212022202320242025202620272028% of GDPGraph 2. Stochastic debt projections 2024-2028MedianBaselineBaselineHistorical SPBLower SPBAdverse 'r-g'Financial stressOverallHIGHHIGHHIGHHIGHHIGHHIGHDebt level (2034), % GDP139.2132.7142.7150.2141.4Debt peak year20342034203420342034Fiscal consolidation space93%92%100%93%93%Probability of debt ratio exceeding in 2028 its 2023 level93%Difference between 90th and 10th percentiles (pps. GDP)19.9Short termMedium term - Debt sustainability analysis (DSA)Long termOverall                               (S0)Overall Deterministic scenariosStochastic projectionsS2S1Overall(S1 + S2)(1) Debt level in 2034. Green: below 60% of GDP. Yellow: between 60% and 90%. Red: above 90%. (2) The debt peak year indicates whether debt is projected to increase overall over the nextdecade.Green:debtpeaksearly.Yellow:peaktowardsthemiddleoftheprojectionperiod.Red:latepeak.(3)Fiscalconsolidationspacemeasurestheshareofpastfiscalpositionsinthecountrythatweremorestringentthantheoneassumedinthebaseline.Green:highvalue,i.e.theassumedfiscalpositionisplausiblebyhistoricalstandardsandleavesroomforcorrectivemeasuresifneeded.Yellow:intermediate.Red:low.(4)Probabilityofdebtratioexceedingin2028its2023level.Green:lowprobability.Yellow:intermediate.Red:high(alsoreflectingtheinitialdebtlevel).(5)thedifferencebetweenthe90thand10thpercentilesmeasuresuncertainty,basedonthedebtdistributionunder10000differentshocks.Green,yellowandredcellsindicateincreasinguncertainty.(ForfurtherdetailsontheCommission'smultidimensionalapproach,seethe2023DebtSustainability Monitor)LOWHIGHMEDIUMMEDIUMMEDIUM