Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of France
Date: 2024-11-26
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: France, budget deficit, coordination of EMU policies, economic reform, fiscal policy, investment, macroeconomics, national planning, public debt, structural adjustment

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   EUROPEAN COMMISSION  Strasbourg, 26.11.2024  COM(2024) 716 final  Recommendation for a COUNCIL RECOMMENDATION endorsing the national medium-term fiscal-structural plan of France  
 
Recommendation for a 

COUNCIL RECOMMENDATION 

endorsing the national medium-term fiscal-structural plan of France 

THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 121 thereof, 

Having regard to Regulation (EU) 2024/1263, and in particular Article 17 thereof, 

Having regard to the recommendation from the Commission, 

Whereas: 

GENERAL CONSIDERATIONS 

(1) 

(2) 

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2 

3 

A  reformed  EU  economic  governance  framework  entered  into  force  on  30  April 
2024. Regulation (EU) 2024/1263 of the European Parliament and of the Council on 
the  effective  coordination  of  economic  policies  and  on  multilateral  budgetary 
surveillance1,  together  with  the  amended  Regulation  (EC)  No  1467/97  on  the 
implementation  of  the  excessive  deficit  procedure2,  and  the  amended  Council 
Directive 2011/85/EU on the budgetary frameworks of Member States3 are the core 
elements of the reformed EU economic governance framework. The framework aims 
at  ensuring  public  debt  sustainability  and  sustainable  and  inclusive  growth  through 
reforms  and  investments.  It  promotes  national  ownership  and  has  a  medium-term 
focus, combined with an effective and coherent enforcement of the rules.  

The  national  medium-term  fiscal-structural  plans  that  Member  States  submit  to  the 
Council and to  the  Commission, are at  the centre of the new economic  governance 
framework. The plans are to deliver on two objectives: i) ensuring that, by the end of 
the  adjustment  period,  general  government  debt  is  on  a  plausibly  downward 
trajectory, or stays at prudent levels, and that the government deficit is brought and 
maintained below the reference value of 3% of GDP over the medium term, and ii) 
ensuring the delivery of reforms and investments responding to the main challenges 

Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the 
effective coordination of economic policies and on multilateral budgetary surveillance and repealing 
Council Regulation (EC) No 1466/97 (OJ L, 2024/1263, 30.4.2024, ELI: 
http://data.europa.eu/eli/reg/2024/1263/oj). 
Council Regulation (EU) 2024/1264 of 29 April 2024 amending Regulation (EC) No 1467/97 on 
speeding up and clarifying the implementation of the excessive deficit procedure (OJ L, 2024/1264, 
30.4.2024, ELI: http://data.europa.eu/eli/reg/2024/1264/oj). 
Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements 
for budgetary frameworks of the Member States (OJ L, 2024/1265, 30.4.2024, ELI: 
http://data.europa.eu/eli/dir/2024/1265/oj). 

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identified  in  the  context  of  the  European  Semester  and  addressing  the  common 
priorities of the EU. To that end, each plan is to present a medium-term commitment 
to a net expenditure4 path, which effectively establishes a budgetary constraint for the 
duration  of  the  plan,  covering  four  or  five  years  (depending  on  the  regular  term  of 
legislature in  a Member  State). In  addition,  the plan is  to  explain how the Member 
State  will  ensure  the  delivery  of  reforms  and  investments  responding  to  the  main 
challenges  identified  in  the  context  of  the  European  Semester,  in  particular  in  the 
country-specific recommendations (including those pertaining to the macroeconomic 
imbalances procedure (MIP), if applicable), and how the Member State will address 
the common priorities of the Union. The period for fiscal adjustment covers a period 
of  four  years,  which  may  be  extended  by  up  to  three  years  if  the  Member  State 
commits  to  delivering  a  set  of  relevant  reforms  and  investments  that  satisfies  the 
criteria set out in Article 14 of Regulation (EU) 2024/1263.  

(3) 

(4) 

Following  the  submission  of  the  plan,  the  Commission  is  to  assess  whether  it 
complies with the requirements of Regulation (EU) 2024/1263. 

Upon  a  recommendation  from  the  Commission,  the  Council  is  to  then  adopt  a 
recommendation to set the net expenditure path of the Member State concerned and, 
where  applicable,  endorse  the  set  of  reform  and 
investment  commitments 
underpinning an extension of the fiscal adjustment period. 

CONSIDERATIONS  CONCERNING  THE  NATIONAL  MEDIUM-TERM  FISCAL-
STRUCTURAL PLAN OF FRANCE  

(5) 

On  31  October  2024,  France  submitted  its  national  medium-term  fiscal-structural 
plan to the Council and to the Commission. The submission took place following an 
extension  of  the  deadline  set  out  in  Article  36  of  Regulation  (EU)  2024/1263,  as 
agreed with the Commission to give France the possibility to present a plan based on 
a solid political commitment of the newly appointed government. 

Process prior to the submission of the plan  

(6) 

On  21  June  2024  the  Commission  sent,  according  to  Article  9  of  Regulation  (EU) 
2024/1263,  the  reference  trajectory5  to  France.  The  Commission  published  the 
reference trajectory on 31 October 20246. The reference trajectory is risk-based and 

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Net expenditure as defined in Article 2 of Regulation (EU) 2024/1263, namely government expenditure 
net of (i) interest expenditure, (ii) discretionary revenue measures, (iii) expenditure on Union 
programmes fully matched by revenue from Union funds, (iv) national expenditure on co-financing of 
programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure and (vi) 
one-offs and other temporary measures.  
Prior guidance transmitted to the Member States and Economic and Financial Committee includes 
trajectories without and with an extension of the adjustment period (covering 4 and 7 years, 
respectively). It also includes the main initial conditions and underlying assumptions used in the 
European Commission’s medium-term government debt projection framework. The reference trajectory 
was calculated on the basis of the methodology described in the European Commission’s Debt 
Sustainability Monitor 2023 (https://economy-finance.ec.europa.eu/publications/debt-sustainability-
monitor-2023_en). It is based on the European Commission 2024 spring forecast and its medium-term 
extension up to 2033, and long-term GDP growth and ageing costs are in line with the joint European 
Commission-Council 2024 Ageing Report (https://economy-finance.ec.europa.eu/publications/2024-
ageing-report-economic-and-budgetary-projections-eu-member-states-2022-2070_en). 
https://economy-finance.ec.europa.eu/economic-and-fiscal-governance/national-medium-term-fiscal-
structural-plans_en#france  

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ensures that, by the end of the fiscal adjustment period and in the absence of further 
budgetary measures beyond the adjustment period, general government debt is on a 
plausibly downward trajectory or stays at prudent levels over the medium term, and 
the  general  government  deficit  is  brought  below  3%  of  GDP  over  the  adjustment 
period  and  maintained  below  that  reference  value  over  the  medium  term.  The 
medium term is defined as the ten-year period after the end of the adjustment period. 
In accordance with Articles 6, point (d), 7 and 8 of Regulation (EU) 2024/1263, the 
reference  trajectory  is  also  consistent  with  the  deficit  benchmark,  the  debt 
sustainability safeguard and the deficit resilience safeguard. 

The  reference  trajectory  of  France  sets  out  that,  based  on  the  Commission’s 
assumptions  and  assuming  a  7-year  adjustment  period,  net  expenditure  should  not 
grow by more than the values provided in Table 1. This corresponds to average net 
expenditure  growth  of  1.6%  over  both  the  adjustment  period  (2025-2031)  and  the 
period covered by the plan (2025-2029).  

Table 1: Reference trajectory provided by the Commission to France on 21 June 2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

Average 
2025-
2029 

Average 
2025-
2031 

Maximum net 
expenditure 
growth (annual, %) 

2.0 

1.7 

1.6 

1.4 

1.5 

1.6 

1.7 

1.6 

1.6 

Source: Commission’s calculations. 

(7) 

(8) 

(9) 

In line with  Article 12 of Regulation  (EU) 2024/1263,  France and the Commission 
engaged  in  a  technical  dialogue  in  October  2024.  The  dialogue  centred  on  the  net 
expenditure path  envisaged by  France  and its underlying assumptions (in particular 
the  envisaged  trajectory  for  potential  growth,  real  GDP  and  GDP  deflator,  and  the 
fiscal  multiplier),  the  envisaged  set  of  reform  and  investment  commitments  to 
underpin  an  extension  of  the  adjustment  period  including  reforms  and  investments 
such  as  commitments  to  complement  recent  labour  market  reforms  towards  the 
objective of full employment, to reinforce reindustrialisation and competitiveness via 
support to research and innovation and a simplified business environment, to speed 
up the green transition and to  strengthen public finances’ management), which also 
aim  to  respond  to  the  main  challenges  identified  in  the  context  of  the  European 
Semester and the common priorities of the Union in fair green and digital transition, 
social  and  economic  resilience,  energy  security  and  the  build-up  of  defence 
capabilities. 

The  plan  does  not  report  on  a  consultation  process  with  relevant  national 
stakeholders (including social partners) prior to submission. 

The  High  Council  of  Public  Finance  (France’s  independent  fiscal  institution) 
delivered  an  opinion  on  the  macroeconomic  forecast  and  the  macroeconomic 
assumptions underpinning the multi-annual net expenditure path. The High Council 
concluded that the information provided by the Government at the time of preparing 
the opinion was insufficient to enable an assessment of the realism of the multi-year 
trajectory set out in the medium-term plan, in particular, concerning the composition 

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of  growth  beyond  2025,  the  path  of  public  finances  or  the  set  of  reforms  and 
investments which would underpin an extension of the adjustment period from 4 to 7 
years.  However,  based  on  the  information  available,  the  High  Council  considered 
that  the  potential  GDP  scenario  and  the  output  gap,  although  still  somewhat 
optimistic, were reasonable compared to previous estimates, while the actual growth 
scenario remained optimistic. The High Council reiterated the importance for France 
to  respect  the  trajectory  of  the  medium-term  plan,  while  continuing  to  finance 
priority investments and preserving growth potential. 

(10) 

The plan was presented to the national parliament on 21 October 2024. 

Other related processes  

(11) 

On  26  July  2024,  the  Council  established  the  existence  of  an  excessive  deficit  in 
France due to non-compliance with the deficit criterion7.  

The  present  Recommendation  coincides  with  the  Council  Recommendation  under 
Article 126(7) TFEU with a view to bringing an end to the situation of an excessive 
government deficit in France. The simultaneous adoption of those recommendations, 
which is tailored to and justified by the transition to the new economic governance 
framework, ensures consistency between the recommended adjustment paths.  

(12) 

(13) 

On 23 October 2024,  France submitted its Draft  Budgetary Plan for the year 2025. 
The Commission adopted an opinion on this Draft Budgetary Plan on [26 November 
2024]8. 

On  21  October  2024,  the  Council  addressed  to  France  a  series  of  country-specific 
recommendations (CSRs) in the context of the European Semester9. 

SUMMARY OF THE PLAN AND THE COMMISSION’S ASSESSMENTTHEREOF 

(14) 

In line with Article 16 of Regulation (EU) 2024/1263, the Commission assessed the 
plan as follows: 

Context: macroeconomic and fiscal situation and outlook  

(15) 

Economic activity in France grew by 0.9% in 2023, driven by private consumption 
and  a  positive  contribution  of  net  exports.  According  to  the  European  Commission 
Autumn  2024  Forecast,  the  economy  is  expected  to  grow  by  1.1%  in  2024,  on  the 
back of still buoyant net exports, supporting public consumption and investment. In 
2025, real GDP is set to increase by 0.8%, as a contractionary fiscal stance is set to 
weigh on economic activity. Although supported by disinflation and increases in real 
wages, private consumption is expected to remain subdued, while the delayed effects 
of  a  more  accommodative  monetary  policy,  as  well  as  economic  and  policy 
uncertainty  are  set  to  keep  weighing  on  private  investment.  In  2026,  real  GDP  is 
expected to increase by 1.4%, as lower fiscal adjustment and further declining credit 
costs are forecast to drive private domestic demand and private investment. Over the 

7 OJ L, 1.8.2024, ELI: https://eur-lex.europa.eu/eli/dec/2024/2122/oj 
8 
9 

Commission Opinion on the Draft Budgetary Plan of France, 26.11.2024, C(2024)9055 final. 
Council Recommendation on economic, budgetary, employment and structural policies of France, not 
yet published. 

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(16) 

forecast  horizon  (i.e.,  2024-2026),  potential  GDP  growth  in  France  is  expected  to 
slightly  decelerate,  driven  by  a  decelerating  contribution  from  labour.  The 
unemployment  rate  stood  at  7.3%  in  2023,  and  is  projected  by  the  Commission  to 
amount to 7.4% in 2024, 7.5% in 2025 and 7.6% in 2026. Inflation (GDP deflator) is 
projected to decrease from 5.3% in 2023 to 2.2% in 2024, and to reach 1.6% in 2025 
and 1.7% in 2026.  

Regarding  fiscal  developments,  in  2023  France’s  general  government  deficit 
amounted  to  5.5%  of  GDP.  According  to  the  European  Commission  Autumn  2024 
Forecast, it is set to reach 6.2% of GDP in 2024 and to decline to 5.3% of GDP in 
2025 and, on a no-policy change basis, to increase to 5.4% in 2026. The Commission 
forecast includes France’s draft budget for 2025 that the government proposed to the 
national  parliament  in  October.  General  government  debt  was  109.9%  of  GDP  at 
end-2023. According to the European Commission Autumn 2024 Forecast, the debt 
ratio  is  expected  to  increase  to  112.7%  of  GDP  at  end-2024.  It  is  projected  to 
increase further to 115.3% of GDP at end-2025 and 117.1% at end-2026. The fiscal 
forecast  by  the  Commission  does  not  consider  the  policy  commitments  in  the 
medium-term  plans  as  such  until  they  are  underpinned  by  credibly  announced  and 
sufficiently specified concrete policy measures. 

Net expenditure path and main macroeconomic assumptions in the plan  

(17) 

(18) 

(19) 

France’s  national  medium-term  fiscal-structural  plan  covers  the  period  2025-2029 
and presents a fiscal adjustment over seven years.  

The  plan  contains  the  information  required  by  Article  13  of  Regulation  (EU) 
2024/1263,  with  the  exception  of  the  consultation  of  national  parliaments  and  the 
consultation  referred  to  in  Article  11  required  by  Article  13(g)  of  Regulation  (EU) 
2024/1263. 

The plan commits to the net expenditure path indicated in Table 2, corresponding to 
average  net  expenditure  growth  of  1.1%  over  the  years  2025-2029.  In  addition, 
France commits to a set of reforms and investments with the view to extending the 
adjustment  period  to  7  years  (2025-2031),  over  which  the  average  net  expenditure 
growth is planned to be 1.1%. 

The average net expenditure growth reported in the plan over the adjustment period 
(2025-2031) is lower than the reference trajectory transmitted by the Commission on 
21 June 2024. 

The  plan  assumes  potential  GDP  growth  to  remain  stable  at  1.2%  until  2028 
(unchanged  from  2024),  before  decreasing  to  1.0%  in  2029.  In  addition,  the  plan 
expects the growth rate of the GDP deflator to decrease to 1.7% in 2025 (from 2.3% 
in 2024) before decreasing further to 1.6% in 2026-2029. 

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Table 2: Net expenditure path and main assumptions in France’s plan  

Extension of the 
adjustment period 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

Average 
over the 
period of 
validity 
of the 
plan 

2025-
2029 

Average 
over the 
adjustment 
period 

2025 – 2031 

Net 
expenditure 
growth 
(annual, %) 

Net 
expenditure 
growth 
(cumulative, 
from base year 
2023, %) 

Potential GDP 
growth (%) 

Inflation (GDP 
deflator 
growth) (%) 

3.8 

0.0 

1.4 

1.4 

1.4 

1.3 

1.3 

1.3 

1.1 

1.1 

3.8 

3.8 

5.2 

6.7 

8.1 

9.5 

10.9 

12.4 

n.a. 

n.a. 

1.2 

1.2 

1.2 

1.2 

1.2 

1.0 

1.0 

1.0 

1.2 

1.1 

2.3 

1.7 

1.6 

1.6 

1.6 

1.6 

1.6 

1.6 

1.6 

1.6 

Source: Medium-term fiscal-structural plan of France and Commission calculations 

Implications of the plan’s net expenditure commitments for general government debt  
Debt developments 

(20) 

If the net expenditure path committed to in the plan and the underlying assumptions 
materialise,  general  government  debt  would,  according  to  the  plan,  gradually 
increase from 112.9% of GDP in 2024 to 116.5% of GDP in 2027 and then gradually 
decrease  to  113.5%  of  GDP  at  the  end  of  the  adjustment  period  (2031),  as  per  the 
following table. Over the medium term, that is over the 10 years after the end of the 
adjustment  period,  the  general  government  debt  ratio  would  remain  on  a  steady 
declining trend, reaching a level of 100.9% in 2041. 

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Table 3: General government debt and balance developments in France’s plan  

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

2041 

Government 
debt 

(% of GDP) 

Government 
balance 

(% of GDP) 

109.9 

112.9 

114.7 

115.9 

116.5 

116.1 

115.8 

114.9 

113.5 

100.9 

-5.5 

-6.1 

-5.0 

-4.6 

-4.0 

-3.3 

-2.8 

-2.2 

-1.7 

-1.6 

Source: Medium-term fiscal-structural plan of France 

Thus,  according  to  the  plan,  the  general  government  debt  ratio  would  be  put  on  a 
downward  path  by  the  end  of  the  adjustment  period  (2031).  This  is  plausible  as, 
based  on  the  plan’s  assumptions,  debt  is  projected  to  decline  over  the  ten  years 
following  the  adjustment  period  under  all  deterministic  stress  tests  of  the 
Commission’s  Debt  Sustainability  Analysis,  and  the  stochastic  projections  indicate 
that debt would decline with a sufficiently high probability.  

Therefore,  based  on 
the  plan’s  policy  commitments  and  macroeconomic 
assumptions, the net expenditure path put forward in the plan is consistent with the 
requirement for debt as set out in Articles 6, point (a), and 16(2) of Regulation (EU) 
2024/1263.  

Implications  of  the  plan’s  net  expenditure  commitments  for  the  general  government 
balance 

(21) 

Based  on  the  plan’s  net  expenditure  path  and  assumptions,  the  general  government 
deficit would progressively decline from 6.1% of GDP in 2024 to 2.8% of  GDP in 
2029  and  to  1.7%  of  GDP  at  the  end  of  the  adjustment  period  (2031).  Thus, 
according to the plan, the general government balance would not exceed the 3% of 
GDP reference value at the end of the adjustment period (2031). In addition, in the 
ten  years  following  the  adjustment  period  (i.e.  until  2041),  the  government  deficit 
would not  exceed 3% of GDP. Therefore, based  on the plan’s policy commitments 
and macroeconomic assumptions, the net expenditure path put forward in the plan is 
consistent with the requirement for the deficit as set out in Articles 6, point (b), and 
16(2) of Regulation (EU) 2024/1263.  

Time profile of the fiscal adjustment 

(22) 

The  time  profile  of  the  fiscal  adjustment,  measured  as  the  change  in  the  structural 
primary balance, as described in the plan, is frontloaded, compared to the linear path 
referred to as  a rule under Article 6, point (c), of Regulation (EU) 2024/1263. This 
reflects  a  large  consolidation  effort  in  2025.  In  addition,  the  fiscal  adjustment  over 
the first four years of the plan is more than proportional to the total adjustment effort. 

Therefore,  based  on 
the  plan’s  policy  commitments  and  macroeconomic 
assumptions, the net expenditure path put forward in the plan is consistent with the 
no-backloading  safeguard  clause  set  out  in  Article  6(c)  of  Regulation  (EU) 
2024/1263.  

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Table 4: Structural primary balance developments in France’s plan  

2023 

2024 

2025 

2026 

2027 

2028 

2029 

2030 

2031 

Structural 
primary 
balance 

(% of GDP) 

Change in 
structural 
primary 
balance 

(pps.) 

-3.2 

-3.6 

-2.3 

-1.7 

-1.0 

-0.3 

0.3 

1.1 

1.8 

n.a. 

-0.4 

1.4 

0.6 

0.7 

0.7 

0.7 

0.7 

0.7 

Source: Medium-term fiscal-structural plan of France 

Consistency with the excessive deficit procedure 

(23) 

The net expenditure path set out in the plan is in line with the requirements under the 
excessive  deficit  procedure  (in  particular  with  the  minimum  annual  structural 
adjustment  established  in  Article  3(4),  third  subparagraph  of  Council  Regulation 
(EC) 1467/97). 

Consistency of the plan with the deficit resilience safeguard 

(24) 

The  requirement  of  the  preventive  arm  set  out  in  Article  8  of  Regulation  (EU) 
2024/1263  regarding  the  deficit  resilience  safeguard,  which  aims  to  provide  a 
common  margin  relative  to  the  deficit  reference  value  of  3%  of  GDP,  applies  to 
France as of 2030, as the deficit is planned to be below 3% of GDP as of  2029. In 
2030  and  2031,  the  annual  adjustment  in  the  structural  primary  balance  should 
therefore  not  be  less  than  0.25%  of  GDP  if  the  structural  deficit  remained  above 
1.5%  of  GDP  in  the  years  before,  to  achieve  a  common  resilience  margin  in 
structural terms of 1.5% of GDP. The fiscal adjustment that results from  the plan’s 
policy  commitments  and  macroeconomic  assumptions  exceeds  0.25%  of  GDP  in 
both years. Therefore, based on the plan’s policy commitments and macroeconomic 
assumptions, the net expenditure path put forward in the plan is consistent with the 
deficit resilience safeguard. 

Consistency of the plan with the debt sustainability safeguard 

(25) 

 In accordance with Article 7 of Regulation (EU) 2024/1263, as general government 
debt will be above 90% of GDP over the adjustment period according to the plan, the 
debt  ratio  is  required  to  decline  by  at  least  1  percentage  point  on  average  per  year 
until  it  falls  below  90%,  after  which  it  should  decline  by  0.5  percentage  points  on 
average. As the deficit is planned to be below 3% of GDP as of 2029 according to 
the plan, this decline is calculated for the year 2031 (compared to the level of 2030) 
and amounts to  1.4 percentage points (see Table 3). Therefore, based on the plan’s 
policy commitments  and macroeconomic  assumptions, the net  expenditure path  put 
forward in the plan is consistent with the debt sustainability safeguard. 

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Macroeconomic assumptions of the plan 

(26) 

The  plan  is  based  on  a  set  of  assumptions  which  differs  from  the  Commission’s 
assumptions  transmitted  to  France  on  21  June  2024.  In  particular,  the  plan  uses 
different  assumptions  for  ten  variables,  namely  the  starting  point  (the  structural 
primary balance in 2024), potential GDP growth, GDP deflator growth, actual GDP 
growth, the output gap, the nominal implicit interest rate, the fiscal multiplier, stock-
flow  adjustments,  one-off  and  other  temporary  measures,  and  the  budget  balance 
semi-elasticity. Moreover, the adjustment is frontloaded, and France uses a different 
formula  to  compute  net  expenditure  growth.  An  assessment  of  these  differences  in 
assumptions is provided below. 

The  differences  in  assumptions  with  the  most  significant  impact  on  average  net 
expenditure growth are listed below, together with an assessment of each difference 
considered in isolation.  

• 

• 

• 

the  Commission’s  assumptions 

The  plan  assumes  a  lower  structural  primary  balance  for  2024,  namely  a 
structural  primary  deficit  of  3.6%  of  GDP,  while  the  Commission  expected  a 
structural primary deficit of 3.0% of GDP in its prior guidance in spring 2024. 
This less favourable initial fiscal position is also reflected in the higher budget 
deficit (of 6.1% of GDP in the plan) for 2024, against a deficit of 5.3% of GDP 
the 
in 
accompanying updated macroeconomic conditions for 2024 in the plan reflect 
more  recent  information  available  since  spring.  It  is  also  in  line  with  the 
European Commission 2024 Autumn forecast. Consequently, this difference in 
assumption is deemed to be duly justified. Taken in isolation, this difference in 
assumptions  contributes  to  a  lower  average  net  expenditure  growth  over  the 
adjustment period in the plan than according to the Commission’s assumptions.   

in  spring.  This  revision  and 

The plan uses a smoother and higher potential output growth assumptions over 
the  period  2025-2041.  The  possibility  to  use  alternative  potential  growth 
assumptions  is  in  line  with  Article  36(1)(f)  of  Regulation  (EU)  2024/1263, 
provided that cumulative growth over the projection horizon (i.e. up to 2041) is 
broadly in line with the Commission’s assumptions. This is not the case in the 
plan.  Average  potential  GDP  growth  in  the  plan  over  the  period  2025-
2041 exceeds  by  0.3  pp.  the  Commission’s  assumption  shared  on  21  June 
2024. This difference drops to 0.1 pp. but still exists when the Commission’s 
assumptions  are  updated  to  account  for  both  the  statistical  revision  issued  by 
Eurostat  in  its  mid-term  review  and  the  European  Commission  2024  Autumn 
forecast.  Therefore,  the  difference  in  assumptions  for  potential  GDP  growth 
estimates  between  the  plan  and  the  Commission’s  assumptions  in  its  prior 
guidance  cannot  be  entirely  explained  by  updated  data  using  the  commonly 
agreed  methodology.  Hence,  this  assumption  is  not  consistent  with  the 
common  DSA  framework.  Taken  in  isolation,  it  raises  the  average  net 
expenditure  growth  ceiling  over  the  adjustment  period  compared  with  the 
reference trajectory. 

The plan projects  a lower average GDP  deflator  growth  over 2025-2031  than 
according  to  the  Commission’s  assumptions,  at  1.6%  compared  to  2.2%. 
Beyond the adjustment period, the plan assumes GDP deflator growth at 1.75% 
each  year,  which  is  lower  than  the  convergence  values  of  2.6%  in  2033  and 
2.0% in the longer term in the Commission’s assumptions. The assumption in 
the  plan  is  more  cautious  and  deemed  to  be  duly  justified.  It  contributes  to 

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lower  average  net  expenditure  growth  over  the  adjustment  period  in  the  plan 
than according to the Commission’s assumptions.  

• 

Compared with the common DSA framework, the plan uses a different formula 
to  translate  the  required  change  in  the  structural  primary  balance  into  net 
expenditure  growth.  This  formula  corrects  for  a  non-discretionary  component 
to  account  for  temporarily  lower  revenue  elasticity  to  nominal  potential GDP 
compared to the conventional unit elasticity assumption. The application of this 
formula for the plan leads to lower net expenditure growth over the first years 
of the adjustment period. It is therefore more cautious and deemed to be duly 
justified. 

On  balance,  the  joint  impact  of  more  cautious  assumptions  and  the  differences  in 
assumptions  that  are  duly  justified  outweighs  the  impact  of  the  assumption  for 
potential  GDP  growth.  Moreover,  the  remaining  differences  in  assumptions,  while 
not  always  consistent  with  the  common  DSA  framework, do  not  have  a  significant 
impact  on  average  net  expenditure  growth  compared  to  the  Commission’s 
assumptions.  Overall,  all  the  differences  in  assumptions  taken  together  lead  to  an 
average net expenditure growth in the plan that is lower than the reference trajectory.  

The  Commission  will  take  into  account  the  above  assessment  of  the  plan’s 
assumptions in future assessments of compliance with the net expenditure path.  

Fiscal strategy of the plan  

(27) 

According  to  the  indicative  fiscal  strategy  in  the  plan,  the  commitments  on  net 
expenditure  will  be  delivered  through  both  expenditure  restraint  and  discretionary 
revenue increases. The plan envisions a frontloaded consolidation, with one-third of 
the  reduction  of  the  deficit-to-GDP  ratio  below  the  3%  reference  value  to  be 
achieved  in  2025  only.  This  would  be  mostly  achieved  via  the  containment  of 
expenditure  compared  to  a  no-policy  change  scenario,  mostly  at  the  level  of  the 
central  government  but  with  the  contribution  of  all  subsectors  of  the  public 
administration.  Over  the  duration  of  the  plan,  efforts  to  contain  expenditure,  while 
improving  its  quality  and  effectiveness,  would  be  supported  by  revamped 
commitments in terms of spending reviews and simplification of public action. Main 
complementary measures advanced on the revenue side aim at reaching greater social 
and  fiscal  justice  and  encouraging  greater  energy  efficiency.  They  concern 
exceptional taxes on highest incomes and largest companies’ profits, the reduction of 
certain tax expenditures and greening of taxation. 

The specification of the policy measures to be adopted is to be confirmed or adjusted 
and  quantified  in  the  annual  budgets.  At  the  same  time,  there  are  risks  to  the 
implementation  of  the  indicative  fiscal  strategy  in  the  plan,  which  stem  from  the 
macroeconomic  assumptions  underpinning  the  plan,  which  imply  an  upbeat  GDP 
growth  under  the  adjustment  scenario,  and  the  possibility  of  lower-than-expected 
savings from spending reviews.  

In  addition,  the  budget  that  the  government  tabled  in  the  national  parliament  in 
October 2024 for 2025 specifies most of the policy measures through which the net 
expenditure commitment for 2025 will be achieved10. 

10 

See Commission Opinion on the Draft Budgetary Plan of France, 26.11.2024, C(2024)9055 final. 

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Set of reform and investment commitments in the plan to underpin an extension of the 
fiscal adjustment period  

(28) 

In the plan, France commits to a set of reforms and investments, aiming to improve 
potential  growth  and  fiscal  sustainability,  to  underpin  an  extension  of  the  fiscal 
adjustment period from 4 to 7 years. 

The  set  of  reforms  and  investments  underpinning  an  extension  of  the  adjustment 
period is composed of three existing commitments from the recovery and resilience 
plan (RRP); two commitments from the RRP with additional specifications as well as 
six new reforms and investments (see also Annex II): 

Reform of the unemployment insurance, included in the RRP (Component 8, Job 
protection, youth, disability, vocational training,), aimed at strengthening incentives 
to  return  to  stable  employment  and  to  limit  the  alternation  of  short  contracts  and 
periods of unemployment. The reform is an existing RRP commitment. It consisted 
of  a  legislative  package  adopted  in  2019  that  entered  into  force  in  2021  under  the 
RRP.  It  included  measures  concerning  the  calculation  of  the  compensation  and  a 
“bonus-malus” measure determining employers’ contributions to the scheme. 

Reforms  under  the  Research  programming  law.  This  measure  is  an  existing 
commitment  under  the  RRP  (Component  6,  Technological  sovereignty  and 
resilience),  namely  via  measure  ‘Structural  aspects  of  the  Research  Programming 
Law’,  which  calls  for  the  demonstration  by  Q3-2025  of  the  increase  of  public 
research  spending  compared  to  2020.  The  various  provisions  relate  to  research  and 
higher education and aim at strengthening the funding and organisation of research, 
promoting  scientific  excellence,  improving  the  attractiveness  of  scientific  jobs  and 
careers,  and  better  diffuse  the  results  of  public  research  into  the  private  sector,  by 
enhancing  links  between  public  research  and  private  innovation,  the  economy  and 
society.  The  implementation  of  the  Research  programming  law  spreads  over  the 
period 2021-2030, beyond the duration of the RRP. 

Reforms  under  the  Law  on  the  acceleration  of  renewable  energy  production. 
The  measures  stemming  from  the  implementation  of  the  law,  adopted  and  entered 
into  force  in  Q1-2023,  is  an  existing  commitment  under  the  RRP  (Component  10, 
REPowerEU),  namely  via  measure  ‘Law  on  the  acceleration  of  renewable  energy 
production’.  Several  actions  are  foreseen  for  implementation  over  the  period  2023-
2030,  following  the  adoption  of  past  and  future  implementing  decrees,  and  aim 
overall to speed-up the uptake of renewable energies in France, to achieve France’s 
energy  transition  objectives  and  ensure  its  energy  security  of  supply.  The  measure 
involves  multiple  channels  of  intervention,  namely  procedural  simplification  and 
territorial  planning  acceleration,  focus  on  solar  (thermal,  photovoltaic  and 
agrivoltaics)  and  offshore  renewable  energy  sources  as  well  as  across-the-board 
financing. 

Investments  under  the  multiannual  plan  France  2030.  The  investment  plan 
includes  the  programme  PIA4  (Programme  d’Investissements  d’Avenir),  and  this 
commitment  adds  to  existing  measures  in  the  RRP  (notably  under  Component  6, 
Technological  sovereignty  and  resilience),  namely  ‘Innovating  for  the  resilience  of 
our  business  models’,  supporting  investment  for  the  development  of  key  digital 
technologies, and ‘Supporting innovative businesses’, financing R&D investment for 
innovative companies. Both measures are expected to be finalised by Q4-2024. The 
plan  France  2030  supports  the  transformation  over  the  long  term  of  production 
processes in strategic sectors such as health, energy, and aeronautics, along the whole 

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value chain, from basic research to innovation and to industrialisation and covers a 
broader scope than the RRP. The plan also contributes to catching up the investment 
gap in R&D spending in specific areas, accelerating the greening and digitalisation of 
the economy. It covers the period 2022-2026. 

Reforms  stemming  from  the  evaluation  of  the  quality  of  public  spending  via 
reinforced spending reviews compared to RRP commitments. The plan commits 
to the reinforcement of annual spending reviews across all general government sub-
sectors. The commitment thus adds to measures included in the RRP (Component 7, 
Digitalisation of State, territories, enterprises, Culture) via the measure ‘Assessment 
of the quality of public expenditure’. A quantitative cumulative target for permanent 
public  spending  savings  and  tax  and  social  expenditure  reductions  (on  top  of  the 
measure  “reform  of  the  general  reductions  of  social  contributions  relative  to  the 
minimum wage (SMIC)”) inspired by spending reviews is put forward for the period 
2025-2027. Implementation is expected to spread over the whole adjustment period 
and imply the effective and regular integration of results of spending reviews in the 
annual draft budgets, accompanied by the publication of annual monitoring reports, 
showing both the annual and cumulative savings identified and implemented. 

Reform  of  the  unemployment  insurance  following  negotiations  between  social 
partners. This measure, new compared to the RRP, aims to further reform the rules 
for  unemployment  insurance  over  the  next  three  years,  in  particular  concerning 
senior  workers,  while  preserving  the  achievements  of  the  2019,  2021  and  2023 
reforms  and  contributing  to  reinforce  their  positive  budgetary  impact.  The  plan 
foresees the implementation of the new rules resulting from the negotiation between 
social partners as of mid-2025, and an assessment report on the cumulated effects of 
all the unemployment insurance reforms by end-2027. 

Reform of the contribution rate to the Caisse Nationale de Retraites des Agents 
des  Collectivités  Locales  (CNRACL).  The  reform,  which  is  new  compared  to  the 
RRP,  consists  in  the  permanent  increase  of  the  rate  of  employers’  social 
contributions to the special retirement scheme responsible for the insurance of local 
governments  and  hospitals’  officials.  By  producing  a  positive  budgetary  impact,  it 
aims at contributing to the financial equilibrium of the scheme and, to this end, the 
plan includes a commitment to possibly implement further permanent increases over 
the adjustment period. The reform is thus also presented as contributing to the overall 
sustainability  of  the  pension  system  jointly  with  the  major  2023  pension  reform, 
whose  main  features  were  the  increase  of  the  legal  retirement  age  and  the 
anticipation of the increase of the minimum contribution period for  receiving a full 
pension  and  of  which  the  plan  commits  to  preserve  the  impacts  in  terms  of 
sustainability. The plan foresees the adoption of the increase of the contributions to 
the CNRCAL by 5 percentage points in the social security budget laws for 2025 and 
2026, and subsequent implementation in addition to the increase already enacted in 
2024. 

Reform of the general  reductions in social security contributions on low wages 
relative to the minimum wage (SMIC). The reform, which is new compared to the 
RRP, aims at simplifying and rationalising the existing schemes of reduction of the 
labour cost, with the objective of incentivising wage mobility and reducing the risks 
of  low-wage  traps,  mainly  at  the  level  of  the  minimum  wage.  In  particular,  the 
reform consists in smoothening the curve of the general reductions, to make it more 
degressive,  and  reducing specific  exemptions  from  health and family  contributions. 
The  plan  foresees  the  adoption  of  the  reform  in  the  social  security  budget  law  for 

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2025, to  be approved by December 2024, and  a progressive  implementation  in  two 
phases, to be completed by end-2025 and end-2026, respectively. 

Reforms under the new Law on simplification of the business environment. The 
reform,  which  is  new  compared  to  the  RRP,  has  three  main  objectives:  reduce 
radically  the  burden  of  administrative  procedures  for  businesses,  for  example  by 
transforming certain authorisation procedures to be converted into simple declaration 
or  improving  companies’  access  to  public  procurement;  review  the  relationship 
between  the  administration  and  businesses,  in  particular  for  very  small  enterprises, 
by aligning their rights to those of self-employed; and streamline existing standards 
via  derogatory  measures  to  support  the  establishment  of  industrial  and  energy 
transition  projects.  The  new  law,  expected  to  be  adopted  by  end-2025,  will  be 
implemented  progressively  with  the  adoption  and  monitoring  of  the  implementing 
decrees over the period until 2028. 

Reforms  under  the  Law  on  green  industry.  New  commitments  under  the  law, 
adopted  in  Q4-2023,  which  are  new  compared  to  the  RRP,  foresee  implementation 
and  regular  monitoring  of  outcomes  spread  over  the  period  until  2030.  The  main 
objectives  pursued  concern 
the  development  of  green 
the  acceleration  of 
technologies  and  the  accompanying  of  industry  towards  decarbonisation.  More 
specific, yet broad axes for intervention refer to the facilitation of the installation of 
new industrial sites, the improvement of the financing conditions of green industrial 
project,  the  greening  of  public  procurement,  and  the  strengthening  of  the 
conditionality of public support to green transition objectives. 

Reform of tax and social expenditures. The reform, which is new compared to the 
RRP, aims at rationalising tax and social expenditures by reducing and removing the 
least efficient ones. A quantitative cumulative target for permanent reduction in tax 
and social expenditures and public spending savings (on top of the measure “reform 
of  the  general  reductions  in  social  contributions  relative  to  the  minimum  wage 
(SMIC)”)  is  put  forward  for  the  period  2025-2027.  Implementation  is  expected  to 
spread  over  the  whole  adjustment  period  and  imply  the  effective  and  regular 
integration  of  tax  and  social  expenditure  reductions  in  the  draft  budgets, 
accompanied  by  the  publication  of  annual  monitoring  reports,  showing  both  the 
annual and cumulative savings identified and implemented. 

In  line  with  Article  14  (3)  of  Regulation  (EU)  2024/1263,  each  reform  and 
investment  underpinning  an  extension  of  the  adjustment  period  is  sufficiently 
detailed, front-loaded, time-bound and verifiable. 

The  RRP  commitments  underpinning  the  extension  contain  significant  reforms  and 
investments  aimed  at  improving  fiscal  sustainability  and  enhancing  the  growth 
potential of the economy. In addition, France commits to continuing the reform effort 
over  the  period  covered  by  the  medium-term  fiscal-structural  plan  and  maintaining 
the  nationally  financed  investment  levels  realised  over  the  period  covered  by  the 
RRP  (see  below,  Table  5).  The  commitments  will  be  monitored  throughout  the 
implementation of the plan. Accordingly, commitments under the RRP can be taken 
into account for the extension of the adjustment period as provided by Article 36 (d) 
of Regulation (EU) 2024/1263. 

(29) 

(30) 

(31) 

The  set  of  reforms  and  investments  underpinning  the  extension  is  expected  to 
improve  the  growth  and  resilience  potential  of  France’s  economy  in  a  sustainable 
manner  as  required  by  Article  14(2),  point  (a),  of  Regulation  (EU)  2024/1263. 
France’s plan does not provide an estimation of the overall expected impact of the set 

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of reforms and investments put forward. Such impact is however reported for some 
of  the  reforms,  based  on  past  analyses  and  available  literature.  In  this  regard, 
according  to  the  plan,  the  accumulated  impact  on  GDP  of  some  of  these  reforms 
would  exceed  0.7  percentage  points  by  2030,  being  somewhat  larger  in  the  long 
term. In particular, the unemployment insurance reform is estimated to increase GDP 
by  0.5  percentage  points  and  create  more  than  40  000  jobs  in  the  long  term. 
Moreover, based on the simulations of the macroeconomic model QUEST-III R&D 
developed by the Commission, the implementation of the research programming law 
would add 0.2 percentage points of GDP in 15 years and 0.3 percentage points in the 
long term. For other reforms an ad hoc assessment is either indicated to be already 
ongoing or will be conducted throughout the implementation of the plan, thus will be 
supporting the accompanying set of indicators. These reforms are also set to entail a 
positive impact on activity that is not quantified at this stage.  Overall, based on the 
information  provided,  the  economic  strategy  behind  the  set  of  reforms  and 
investments, including RRP commitments, appears well articulated and is assumed to 
effectively  address  previously  identified  weaknesses  in  France’s  growth  and 
resilience  potential  (e.g.  in  Country  reports).  Key  areas  of  intervention  indeed 
concern  the  labour  market  and  progress  towards  full  employment;  the  need  to 
support  reindustrialisation  and  the  strengthening  of  competitiveness;  the  challenges 
of a fair green and energy transition and the governance of public finances. 

The set of reforms and investments underpinning the extension is expected to support 
fiscal  sustainability  as  required  by  Article  14(2),  point  (b),  of  Regulation  (EU) 
2024/1263. According to the estimates in the plan, the set of reforms and investments 
underpinning  the  extension  would  entail  a  direct  deficit-reducing  impact  of  about 
EUR 20 billion a year (0.6% of GDP) as of 2027, mainly due to the budgetary impact 
of reforms of the unemployment insurance scheme of 2021 and the complementary 
reform  adopted  in  2023  modulating  the  duration  of  unemployment  benefits, 
depending  on  the  labour  market  situation,  to  provide  more  incentives  to  return  to 
work in favourable times and more protection in adverse phases (0.1% of GDP ) and 
the recasting of the reductions of social contributions relative to the minimum wage 
(0.2% of GDP) and the permanent savings from spending reviews and the reduction 
in tax and social expenditures (0.3% of GDP). In turn, the reforms and investments 
aimed  at  implementing  the  investment  plan  France  2030,  the  reforms  and 
investments  under  the  Research  programming,  simplification  and  Green  Industry 
laws  are  also  expected  to  imply  an  indirect  positive  effect  on  public  finances  via 
increased  tax  revenues,  as  those  reforms  are  set  to  involve  a  positive  impact  on 
employment,  investment  and  growth.  Overall,  the  set  of  reforms  and  investments 
underpinning the extension imply a direct modest contribution to improvement of the 
sustainability  of  public  finances,  although  this  contribution  might  be  somewhat 
higher after adding up the potential contribution of the envisaged spending reviews, 
the rationalisation of tax expenditures and indirect effects derived from higher GDP 
and employment in the long term. 

The  set  of  reforms  and  investments  underpinning  the  extension  addresses  the 
common  priorities  of  the  EU  as  required  by  Article  14(2),  point  (c),  of  Regulation 
(EU)  2024/1263.  In  particular,  social  and  economic  resilience,  including  the 
European  Pillar  of  Social  Rights,  would  be  addressed  by  the  reforms  of  the 
unemployment  insurance  scheme,  increased  contributions  to  the  retirement  scheme 
of  local  and  hospital  officials,  coupled  with  the  preservation  of  the  2023  pension 
reform,  the  reform  of  the  general  reductions  in  social  contributions  on  low  wages 
relative  to  the  minimum  wage  and  the  law  on  simplification  of  the  business 

(32) 

(33) 

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(34) 

environment.  The  priorities  linked  to  a  fair  green  and  digital  transition  and  to 
ensuring energy security would be addressed by  reforms and investments under the 
investment  plan  France  2030,  the  research  programming  law,  the  law  on  green 
industry, the law on the acceleration of renewable energy production.  

The  set  of  reforms  and  investments  underpinning  the  extension  addresses  the 
relevant11  CSRs  issued  as  part  of  European  Semester  as  required  by  Article  14(2), 
point (d), of Regulation (EU) 2024/1263. In particular, reforms and measures in the 
area  of  budgetary  framework  and  fiscal  governance,  pension  systems  and  active 
ageing relate to the fiscal structural CSRs in 2019, 2021, 2022 and 2024 requesting 
France  to  better  target  tax  expenditures,  continue  efforts  to  enhance  the  quality  of 
budgetary  measures,  including  by  setting  up  quantitative  targets  for  expenditure 
savings,  achieve  expenditure  savings  and  efficiency  gains  across  all  sub-sectors  of 
the government, reform the pension system while underpinning its sustainability and 
further improve framework conditions to facilitate investment and innovation. Other 
reforms  and  measures  in  the  areas  of  green  transition,  smart,  sustainable  and 
inclusive growth and social and territorial cohesion relate to relevant CSRs in 2019, 
2020, 2021, 2022, 2023 and 2024, requesting to improve the business environment, 
foster business R&D intensity, accelerate the deployment of renewable energies and 
reduce overall reliance on fossil fuels. 

(35) 

The  plan  ensures  that  the  planned  overall  level  of  nationally  financed  public 
investment realised on average over the period covered by the RRP is maintained, as 
required by Article 14(4) of Regulation (EU) 2024/1263. 

Table 5: Nationally financed public investment in the plan (% of GDP) 

Average level over 
the period covered 
by the RRP (2021 
to 2026) (12) 

2025 

2026 

2027 

2028 

2029 

Average over the 
duration of the plan 

3.9 

3.9 

4.0 

3.9 

3.8 

3.7 

3.9 

Source: Medium-term fiscal-structural plan of France 

(36) 

Finally,  the  set  of  reform  and  investment  commitments  underpinning  an  extension 
can be regarded as consistent with the commitments in the RRP and the Partnership 
Agreement  agreed  under  the  Multiannual  Financial  Framework  as  required  by 
Article 14(4), point (d), of Regulation (EU) 2024/1263. Namely, in accordance with 
the  requirements,  each  commitment  is  expected  to  operate  in  continuity  and 
complementarity  with  the  RRP  or  the  Partnership  Agreement  of  France,  and  to 

11 

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CSRs considered ‘relevant’ are recommendations: i) adopted by the Council from 2019 onwards, ii) for 
which the Member State has not yet made ‘full’ or ‘substantial’ progress in addressing them and are not 
outdated (assessed as ‘Not Assessed / No Input to Add ’), as assessed in the latest European Semester 
surveillance exercise (available in CeSaR (europa.eu)), iii) not linked to purely fiscal SGP-related and 
iv) not covering the same challenge but in a rephrased manner. 
It is assumed and accepted that the two periods will overlap. The requirement to maintain the level of 
investment is intended to apply to the years after the end of the lifetime of the RRF. 

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respond to the Country Specific Recommendations and to one or more common EU 
priorities. 

(37) 

In conclusion, the set of reforms and investments underpinning the extension of the 
adjustment period is assessed as fulfilling, taken altogether, the criteria in Article 14 
of  Regulation  (EU)  2024/1263.  As  a  result,  the  adjustment  period  can  be  extended 
from 4 to 7 years, as put forward in the plan. 

Other  reforms  and  investments  responding  to  the  main  challenges  identified  in  the 
context of the European Semester and addressing the common priorities of the Union  

(38) 

(39) 

(40) 

Besides  the  set  of  reforms  and  investments  underpinning  an  extension  of  the 
adjustment period, the plan describes policy intentions concerning other reforms and 
investments  to  respond  to  the  main  challenges  identified  in  the  context  of  the 
European Semester, especially the CSRs, and to address the common priorities of the 
EU.  The  plan  includes  28  reforms  and  investments,  of  which  seven  are  financially 
supported by the Recovery and Resilience Facility. 

Concerning the common priority of a fair green and digital transition, including the 
climate  objectives  set  out  in  Regulation  (EU)  2021/1119,  the  plan  includes  several 
measures. These concern the transport sector, also tackling pollution prevention, with 
the  development  of  public  transport  (under  the  RRP),  the  greening  of  French 
harbours (under the RRP), the walking and cycling plan, and support to purchase and 
lease low-emitting light vehicles. The plan also focuses on innovation projects for the 
green  transition  (under  the  RRP)  in  the  context  of  the  fourth  future-oriented 
investments  programme  (‘Programme  d’Investissements  d’Avenir’,  PIA4).  Related 
to  CSRs  in  2022  and  2023  covering  energy  efficiency,  the  plan  includes  measures 
such  as  the  alignment  of  the  VAT  rate  on  gas  boilers  and  the  renovation  and 
modernisation of hospital buildings. The measures in the plan related to the priority 
of  digital  transition  build  on  the  objectives  set  under  the  Digital  Decade  policy 
programme  for  connectivity  infrastructure  and  digitalisation  of  public  services. 
Examples of measures in the plan concern the high-speed broadband plan, expected 
to benefit digitization of French economy as well as measures on space, digital health 
and on the modernisation and digitization of professional training. 

Concerning  the  common  priority  of  social  and  economic  resilience,  including  the 
European  Pillar  of  Social  Rights,  the  plan  includes  a  number  of  reforms  and 
investments. Related to CSRs in 2019, 2022 and 2023 on skills, vocational education 
and  training  and  adult  learning,  and  to  CSRs  in  2019  and  2020  on  active  labour 
market policies, incentives to work & labour market participation, relevant measures 
concern: the creation of  a  public  Early Childhood Service  at  local  level,  to  support 
parents,  in  particular  women,  and  low-income  households  to  enter  and  stay  in  the 
labour market, the reform  of public employment services and enhanced support for 
recipients  of  the  Active  Solidarity  Income  (RSA)  and  businesses,  the  support  to 
lasting  professional 
young  people  without  employment  or  training  towards 
integration,  the  deployment  of  the  training  component  of  France  2030,  the  Skills 
Investment  Plan  (PIC)  aimed  to  enhance  the  employability  of  individuals  furthest 
from  the  labour  market,  the  apprenticeship  support  program,  and  the  reform  of 
vocational  high  schools.  Related  to  CSRs  in  2022,  2023  and  2024  on  education, 
further measures aim to improve basic skills in secondary school and to promote and 
enhance  the  teaching  profession  notably  by  strengthening  initial  and  continuous 
training.  In  addition,  the  plan  includes  other  policy  measures  to  improve  access  to 
and  the  efficiency  of  healthcare  supply,  the  renovation  and  adaptation  of  care 

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(41) 

(42) 

(43) 

facilities  for  dependent  elderly  people,  as  well  as  measures  aimed  at  strengthening 
prevention  and  mobilising  artificial  intelligence  to  improve  medical  diagnosis  and 
prescription in healthcare services.  According to the information provided, the plan 
does not include measures directly related to 2019 CSR in the policy area of single 
market, competition and state aid, recommending reducing regulatory restrictions, in 
particular  in  the  services  sector.  Neither  does  the  plan  include  measures  directly 
related  to  CSRs  in  2022,  2023  and  2024  covering  non-discrimination  and  equal 
opportunities,  in  particular  recommending  to  adapt  resources  and  methods  to  the 
needs of disadvantaged students and schools. 

Concerning  the  common  priority  of  energy  security,  the  plan  includes  several 
measures,  such  as  the  development  of  small  nuclear  reactors  (SMRs)  and  the 
renovation  of  existing  nuclear  facilities.  Related  to  CSRs  in  2019,  2020,  2022  and 
2023 covering renewable energy, energy infrastructure & networks, the plan includes 
measures  such  as  the  second  electric  interconnection  between  Savoie  (France)  and 
Piemonte  (Italy),  and  the  implementation  of  the  plan  for  the  sobriety  of  energy 
consumption. 

Concerning  the  common  priority  of  defence  capabilities,  the  plan  includes  the 
Military  Programming  Law  which  sets  out  the  objectives  of  defence  policy  and  its 
financial  programming  for  the  years  2024-2030,  to  strengthen  the  defence 
capabilities in a geopolitical context of rising tensions, including the war in Ukraine. 
The measure envisages investment in the defence industry and disruptive innovation 
in defence. 

The  plan  provides  information  on  the  consistency  and,  where  appropriate, 
complementarity,  with  the  cohesion  policy  funds  and  France’s  RRP.  The  plan 
underlines  that,  to  avoid  any  risk  of  double  funding  and  under-utilisation  of  funds, 
the  close  coordination  is  required  for  implementation  of  those  funds  in  France. 
According to the plan, the non-RRP reforms and investments included in the plan are 
nationally financed measures that do not involve European co-financing. Some of the 
measures included in the plan were adopted as a continuation of measures included 
in  the  RRP.  Moreover,  the  plan  explains  for  several  of  them  in  which  way  they 
continue  and  extend  the  actions  adopted  in  the  RRP  (for  the  reforms  of 
unemployment insurance, public employment services and green industry). 

(44) 

The plan aims to contribute to meet the public investment needs of France related to 
the common priorities of the EU. 

Concerning  a  fair  digital  transition,  the  plan  mentions  the  need  for  the  French 
economy to continue its digitalisation and to increase its investment in R&D, looking 
at  international  comparisons.  For  example,  despite  encouraging  improvements  over 
the recent past, efforts are needed to further support the adoption of new information 
and  communication  technologies  and  basic  digital  tools  by  French  companies,  in 
their  productivity.  Amongst  other  priorities, 
particular  SMEs,  strengthening 
companies  need  to  be  incentivised  to  invest  more  to  become  more  competitive, 
especially in key sectors for the green and digital transitions. 

On  a  fair  green  transition  and  on  ensuring  energy  security,  the  plan  refers  to  the 
yearly  estimated  investment  needs  to  meet  the  national  decarbonisation  targets  by 
2030  and  to  the  economic  policy  levers  to  encourage  and  support  this  additional 
effort  from  both  public  and  private  actors  as  set  out  in  the  multiannual  financing 
strategy for the green transition and energy policy of France (SPAFTE), published in 
October 2024. 

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In relation to social and economic resilience, including the European Pillar of Social 
Rights, the plan refers to the key objective of achieving full employment and to the 
investments  planned  to  this  end  in  favour  of  active  labour  market  policies  and 
towards increasing labour market participation, while supporting youth and women’s 
employment and the inclusion of all workers. Another area of intervention indicated 
concerns  the  strengthening  of  skills  and  education,  including  at  the  local  level,  to 
anticipate  the  future  needs  of  the  French  economy  and  to  support  the  green  and 
digital transitions, as well as innovation in strategic sectors. 

On  the  build-up  of  defence  capabilities,  the  plan  refers  to  the  need  to  strengthen 
France’s  sovereignty  in  a  geopolitical  context  of  rising  tensions  and  to  support  the 
objectives set out in the Strategic Agenda 2024-2029, adopted by the Council on 27 
June 2024, namely, to strengthen preparedness and capacity for the EU on defence, 
including through increased defence spending. 

Conclusion of the Commission’s assessment 

(45) 

Overall, the Commission is of the view that France’s plan [fulfils] the requirements 
of Regulation (EU) 2024/1263. 

OVERALL CONCLUSION 

(46) 

In  accordance  with  Article  17  of  Regulation  (EU)  2024/1263,  the  net  expenditure 
path as set in the plan should be recommended by the Council to France, and the set 
of reforms and investments underpinning the extension of the adjustment period to 7 
years [should be] endorsed. 

HEREBY RECOMMENDS that France 

1. 

2. 

Ensure  that  net  expenditure  growth  does  not  exceed  the  maxima  established  in 
Annex I to this Recommendation. 

Implement  the  set  of  reforms  and  investments  that  underpins  the  extension  of  the 
fiscal  adjustment  period 
this 
Recommendation, by the indicated deadlines. 

to  7  years,  as  established 

in  Annex  II 

to 

In addition, the Council invites France to ensure the delivery of other reforms and investments 
responding  to  the  main  challenges  identified  in  the  context  of  the  European  Semester,  in 
particular in the country-specific recommendations, and addressing the common priorities of 
the Union. 

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ANNEX I 
Maximum growth rates of net expenditure 
(annual and cumulative growth rates, in nominal terms) 
France 

Years 

2025 

2026 

2027 

2028 

2029 

Growth rates 

Annual 

(%) 

Cumulative (*) 

0.0 

3.8 

1.4 

5.2 

1.4 

6.7 

1.4 

8.1 

1.3 

9.5 

(*) The cumulative growth rates are calculated by reference to the base year of 2023. 

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ANNEX II 
Set of reforms and investments that underpins an extension of the adjustment period to 7 years 
France 

Reform of the 
unemployment insurance 
to strengthen the 
incentives for stable 
employment (Existing 
RRP reform C8.R4)  

Main objective 

The reform aims to 
strengthen the 
incentives for stable 
employment, limit 
the alternation of 
short contracts with 
unemployment 
periods and reduce 
unemployment-
related expenditure. 

Research programming 
law (Existing RRP 
measure C6.R1) 

Implementation of the 
law on acceleration of the 
production of renewable 
energies 

(Existing RRP measure 
C10.R1) 

Foster public and 
private R&D as well 
as enhance business 
applications of 
results over the 
implementation 
period 2021-2030.  
Reduce CO2 
emissions, preserve 
competitiveness and 
support national 
energy security and 
independence 

Monitoring 
indicator(s) 
Step 1: Satisfactory 
fulfilment of the 
relevant RRP 
milestones, with the 
entry into force of 
new unemployment 
insurance provisions 

Step 2: Publication 
of the evaluation 
report  

Description and 
timing of key steps13 
Step  1:  Entry  into 
force 
new 
of 
unemployment 
insurance provisions. 

by 

Step 2: Evaluation of 
and 
past 
complementary 
reforms 
end-
2027,  reflecting  the 
job, 
impact 
activity 
economic 
budgetary 
and 
on 
savings 
unemployment-
related expenditure. 

on 

Q3 

2025: 
By 
Increase  of  R&D 
endowments 
by 
billion 
1.8 
EUR 
compared to 2020. 

Satisfactory 
fulfilment of the 
relevant RRP target 
6-3. 

Satisfactory 
fulfilment  of 
relevant 
milestone 
following 
commitments.  

the 
RRP 
and 

Step 1: By Q1 2023, 
adoption  of  the  law 
on 10 March 2023  

Step  2:  July  2024: 
First  Assembly  of 
and 
stakeholders 
of 
compilation 
existing reports. 

Step 
3:  Autumn 
2024,  publication  of 
the decision on the 
maritime planning 
and offshore wind in 
the  continuation  of 
the public debate 

13 

The timing of RRP measures is indicative and corresponds to commitments in the relevant Council 
Implementing Decisions. 

EN 

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organised 
in 
accordance  with  the 
law.  

4: 
launch 
site 

January 
Step 
of 
2025, 
internet 
and 
systematic  review  of 
of 
impacts 
the 
renewable  energies 
on the biodiversity. 

Step  5:  July  2025, 
second Assembly of  
stakeholders, 
publication  of 
first 
reports. 

the 
assessment 

Step  1:  By  Q4  2024 
for 
financing 
decisions  linked  to 
projects 
financed 
under RRP. 

Step  1:  Awards  of 
contracts 
via 
financing  decisions 
of 
Prime 
the 
Minister. 

Step 2: By Q4 2025: 
Ex  ante  assessment 
report 
of 
macroeconomic 
impacts  of  overall 
plan by end-2025. 

Step 3: By Q4 2026, 
commitment  of  the 
whole  envelope  of 
the plan. 

By  Q2  2025,  Q2 
2026,  Q2  2027,  Q2 
2028, Q2 2029:  
Conduct 
spending reviews. 

annual 

By  Q3  2025,  Q3 
2026,  Q3  2027,  Q3 
2028,  and  Q3  2029, 
respectively: 
Effective  integration 
of 
results 
of 

Step  2:  Publication 
ex-ante 
the 
of 
assessment report. 

Step 3: Publication 
of report on 
Investment plan 
France 2030 and its 
impact on R&I and 
state-of-the-art 
business investment 
in healthcare, energy 
and aeronautics. 
Publication 
of 
annual  monitoring 
reports  showing  the 
achievement  of  the 
cumulative  target  of 
EUR 
of 
savings 
permanent 
(based 
both 
spending 
public 
savings 
and 
reduction  in  tax  and 
social  expenditures 

8 bn 

on 

Investment plan France 
2030 (Adding to RRP 
reform, C6.I2 
C6.I3) 

at 

plan, 

under 

Investment 
including 
investments 
investment 
PIA4; 
programme 
The  overall  plan 
aims 
fostering 
R&I  and  state-of-
business 
the-art 
in 
investment 
healthcare, 
energy 
and  aeronautics  by 
mobilising  EUR  54 
bn  between  2022-
2026.  EUR  30  bn 
committed 
already 
by May 2024. 

Evaluation of the 
quality of public 
expenditure via 
reinforced spending 
reviews 

of 
Reinforcement 
annual 
spending 
reviews  across  all 
general  government 
sub-sectors  over  the 
period 2025-2027.   

(Adding to RRP reform, 
C7.R5) 

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21 

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and  on  top  of  the 
measure  “reform  of 
the 
general 
reductions  in  social 
contributions relative 
the  minimum 
to 
wage  (SMIC)”)  over 
the  
period 2025-2027 

spending  reviews  in 
draft 
annual 
the 
budget.  

By  Q3  2025,  Q3 
2026,  Q3  2027,  Q3 
2028,  and  Q3  2029, 
respectively: 
Publication  of  an 
annual  monitoring 
reporting 
report, 
permanent 
annual 
expenditure  savings. 
This  report  for  each 
year  T  contains  3 
elements: 
Identified 
1. 
potential expenditure 
be 
savings 
the 
included 
preparation  of 
the 
draft budget  for year 
T+1. 
2.  Actual  measures 
taken  in  the  budget 
for  year  T  stemming 
the  spending 
from 
reviews conducted in 
previous years. 

to 
in 

taken 

3.  An  assessment  of 
of 
the 
outcome 
measures 
in 
budget 
the 
T-1 
from 
stemming 
spending reviews.  
The first report, to be 
delivered  by  Q3-
2025, 
could  only 
contain  elements  1 
and 2. 
and 
The 
subsequent 
reports, 
to  be  delivered  by 
as  of  2026, 
Q3 
should 
contain 
elements  1,  2  and  3, 
the 
jointly  with 
the 
assessment  of 
savings 
cumulative 

second 

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Reform of the rules of the 
unemployment benefit 
scheme over the next 
three years, in particular 
concerning senior 
workers, while 
reinforcing positive 
budgetary impact of the 
2019 and 2023 reforms 
(new measure) 

Strengthen the financial 
sustainability of the 
pension system by 
increasing employers’ 
contributions to the 
National Pension Fund of 
local authorities’ staff 
(CNRACL) whilst 
preserving the impact of 
the 2023 pension reform 
on the financial 
sustainability of the 
pension system, thereby 
ensuring that gross 
pension expenditure over 
the period 2026-2040, net 
of revenue measures 
adopted since 1 January 
2024 has decreased with 
respect to the gross 
pension expenditure as in 
the 2024 Ageing Report 
(new measure). 

Redefine the rules of 
the unemployment 
benefit scheme for 
the next 3 years to 
complement the 
2019 and 2023 
reforms, while 
achieving budgetary 
savings. This would 
stem from the 
negotiations that the 
government 
proposed to social 
partners and would 
focus on senior 
employment and the 
overall benefit 
scheme. 

In addition to the 1 
pp increase already 
enacted in 2024, 
increase by 5 points 
the employers’ 
contributions to 
CNRACL (special 
social security 
scheme for local and 
hospital civil 
servants) to 
contribute to the 
financial equilibrium 
of this special 
scheme, whilst 
preserving the 
impact of the 2023 
pension reform on 
the sustainability of 
the pension system.  

attained since 2025. 

Step 1: By Q2 2025: 
Entry  into  force  of 
the 
rules 
new 
stemming  from  the 
among 
negotiation 
social partners. 

Step 1: Entry into 
force of the 
legislative act 

Step 2: Publication 
of evaluation report  

Step 2: By Q4 2027, 
publication  of  an 
evaluation  report  of 
past 
and 
complementary 
also 
reforms, 
showing 
the 
additional permanent 
EUR  400  million 
savings 
stemming 
from the new reform 
committed  by 
the 
government. 
Step 1:  
By 
Q4 
Implementation of 
the  increase  by  at 
least  3  percentage 
points  (including  the 
increase  of  1  pp 
already  enacted 
in 
2024) in 
employers’ 
contributions 
of 
entered into force. 

the  CNRACL, 

2025: 

Q4 

2026: 
of 

Step 2: 
By 
Implementation 
the 
 increase in 
employers’ 
contributions 
of  the  CNRACL  to 
the  overall 
reach 
target 
6 
points, 
percentage 
into  force, 
entered 

of 

Step  1:  Entry-into-
force 
the 
of 
provisions increasing 
the 
employers’ 
contributions  in  the 
2025  social  security 
budget law. 

Step  2:  Entry-into-
the 
of 
force 
provisions increasing 
the 
employers’ 
contributions  in  the 
2026  social  security 
budget law. 

Step  3:  Publication 
evaluation 
of 
report 

the 

EN 

23 

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including 
the 
increase  of  1  pp 
already  enacted 
in 
2024. 

to 

the 

the 

and 

Step 3: By Q4 2027, 
publication  of  an 
report 
evaluation 
demonstrating 
that 
(i)  the  increase  in 
employers’ 
to 
contributions 
has 
CNRACL 
contributed 
the 
financial  equilibrium 
special 
of 
scheme, 
(ii) 
confirming  that  the 
financial 
sustainability  of  the 
pension  system  has 
been strengthened by 
this measure and that 
the 
the 
impact  of 
2023  pension  reform 
financial 
on 
sustainability  of  the 
pension  system  has 
been  preserved.  The 
report 
evaluation 
an 
will 
update 
the 
pension  expenditure 
projections  from  the 
2024 Ageing Report, 
using 
same 
the 
macroeconomic 
assumptions. 
The 
report  should  show 
that  gross  pension 
expenditure  over  the 
2026-2040, 
period 
net 
revenue 
measures,  including 
social 
security 
contributions, 
adopted 
1 
January  2024  has 
with 
decreased 

provide 
of 

since 

of 

EN 

24 

  EN 

 
 
Reform of the general 
reductions in social 
contributions relative to 
the minimum wage 
(SMIC) (new measure). 

The  reform  aims  to 
avoid  a  low  wage 
trap,  by  simplifying 
and  rationalising  the 
incentives 
reducing 
labour  costs  around 
the  minimum  wage 
(SMIC).  This  would 
by 
be 
attained 
specific 
reducing 
from 
exemptions 
health  and 
family 
contributions.  

Reforms under the new 
Law on simplification of 
the business environment 
(New measure) 

and 

business 

Improve 
conditions, 
competition, 
investment 
innovation, 
especially  for  SMEs 
micro 
and 
by 
enterprises 
reducing 
tape, 
simplifying access to 
public  procurement 
and  by  supporting 
industrial  and 
new 
transition 
energy 
projects. 

red 

respect  to  the  gross 
pension  expenditure 
as 
the  2024 
Ageing Report. 

in 

in 
of 

Step 1: By Q1 2025, 
implementation 
of 
phase 
the 
first 
the 
consisting 
reduction 
the 
from 
exemptions 
health  and 
family 
contributions 
yielding 
least 
at 
EUR 2.5 bn savings. 

Step 2: By Q1 2026, 
implementation 
of 
second  phase 
the 
the 
in 
consisting 
pursuit  of  reduction 
the  exemptions 
of 
from 
and 
health 
family  contributions, 
least 
yielding 
EUR 
bn 
additional savings. 

at 
2.5 

Step 1: By Q4 2025: 
Entry  into  force  of 
on 
law 
the 
simplification  of  the 
business 
environment. 

Step 2: By Q4 2025-
2028, 
respectively, 
annual  adoption  of 
implementing 
decrees. 

Step 3: By Q4 2026, 
annual 
report  on 
impact 

Step 4: By Q4 2028, 
annual 
report  on 
impact 

Step 1 and 2: Entry 
into force of the 
legislative acts 

Step  1:  Entry  into 
force 
the 
of 
legislative act. 

2:  Annual 
of 

Step 
publication 
implementation 
decrees.  

Step  3:  Publication 
of 
report  showing 
the  impact  in  terms 
of  improvement  of 
business  conditions, 
competition, 
investment 
innovation. 

and 

Step  4:  Publication 
of 
report  showing 
the  impact  in  terms 
of  improvement  of 

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Reforms and investments 
under the Law on green 
industry (New measure) 

Acceleration  of  the 
development 
of 
technologies 
green 
and  decarbonisation 
of the industry. 

Rationalisation and 
reduction of tax and 
social expenditures (new 
measure) 

and 

of 
Rationalisation 
social 
tax 
by 
expenditures 
and 
reducing 
removing 
least 
efficient  ones  over 
the  
period 2025-2027. 

the 

business  conditions, 
competition, 
investment 
innovation. 

and 

of 
Publication 
annual 
reports 
showing  the  impact 
in  terms  of  creation 
industrial 
of  new 
sites, 
improvement 
in  the  financing  of 
new projects  and the 
deployed 
financial 
public support. 

on 

Publication 
of 
Annual  Monitoring 
Reports, showing the 
achievement  of  the 
cumulative  target  of 
of 
8 
EUR 
bn 
savings 
permanent 
(based 
both 
public 
spending 
and 
savings 
reduction  in  tax  and 
social  expenditures 
and  on  top  of  the 
measure  “reform  of 
the 
general 
reductions  in  social 
contributions relative 
to 
the  minimum 
wage  (SMIC)”)  over 
the  
period 2025-2027. 

of 

report 

By  Q3  2025,  Q3 
2026,  Q3  2027,  Q3 
2028,  and  Q3  2029, 
respectively: 
publication  of  an 
annual 
report  on 
adoption of legal and 
acts 
administrative 
regarding 
the 
new 
creation 
industrial 
sites, 
financing  decisions 
of  new  projects  and 
of  financial  public 
support. 
By  Q3  2025,  Q3 
2026,  Q3  2027,  Q3 
2028,  and  Q3  2029, 
respectively:  
Publication  of  an 
on 
annual 
increases 
revenue 
derived 
the 
reduction 
and 
permanent 
tax 
withdrawal  of 
and 
social 
expenditures.  This 
report  for  each  year 
T 
3 
contains 
elements: 
Identified 
1. 
and 
tax 
potential 
expenditure 
social 
be 
to 
reductions 
the 
included 
preparation  of 
the 
draft budget  for year 
T+1. 
2.  Actual  measures 
taken  in  the  budget 
for  year  T  to  reduce 
social 
tax 
expenditures 

from 

and 

in 

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stemming  from  the 
reviews 
spending 
conducted 
in 
previous years.  
3.  An  assessment  of 
the  outcome  of  tax 
and 
social 
expenditure 
reductions 
in the T-1 budget.  

adopted 

The first report, to be 
delivered  by  Q3-
2025, 
could  only 
contain  elements  1 
and 2. 

second 

and 
The 
subsequent 
reports, 
to  be  delivered  by 
as  of  2026, 
Q3 
should 
contain 
elements  1,  2  and  3, 
the 
jointly  with 
assessment  of 
the 
cumulative 
savings 
attained since 2025.  

Done at Strasbourg, 

For the Council 
The President 

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