COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of France
Date: 2025-06-04
Institutions: European Commission, Reform and Investment Task Force
Subjects: France, budget policy, economic policy, economic recovery, economic reform, employment policy, energy policy, labour market, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 4.6.2025  SWD(2025) 210 final  COMMISSION STAFF WORKING DOCUMENT 2025 Country Report - France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of France {COM(2025) 210 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

Employment growth turning down 
amid heightened challenges 

Labour  market  situation  has  worsened 
marginally.  In  the  fourth  quarter  of  2024, 
payroll  employment  fell  by  0.3%,  that  is 
90 100 jobs.  The  decline  in  unemployment 
rate  in  the  fourth  quarter  of  2024  took  place 
against  the  backdrop  of  a  decrease  in  the 
active  population.  Moreover,  at  7.3%  in  the 
fourth  quarter  of  2024,  the  unemployment 
rate  remains  high  compared  to  both  the  EU 
and  euro  area  averages.  Over  the  year,  the 
unemployment rate increased only marginally, 
to  7.4%  of  the  labour  force  (see  Social 
Scoreboard  in  Annex  13).  It  is  expected  to 
gradually  pick  up  to  7.9%  in  2025  and  to 
decrease  marginally  to  7.8%  in  2026.  After  a 
record  high  employment  rate  of  75.1%  in 
2024  (75.3%  in  the  third  quarter  of  2024), 
employment  growth  is  set  to  slow  down  in 
2025  and  to  rebound  in  2026  (-0.2%  and 
+0.5% respectively, after the 0.5% increase in 
2024),  as 
the  effect  of  apprenticeship 
contracts on employment growth decreases (4), 
hours worked return to their 2019 levels,  and 
labour productivity bounces back. 

Competitiveness keeps improving 
and labour productivity is 
recovering from recent losses 

Competitiveness  keeps  improving.  Since 
2020,  price-based  real  effective  exchange 
rates depreciated more in France than in most 

(4)  According  to  DARES,  by  the  end  of  February  2025, 
40 800 apprenticeship contracts had been started since 
the beginning of the year, down 10.9% year-on-year. 

Economic growth is set to slow 
down amid high economic and 
political uncertainty 

in  2024,  up  from  0.9% 

France’s economic growth accelerated on 
average  in  2024  compared  to  2023,  but 
since  the  second  half  of  2024,  activity 
has  been  slowing  down (1). 
Investment 
decreased  strongly  in  2024  amid  restrictive 
monetary  policy  and  high  economic  and 
political  uncertainty (2).  Real  GDP  grew  by 
1.2% 
in  2023. 
Economic activity is expected to slow markedly 
in  2025. Investment is set to remain subdued 
until  the  cost  of  capital  decreases  and 
uncertainty  dissipates.  Net  exports  are  set  to 
stall, because of high energy costs and tariffs 
increases. However, the recent fall in inflation, 
on  the  back  of  declining  energy  prices,  is 
expected  to  allow  for  a  gradual  recovery 
starting  in  the  second  half  of  2025.  Private 
consumption  is  set  to  drive  GDP  growth  as 
inflationary 
while 
households’  savings  rate (3)  is  set  to  remain 
broadly stable. Activity is therefore forecast to 
increase by 0.6% in 2025 and 1.3% in 2026. 

pressure 

reduces, 

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

Country Report was 5 May 2025. 

(2)  According  to  the  latest  available  uncertainty  indicators 
and business surveys, uncertainty remained elevated in 
2024 as compared to 2023 and pre-COVID period. See, 
https://www.banque-
for 
france.fr/fr/publications-et-
statistiques/publications/enquete-mensuelle-de-
conjoncture-debut-avril-2025;  and  EIB 
survey 2024: European Union Overview, page 26.  

investment 

instance, 

(3)  Since  the  pandemic,  households’  savings  rate  has 

surged (+3.6 points in 2024-Q4 vs 2019-Q4). 

2 

 
 
 
 
other 

other  EU  economies.  This  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. 
Unit  labour  costs  grew  by  4.3%  in  2023  and 
slowed  down  significantly,  to  2.6%  in  2024, 
thanks  to  moderate  wage  increases.  In  both 
years, the growth in unit labour costs was well 
below  the  euro  area  and  EU  averages. 
Likewise, 
competitiveness 
price 
indicators  keep  showing  improvements:  price 
and  unit  labour  cost-based  real  effective 
exchange  rates  have  depreciated  on  average 
between  2022  and  2024  more  than  in  the 
euro  area  and  the  EU.  As  a  result,  after  the 
strong  rebound  in  2023  (by  6.1%),  export 
market  shares  further  improved  in  2024, 
partly  offsetting  export  market  share  losses, 
observed  since  2020.  Recent  and  ongoing 
reforms and investments are expected to keep 
supporting  non-price  competitiveness  and 
productivity. 

market (5)  further  supported  the  resilience  of 
employment, mechanically weighing on labour 
productivity. 

in 
Employment  growth  slowed  down 
2024.  While  still  on  the  rise,  apprenticeship 
contracts  slowed  down  significantly.  In  turn, 
recovery  of  key  sectors  such  as  aeronautics 
and transport equipment that were hit hard by 
the recent crises, has brought about a decline 
in  labour  hoarding.  However,  the deterioration 
of  economic  prospects  may  be  hampering 
faster  hiring.  Accordingly,  labour  productivity, 
both in terms of full-time equivalent jobs and 
hours  worked,  gained  momentum  in  2024, 
outpacing  the  euro  area  and  EU  average  and 
partially  recovering  recent  losses.  Despite  the 
weak  growth  performance  of  recent  years, 
French  labour  productivity  in  levels  remains 
well above the EU average, at around 117% of 
the  EU  aggregate  in  2023.  Further  labour 
productivity  increases  are  expected  for  2025 
and 2026. 

in 

improvements 

Wages have been decelerating in nominal 
terms  but  have  rebounded  in  real  terms. 
Real  wage  growth  over  2022  and  2023  was 
labour 
negative,  despite 
market  conditions.  In  2024,  real  wages  are 
expected  to  show  modest 
increases:  the 
slowdown in nominal wages, despite the boost 
provided  by  the  minimum  wage  indexation  in 
the  fourth  quarter, is  outpaced  by  the decline 
in  inflation.  Sector-wise,  the  highest  nominal 
wage  increases  were  observed  in  industry,  by 
3.5%, compared to a 2.8% and 2.4% growth in 
services and in construction, respectively. 

explained 

Labour  productivity  is  showing  signs  of 
recovery  after  some  years  of  weak 
performance,  mainly 
by 
temporary factors. Policy measures adopted 
since  2018,  such  as  permanent  cuts  in  social 
contributions  and  production  taxes  or  support 
to  apprenticeship  contracts,  contributed  to 
supporting  employment 
recent  years. 
Emergency measures triggered by the COVID-
19  pandemic  and  the  more  recent  energy 
crisis,  and  significant 
in 
industrial branches in a context of tight labour 

labour  hoarding 

in 

Public debt back on the rise due to 
persistently high general 
government deficits 

France’s  2023  sizeable  deficit  slippage 
was followed by another one in 2024. The 
general government deficit rose from 4.7% of 
GDP  in  2022  to  5.4%  in  2023  and  again,  to 
5.8% of GDP, in 2024. Specifically, the deficit 
slippage  in  2024  was  due  to  tax  revenues 
rising well below economic activity because of 
shortfalls in corporate income and stamp duty 
indexation  of  social  benefits 
taxes, 
(pensions)  to  high  inflation  in  2023  and  high 
public consumption and investment growth by 
local  governments.  As  a  result,  public  debt 
increased to 113% of GDP in 2024, ending the 
moderate  decline  observed  since  2021.  The 
latter  was  mainly  due  to  the  post-COVID-19 
economic  rebound,  outpacing  the  sizeable 

the 

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

3 

 
 
measures  deployed  to  mitigate  the  effects  of 
the recent energy crisis. 

Graph 1.1: General government balances and 
slippages 

forecast  and  debt  sustainability  analysis, 
France  faces  high  fiscal  sustainability  risks  in 
the medium term and medium risks in the long 
term (see Annex 1). 

to 

of 

expected 

evolution 

the  withdrawal  of 

The 
net 
expenditure  does  not  signal  any  risk  of 
deviation  in  2025.  In  2024,  net  expenditure 
in  France  grew  by  3.1%  (see  Annex  1).  This 
increase is mainly  driven by  the  indexation  of 
social  benefits  (pensions)  to  high  inflation  in 
2023  and  high  public  consumption  and 
investment  expenditure  growth,  especially  by 
local  governments. 
turn,  discretionary 
In 
revenue  measures  had  a  deficit-reducing 
impact of 0.3% of GDP, the most sizeable one 
the 
corresponding 
electricity  price  cap.  The  revenue  increasing 
annual  impact of those measures is deducted 
from  net  expenditure.  Interest  payments,  not 
included in net expenditure, increased by 0.2% 
of GDP. In 2025, net expenditure is forecast by 
the  Commission  to  grow  by  0.9%,  which  is 
rate 
above 
(6).  The 
recommended  by 
cumulative  growth  rate  of  net  expenditure  in 
2024 and 2025 taken together is projected at 
is  below  the  recommended 
4.1%,  which 
maximum  rate.  The  reforms  and  investments 
underpinning  the  extension  of  the  fiscal 
adjustment to 7 years that were due by the 30 
April  2025  have  been  implemented  with  the 
exception  of  the  reform  of  the  general 
reductions 
in  social  security  contributions 
relative  to  the  minimum  wage  (SMIC),  which 
than 
delivered 
committed.  

the  maximum 

the  Council 

savings 

slightly 

growth 

lower 

Stepped-up  efforts  are  awaited  in  public 
expenditure and overall deficit control. At 
57.1%  of  GDP  in  2024,  public  expenditure 
remains the  highest in the EU, well above the 
EU average (49.2%). Reducing it would require 
strategy 
an  effective 
permanently 
into  annual  and 
multiannual  budgetary  decisions.  In  line  with 

spending 
integrated 

review 

(6)  Council Recommendation with a view to bringing an end 
to  the  situation  of  an  excessive  deficit  in  France, 
C/2025/5033/1  and  Council  Recommendation  of  21 
January  2025  endorsing  the  national  medium-term 
fiscal-structural  plan  of  France  (OJ  C,  C/2025/659, 
10.2.2025, ELI: http://data.europa.eu/eli/C/2025/659/oj). 

4 

Source: Ameco, budget laws for 2021-2024 and 2023-
2027 budgetary programming law. 

Strong  political  uncertainties  surround  a 
steady  deficit 
reduction.  The  highly 
fragmented  political  landscape  following  the 
general elections of summer 2024 resulted in 
an unprecedented delay in the adoption of the 
budget for 2025, ultimately leading to reduced 
budgetary ambitions for the year compared to 
the  original  draft  budget  bill.  The  lack  of  a 
clear  political  majority  in  Parliament  risks 
complicating  the  timely  implementation  of 
budgetary  decisions  and  could  slow  down 
public deficit reduction over the short term. In 
turn,  interest  payments  on  government  debt, 
on  the  back  of  recent  increased  rates  on 
sovereign bonds, are expected to keep rising to 
reach  2.5%  and  2.9%  of  GDP  in  2025  and 
the 
2026, 
Commission’s 
general 
government  deficit  is  thus  expected  to  only 
slightly  reduce  in  2025,  to  5.6%  of  GDP,  and 
to  slightly  rise  in  2026,  to  5.7%  of  GDP,  as 
some 
revenue  measures 
adopted in 2025 are set to expire. Public debt 
is  expected  to  keep  increasing  gradually,  to 
reach 116% and 118.4% of GDP in 2025 and 
2026, respectively. 

According 
forecast, 

consolidation 

respectively. 

latest 

to 

Getting  public  debt  on  a  sustained 
downward  trajectory  remains  a  major 
Commission’s 
challenge. 

According 

to 

-8.0-7.0-6.0-5.0-4.0-3.0-2.0-1.00.02021202220232024ActualBudget lawProgramming law% GDP 
  
 
Box 1: 

UN Sustainable Development Goals (SDGs) 

France is improving on all SDGs related to productivity (SDGs 4, 8, 9), although its performance 
on  SDG  9  (Industry,  innovation  and  infrastructure)  is  below  the  EU  average.  While  France 
improved on most fairness-related indicators (SDGs 4, 5, 7, 8), it is moving away from the goals 
on SDG 1 (no  poverty), SDG  3 (good health and well-being) and SDG 10 (reduced inequalities), 
with more people at risk of poverty or social exclusion. 

Out of the 17 SDGs, France performs less well than the EU for 8 SDGs. Besides those highlighted 
above, these  relate to fairness (SDGs 3 and 10), environmental sustainability (SDGs 7, 11, 14) 
and macroeconomic stability (SDGs 16 and 17) (see Annex 15). 

commitments  included  in  the  medium-term 
plan,  efforts  already  started  in  this  area,  as 
reflected  in  the  2025  budget,  are  to  be 
coupled  with 
towards 
decisive 
rationalising  tax  expenditures.  Exceeding  3% 
of  GDP  in  2023,  tax  expenditures  continue  to 
significantly  drain  budgetary  revenues,  while 
creating economic distortions. 

action 

as 

boosting 
twin 
the 

Fiscal consolidation is essential to create 
fiscal  space  to  deal  with  known  and 
emerging  challenges.  Resources  should  be 
channelled towards well-defined priority policy 
economic 
areas, 
such 
competitiveness  and 
transition. 
However,  strengthening  defence  capabilities 
has  also  recently  become  a  major  challenge 
for  the  EU  Member  States.  In  France's  case, 
this  may 
require  mobilising  additional 
resources  on  top  of  the  increases  already 
planned in the Military Programming Law over 
the period 2024-2030. In this respect, abiding 
by the deficit reduction trajectory in the French 
medium-term  plan,  as  announced  by  the 
government, would imply budgetary trade-offs 
that will call for careful budgetary choices. 

Main macroeconomic and 
competitiveness challenges ahead 

Non-financial  corporations’  high  level  of 
indebtedness  could  hamper  investment, 
impact  of  exogeneous 
aggravate  the 
shocks  and  hinder  their  resilience.  NFC 
indebtedness  rate  remains  high,  above  the 
euro  area  average.  Corporate  bankruptcies 
have been rising since 2022 and have reached 
record highs. If bankruptcies lead to an exit of 
improve 
non-viable  companies,  they  may 

5 

productivity  and  long-term  growth  but  could 
increase  unemployment  in  the  short  term. 
They  could  also  lead  to  an  increase  in  non-
performing loans  and  weigh  on  French  banks’ 
profitability (see Section 2). 

Competitiveness  and  productivity  keep 
recovering  but  significant  room  for 
improvement remains. Despite a favourable 
performance in terms of price competitiveness 
compared to other EU Member States over the 
last  years,  there  is  scope  to  further  shore  up 
non-price  competitiveness.  French  SMEs  could 
also  better  exploit  the  export  opportunities 
within  the  single  market  (see  Annex  4). 
Temporary factors, which have been weighing 
on  labour  productivity  since  2020,  are  fading 
away.  However, 
of 
productivity  growth,  such  as  (i)  technical 
progress,  driven  by  increased  investment  in 
research  and  development  and  business 
digitalisation,  and  (ii)  capital  accumulation, 
including  developing  people's  skills  through 
education  and  qualifications,  have  been 
identified  as  key  areas  of  focus  for  France 
(see Sections 2, 4 and Annexes 3 and 12). 

structural 

drivers 

Several  barriers  to  investments  persist. 
These  include  temporary  factors,  such  as 
economic  policy  uncertainty  and  elevated 
energy costs. Structural constraints like a lack 
of  skilled  labour  and  the  regulatory  and 
administrative burden, also continue to impact 
firms’  activity  and  investment  decisions  (see 
Box 2 and Sections 2, 3 and 4). 

could  accelerate 

France 
renewable 
energy  deployment,  which  would  in  turn 
boost  investment  in  net-zero  industry.  In 
addition to its strengths in nuclear energy and 
hydrogen 
and 
technologies,  France  has  a  relatively  strong 

components 

production 

 
 
capacity.  This 

net-zero 
for  manufacturing 
capacity 
technologies  needed  for  renewable  energies, 
such as wind, battery and storage technologies 
(see  Annex  7).  Accelerated  deployment  of 
renewable  energies could boost  investment in 
the  related  value  chain  and  increase  energy 
production 
is  particularly 
important  given  the  expected  increase  in 
electrification in the country, which will require 
a  significant  step-up  in  renewable  energy 
production.  However,  this  growth  is  currently 
hindered  by  a  lack  of  a  national  objective  to 
develop  the  sector,  grid  bottlenecks,  and 
burdensome 
(see 
Section 3). 

procedures 

permitting 

in  France 

House prices  in  France were significantly 
higher  in  2023  compared  to  eight  years 
ago,  while  housing  supply  struggles  to 
keep  pace  with  demand.  From  2015  to 
2023,  house  prices 
increased 
significantly (by more  than  30%),  though  less 
than  the  EU  average (7).  They  fell  slightly  in 
2024.  Housing  supply (8)  struggles  to  keep 
pace  with  demand.  There 
is  substantial 
regional variation within France in house prices 
per  square  metre  and  rents,  with  heightened 
pressures  for  access  to  housing  in  growth 
poles and major cities, including Paris. 

Territorial  differences  in  France  have 
become  more  pronounced.  Based  on  2023 
data,  some  areas  of  mainland  France  would 
now fall under the category of less developed 
areas.  Five  'NUTS 2'  regions,  as  basic  regions 
for  regional  policies  are  known  in  the  EU's 
nomenclature  of  territorial  units  for  statistics, 
are  below  75%  of  the  EU  GDP  per  head.  As 
Annex  17  shows,  there  are  growing  gaps  at 
the  territorial  level  in  demographic  trends, 
skills,  firms’  agglomeration,  plus  gaps 
in 
access  to  public  services, including  healthcare 
(see  Annex  14),  and  housing,  especially  in 
outermost regions. 

(7)  Housing 

in  Europe  –  2023  edition  - 

Interactive 

publications - Eurostat 

(8)  In  2024,  housing  supply,  as  measured  by  building 
permits for residential construction in square metres per 
thousand persons, was at the bottom of the range over 
2012-2024. 

6 

 
 
Box 2: 

Barriers to private and public investment 

French  corporations’  investment  (12.8%  of  GDP  in  2023)  is  close  to  the  EU  and  euro  area 
averages (respectively  13.0%  and  12.8%),  but  is somewhat  curbed  by  the  following  long-term 
factors (9): 

•  Availability  of  skilled  staff.  Businesses  refer  to  the  lack  of  adequately-trained 
workers as one of the main barriers for recruitment, particularly in industry (see Section 
4), as skill shortages can hinder firms’ ability to innovate and adopt new technologies. 
Declining educational outcomes in France exacerbate these challenges, making it more 
difficult for businesses to access the skilled workforce they need to remain competitive. 

• 

Labour and business regulations. While increasingly perceived as less detrimental to 
the  investments  and  below  EU  average,  regulatory  restrictions  still  negatively  affect 
business investments and may be less costly or quicker to address than other factors. 

•  Corporates’  fragile  financial  situation  amid  high  funding  costs  and  lack  of 

equity, especially for very small, small, and medium-sized businesses. 

Public investment has been preserved over the last years and is expected to be so going forward. 
At 4.3% of GDP in 2024, it remains above the EU and the euro area averages (3.6% and 3.4% of 
GDP, respectively). The limited fiscal space available, however, might pose some obstacles over 
the medium term, given the pressing and increasing investment needs in priority areas such as 
boosting  economic  competitiveness,  the  twin  transition  and  increasing  defence  capabilities. 
Forward-looking budgetary choices will be key to the best allocation of public resources.  

The  implementation  of  France’s  RRP  is  well  underway.  France  has  fulfilled  82%  of  the 
milestones and targets, making it the most advanced Member State in implementing its RRP.  

It remains important to accelerate the implementation of cohesion policy programmes. The mid-
term review offers opportunities to speed up progress and better address EU strategic priorities 
related to competitiveness, defence, housing, water resilience and the energy transition. 

While  France  has  leveraged  STEP  to  reallocate  some  Cohesion  Policy  resources  towards  this 
priority, it can further support the development or manufacturing of critical technologies in the 
areas of digital and deep tech, clean and resource efficient technologies, and biotechnologies. 

(9)  Also  prominent  in  EIB  surveys  over  the  last  years,  for 
instance:  EIB investment  survey  2024: European Union 
Overview, page 26. 

7 

 
 
 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

growth (10).  Reducing  them  could  also  help 
improve  public  debt  sustainability 
in  the 
medium term. However, this would necessarily 
entail  short-term  budgetary  costs  that  would 
need  to  be  offset,  including  for  instance  by 
making savings identified in spending reviews. 

Persistent 
weaknesses 
structural 
weighing  on  labour  productivity  mainly 
relate  to  low  business  R&D  and  skills 
shortages.  While  France’s  overall  research 
and  development  intensity  (including  private 
and  public  sectors)  is  comparable  to  the  EU 
average, it remains significantly below the 3% 
target  set  by  the  Lisbon  strategy  and  the 
Europe  2020 strategy. A low uptake of digital 
technologies  by  businesses,  skills  shortages 
and  mismatches  also  continues  to  take  a  toll 
on productivity. 

High corporate debt limits credit 
financing options 

The fall in corporate credit is a strain on 
corporate  investment.  In  2024,  long-term 
borrowing  costs  remained  elevated  compared 
to  the  preceding  decade.  This,  coupled  with 
economic  policy  uncertainty  (see  Box  2  in 
Section  1),  including  concerns  about  France’s 
need  for  fiscal  consolidation,  has  started  to 
affect business confidence. These factors keep 
reining  in  corporate  demand  for  credit  and 
thus investment. 

In  a  context  of  high  corporate  debt, 
liquidity  buffers  started  being  depleted 
and  debt  servicing  costs  continued  to 
rise.  In  2024,  consolidated  corporate  debt 
kept  declining  and  fell  to  89%  of GDP  (above 

(10)  France 2024 in-depth review. 

Improving labour productivity by 
tackling structural weaknesses 

total 

productivity 

France’s weak productivity growth can be 
partly  explained  by  poor  total  factor 
the 
productivity.  Closely  aligned  with 
eurozone  average  between  2000  and  2010, 
France’s 
(i.e. 
factor 
productivity 
to  better 
improvements  due 
technology  and  skills)  started  lagging  behind 
since  the  mid-2010s.  More  recently,  lower 
capital  deepening 
less  capital  being 
(i.e. 
invested  per  worker)  and  stagnating  total 
factor  productivity  have  contributed  to  the 
decline in labour productivity growth. However, 
as  the  temporary  factors  weighing  on  labour 
productivity in recent years fade away and the 
full effects of recent and planned reforms and 
investments (notably as part of “France 2030” 
plan  and 
the  Research  Law) 
materialise to support upskilling and reskilling 
of  the  labour  force,  the  digital  and  green 
transition,  and  state-of-the-art  R&D,  total 
factor productivity is expected to pick up in the 
medium term. 

through 

Taxes 

High  taxes  on  production  in  France  keep 
on 
competitiveness. 
hindering 
in 
remain  significantly  higher 
production 
France than in the EU. They comprise a broad 
category of taxes levied on wages and labour 
(around 1.8% of GDP), including on individuals, 
and  other  taxes  on  production  (2.7%  of  GDP), 
totalling  around  4.5%  of  GDP  in  2023.  The 
largest  share  is  paid  by  firms  and  is  mainly 
collected  by  local  governments.  These  taxes  
are particularly detrimental to competitiveness 
as they increase the cost of production factors 
and  can  alter  their  relative  price.  Further  cuts 
in  production 
taxes  would  help  boost 
productivity, employment, competitiveness and 

8 

 
 
 
Graph 2.1: Labour productivity growth drivers: France vs euro area 

Source: European Commission Spring 2025 Forecast 

67% on average in the euro area, but below its 
peak  of  106%  in  2020).  Since  2023,  this 
decline has been driven by the reduction of net 
credit flows (11) as a result of tighter financing 
conditions.  Furthermore,  firms 
increasingly 
started  to  use  their  previously  accumulated 
significant  liquidity  buffers  to  complement 
bank borrowing. In France, a substantial share 
of corporate debt is borrowed at fixed interest 
rates. This leads to old,  low-interest-rate debt 
being  replaced  or  rolled  over  at  a  higher  rate 
over longer period. Hence, despite the interest 
rate cuts in 2024, corporate debt service cost 
continued to rise, albeit at a slower pace than 
in 2023.  

Late payments to businesses, particularly 
SMEs,  disrupt  their  cash  flows.  France  is 
significantly  above  the  EU  average  for  the 
share  of  businesses  reporting  late  payments. 
In  2024,  58%  of  French  SMEs  reported  late 
payments  from  private  customers  (48%  on 
average  in  the  EU)  and  28.7%  from  public 
customers  (16.6%  on  average  in  the  EU) (see 
Annex  4).  Medium  and  large  companies  also 
report  late  payments  on  the  rise  since  the 
beginning of 2024 (12). 

(11)  After a previous strong increase, credit flows to 

corporates fell from 4.8% of GDP in 2022 to around 1% 
in both 2023 and 2024. 

(12)  ‘Grandes entreprises et ETI: les trésoreries se dégradent 
et les délais de paiement clients s’allongent’, Rexecode 
survey of March 2025. 

Corporate  bankruptcies  keep  increasing 
rapidly. Corporate bankruptcies started to rise 
sharply as of 2022, after having decreased by 
a cumulated 50% between 2019 and 2021. At 
the  end  of  2024,  the  number  of  bankruptcies 
rose  by  17.4%  with  respect  to  the  previous 
year, situating it at the highest levels since the 
early  1990s (13)  (see  Annex  4).  The  increase 
larger 
was  particularly  pronounced 
in  transport, 
companies  and  was  highest 
financial  and 
in 
communication  and  information  services.  Part 
of  the  brisk  increase  observed  since  2023 
stems  from  the  catching-up  from  artificially 
low  levels  ensured  by  emergency  measures 
adopted  during  the  pandemic.  However,  the 
it  might 
trend 
eventually  weigh  on 
employment  and 
economic activity. 

requires  monitoring  as 

insurance  sectors  and 

for 

However,  there  are  signs  of  resilience. 
The  share  of  non-performing  loans  remains 
relatively  low,  despite  a  moderate  increase  in 
2024  and  French  credit  and 
insurance 
institutions  continue  to  enjoy  robust  liquidity 
and  solvency  (see  Annex  5).  Similarly,  the 
financial  position  of  corporations  remains  on 
average relatively sound, with resilient balance 
sheets  (decreasing  ratio  of  total  liabilities  to 
total  financial  assets  or  equity  alongside 

(13)  ‘Les défaillances d’entreprises – France • Janvier 2025. 
Banque  de  France’,  February  2025.  Stat  Info  -  Les 
défaillances d’entreprises 

9 

-0.50.00.51.01.52.020022007201220172022FranceTFPCapital deepeningLabour productivity-0.50.00.51.01.52.020022007201220172022EATFPCapital deepeningLabour productivity 
 
 
  
relatively  stable  mark-ups  at  around  31%  on 
average). 

United  Kingdom  (which  is  accelerating)  and 
ahead of Germany (which is slowing down). 

relatively 

France has a relatively low percentage of 
high-growth  firms,  which  is  likely  due  to 
a  lack  of  equity  financing.  France's  high-
growth firms (15) account for a very low share 
of total active firms (among the lowest in the 
EU in 2022 with 6.4% in France vs 9.2% in the 
EU),  despite 
strong  business 
dynamics  (in  terms  of  firm  birth  and  death). 
This  may  be  linked  to  a  lack  of  equity 
financing  for  the  growth  phase  of  business 
development,  that  is  during  the  transition  to 
industrialisation or scaling up (16). High-growth 
firms contribute a lot to economic growth and 
creating jobs, so addressing this funding gap is 
crucial  to  boost  economic  growth  and  job 
creation in France. 

More targeted public support for 
business R&D and digitalisation 
could further boost productivity 

Significant  levels  of  public  support  to 
incentivise  business  R&D  have  failed  to 
increase  its  intensity.  So  far,  the  large 
volume  of  public  support  for  business  R&D  – 
which is the highest in the EU as a percentage 
of  GDP  and  relies  significantly  on  the  ‘crédit 
impôt recherche’ research tax credit scheme - 
has  not  had  a  tangible  effect  on  innovation 
output,  as  measured  for  example  by  patents 
(see  Annex  3).  Moreover,  business  R&D 
intensity  is  stagnating  at  1.44%  in  2023, 
slightly below the EU average of 1.49%. This is 
in  stark  contrast  with  the  investment  levels 
and  trends  observed  in  other  strong  R&D 
countries  in  the  EU  (Belgium,  Germany)  and 
globally. A strong territorial polarisation is also 
observed  as  regards  competitiveness,  partly 
explained by access to innovation drivers such 

(15)  Share of high-growth firms (growth in employment by 
10% or more over a three-year period) in total active 
firms, excluding holding companies.  Source: Eurostat 
(bd_9pm_r2 up to 2020, bd_hg from 2021). 

(16)  Accueil - France Digitale x EY - Baromètre 2024, pages 

12-13. 

Unmet equity financing needs may 
hinder businesses reaching the 
necessary scale 

A  large  pool  of  private  savings  holds 
potential  for  further  developing  equity 
financing,  particularly  venture  capital. 
French market capitalisation of listed equity is 
relatively 
large  (100%  of  GDP  in  2023) 
compared with the EU average (67% of GDP), 
but  much  lower  than  the  US  (170.4%)  (see 
Annex  5).  Although  above  the  EU  average  in 
2023,  venture  capital  investments  relative  to 
GDP  (which  are  particularly  important  for 
financing  young  innovative  companies  with 
high-growth  potential)  are  lagging  compared 
to  global  competitors  such  as  the  US  and  EU 
like  Estonia,  Finland,  Denmark,  the 
peers 
Netherlands  and  Sweden  (see  Annex  3).  This 
contrasts  with  a  relatively  sizeable  pool  of 
French households’ financial assets at 224.8% 
of  GDP  in  2023,  above  the  EU  average 
(209.4%). The structure of French households’ 
financial  portfolios 
reveals,  however,  a 
predominance  of  low-risk  assets,  with  assets 
invested  in  equity  at  95%  of  GDP,  below  the 
EU  average  (118%)  and  much  below  the  US 
levels. 

In  2019 

France is making efforts to mobilise more 
private  capital. 
the  French 
government  launched  the  Tibi  initiative  in 
collaboration  with  institutional  investors.  This 
initiative  aims  to  bolster  the  availability  of 
funding (including late-stage funding) for tech 
companies  and  scale-ups 
in  France.  The 
the  participation  of 
initiative 
institutional 
in 
investors,  notably 
venture  capital  fundraising  rounds (14).  In  the 
first  half  of  2024,  France  had  Europe's 
second-highest  number  of  venture  capital 
transactions  and  amounts  raised,  behind  the 

increased 

insurers, 

(14)  France Invest (2023). Le capital-investissement Venture 
et Growth en France – Étude 2023. February 2023. 

10 

 
 
 
as R&D spending, and infrastructure and skills 
for innovation (see Annex 17). 

the 

streamlined, 

While the research tax credit scheme was 
recent 
somewhat 
measures are not expected to bring about 
a  major  change.  In  the  2025  budget,  the 
research  tax  credit  scheme  was  refocused  on 
R&D  only,  by  excluding  expenditure  linked  to 
technology  watch  and  intellectual  property 
from  the  eligible  expenditure  base (17).  Also 
doubling of the tax base for the hiring of post-
doctoral  researchers  was  discontinued  (see 
Annex 2). While these measures should lead to 
some  savings  (estimated at  5% (18)),  they  are 
not expected to significantly increase business 
R&D  outcomes,  as  they  only  marginally  alter 
the  scope  of  the  scheme.  Concentrating  a 
larger  share  of  public  support 
towards 
innovative  SMEs,  mid-cap  companies  and 
start-ups  and  facilitating  their  uptake  of  the 
research  tax  credit  scheme (19)  could  boost 
R&D  efforts,  since  those  firms  are  more 
financially constrained. 

businesses 

France  could  also  boost  growth  by 
between 
collaboration 
improving 
and 
and 
academia 
streamlining the technology transfer and 
research  valorisation  system.  France 
continues  to  score  below  the  EU  average  for 
business-financed public R&D (see Table A1.1). 
This 
low 
inclination  to  contract  and  cooperate  with 
public  research  labs.  The  2019  evaluation 
report  on  the  ‘investments  for  the  future’ 
programme 
suboptimal 
performance  of  schemes  such  as  those 
establishing  technology  transfer  acceleration 
research 
companies 

reflects  businesses' 

technological 

highlighted 

relatively 

and 

the 

(17)  This change was among those mentioned by the 

Inspection Générale des Finances in March 2024 report 
(2023-M-105-03 Rapport Aides aux entreprises.pdf) 

(18)  Projet de loi de finances pour 2025 : Les conditions 
générales de l'équilibre financier (article liminaire et 
première partie de la loi de finances) - Sénat. 

(19)  Lignau (DGE, 2024) reported that among the startups 
created since 2016, only 44% benefited from the 
research tax credit scheme in the period 2017-2021, 
although they used it more than other schemes such as 
the 'JEI' young innovative company status or the 'CII' 
innovation tax credit.  

that 

target 

the  gap  between 
institutes 
research  and  the  economy  and  that  are 
dedicated  to  turning  public  research  findings 
into  tangible  benefits  for  society  and  the 
economy (20).  However,  since  then,  no  major 
reform  of  the  SATT  model  was  carried  out. 
Despite  operating  for  15 years  already,  the 
technology  transfer  acceleration  companies 
have  so  far  failed  to  achieve  the  financial 
autonomy  initially  expected.  More  recently,  in 
2023,  the  university  innovation  hubs initiative 
was  introduced  to  strengthen  local  innovation 
ecosystems.  To  improve  effectiveness  and 
efficiency  of  knowledge  and 
technology 
transfer  system,  the  following  avenues  for 
improvement 
(i) 
standardising  and  streamlining  knowledge 
transfer  processes;  (ii)  reviewing  the  tools 
supporting  technology  transfer;  (iii)  improving 
the 
acceleration 
companies  model;  and  (iv)  reducing  their 
operating costs (21). 

technology 

pursued: 

transfer 

could 

be 

gross 

Public 

Innovation 

A  decline  in  R&D  intensity  in  the  public 
sector,  which  plays  a  key  role  in  basic 
research, has hindered France’s scientific 
performance. 
domestic 
expenditure  on  R&D  as  a  percentage  of  GDP 
fell  from  0.75  in  2012  to  0.71  in  2023.  The 
country’s share of scientific publications in the 
top  10%  most-cited  scientific  publications 
worldwide  as  a  share  of  total  publications  of 
the country has been declining since 2010 and 
fell to 8.8% in 2021, below the EU average of 
9.6%. 
scientific 
in 
breakthroughs,  which  are  concentrated 
mostly public-sector basic research and higher 
education  entities.  Therefore,  this  declining 
scientific  performance  raises  concerns  as  to 
France’s  ability  to  continue  leveraging  its 
strong  science  base  to  continue  to play  a  key 
role 
technological  change. 
Moreover, research careers in the public sector 
are becoming less attractive due to decreasing 
job  security:  the  researchers  get  a  permanent 
position increasingly later in the career. To give 
the 
to  French 
fresh 
Research  Law  2021-2030  has  set  up  a 

the  global 

research, 

impetus 

hinges 

on 

in 

(20)  ‘Le PIA, un outil à préserver, une ambition à refonder’. 

(21)  They were mentioned in the speech of the Minister for 
Higher Education and Research of 12 March 2025. 

11 

 
 
 
budgetary  path  to  gradually  increase  public 
R&D  funding until  2030, as  set  out  under the 
French recovery and resilience plan and in the 
commitments  of  the  French  medium-term 
plan. 

Graph 2.2: Business and public R&D 
investments (as % of GDP) in selected 
countries, in 2013 and 2023 

Source: Eurostat 

While improving, France is still lagging in 
the  basic  digitalisation  of  SMEs  and  in 
adopting  advanced  technologies,  such  as 
AI (see Annex 3). Only 68.5% of SMEs reached 
at least a basic level of digitalisation in 2024, 
up from 63.5% in 2022 but still below the EU 
average  of  72.9% (22).  Furthermore,  in  2024, 
the  uptake  of  AI  remained  below  the  EU 
average (9.91% vs 13.48%). For French SMEs, 
the  lowest  AI  usage  rates  are  found  in  the 
food  industry  (6%)  and  agriculture  (4%) (23). 
According  to  the  French  AI  Commission,  to 
become a key global player in AI, France would 
need  to  attract  a  sizeable  share  of  highly-
qualified 
individuals  from  abroad  and  to 
strengthen  public  research  as  well  as  make 
research  careers  in  France  more  attractive  in 
terms  of  job  security  and  pay,  in  addition  to 
the  measures  introduced  under  the  Research 

(22)  2024 Country Report – France, page 12. 

(23)  France Digital Barometer 2024: Perception and Use of 
Digital Technology by SMEs, available at: Baromètre 
France Num 2024 : perception et usages du numérique 
par les TPE et PME - francenum.gouv.fr. 

Law 2021-2030 Act (24). In February 2025, the 
French  president  announced 
forthcoming 
private investments  of  EUR 109  billion into  AI 
in  coming  years,  but 
to 
materialise.  Digitalisation  and  diffusion  of 
advanced technologies are necessary to boost 
productivity. 

this  has  yet 

initiative  for 

for  digitalisation 

Further  improving  the  effectiveness  of 
public  support 
is 
warranted. In September 2018, France put in 
place the digital transformation plan focussed 
on industry, covering measures until 2023 and 
amounting  to  EUR  1.3  billion.  The most  costly 
measure  of  the  plan  (EUR  880  million)  –  a 
subsidy  for  the  adoption  of  new  advanced 
digital  technologies  by  industrial  SMEs  and 
mid-cap  companies  –  was  financed  under 
recovery  and  resilience  plan (25).  France  Num, 
the  key  public 
the  digital 
transformation  of  SMEs, was  created in  2018 
and  has  been  reinforced  since, 
including 
through  financing  under  the  EU  Recovery  and 
It  provides  diagnostics, 
Resilience  Facility. 
training  and  references  a network  of  partners 
willing 
their 
digitalisation  efforts.  However,  its  role  as  a 
mere intermediary, connecting businesses with 
digital  solution  providers  and  acting  as  a 
documentation  centre,  limits  its  ability  to 
directly  impact  the  digitalisation  of  SMEs.  As 
of  2020,  the  existence  of  over  100  different 
territorial  financial  aids  with  heterogeneous 
eligibility  criteria  and  the  multiplication  of 
competent  actors  complicates  the  landscape 
for  SMEs  seeking  support (26).  Streamlining 
available support schemes, better aligning the 
type  of  support  with  business  needs  while 
favouring the technologies more likely to boost 

to  support  businesses 

in 

(24)  ‘IA : notre ambition pour la France, Commission de 

l’intelligence artificielle’, March 2024. 

(25)  Direction Générale des Entreprises (2024). La 

numérisation des entreprises industrielles en France : un 
soutien à la demande et à l’offre de solutions 
technologiques. Les Thémas de la DGE n°24. Novembre, 
page 8. 

(26)  Senate, extraordinary session 2018-2019, Information 
report made on behalf of the delegation of businesses 
on the support for the digital transition of SMEs: how 
can France catch up on its delay?, by Ms. Pascale Gruny 
(Senator), available at:  Projet de loi de finances pour 
2021 : Économie - Sénat. 

12 

00.511.522.533.5420132023201320232013202320132023201320232013202320132023SwedenDenmarkBelgiumGermanyUSAChinaFrancebusiness R&Dpublic R&D 
  
 
 
in  clean 

industry,  despite 

procedures to authorise building new factories, 
especially 
the 
improvements  brought  by  the  law  on  green 
industry.  Since  2019,  France  has  adopted 
stringent restrictions on opening and operating 
retail  shops.  In  particular,  France  adopted  the 
EGalim 3 Law in March 2023 and updated it in 
November  2023.  This  law  seeks  to  rebalance 
negotiating power along the food supply chain 
but  may  prevent  consumers  from  benefiting 
from competitive prices and a larger choice of 
products  (see  Annex  4).  Moreover,  regulatory 
barriers  to  entry  and  competition  for  several 
professions  (namely  architects,  accountants, 
tax  advisers,  and  real  estate  agents)  are 
higher in France than in most other OECD and 
EU countries, which may harm competition and 
innovation. 

a 

and 

number 

France is taking action to further simplify 
administrative procedures and streamline 
regulations.  The  government  has  tabled  a 
draft  law  on  the  simplification  of  economic 
life,  which  aims  to  cut  bureaucracy  by 
‘tell  us  once’  principle, 
strengthening  the 
digitising 
deleting 
of 
or 
administrative 
favouring 
processes 
declarations  over  authorisations.  It  also  aims 
to 
improve  businesses’  access  to  public 
procurement  and  make  mediation  more 
widespread  in  disputes  between  businesses 
and  the  administration.  The  draft  is  currently 
being examined by the French parliament. This 
is one of the reforms France has committed to 
undertake in its medium-term plan to underpin 
the  adjustment  period. 
an  extension  of 
According to the commitment in that plan, the 
law  should  enter  into  force  by  the  end 
of 2025.  France  would  benefit  from  a  swift 
adoption  of  the  law  and  its  accompanying 
decrees (see Annex 4). 

productivity  growth (27)  such  as  AI  could 
improve 
the  digitalisation  adoption  by 
businesses. 

Further reforms are needed to 
support business investments and 
growth 

since 

2017 

Over the last years, France has improved 
its business environment and reduced the 
but  many 
burden, 
administrative 
businesses  still  consider  the  complexity 
of  administrative  procedures  to  be  a 
problem when doing business. The reforms 
introduced 
promote 
entrepreneurship,  scale  up  businesses  and 
streamline  administrative  processes,  are 
yielding  positive  results:  in  2024,  fewer  firms 
in France than in the rest of the EU considered 
regulations  a  major  obstacle  to  investing 
(19.7% vs 24.5%) (28) (see Annex 4). Yet, 84% 
of  businesses  consider  the  complexity  of 
administrative procedures to be a problem for 
their  company  when  doing  business  in  France 
(in contrast with 66% in the EU) (29). 

to 

including 

There  is  further  scope  to  reduce  the 
administrative  burden  and  regulatory 
in  the  services 
restrictions, 
sector.  The  OECD  product  market  regulation 
indicators  show  that  while  France’s  licensing 
and  permitting  system  is  less  burdensome 
than  in  the  EU  on  average,  it  could  still  be 
further  aligned  with  best  practices 
(see 
Annex 6) (30). 
lack  of 
In  addition, 
administrative  capacity  (particularly  technical 
expertise)  at  local  level  may  slow  down 

the 

(27)  Rapport CNP (2025) | Un monde en mutation – 

Productivité, compétitivité et transition numérique, page 
188.  

(28)  European Investment Bank, EIB Investment Survey 

2024: European Union overview, page 26. 

(29)  Businesses' attitudes towards corruption in the EU’ 
Flash Report, Eurobarometer Report, fieldwork: April 
2024. 

(30)  For instance, in retail sector, delay with the 

establishment procedure may last 12 months. European 
Commission, Retail restrictiveness indicator (2022 
update), 2024. 

13 

 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

in 

achievement  of  the  next  carbon  budgets 
the  SNBC 3,  particularly  by 
defined 
addressing  administrative  and 
structural 
barriers.  In  2023,  France’s  greenhouse  gas 
emissions  declined  to  372.9 Mtonnes  of  CO2, 
marking  a  6%  decrease  from  2022  and  31% 
reduction  compared  to  1990.  Despite  these 
advances,  France  is  still  falling  short  of  its 
decarbonisation targets in several key sectors. 
Moreover,  France’s  greenhouse  gas  emissions 
have  decreased  by  only  1.8% 
in  2024 
compared  to  2023,  far  from  the  5%  required 
to  achieve  its  climate  ambition,  according  to 
the  most  recent  estimates  (by  Citepa) (33). 
France’s  delays  in  decarbonising  the  building 
and  transport  sectors  stem  from  several 
challenges, including: (i) budgetary constraints 
inhibiting  investments;  (ii)  a  high  level  of 
administrative 
the 
complexity, 
fragmented  landscape  of  energy  renovation 
aid  schemes;  and  (iii)  structural  barriers, 
notably a shortage of skilled labour specialised 
in high-performance renovations (34). 

such  as 

Focusing on sectors least likely to 
meet their decarbonisation targets 

Decarbonisation  of  transport  requires  a 
transport 
sustained  effort. 
remained  the  main  source  of  greenhouse  gas 
emissions in France, accounting for the highest 
share  of  total  emissions  (34%) (35).  It  is  also 

In  2023, 

(33)  Baromètre du Citepa : première estimation des 
émissions sur l'ensemble de l'année 2024 - 
Citepa. Citepa (‘Centre Interprofessionnel Technique 
d'Études de la Pollution Atmosphérique’) is the French 
organization mandated to produce the national 
greenhouse gas and air pollution inventories submitted 
to the UN and EU. 

(34)  “Bilan environnemental de la France”, page 86. 

(35)  The percentage excludes international bunkers such as 

international aviation and shipping. 

France’s green transition: ensuring 
consistent and effective policies 

consultation 

low-carbon 
for 

France’s  decarbonisation  pathway 
is 
ambitious.  France has set a target to reduce 
in  gross 
its  greenhouse  gas  emissions 
terms (31) by 50% by 2030 compared to 1990 
levels. This target is broken down by sectors in 
the 
strategy 
third  national 
in 
(SNBC 3),  published 
November  2024,  and  set  to  be  adopted  in 
2025.  It  reflects  a  higher  level  of  ambition 
compared  to  the  previous  strategy  and  is  a 
step  towards  achieving  carbon  neutrality  by 
2050,  in  line  with  the  EU’s  objectives.  It  is 
underpinned  by 
robust  planning,  closely 
following  up  on  the  implementation  of  high-
level  objectives  at  sectoral  and  sub-national 
levels.  A 
for 
transition (32)  was 
financing 
published  in  October  2024,  which,  however, 
requires  further  clarifications  on  policies  to 
ensure  investments  from  private  entities,  as 
well as local and regional authorities. 

first  multiannual  strategy 
the  green 

Addressing  administrative  and  structural 
barriers  would  be  needed  to  accelerate 
decarbonisation as envisaged under draft 
SNBC 3.  France’s  greenhouse  gas  emissions 
have  been 
falling  steadily  since  1990, 
enabling  the  country  to  meet  its  multi-year 
carbon budget (excluding land-use change and 
forestry)  for  2019-2023  under  the  second 
national  low-carbon  strategy  (SNBC 2).  This 
trend  needs  to  be  accelerated  to  meet  the 

(31)  It does not account for land use, land-use change and 

forestry. 

(32)  La Stratégie Pluriannuelle des Financements de la 
Transition Écologique (SPAFTE) : une mobilisation 
collective pour financer les investissements pour le 
climat et l’environnement | Direction générale du Trésor 

14 

 
 
 
 
Graph 3.1: Domestic GHG emissions in 1990, 2022 and 2024, as compared to 2030 targets under 
draft SNBC 3 (MtCO2e/year) 

(1) For agriculture, waste and carbon sinks, no estimates available for 2024. 
Source: CITEPA, 2024 and 2025, the national energy and climate plan, page 17. 

two  years  following 

the  only  sector  whose  emissions  increased 
between  1990  and  2023,  by  3% (36).  After 
rebounding  for 
the 
pandemic  (+16%  between  2020  and  2022), 
transport  emissions  (excluding  international 
transport) decreased by 3% in 2023 to a level 
5% lower than in 2019. In 2024, according to 
the  most  recent  estimates  of  Citepa (37), 
greenhouse  gas  emissions  of  the  transport 
sector  have  decreased  by 
less  than  1% 
compared  to  2023.  Road  transport  accounts 
for 
emissions. 
Decarbonising  the  transport  sector  is  socially 
sensitive,  because  it  touches  on  personal 
choices related to transportation and lifestyle. 

94% (38) 

sector 

of 

France  is  taking  measures  to  better 
incentivise  green  mobility.  In  particular, 
France  aims  to  improve  access  to  public 
transport  and  encourage  the  purchase  of 
electric cars through various tax and incentive 
schemes,  such  as  leasing  schemes  for  low-
income  households.  It  has  also  set  itself  a 

(36)  Livre | Chiffres clés du climat 2024, pages 8 and 52. 

(37)  Baromètre du Citepa : première estimation des 

émissions sur l'ensemble de l'année 2024 - Citepa.  

investments 

legally  binding  target  of  having  seven  million 
public  and  private  recharging  points  by  2030. 
The  French  recovery  and  resilience  plan 
supports  the  green  transition  of  the  transport 
in 
sector  through  significant 
green infrastructure and mobility, notably in (i) 
a  support  plan  for  rail;  (ii)  development  of 
public transport in urban areas; (iii) support for 
the  deployment  of  electric  vehicle  charging 
the 
improvements  of 
points; 
inland 
(iv) 
waterways 
(v)  support 
infrastructure;  and 
schemes  for  the  purchase  of  zero-  or  low-
emission  vehicles.  The  plan  also  includes 
significant  investments  in  green  energy  and 
technologies, including low-carbon hydrogen. 

France  has  recently  adjusted  its  policies 
to  address  budgetary  pressures  while 
recalibrating 
incentives  through  taxes 
and  public  support.  For  instance,  it  has 
adapted its battery electric vehicle policies and 
incentives  for  users  in  2025,  including  for 
purchasing  and  leasing  private  vehicles,  and 
modulating  tax  benefits  for  company  and 
favour  of 
employer-provided  vehicles 
electric cars (39). In parallel, it aims to promote 

in 

(38)  The percentage excludes international bunkers such as 

(39)  France: over 2 million rechargable vehicles in 2024 | 

international aviation and shipping. 

European Alternative Fuels Observatory. 

15 

-20020406080100120140199020222024draft SNCB 3199020222024draft SNCB 3199020222024draft SNCB 3199020222024draft SNCB 3199020222024draft SNCB 3199020222024draft SNCB 3199020222024draft SNCB 3TransportBuildingsIndustryEnergyAgricultureWasteCarbon sinks 
 
 
  
cleaner electric vehicle production through CO2 
emission-based eligibility criteria for subsidies, 
which  could  potentially  make  European-made 
electric  vehicles  more  competitive.  When 
designing  further  incentives  to  encourage  a 
towards  more  sustainable  mobility 
shift 
options,  France  could 
targeted 
measures in its national social climate plan to 
shield  the  most  vulnerable  transport  users 
from  the  impacts  of  decarbonisation  and 
ensure a fair transition. 

integrate 

is  scope 

to 
decarbonise 

take  additional 
There 
freight 
measures 
to 
transport.  For  freight,  road 
is  still  the 
dominant  mode  of  transport  at  85 %,  with 
only  10 %  of  freight  transported  by  rail 
(against  the  EU  averages  of  75 %  and  16 %, 
respectively).  This  trend  worsened  in  2023. 
Issues  with 
data 
interoperability 
availability limit the modal shift to rail freight. 
Expanding  charging  infrastructure  for  trucks 
on safe and secure parking areas and boosting 
inland  waterway  freight (40)  would  also  help 
accelerate  the  decarbonisation  of  freight 
transport. 

and 

to 

trigger 

The  decarbonisation  of  the  building 
sector continues,  but  current policies are 
insufficient 
the 
transformations  needed  to  achieve  the 
objective of carbon neutrality. Greenhouse 
gas  emissions  of  residential  and  tertiary 
buildings  have  decreased  by  only  1.1%  in 
2024  compared  to  2023,  according  to  the 
most recent estimates (by Citepa) (41). France’s 
General Secretariat for Ecological Planning has 
expressed concerns (42) about the slow pace of 
energy 
deep 
the 
renovations  crucial  for  decarbonising 
building  sector.  In  2024,  the  target  for  deep 

renovations, 

particularly 

(40)  France has one of the EU's largest waterways networks, 
but the market share of inland waterway freight is 
rather low compared for instance to the Netherlands 
and Germany. One inland waterway vessel can replace 
on average 100 trucks on the road and is one of the 
most sustainable modes per tonne-kilometre.  

(41)  Baromètre du Citepa : première estimation des 

émissions sur l'ensemble de l'année 2024 - Citepa.  

(42)  Secrétariat général à la planification écologique, 2024: 
La Planification Ecologique : une méthode collective et 
transformante. 

energy  renovations  under  the  MaPrimeRénov’ 
scheme 
(the  main  financial  support  for 
households  financed  by  the  recovery  and 
resilience plan, with a particular focus on deep 
renovations  under  the  REPowerEU  chapter) 
was  set  at  200 000,  but  only  91 374  were 
financed (43)  -  a  significant  shortfall.  Since 
2023,  the  scheme  has  undergone  major 
budget  fluctuations  (and  budget  cuts  in  the 
course  of  2024)  and  a  shift  in  focus  towards 
partial  renovations 
instead  of  deep  and 
ambitious  ones.  These  changes  are  also  a 
result  of  the  construction  sector’s  limited 
capacity  to  carry  out  deep  renovations  on  a 
large scale, partly because of a lack of skilled 
workers.  

The full impact of the measures will have 
to  be  carefully  monitored.  The  current 
system  of  funding  instruments  for  renovation 
of buildings is fragmented. The many different 
programmes  in  place  (MaPrimeRénov’,  eco-
PTZ (44)  and  energy  savings  certificates (45)) 
for 
create 
households.  The  financing  system  for  energy 
renovation  could  be  simplified  by  stabilising 
and  streamlining  existing  schemes,  reducing 
complexity  and  increasing  predictability  to 
build 
accessibility, 
particularly for lower-income households. 

complexity  and  uncertainty 

improve 

trust 

and 

could 

to 
of 

incentives 

accelerate 
buildings, 

be 
Non-budgetary 
energy 
mobilised 
renovation 
without 
increasing  the  public  deficit.  The  Climate 
and  Resilience  Law  of  2021  (under  the 
recovery  and  resilience  plan)  provides  for  a 
gradual ban on renting thermal sieves as from 
1 January 2025.  Further  measures  could  help 
accelerate  building  decarbonisation,  such  as 
savings 
refocusing 
the 
certificates schemes 
the  most 
impactful  energy  related  interventions,  while 
continuing  to  combat  fraud (46).  Moreover, 

towards 

energy 

(43)  ‘Bilan MaPrimeRénov' 2024’, page 8. 

(44)  Eco-PTZ is a government-backed zero-interest loan to 
homeowners for energy-efficient home renovations. 

(45)  Certificats d’économie d’énergie - CEE. 

(46)  Les certificats d'économies d'énergie | Cour des 
comptes ; Revue du dispositif des certificats 
d'économies d'énergie en préparation de la 6ème 
période | IGEDD 

16 

 
 
 
providing  low-interest  banking  solutions  (in 
line  with  the  eco-PTZ)  could  help  low-income 
owners finance the remaining costs. 

sector, 

construction 

Although  France  has  made  progress  in 
decarbonising  its  manufacturing  industry 
and 
emissions 
intensity  remains  high  in  some  sectors. 
Industry  still  accounts  for  almost  a  fifth  of 
total emissions. The greenhouse gas emissions 
intensity of manufacturing in France is low for 
energy  use,  but  above  the  EU  average  for 
industry  processes  and  product  use  (see 
Annex 7).  Energy-intensive  industries  account 
for  only  2.6%  of  France’s  gross  value  added 
(in  2022,  among  the  lowest  in  the  EU),  but 
consume a large share of electricity. While the 
greenhouse  gas  emissions  continue  to  fall  in 
the  manufacturing  industry  and  construction 
sector  in  2024,  the  pace  is  slowing  down. 
According  to  Citepa (47),  the  emissions  for  the 
year 2024 for the manufacturing industry and 
construction  sector  do  not  meet  the  more 
ambitious targets of the draft SNBC 3.  

land  use, 

France’s  carbon  removals  fall  short  of 
the  level  of  ambition  needed  to  meet  its 
land-use 
2030  target  for 
change and forestry.  In 2019-2023, France 
managed to reduce greenhouse gas emissions 
in all sectors in line with the plans, except for 
the  absorption  of  emissions  by  carbon  sinks 
through  land  use.  As  other  sectors  –  notably 
buildings  and energy production  –  contributed 
more  than  anticipated  to  the  trajectory,  the 
deficit  was  partially  compensated.  However, 
this higher contribution was made possible by 
temporary  factors  such  as  pandemic-related 
lockdowns,  high  energy  prices  and  favourable 
weather  conditions  in  2023.  Natural  carbon 
sinks,  essential  for  sequestering  CO2,  are  in 
decline  due  to  the  impacts  of  climate  change 
in  forest  mortality  and  a 
increase 
(high 
significant  decrease 
in  tree  growth),  the 
increase  in  bioenergy  and  challenges  with 
managing forest-wood sector (48). 

the 

revision  of 

into  account 

In response to the forest crisis of the last 
few  years,  France  has  acknowledged  the 
uncertainty  with  the  land  use  sector  and 
the  unrealistic  projected  evolution  in 
latest 
SNBC 2.  Taking 
research  on  the  evolution  of  the  forest-wood 
sector, the draft SNBC 3 therefore significantly 
lowers  the  expected  contribution  from  this 
sector  to  keeping  carbon  sequestration  at  a 
level  similar  to  that  of  1990  and  2022  (see 
graph  3.1).  The  draft 
the 
multiannual  energy  programme  proposed  by 
the  Government  in  March  2025  includes  an 
explicit  merit  order  for  the  uses  of  biomass, 
which  gives  priority  to  non-energy  uses.  This 
would  need  to  be  confirmed  in  the  final 
programme,  yet  to  be  adopted,  and  enforced 
through  relevant  legislation.  In  parallel,  the 
existing  subsidies  for  the  use  of  biomass  for 
energy  may  need  to  be  revised.  Moreover, 
beyond  2030,  carbon  capture  and  geological 
storage  will  be  crucial  for  offsetting  the 
residual  emissions  from  sectors  that  are 
to 
difficult 
capture 4 to 8 million tonnes of CO2 per year 
by 2030, with a gradual increase to 30 to 50 
million tonnes of CO2 per year by 2050 (49). 

to  decarbonise.  France  aims 

Steering the energy sector 
transition towards a low-carbon 
economy 

firm  updated 
The  absence  of  a 
commitment  towards  2030  target  for 
renewable energy creates uncertainty for 
investors (50).  While  the  multiannual  energy 
programme 
(2019-2028)  sets  targets  by 
technology (51),  France’s  national  energy  and 
climate  plan  does  not  include  an  explicit 
contribution  to  the  EU’s  renewable  energy 
target 
final  energy 
consumption  for  2030.  In  2023,  France  was 

terms  of  gross 

in 

(47)  Baromètre du Citepa : première estimation des 

émissions sur l'ensemble de l'année 2024 - Citepa.  

(48)  Pour un nouveau paradigme forestier | Terra Nova. 

(49)  État des lieux et perspectives CCUS_0.pdf 

(50)  SWD(2023) 931 final, page 15 and final updated FR 

NECP. 

(51)  Programmations pluriannuelles de l’énergie (PPE) | 
Ministères Aménagement du territoire Transition 
écologique (ecologie.gouv.fr). 

17 

 
 
 
still  below  its  2020  binding  renewable  energy 
target (22.3% vs.  23%)  (see  Annex  8).  France 
could intensify its effort to increase the share 
of  renewable  energy  to  better  contribute  to 
the  level  required  by  the  Renewable  Energy 
Directive  III  (42.5%  by  2030  at  EU  level). 
Initially  set  at  33%  by  the  2019  Energy-
Climate Law for 2030, France now lacks a firm 
updated  commitment  to  a  renewable  energy 
target for that year to comply with the current 
EU 2030 targets. 

France  has  reached  a  milestone  of  95% 
low-carbon  electricity,  mainly  due  to  a 
high  share  of  nuclear  (68%),  but  rapid 
renewable  energy  growth  is  needed  to 
ensure  energy  security  and  meet  the 
anticipated  rise  in  electricity  demand (52) 
in the medium term. For the first time, low-
carbon  production  (nuclear  and  renewables 
combined)  has  reached  the  threshold  of  95% 
of  the  electricity  produced  (nuclear  alone 
accounting  for  about  68%).  However,  as  the 
construction of additional nuclear power plants 
may not be finalised before 2035 and France 
imports (53) 
relies 
(although  diversified  and  reduced  through 
capabilities (54)), 
rapid 
recycling 
deployment  of  renewables 
is  crucial  for 
ensuring  France’s  energy  security  of  supply. 
France  is  making  good  progress  in  reducing 
coal  use,  with  a  complete  phase-out  planned 
for 2027. 

uranium 

heavily 

the 

on 

Tackling  barriers  to  renewable  energy 
while  maintaining  consistent  policies 
remains  a  challenge.  The  proposed  revision 
of  France’s  multiannual  energy  programme in 

(52)  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). 

(53)  Over 50% of uranium came from Kazakhstan and Niger 
in 2023. Worldbank: France Natural uranium and its 
compounds, etc. imports by country | 2023 | Data, 
https://wits.worldbank.org/trade/comtrade/en/country/FR
A/year/2023/tradeflow/Imports/partner/ALL/product/284
410. 

(54)  Traitement et recyclage du combustible nucléaire - ce 

include 

March  2025 (55)  decreases  the  ambition  for 
new photovoltaic capacities in 2030 and 2035. 
The  downward  revision  of  purchase  prices  for 
this technology risks weakening the sector and 
making many projects unviable. Other barriers 
for  deploying 
limited 
renewables 
storage  capacity,  burdensome  permitting 
lack  of  administrative 
procedures,  and 
regional  energy 
capacity,  particularly  for 
committees  responsible  for  designating  and 
implementing  renewable  energy  ‘acceleration 
areas’.  The  reform  outlined  in  the  REPowerEU 
chapter  (the  ‘Law  on  the  acceleration  of 
renewable  energy  production’  adopted 
in 
March  2023),  also  monitored  under  the 
medium-term  plan, 
introduced  provisions 
for 
related 
renewables generation. However, it has shown 
limited  impact  and  is  being  implemented 
slowly. Most of its implementing acts still have 
to be adopted and, roughly two years after its 
(by  July  2024),  only  34%  of 
adoption 
municipalities  had  designated 
renewables 
‘acceleration areas’. 

to  planning  and  permitting 

Energy  affordability  remains  a  growing 
challenge  for  households,  especially  the 
most  vulnerable  ones.  Retail  electricity 
prices  for  households  increased  by  20.7%  in 
the  first  half  of  2024  compared  to  the  same 
period  in  2023 approaching  the  EU  average 
(288.9 EUR/MWh) (56). This was due to the way 
regulated prices, representing two thirds of the 
household  market,  are  built (57)  and  to  the 
removal  of  the  tariff  shield,  implemented  at 
the  end  of  2021  to  limit  the  impact  of  the 
energy  crisis on households.  Retail  gas  prices 
remained  very  close  to  the  EU  average.  The 
price  increase  impacted  the  most  vulnerable 
households: in 2023, 12.1% of the population 
was  unable  to  keep  their  home  adequately 
warm,  against  10.6%  on  average  in  the  EU. 
This  was  more  pronounced  among  people  at 
risk of poverty or social exclusion, with 25.1% 

(55)  Stratégie française pour l'energie et le climat. 

Programmation pluriannuelle de l'énergie (2025-2030, 
2031-2035). 

(56)  All taxes and levies included, for users with 2500-5000 

KWh/year consumption 
(https://ec.europa.eu/eurostat/databrowser/view/nrg_pc_
204__custom_16000723/default/table?lang=en). 

qu'il faut retenir | Orano 

(57)  Supply cost smoothed over the preceding two years. 

18 

 
 
 
affected  (EU:  22.2%),  compared  to  9.8%  of 
those not at risk (EU: 8.3%) (58). 

More  predictable  electricity  prices  would 
help  non-financial  firms  be  competitive, 
especially  in  energy-intensive  industries. 
While  retail  prices  impact  smaller  businesses 
and  service-oriented 
industries,  wholesale 
prices  are  more  relevant  for  large  industrial 
consumers,  especially 
in  energy-intensive 
industries.  Wholesale  prices  were  subject  to 
large 
the  past  years. 
Nonetheless,  in  2024,  France  had  the  EU’s 
third-lowest  wholesale  electricity  prices (59). 
According  to  businesses,  in  the  first  half  of 
2024,  energy  costs  were  among  the  top 
obstacles  to  investment,  significantly  more 
than in 2021 (60). 

fluctuations  over 

Energy-intensive industries are producing 
well  below  their  mid-2021  levels  (see 
Annex 7) (61). In anticipation of the phaseout of 
ARENH  on  31  December  2025,  the  new 
regulation of existing nuclear capacities allows 
EDF  to  offer  long-term  contracts  and  nuclear 
production  allocation  contracts  to  companies. 
The  latter  allows  industrial  consumers  to 
benefit  from  stable  and  affordable  electricity 
prices if they commit to consuming in the long 
run (10 to 15 years). This new regulation aims 
to  provide  the  state-owned  energy  provider 
revenues, 
EDF  with  more 
facilitating  its  wave  of  investments  in  the 
future  nuclear  plan  and  to  offer  visibility  and 
stability to companies, particularly for energy-
intensive  ones.  Accelerating  the  adoption  of 
these  contracts  between  EDF  and  those 
Increasing 
is  essential  here. 
companies 

predictable 

(58)  Observatoire National de la Précarité Énergétique, 

« Tableau de bord de l’ONPE 2024 », 2024. 

(59)  EUR 58 per MWh in France vs. EUR 84.7 per MWh in the 
EU on average according to Fraunhofer (ENTSO-E data). 
For quarterly average wholesale prices since 2018 and 
projections until end-2026, see also IEA (2025), 
Electricity 2025. Analyses and forecast to 2027; for gas 
prices: Gas market report, Q1-2025. 

(60)  EIB investment survey 2021: European Union overview, 
page 20 and EIB investment survey 2024: European 
Union overview, page 26. 

volumes under power purchase agreements in 
general  could  be  encouraged  as  well.  With 
1.48  GW  in  such  contract  volumes  in  2024, 
France 
(4.66  GW)  and 
Germany  (2.04  GW),  but  closing  the  gap 
(+0.84 GW since 2023), though the significant 
increase  in  2024  was  mainly  driven  by  solar 
photovoltaics (62). 

is  behind  Spain 

of 

would 

enable 

planning 

deployment 
This 

Stepping  up  investment  in  the  electricity 
grid,  including  interconnections,  is  key, 
alongside 
flexibility 
the 
solutions. 
electrification of sectors that still rely on fossil 
fuels  and  integrate  increasing  volumes  of 
renewables.  The 
increasing  curtailment  of 
renewables  and  negative  price  occurrences  in 
2023  and  2024  point  to  the  constraints  on 
electricity  grids  and  the  need  for  increased 
flexibility (63).  Electricity  system  operators  RTE 
and  Enedis  have  recently  announced  major 
investment plans to develop  the grid over the 
next  15  years (64).  However,  RTE’s  plan  is  still 
in its consultation phase. It is crucial that long-
term 
account 
takes 
interconnections  with  neighbouring  countries, 
particularly with the Iberian peninsula, to boost 
EU  market  integration.  In  that  respect,  the 
French  Transmission  System  Operator’s  (RTE) 
planning 
increasing 
interconnectivity with up to 29 GW by 2030. In 
recent  years,  France  has  commissioned 
interconnection  projects  with  Italy  (Savoie-
Piedmont),  and  further  commissionings  are 
planned in the coming years, such as the Celtic 
Interconnector  and  the  Bay  of  Biscay  project. 
The  timely  finalisation  and  implementation  of 
these 
facilitate 
investments  in  renewables  and  accelerate 
decarbonisation. Flexibility solutions – such as 
demand-side  response,  batteries  and  thermal 
storage – need to be deployed more quickly as 
well. 

investment  plans  would 

includes 

targets 

into 

for 

France  is  working  to  secure  critical  raw 
materials essential for renewable energy 

(62)  Pexapark Renewables Market Outlook 2025. 

(63)  Bilan électrique 2024 | RTE 

(61)  Insee (2025), “Output in energy-intensive industries 
remained in sharp decline compared to the level of 
2021”. 

(64)  RTE présente les grandes orientations de sa stratégie 

de transformation du réseau de transport d’électricité à 
l’horizon 2040 | RTE.  

19 

 
 
 
technologies  and  energy  storage,  among 
other  things.  Like  many  other  European 
countries,  France  strongly  relies  on  imports 
from  non-EU  countries  for  many  critical  raw 
materials (65).  In  2022,  France  adopted  a 
national strategy to secure its supply of critical 
raw  materials.  This  includes  enhancing  supply 
chain monitoring, developing partnerships with 
raw  material-rich  countries,  and  providing 
financial  support  for  extraction,  processing, 
and  recycling (66).  While  France  has  a  circular 
material  use  rate  above  the  EU  average 
(17.6% vs 11.8%) (67), the recycling rate of e-
waste is below the EU average in 2022 (77% 
vs  81%).  France  has  also  allocated  dedicated 
funding  through  the  France  2030  investment 
plan  to  promote  the  reuse  and  increased 
recycling  of  critical  raw  materials (68)  (see 
Annex 7). 

Ensuring resilience as the climate 
warms 

France is significantly exposed to climate 
and  environmental  risks,  and  could  do 
more  to  improve  resilience.  The  costs  of 
climate-related damage are increasing, calling 
for  adaptation  policies  and  investments  to 
prepare  for  temperature  increase.  France’s 
third  national  climate  change  adaptation 
plan (69) sets out the policies to be adjusted by 
2030  and  how  investments  can  be  aligned 
with  the  adaptation  objectives.  However,  as  a 
whole it is not attached to a specific dedicated 
budget  and  contains  few  binding  adaptation 
goals (70) 
The 
EU's 
recommends 
competitiveness 

Annex 9). 
compass 

(see 

improving  critical  infrastructure  resilience  by 
design.  This  merits  being  embedded  in  future 
public  infrastructure  works  to  save  resources 
in the longer term. 

intensity 

increasing 

The 
in  water 
exploitation  needs  to  be  managed  to 
prevent  tensions,  particularly 
in  the 
energy  sector.  Climate  change  resulting  in 
more frequent floods, heatwaves and drought, 
especially  in  summer,  further  strains  France’s 
water  resources.  Water  supply  and  sanitation 
are also major concerns in France’s outermost 
regions,  where  climate  change  is  affecting 
rainfall  patterns.  The  Water  Exploitation  Index 
Plus (WEI+) rose significantly to 4.8% in 2022 
(exceeding  the  EU  average  of  4.1%)  (see 
Annex  9).  This  increases  the  risk  of  electricity 
disruption  for  hydro  and  nuclear  energy 
production (71). 

and 

while 

economic 

Over  the  past  two  decades,  freshwater 
extractions  for  domestic  use  (drinking 
activities 
water) 
(agriculture, industry, leisure, and cooling 
of  electric  power  plants)  have  been 
declining, 
for 
remained 
agricultural 
relatively stable. Regulatory measures are in 
place  for  managing  water  resources  and 
allocating  water  when  it  is  in  short  supply. 
improve  water 
Additional  measures 
management  are  being  taken  under  the 
national  plan  for  water,  announced  in  March 
2023 (72). 

extractions 
have 

uses 

to 

(65)  E.g. coking coal, aluminium and copper (see: EC, Raw 
material Information System, country profile France) 

(66)  France, Ministère de l’écomie, Trésor-eco n°351, Les 
minerais dans la transition énergétique, encadré N°2, 
10/2024. 

(67)  EC: Circular material use rate 

https://ec.europa.eu/eurostat/databrowser/view/cei_srm
030/default/bar?lang=en  

(68)  PEPR Recyclage | CNRS. 

(69)  PNACC3.pdf.  

(70)  Le point dur du PNACC3 : la question des moyens - I4CE 

(71)  Freshwater extractions for cooling electric power plants 
accounted for almost half of all water use in 2021 (the 
data excludes hydroelectricity and seawater). See 
footnote 11, page 22. 

(72)  Plan d’action pour une gestion résiliente et concertée de 
l’eau | Ministères Aménagement du territoire Transition 
écologique. 

20 

 
 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

Tackling employment gaps and 
skills shortages 

that 

curb 

improved 

challenges 

Despite  progress,  France  continues  to 
face  significant  employment  and  skills-
related 
its 
competitiveness.  The  overall  employment 
situation 
the 
employment  rate  (for  people  aged  20  to  64) 
standing  at  75.1%,  after  reaching  a  record 
high  of  75.3%  in  the  third  quarter  of  2024. 
However,  this  remains  below  the  EU  average 
of 75.8%, and France continues to have one of 
the  highest  unemployment  rates  in  the  EU 
(7.4% vs 5.9%). 

in  2024,  with 

significant 

employment 

Some  groups,  including  young  people, 
individuals,  people  with  a 
low-skilled 
migrant  background  and  older  workers, 
face 
gaps. 
Bridging  these  gaps  could  significantly  boost 
economic  growth,  with  estimates  suggesting 
that  raising  the  employment  rate  to  the  EU 
average could increase France’s GDP by 2% to 
4% (73).  While  postponing  the  legal  retirement 
age tends to increase the employment rate of 
older  workers,  notably  those  aged  60-64, 
additional measures, such as adapting working 
conditions  and  improving  access  to  training, 
in 
are  needed 
employment  and 
reduce  unemployment. 
Targeted  measures  are  also  needed  to  bridge 
the  employment  gap  of  people  born  outside 
the  EU,  which  remains  higher  than  the  EU 
average 
vs 
12.7 percentage 
8.6 percentage  points  in  the  third  quarter  of 
2024  -  especially  among  women  (see  Annex 
10). 

to  keep  older  workers 

points 

- 

hiring 

subsidies, 

Young  people  face  barriers  in  accessing 
the  labour  market.  Despite  the  increase  in 
the  number  of  apprentices,  boosted  by  the 
apprenticeship 
initially 
supported by the recovery and resilience plan, 
youth unemployment is above the EU average 
(14.4%  for  people  aged  15-29  in  France  in 
2024  vs  11.3%).  The  share  of  those  not  in 
education, employment or training is also high 
(12.5% vs 11.0%), and on the rise, particularly 
in France's outermost regions (25%).  

youth 

Significant  efforts  have  been  made  to 
support  youth  employment  under  the 
recovery  and  resilience  plan.  However, 
addressing  strong 
inequalities  and  better 
coordinating  the  large  number  of  support 
measures  would  make 
support 
measures  more  effective (74).  Better  targeting 
employment  support  measures  (such  as  the 
the 
‘Contrat  d’engagement 
apprenticeship  subsidies)  to  those  furthest 
away  from  the 
labour  market,  improving 
academic and professional guidance for young 
people and supporting their access to housing 
would  also  help  improve  their  labour  market 
outcomes. 

jeune’  and 

remains  a  major  barrier 

Labour  and  skills  shortages  continue  to 
hinder  productivity  growth.  Despite  some 
improvement,  labour  shortages  remain  high, 
with  most  companies  reporting  recruitment 
difficulties.  The  lack  of  adequately  skilled 
workers 
to 
recruitment,  especially  in  key  sectors  such  as 
care 
the  automotive, 
sectors (75).  France  faces  challenges  in  the 
quality, adequacy and labour market relevance 
of  the  training  it  offers,  despite  significant 
financial investments. Over the past years, the 
training offer often failed to meet recruitment 

construction  and 

(73)  Rexecode, ‘Augmenter la quantité de travail en France : 

(75)  France Travail, ‘Enquête Besoins en Main-d’Œuvre 

enjeux et leviers’, 2025. 

2024’, 2024. 

(74)  Cour des Comptes, Le rapport public annuel, 2025. 

21 

 
 
 
 
needs  for  professions  that  are  highly  in 
demand,  and  the  number  of  training  offers 
leading  to  qualifications  –  and  thus  better 
employment  prospects  –  remains  limited (76) 
(see  Annexes  10  and  12).  Building  on  the 
results  of  previous  evaluations, the  new  Skills 
(2024-2027)  has  been 
Investment  Plan 
designed 
this  challenge  and 
improve  the  relevance  of  the  training  offer 
notably  through  strengthened  collaboration 
between  private  and  public  actors  at  local 
level,  to  better  match  skills  supply  and 
demand.  The  impact  of  this  measure  remains 
to be evaluated. 

to  address 

to 

the 

to 
by 

the  green 

respond 
driven 

These  skills  mismatches  limit  France’s 
emerging 
ability 
opportunities 
twin 
transition.  Efforts  to  foster  the  development 
of  green  skills,  including  by  boosting  the 
implementation  of 
roadmap 
strategy  with  the  support  of  the  Technical 
Support  Instrument (77),  may  help  better  align 
French  upskilling  and  reskilling  measures  to 
labour  market  needs.  The  increasing  demand 
for  skills  stemming  from  France’s 
large 
investments 
in  clean  tech  must  also  be 
addressed  (see  Annex  7).  Although  above  the 
EU average, the share of adults with at least a 
basic  level  of  digital  skills  is  stagnating,  and 
the  demand  for 
ICT  specialists  outstrips 
supply.  Taking  measures  to  boost  the  digital 
skills  of  the  population  and  strengthen  STEM 
and  ICT  teaching  could  boost  the  diffusion  of 
innovation and digitalisation across all sectors 
and firms and strengthen competitiveness (see 
Annexes 3 and 12). 

Inequality  in  access  to  labour-market-
relevant  training  hampers  upskilling  and 
reskilling  efforts. 
France  has  made 
significant investments under the recovery and 
resilience plan. Despite this, the participation in 
training  only  increased  slightly  since  2016 
(49.2% in 2022, an increase of 0.8 percentage 
points  vs  2.1 percentage  points  in  the  EU), 

(76)  Cour des Comptes, Évaluation du plan d’investissement 

dans les compétences (PIC), 2025. 

resulting in limited progress towards the 2030 
adult  learning  target  of  65%.  Participation  in 
training  declines  with  age  and 
remains 
significantly  lower  for  the  low-skilled  (see 
Annex 12).  

The  Bozio-Wasmer  report (78)  underlined 
potential disincentives effects of the tax 
and  transfers  system.  The  report  shows 
that social security contribution rebates on low 
wages  designed  to  reduce  labour  costs  and 
stimulate jobs creation might create low wage 
traps,  and  contribute  to  underinvestment  in 
skills  by  companies  and  workers.  Such  traps 
may  hamper  access  to  training  and  limit 
opportunities 
career 
advancement.  Better  targeting  the  support  to 
in  high-quality  and 
enhance  participation 
labour-market-relevant 
learning, 
particularly  by  low-skilled  and  older  workers, 
could enhance employability and boost labour 
productivity. 

salary 

adult 

and 

for 

Enhancing basic skills and adult 
learning to support fairness and 
competitiveness 

insufficient 

The skills challenges in the labour market 
are  rooted  in  the  weak  performance  of 
the French education system, resulting in 
an 
level  of  basic  skills, 
especially  for  disadvantaged  groups. 
French  pupils  at  both  primary  and  secondary 
levels  underperform 
in  mathematics  and 
science  compared  to  their  peers  in  the  EU 
(2023  TIMSS,  see  Annex  12).  This  translates 
into  a  lack  of  basic  skills among  a  quarter  of 
15-year-olds,  according  to  the  2022  PISA 
report. Among disadvantaged pupils, this share 
was  49.4%  (EU  average:  48%),  and  the  trend 
is  worsening.  While  overall  PISA  results  are 
around  the  EU  average,  the  share  of  top 
performers 
the  average,  and 
inequalities  are  more  pronounced.  France  has 

is  below 

(77)  OECD: Cultiver l’excellence dans l’apprentissage et le 
développement professionnel des personnels de 
l’éducation, 2024. 

(78)  Bozio, Wasmer: Les politiques d’exonérations de 

cotisations sociales: une inflexion nécessaire, 2024, 
pages 27, 98-99. 

22 

 
 
 
among  the  highest  socio-economic  (fourth 
highest in the EU). 

for  contract  teachers  which  represent  a 
growing share of the teaching force (82). 

for 

criteria 

flexible 

Existing  support 
low-performing 
learners does not reach all those in need. 
Introducing  more 
for 
disadvantaged schools to benefit from support 
schemes  and  reinforcing  cooperation  between 
disadvantaged  schools  and  local  actors  could 
support.  Recently, 
help  ensure  broader 
frequent  political  changes  have 
to 
led 
reforms 
numerous 
insufficient 
and 
for 
timeframes 
evaluation.  Embedding  measures  to  improve 
basic  skills  and  reduce  inequality  in  a  long-
could 
term, 
and 
contribute 
effectiveness. 

implementation 

evidence-based 

strategy 

stability 

greater 

with 

to 

The  low  attractiveness  of  the  teaching 
profession  undermines  the  performance 
of  the  education  system.  The  number  of 
candidates 
recruitment 
taking  competitive 
exams  is  decreasing  and  an  increasing  share 
of  permanent  teachers  choose  to  leave  the 
profession (79).  French  teachers  are  less  well 
paid  than  other  workers  with  a  similar 
education  level,  to  a  larger  extent  than  their 
OECD peers, especially at mid-career level (80), 
and they report lower job satisfaction (81) (see 
Annex 12). A 2023 large-scale  teacher survey 
revealed  that  salaries,  workload,  early  career 
mentoring,  professional  collaboration  and 
career  prospects  are  key  to  improving  job 
satisfaction.  The  Court  of  Auditors  found  that 
the  Ministry  for  Education  needs  to  manage 
teachers in a more personalised and forward-
looking  way. 
It  should  also  address  the 
declining pupil numbers and the relatively rigid 
rules on job placements, geographical mobility 
and  job  recognition.  HR  services  will  need  to 
evolve to truly include recruitment and support 

also 

limits 

training 

Underdeveloped  continuous  professional 
education 
development 
outcomes.  The  2022  reform  aiming  to 
organise  training  in  dedicated  local  centres 
has not yet fulfilled its potential  for coverage 
of all education levels,  access and quality (83). 
Furthermore, 
initiatives  seen  as 
effective to strengthen teachers’ skills, such as 
the 
programmes 
(’formation  en  constellation’)  for  primary 
school  teachers  for  French  and  maths,  are 
limited to primary education  level. Continuous 
professional  development  could  improve  both 
job  satisfaction  and  the  teaching  of  basic 
skills,  thus  making  support  schemes  for  low-
performing pupils more effective. 

peer-to-peer 

learning 

market 

outcomes 

Inequalities  in  the  education  system  and 
the  lack  of  basic  skills  have  a  strong 
impact  on  the  adult  learning  system  and 
for 
labour 
disadvantaged  groups.  Despite  a  slight 
increase in participation since 2016 (49.2% in 
2023, an increase of 0.8 percentage points vs 
2.1 percentage  points  in  the  EU),  France  has 
not  made  significant  progress  towards  the 
2030  adult 
target  of  65%. 
Engagement in education and training declines 
with  age  and  is  significantly  influenced  by 
qualification 
Annex 12). 
Implementing  additional  measures  to  support 
access  to  quality  and  labour  market-relevant 
adult  learning  could  increase  employability, 
particularly  for  individuals  from  the  most 
disadvantaged  groups,  while  also  boosting 
labour productivity. 

learning 

levels 

(see 

(79)  France Stratégie, 2024, Working in Public Service: The 

Challenge of Attractiveness. 

(80)  OECD, Education at a glance 2024 – Country note 

FRANCE, 2024. 

(81)  DEPP (2024), Notes d’information n°24-47, 24-48 

et 24-49, Décembre 2024. 

(82)  Cour des Comptes, 2024, La fonction ressources 
humaines au ministère de l’éducation nationale. 

(83)  OECD (2024). Cultiver l’excellence dans l’apprentissage 
et le développement professionnel des personnels de 
l’éducation 

23 

 
 
 
Addressing poverty to improve 
social cohesion and enhance 
human capital  

in  France  has 
The  poverty  situation 
worsened 
in  recent  years,  especially 
among  children.  After  decreasing  slightly  in 
2023,  the  share  of  the  population  at  risk  of 
poverty or social exclusion increased slightly in 
2024  by  0.1  percentage  points,  to  20.5%, 
below  the  EU  average  of  21%,  mainly  driven 
by  the  increase  in  the  at  risk  of  poverty 
rate (84).  From  2019  to  2023,  the  number  of 
people  at  risk  of  poverty  or  social  exclusion 
increased by 1.024 million in mainland France 
(from  18.8%  to  19.8%),  marking  the  largest 
deviation  from  the  target  of  reducing  poverty 
by  1.1 million  by  2030,  while  the  situation  in 
the  EU  has  improved.  Some  groups,  such  as 
people 
are 
outside 
disproportionately  affected.  Furthermore,  the 
number  of  homeless  persons,  evictions  and 
demand  for  social  housing  have  all  increased 
(see Annex 11). 

born 

the 

EU, 

Children  face  the  highest  risk  of  poverty 
or  social  exclusion.  In  France  in  2024, 
children faced a higher risk of poverty or social 
exclusion  than  children  in  the  EU  (26.2%  vs 
24.2%),  and  the  gap  between  the  share  of 
children and the share of general population at 
risk  of  poverty  and  social  exclusion  is  one  of 
the  highest in  the  EU.  France  has  also  one  of 
the  highest  rates  (9%)  of  children  living  in 
jobless  households  (very  low  work  intensity 
households)  in  the  EU  and  this  has  increased 
families, 
significantly. 
particularly  those  headed  by  single  mothers, 
are  often  the  furthest  removed  from  the 
labour  market  (see  Annex  11).  To  reduce  the 
risk  of  poverty  and  social  exclusion  for 
families with children, it is essential to address 
the  specific  barriers  they  face  in  integrating 
equal 
the 

labour  market, 

Single-parent 

ensuring 

(84)  Break in time series in 2022, explained by the 

integration of four outermost regions in the data 
calculation (French Guiana, Guadeloupe, La Réunion, 
Martinique). 

opportunities  for  employment  and  career 
advancement (85).  

A key barrier to address is the access of 
children  from  families  at  risk  of  poverty 
or  social  exclusion  to  early  childhood 
education  and  care.  According  to  the  OECD 
Family  Database,  France  has  some  of  the 
highest levels of inequality in access to formal 
childcare.  The  participation  gap 
in  early 
childhood  education  and  care  –  between 
advantaged  and  disadvantaged  children  –  is 
one  of  the  largest  in  the EU  (41.6 percentage 
points  vs  15.8 percentage  points).  Barriers  to 
access  early  childhood  education  and  care 
include  financial,  regional  and  qualitative 
disparities, which weaken access to and choice 
of  early  childhood  education  and  care  for 
children  under  three.  The  cost  of  childcare 
remains a significant obstacle, with nearly half 
(44%)  of  low-income  families  with  children 
under  three  and  77%  of  families  living  in 
poverty  unable  to  use  any  form  of  childcare 
in  2023. 
due 
Although 
increased, 
coverage 
childcare  availability  varies  greatly  depending 
on the department (86). Additionally, the needs 
of  parents  working  non-standard  hours (87) 
and  those  who  are  unemployed (88)  are  not 
into  account (89).  Easier 
sufficiently  taken 
access  to  early  childhood  education  and  care 
would  also  enable  easier  access  to  training 
opportunities  and  further  enhance 
labour 
market integration. 

to  affordability  concerns 
rate 

the 

of 

the 

cycle 

break 

linked 

closely 

the 
To 
intergenerational transmission of poverty 
– 
educational 
attainment  and  labour  market  prospects 
targeted  measures  are 
– 
essential.  These  could 
improving 
include 
access  to  affordable  housing  and  affordable 

further 

to 

(85)  Sénat (2024). Error! Hyperlink reference not valid.. 

(86)  CNAF-ONAPE, L'accueil des jeunes enfants - Édition 

2024. 

(87)  Work over non-standard hours may cover Saturdays, 

Sundays, public holidays and nights. 

(88)  During a parent’s training, punctual recruitment 

interviews, or when taking up a new job position. 

(89)  Cour des Comptes, ‘La politique d’accueil du jeune 

enfant’, 2024. 

24 

 
 
 
childcare,  especially  for  low-income  families 
and those in the most disadvantaged areas. In 
this  regard,  the  measures  included  in  the 
French  ‘Pacte  des  Solidarités’  anti-poverty 
strategy  are  deemed  insufficient.  Addressing 
the challenges of poverty and social exclusion, 
especially  child  poverty,  could  contribute  to 
enhance 
France’s 
and 
productivity and long-term growth. 

human 

capital 

25 

 
KEY FINDINGS 

To  boost  competitiveness,  sustainability  and 
social fairness, France would benefit from: 

• 

implementing  the  RRP,  including  the 
REPowerEU  chapter;  swiftly  implementing 
cohesion policy, taking advantage of the 
opportunities  under  the  mid-term  review 
of 
optimal 
and  making 
EU 
instruments, 
InvestEU  and 
including 
STEP, to improve competitiveness; 

use 

by 

budget 

•  supporting 
consolidation 
spending 
efforts 
reviews 
tax 
expenditures  to  reduce  their  cost  while 
increasing their efficiency; 

rationalising 

conducting 

and 

•  making 

further 

progress 
by 

to 
taking 
including 
decarbonise, 
additional measures to decarbonise freight 
transport,  accelerating  energy  renovation 
of  buildings  and  improving  management 
of forest-wood sector; 

•  accelerating 

the 

investment 

deployment 

of 
related 
renewable  energies  and 
storage  technologies,  and  ensuring 
continued 
in  grids  to 
ensure  energy  security,  notably  by 
finalising  the  setting  up  of  ‘acceleration 
areas’  and 
increasing  administrative 
capacity,  particularly  at  regional  and  local 
levels; 

• 

further  aligning  production 
taxes 
towards the EU averages to stimulate 
production,  while  offsetting  negative 
fiscal impact by savings through spending 
reviews; 

•  strengthening business R&D intensity, 
by better targeting public support schemes 
and  by  making  the  system  that  supports 
collaboration  between  academia  and 
businesses  more  effective,  taking  account 
of territorial needs; 

• 

• 

improving  SME  digitalisation, 
by 
improving  the  effectiveness  of  existing 
support 
by 
streamlining  available  support  schemes, 
and  better  aligning  the  type  of  support 
with business needs; 

measures, 

including 

• 

• 

to 

employment 

reducing 
gaps  and 
addressing  skills  shortages,  by  better 
targeting  measures 
promote 
employment and by addressing barriers to 
employment,  notably  for  youth  and  older 
workers,  and  by  improving  the  labour-
market-relevance of the training offer and 
increasing  participation  in  adult  learning, 
notably by low-skilled and older workers; 

from 

enhanced 

improving  educational  outcomes  and 
reducing  inequalities  in  education  by 
ensuring  that  all  disadvantaged  pupils 
benefit 
educational 
support, by ensuring sufficient timeframes 
for 
implementation  and  evaluation  of 
reforms,  by  securing  teachers’  access  to 
relevant  continuous 
training,  and  by 
tackling teacher shortages, in particular by 
improving teachers’ working conditions; 

•  preventing  and 

combating 

child 
poverty,  particularly  by  promoting  better 
labour  market  outcomes  for  parents  and 
access  to  childcare  services  for  the  most 
disadvantaged households. 

restrictions 

reducing  administrative  burden  and 
regulatory 
further, 
licensing  and 
including  by  aligning 
permitting  system  with  best  practices, 
lifting  the  regulatory  barriers  in  the  retail 
simplifying 
further 
and 
sector, 
administrative procedures; 

26 

 
 
 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

Fiscal 

A1.  Fiscal surveillance and debt sustainability 

A2.  Taxation 

Productivity 

A3. 

Innovation to business 

A4.  Making business easier 

A5.  Capital markets, financial stability and access to finance 

A6.  Effective institutional framework 

Sustainability 

A7.  Clean industry and climate mitigation 

A8.  Affordable energy transition 

A9.  Climate adaptation, preparedness and environment 

Fairness 

A10.  Labour market 

A11.  Social policies 

A12.  Education and skills 

A13.  Social Scoreboard 

A14.  Health and health systems 

Horizontal 

A15.  Sustainable development goals 

A16.  CSR progress and EU funds implementation 

A17.  Competitive regions 

LIST OF TABLES 

General government balance and debt 
Net expenditure growth 
Net expenditure (outturn and forecasts), annual and cumulated deviations vis-à-vis the recommendation 
Defence expenditure 

A1.1. 
A1.2. 
A1.3. 
A1.4. 
A1.5.  Macroeconomic developments and forecasts 
A1.6. 
A1.7. 
A1.8. 
A1.9. 

General government budgetary position 
Debt developments 
RRF Grants 
RRF Loans 

29 

32 

32 

42 

46 

46 

51 

57 

65 

70 

70 

77 

83 

89 

89 

93 

98 

102 

103 

106 

106 

109 

117 

33 
33 
34 
34 
35 
35 
36 
36 
37 

 
 
 
Implementation of Reforms and Investments underpinning the extension 

A1.10. 
A1.11.  Projected change in age-related expenditure in 2024-2040 and 2024-2070 
A1.12.  Fiscal Governance Database Indicators 
A2.1. 
Taxation indicators 
A3.1. 
Key innovation indicators 
A4.1.  Making Business Easier: indicators. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A8.1. 
A9.1. 
A13.1.  Social Scoreboard for France 
A14.1.  Key health indicators 
A16.1.  Selected EU funds with adopted allocations - summary data (million EUR) 
A16.2.  Summary table on 2019-2024 CSRs 
A17.1.  Selection of indicators at regional level in France 

Financial indicators 
France. Selected indicators on administrative burden reduction and simplification 
Key Digital Decade targets monitored through the Digital Economy and Society Index 
Key clean industry and climate mitigation indicators: France 
Key Energy Indicators 
Key indicators tracking progress on climate adaptation, resilience and environment 

LIST OF GRAPHS 

Greenhouse gas emissions in the effort sharing sectors, 2005 and 2023 
Retail energy price components for household and non-household consumers, 2024 

Tax revenue shares in 2023 
Tax wedge for single and second earners, % of total labour costs, 2024 
Business R&D investment (as % of GDP), 2013-2023 
R&D investment of French companies among world’s top 2 000 R&D investors, by sector of activity (2018-2023) 

A2.1. 
A2.2. 
A3.1. 
A3.2. 
A4.1.  Making Business Easier: selected indicators. 
A5.1. 
Net savings-investment balance in France 
A5.2. 
International investment position of France 
A5.3. 
Capital markets and financial intermediaries in France 
A5.4. 
Composition of NFC funding as % of GDP 
A6.1. 
Trust in justice, regional / local authorities and in government 
A6.2. 
Indicators of Regulatory Policy and Governance (iREG) 
A7.1. 
GHG emission intensity of manu-facturing and energy-intensive sectors, 2022 
A7.2.  Manufacturing industry production: total and selected sectors, index (2021 = 100), 2017-2023 
A7.3. 
A8.1. 
A8.2.  Monthly average day-ahead wholesale electricity prices and European benchmark natural gas prices (Dutch TTF) 
A8.3. 
A9.1. 
A9.2. 
A10.1.  Labour market outcomes 
A10.2.  Employment rate by citizenship 
A10.3.  Labour market outcomes of young people (15-24) 
A10.4.  Employment by type of contract 
A11.1.  At-risk-of-poverty or social exclusion rate and its components 
A11.2.  Persons at risk of poverty and social exclusion, age groups 
A11.3. 
A12.1.  Trends in the low performance rate in mathematics in fourth grade (2015-2023) 
A12.2.  Adult participation in learning 
A14.1.  Life expectancy at birth, years 
A14.2.  Treatable mortality 
A15.1.  Progress towards the SDGs in France 
A16.1.  Distribution of RRF funding in France by policy field 
A16.2.  Distribution of cohesion policy funding across policy objectives in France 

France's installed renewable capacity (left) and electricity generation mix (right) 
Direct dependency(1) on ecosystem services(2) of the gross value added generated by economic sector in 2022 
Investment needs and gaps in EUR million, in 2022 constant prices 

In-work poverty rate 

39 
40 
41 
43 
50 
56 
64 
66 
67 
76 
82 
88 
102 
104 
112 
113 
118 

42 
44 
46 
47 
52 
57 
57 
58 
60 
65 
66 
72 
72 
73 
77 
77 
80 
85 
86 
89 
90 
91 
92 
93 
94 
95 
99 
101 
103 
103 
106 
110 
110 

30 

 
 
 
LIST OF MAPS 

A17.1.  Regional Competitiveness Index 2.0, 2022 edition 
A17.2.  House prices relative to income, 2019 
A17.3.  Untapped potential for solar, wind and hydro power, 2019 

119 
120 
121 

31 

 
 
 
 
FISCAL 
ANNEX 1: FISCAL SURVEILLANCE AND DEBT SUSTAINABILITY 

This  Annex  contains  a  series  of  tables  relevant  for  the  assessment  of  the  fiscal  situation  in  France, 
including  how  France  is  responding  to  Council  recommendations  issued  under  the  reformed  Economic 
Governance Framework. 

The  reformed  framework,  which  entered  into  force  on  30  April  2024(90),  aims  to  strengthen  debt 
sustainability  and  promote  sustainable  and  inclusive  growth  through  growth-enhancing  reforms  and 
priority investments. The medium-term fiscal-structural plans (hereinafter, MTPs or plans) constitute the 
cornerstone  of  the  framework,  setting  the  budgetary  commitment  of  Member  States  over  the  medium 
term. The latter is defined in terms of net expenditure growth, which is the single operational indicator for 
fiscal surveillance.  

France  submitted  its  plan on  31  October  2024.  The plan  covers the period  until  2029,  and  presents  an 
extended fiscal adjustment over seven years, which is underpinned by a set of reforms and investments 
to  which  France  committed  with  the  aim  of  improving  potential  growth  and  fiscal  sustainability.  On  21 
January 2025, the Council adopted the Recommendation endorsing France’s plan(91). On 21 January 2025 
the Council also adopted a Recommendation under Article 126(7) TFEU to correct the excessive deficit in 
France(92).  The  corrective  net  expenditure  path  recommended  by  the Council  under  the  excessive  deficit 
procedure is consistent with the path set out in the plan.  

The assessment of the implementation of the Council Recommendations to correct the excessive deficit 
and endorsing France’s plan is carried out on the basis of outturn data from Eurostat and the Commission 
Spring 2025 Forecast and taking into account the Annual Progress Report (APR), that France submitted on 
30 April 2025. Furthermore, in the context of the Commission Communication of 19 March 2025(93), on 
accommodating defence expenditure within the Stability and Growth Pact, the Annex reports the projected 
increase in defence expenditure based on the Commission Spring 2025 Forecast.  

The Annex is organised as follows. First, developments in government deficit and debt are presented 
based  on  the  figures  reported  in  Table  A1.1.  Then,  the  assessment  of  the  implementation  of  the 
Council Recommendation to correct the excessive deficit and of the Council Recommendation 
endorsing  the  plan  follows,  based  on  the  relevant  figures  presented  in  Tables  A1.2  to  A1.9,  including 
data  on  defence  expenditure.  Further  on,  the  progress  made  in  the  implementation  of  the  set  of 
reforms  and  investments  underpinning  the  extension  of  the  fiscal  adjustment  period(94)  is  assessed 
taking into account the information presented in Table A1.10. 

(90)  Regulation (EU) 2024/1263 of the European Parliament and of the Council (EU) on the effective coordination of economic policies 
and on multilateral budgetary surveillance, together with the amended Regulation (EC) No 1467/97 on the implementation of the 
excessive deficit procedure, and the amended Council Directive 2011/85/EU on the budgetary frameworks of Member States are the 
core elements of the reformed EU economic governance framework. 

(91)  OJ C, C/2025/659, 10.02.2025, ELI: http://data.europa.eu/eli/C/2025/659/oj 

(92)  Council Recommendation with a view to bringing an end to the situation of an excessive deficit in France, C/2025/5033/1. 

(93)  Communication  from  the  Commission  accommodating  increased  defence  expenditure  within  the  Stability  and  Growth  Pact of  19 

March 2025, C(2025) 2000 final. 

(94)  According to the Regulation., the required fiscal adjustment (in particular to put or  keep the government debt ratio on a plausible 
downward path by the end of the adjustment period or keep it at prudent levels below 60% of GDP; and to bring or maintain the 
deficit below 3% of GDP over the medium term) should be completed in four years but may be extended over a period to up seven 
years  if  the  Member  State  commits  to  a  relevant  set  of  reforms  and  investments.  The  adjustment  period  of  France  has  been 
extended to seven years based on the set of reforms and investments laid out in detail in Annex II of the Council recommendation 
endorsing the plan of France. 

32 

 
 
 
 
 
The Annex also provides information on the cost of ageing and the national fiscal framework. Fiscal 
sustainability risks are discussed in the Debt Sustainability Monitor 2024. (95) 

Developments in government deficit and debt  

France’s government deficit amounted to 5.8% of GDP in 2024. Based on the Commission’s Spring 2025 
Forecast, it is projected to decrease to 5.6% of GDP in 2025. The government debt-to-GDP ratio amounted 
to  113.0% at the end of 2024 and,  according to the Commission, it is projected to increase to  116.0% 
end-2025.  

Table A1.1:  General government balance and debt 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Developments in net expenditure  

The net expenditure (96) growth of France in 2025 is forecast by the Commission (97) to be slightly above 
the recommended maximum corresponding to a deviation of  0.1% of GDP. Considering 2024 and 2025 
together, the cumulative growth rate of net expenditure is projected  below the recommended maximum 
cumulative growth rate.  The annual deviation in 2025 is below the 0.3% of GDP threshold. 

Table A1.2:  Net expenditure growth 

* The cumulative growth rates are calculated by reference to the base year of 2023. 
Source: Council Recommendation to correct the excessive deficit in France, Annual Progress Report (APR), and Commission's 
calculation based on Commission Spring 2025 Forecast (COM). 

General  government defence expenditure in France amounted to 1.7% of GDP in 2021, 1.8% of GDP in 
2022  and  in  2023.  According  to  the  Commission  2025  Spring  forecast,  expenditure  on  defence  is 
projected to amount to 1.9% of GDP in 2024 and 2025.  

(95)  Commission (2025) ‘Debt Sustainability Monitor 2024,’ European Economy-Institutional Papers 306. 

(96)  Net expenditure is defined in Article 2(2) of Regulation (EU) 2024/1263 as government expenditure net of (i) interest expenditure, 
(ii) discretionary revenue measures, (iii) expenditure on programmes of the Union 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-off and other temporary measures.  

(97)  Commission Spring 2025 Forecast, European Economy-Institutional Paper 318, May 2025.. 

33 

2024OutturnAPRCOMAPRCOM1General government balance% GDP-5.8-5.4-5.6-4.6-5.72General government gross debt% GDP113.0116.2116.0117.6118.4Variables20252026RECAPRCOMRECAPRCOM2024n.a.3.3%3.1%n.a.n.a.n.a.20250.8%0.9%0.9%4.6%4.2%4.1%20261.2%n.a.2.5%5.8%n.a.6.7%AnnualCumulative*Growth rates 
 
      
 
 
      
 
 
Table A1.3:  Net expenditure (outturn and forecasts), annual and cumulated deviations vis-à-vis the 
recommendation 

* The growth rate for 2024 is not a recommendation but serves to anchor the base, as the latest year with outturn data when 
setting the net expenditure path is year 2023. 
Source: Commission Spring 2025 Forecast and Commission's calculation. 

Table A1.4:  Defence expenditure 

Source: Eurostat (COFOG), Commission Spring 2025 Forecast and Commission's calculation 

34 

2023202420252026OutturnOutturnCOMCOM1Total expenditurebn NAC1607.41670.21723.61771.52Interest expenditurebn NAC52.960.373.889.63Cyclical unemployment expenditurebn NAC-3.1-1.82.02.04Expenditure funded by transfers from the EUbn NAC12.110.811.37.75National co-financing of EU programmesbn NAC3.42.93.83.96One-off expenditure (levels, excl. EU funded)bn NAC1.50.90.90.07=1-2-3-4-5-6Net nationally financed primary expenditure (before discretionary revenue measures, DRM)bn NAC1540.61597.21631.81668.28Change in net nationally financed primary expenditure (before DRM)bn NAC56.634.636.49DRM (excl. one-off revenue, incremental impact)bn NAC8.220.2-4.110=8-9Change in net nationally financed primary expenditure (after DRM) bn NAC48.414.440.511Outturn / forecast net expenditure growth% change3.14%0.9%2.5%12Recommended net expenditure growth*% change3.8%0.8%1.2%13=(11-12) x 7Annual deviationbn NAC-10.11.620.914 (cumulated from 13)Cumulated deviationbn NAC-10.1-8.512.415=13/17Annual balance% GDP-0.30.10.716=14/17Cumulated balance% GDP-0.3-0.30.417p.m. Nominal GDP  bn NAC2826.52925.62993.53079.1Variables2021202220232024202520261Total defence expenditure% GDP1.71.81.81.91.92.02of which: gross fixed capital formation% GDP0.30.30.30.30.30.4 
 
 
      
 
 
 
      
 
 
 
Table A1.5:  Macroeconomic developments and forecasts 

Source: Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

Table A1.6:  General government budgetary position 

Source:  Commission Spring 2025 Forecast (COM), Annual Progress Report (APR) 

35 

2024OutturnAPRCOMAPRCOM1=7+8+9Real GDP% change1.20.70.61.21.32Private consumption% change1.01.21.0n.a.1.43Government consumption expenditure% change2.10.91.0n.a.1.14Gross fixed capital formation% change-1.3-0.4-1.0n.a.1.45Exports of goods and services% change1.31.41.1n.a.2.36Imports of goods and services% change-1.21.31.3n.a.2.1Contributions to real GDP growth 7- Final domestic demandpps0.80.80.6n.a.1.38- Change in inventoriespps-0.5-0.10.1n.a.0.09- Net exportspps0.90.0-0.1n.a.0.010Output gap% pot GDP0.0-1.2-0.5-1.1-0.211Employment % change0.60.0-0.2n.a.0.512Unemployment rate%7.4n.a.7.9n.a.7.813Labour productivity% change0.60.70.7n.a.0.914HICP % change2.3n.a.0.9n.a.1.215GDP deflator% change2.31.41.71.41.516Compensation of employees per head% change3.22.02.5n.a.2.017Net lending/borrowing vis-à-vis the rest of the world% GDP-0.6n.a.-0.5n.a.-0.320252026Variables2024OutturnAPRCOMAPRCOM1=2+3+4+5Revenue51.352.052.0n.a.51.8of which:2- Taxes on production and imports15.515.815.7n.a.15.83- Current taxes on income, wealth, etc.12.512.912.8n.a.13.04- Social contributions16.516.716.6n.a.16.55- Other (residual)6.86.66.9n.a.6.78=9+16Expenditure 57.157.357.6n.a.57.5of which:9- Primary expenditure55.055.155.1n.a.54.6of which:10- Compensation of employees 12.412.312.5n.a.12.511- Intermediate consumption5.55.55.4n.a.5.312- Social payments25.625.725.9n.a.25.713- Subsidies2.01.81.9n.a.1.814- Gross fixed capital formation4.34.34.3n.a.4.215- Other5.35.55.3n.a.5.116- Interest expenditure2.12.22.5n.a.2.918=1-8General government balance-5.8-5.4-5.6-4.6-5.719=1-9Primary balance-3.7-3.1-3.1n.a.-2.820Cyclically adjusted balance-5.8n.a.-5.3n.a.-5.621One-offs0.0-0.10.0n.a.0.022=20-21Structural balance-5.7-4.6-5.2-3.9-5.623=22+16Structural primary balance-3.7-2.4-2.8n.a.-2.7Variables (% GDP)20252026 
 
      
 
 
 
      
 
 
 
Table A1.7:  Debt developments 

* End of period.  
** The 'snow-ball' effect captures the impact of interest expenditure on accumulated general government debt, as well as the 
impact of real GDP growth and inflation on the general government debt-to-GDP ratio (through the denominator). The stock-flow 
adjustment includes differences in cash and accrual accounting (including leads and lags in Recovery and Resilience Facility grant 
disbursements), accumulation of financial assets, and valuation and other residual effects. 
Source: Commission Spring 2025 Forecast and Commission's calculation (COM), Annual Progress Report (APR) 

Table A1.8:  RRF Grants 

Source: Annual Progress Report 

36 

2024OutturnAPRCOMAPRCOM1Gross debt ratio* (% of GDP)113.0116.2116.0117.6118.42=3+4+8Change in the ratio (pps. of GDP)3.23.23.1n.a.2.4Contributions**3Primary balance3.73.13.1n.a.2.84≈5+6+7'Snow-ball' effect-1.7-0.2-0.1n.a.-0.3of which:5- Interest expenditure2.12.22.5n.a.2.96- Real growth effect-1.2-0.8-0.6n.a.-1.57- Inflation effect-2.5-1.6-1.9n.a.-1.78'Stock-flow' adjustment1.10.20.0n.a.0.020252026VariablesRevenue from RRF grants (% of GDP)20202021202220232024202520261RRF grants as included in the revenue projectionsn.a.0.50.40.20.10.10.02Cash disbursements of RRF grants from EUn.a.0.20.30.40.30.10.220202021202220232024202520263Total current expenditure0.00.20.10.00.00.00.04Gross fixed capital formation0.00.10.10.10.00.00.05Capital transfers0.00.20.20.10.10.10.06=4+5Total capital expenditure0.00.30.30.20.10.10.020202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.00.08Other costs with impact on revenue0.00.00.00.00.00.00.09Financial transactions0.00.00.00.00.00.00.0Expenditure financed by RRF grants (% of GDP)Other costs financed by RRF grants (% of GDP) 
 
      
 
 
 
 
      
 
 
 
Table A1.9:  RRF Loans 

Source: Annual Progress Report 

Implementation of the set of reforms and investments underpinning the 
extension of the adjustment period  

Table  A1.10  includes  information  on  progress  towards  implementation  of  the  set  of  reforms  and 
investments underpinning the extension of the adjustment period that France committed  to deliver in its 
medium-term fiscal-structural plan as endorsed by the Council. 

Taking  into  account  the  information  provided  by  France  in  its  Annual  Progress  Report,  the  Commission 
finds  that  the  reforms  and  investments  underpinning  an  extension  that  were  due  by  the  30  April  have 
been  implemented  with  the  exception  of  the  reform  of  the  general  reductions  in  social  security 
contributions relative to the minimum wage (SMIC) which delivered slightly lower savings than committed 
(for details, see Table A1.10). 

The R&I underpinning an extension of the adjustment period include reforms stemming from regular and 
reinforced  spending  reviews,  a  reform  of  the  contribution  rate  to  the  pension  scheme  of  local  civil 
servants  (CNRACL),  a  reform  of  the  general  reductions  in  social  security  contributions  relative  to  the 
minimum wage (SMIC) as well as measures to support employment and the labour market, measures to 
boost  economic  and  industrial  competitiveness,  the  business  environment,  innovation  and  R&D,  and 
measures to support and accelerate the green and energy transition (See table A1.10). The reinforcement 
of  spending  reviews  implies  the  effective  and  regular  integration  of  results  of  spending  reviews  in  the 
annual  draft  budgets,  accompanied  by  the  publication  of  annual  monitoring  reports.  The  reform  of  the 
contribution  rate  to  the  CNRACL  aims  to  contribute  to  the  financial  equilibrium  of  this  special  scheme 
responsible for the insurance of local governments and hospitals’ officials and thus to contribute to the 
overall  sustainability  of  the  pension  system  jointly  with  the  2023  pension  reform,  whose  main  net 
financial impacts are to be preserved. The reform of the general reductions in social security contributions 
relative  to  the  minimum  wage  (SMIC)  aims  at  simplifying  and  rationalising  the  existing  labour  cost 
reduction schemes, with the objective of incentivising wage mobility and reducing the risks of low-wage 
traps. 

The measure on the reinforcement of spending reviews adds to previous RRP commitments, namely the 
implementation of a new spending review framework as of 2023, and sets a cumulative target of EUR 8 
bn. permanent public spending savings and tax and social expenditure reductions over the period 2025-

37 

Cash flow from RRF loans projected in the Plan (% of GDP)20202021202220232024202520261Disbursements of RRF loans from EUn.a.0.00.00.00.00.0n.a.2Repayments of RRF loans to EUn.a.0.00.00.00.00.0n.a.20202021202220232024202520263Total current expenditure0.00.00.00.00.00.0n.a.4Gross fixed capital formation0.00.00.00.00.00.0n.a.5Capital transfers0.00.00.00.00.00.0n.a.6=4+5Total capital expenditure0.00.00.00.00.00.0n.a.20202021202220232024202520267Reduction in tax revenue0.00.00.00.00.00.0n.a.8Other costs with impact on revenue0.00.00.00.00.00.0n.a.9Financial transactions0.00.00.00.00.00.0n.a.Expenditure financed by RRF loans (% of GDP)Other costs financed by RRF loans (% of GDP) 
 
      
 
 
2027. According to the French Annual  Progress Report, EUR 4.3 bn. expenditure  savings stemming from 
spending reviews have already been included in the adopted budget for 2025. The annual monitor report 
due by Q3 2025 will need to substantiate these savings while presenting those identified in view of the 
preparation of the 2026 budget. In January 2025, the government enacted by decree an increase of 12 
pps. in employers’ contributions to the CNRACL, with a gradual increase of three points each year between 
2025 and 2028. The increase is additional to the 1 pp increase already enacted in 2024. An anticipation 
and an overachievement of the measure’s quantified objective is thus recorded, with an estimated deficit-
reducing  impact  on  the  CNRACL  pension  scheme  balance  of  EUR  6.6  bn.  A  first  reduction  of  the 
exemptions of health and family contributions vis-à-vis the minimum wage was enacted as of 1st January 
2025 in the social security  budget. The measure is expected to generate EUR 2 bn. of permanent gross 
savings  (i.e.  before  accounting  for  reduced  corporate  income  tax)  in  2025,  thus  slightly  lower  than  the 
objective  in  the  plan  of  at  least  EUR  2.5  bn.  A  second  implementation  phase  is  foreseen  in  the  plan  in 
2026, with a commitment to deliver at least EUR 2.5 bn in additional savings. A number of measures in 
the plan have been assessed as implemented or properly advancing in the context of France’s RRF, while 
other new measures are all assessed to be on track. 

38 

 
 
Table A1.10:Implementation of Reforms and Investments underpinning the extension 

The progress of each backward-looking key step (i.e., those scheduled for completion by 30 April 2025) is classified as either 
‘completed’ or ‘not completed’. The status of forward-looking key steps not yet completed remains blank, as these will be 
assessed by the Commission in future APRs.  
* These key steps correspond to milestones 6-9, 8-7 and 10-1 of France’s RRP, which have been assessed as fulfilled as part of a 
payment request under the RRF. ** These key steps correspond to milestone 7-14.a of France’s RRP, whose assessment is still 
pending in the context of a payment request under the RRF and the table does not prejudge its assessment. 
(1) Each step of this measure is to be repeated yearly over the plan implementation between 2025 and 2029. Effective 
integration of results of spending reviews has already taken place in the 2025 budget. 
(2) The cumulative target of EUR 8 bn permanent savings is related to measures 5 and 11 taken together. It is additional to the 
savings committed to over the period 2025-2027 from measure 8 on the reform of the general reductions in social contributions. 
(3) A first reduction of the exemptions from health and family contributions was enacted in the 2025 social security budget but it 
was lower than expected compared to the original objective. Thus, it is expected to yield EUR 2 bn permanent savings, EUR 0.5 bn 
less than initially expected. 
Source: France's Annual Progress Report and Commission's assessment 

39 

step 1.1: Entry into force of new provisionsQ4 2022Completed *step 1.2: Evaluation of past and complementary reformsQ4 2027Reforms under the Research programming lawstep 2.1: Increase of R&D endowments by compared to 2020Q3 2025step 3.1: Adoption of the lawQ1 2023Completed *step 3.2: First Assembly of stakeholders and compilation of existing reportsQ2 2024Completedstep 3.3: Publication of the decision on the maritime planning and offshore windQ4 2024Completedstep 3.4: Launch of internet site Q1 2025Completedstep 3.5: Second Assembly of stakeholders, publication of the first assessment reportsQ2 2025step 4.1: Financing decisions linked to projects financed under RRPQ4 2024Completed *step 4.2: Ex ante assessment report of macroeconomic impacts of overall planQ4 2025step 4.3: Commitment of the whole envelope of the planQ4 2026step 5.1: Conduct annual spending reviewsQ2 2025Completed (1) **step 5.2: Effective integration of results of spending reviews in the annual draft budgetQ3 2025Completed (1) **step 5.3: Publication of an annual monitoring report showing the achievement of the cumulative target of EUR 8 bn of permanent savings over the period 2025-2027 (2)Q3 2025step 6.1: Entry into force of the new rules stemming from the negotiation among social partnersQ2 2025Completedstep 6.2: Publication of an evaluation report of past and complementary reformsQ4 2027step 7.1: Increase by at least 3 pps (including 1 pp increase already enacted in 2024) in employers’ contributionsQ4 2025Completedstep 7.2: Increase to reach the overall target of 6 pps in employers’ contributionsQ4 2026Completedstep 7.3: Publication of an evaluation report demonstrating the increase enacted and the preservation of the impact of the 2023 pension reform on the financial sustainability of the pension systemQ4 2027step 8.1: First reduction of the exemptions from health and family contributions, to yield at least EUR 2.5 bn additional savingsQ1 2025Not completed (3)step 8.2: Pursuit of reduction of the exemptions from health and family contributions, to yield at least EUR 2.5 bn additional savingsQ1 2026step 9.1: Entry into force of the lawQ4 2025step 9.2: Annual adoption of implementing decreesQ4 2025 -Q4 2028step 9.3: Annual report on impactQ4 2026step 9.4: Annual report on impactQ4 2028Q3 2025Q3 2026Q3 2027Q3 2028Q3 2029Q3 2025Q3 2026Q3 2027Q3 2028Q3 2029ReformsundertheLawontheaccelerationofrenewable energy productionMeasureKey stepsRecommended implementation dateStatus(COM's assessment)Reform of the unemployment insuranceReformsstemmingfromtheevaluationofthequalityof public spending via reinforced spending reviewsReformsandinvestmentsundertheLawongreenindustryInvestments under the multiannual plan France 2030Reformoftheunemploymentinsurancefollowingnegotiations between social partnersReformofthecontributionratetotheCaisseNationaledeRetraitesdesAgentsdesCollectivitésLocales (CNRACL)Reformofthegeneralreductionsinsocialsecuritycontributions relative to the minimum wage (SMIC)ReformsunderthenewLawonsimplificationofthebusiness environmentsteps 10.1 - 10.5: Publication of an annual report on adoption of legal and administrative acts regarding the creation of new industrial sites, financing decisions of new projects and of financial public supportsteps 11.1 - 11.5: Publication of an annual monitoring report showing the achievement of the cumulative target of EUR 8 bn of permanent savings over the period 2025-2027 (2)Reform of tax and social expenditures 
 
      
Cost of ageing  

Total age-related spending in France is projected to remain unchanged overall, at about 29% 
of  GDP,  which  is  among  the  highest  in  the  EU  (see  Table  A1.11).  The  overall  stable  expectation 
reflects  how  a  projected  decline  in  pension  and  education  spending  would  compensate  for  rising 
healthcare and long-term care spending. Public pension spending would start decreasing steadily around 
2035, declining by 0.7 pps of GDP by 2070.  

Public healthcare expenditure is projected at 8.4% of GDP in 2024 (above the EU average of 
6.6%) and is expected to increase by 0.4 pps by 2040 and by a further 0.3 pps by 2070 (98).  

Public  expenditure on  long-term  care (99)  is  projected  at  1.9% of  GDP  in  2024  (above  the  EU 
average  of  1.7%)  and  is  expected  to  increase  by  0.4 pps  of  GDP  by  2040  and  by  a  further 
0.3 pps of GDP by 2070.  

Table A1.11:Projected change in age-related expenditure in 2024-2040 and 2024-2070 

Source: 2024 Ageing Report (EC/EPC). 

National fiscal framework 

The French independent fiscal institution (IFI), the High Council of Public Finance (HCFP), has a 
relatively  narrow  mandate,  focusing  on  assessing  the  realism  of  government  forecast,  the 
consistency  of  annual  versus  multi-year  public  finance  targets,  the  compliance  with  public 
expenditure targets  and  monitoring compliance  with  the fiscal  rules. Despite being  a euro  area 
Member State, the HCFP only assesses government forecasts and does not endorse nor produce its own 
forecasts. The HCFP is deeply embedded in the National Audit Office (NAO), with staff working part time 
for both the HCFP and the NAO and, after a recent reform, the HCFP budget now being fully integrated 
into the NAO budget. While this does not pose an immediate threat to its independence, it could make it 
more  difficult  for  the  public  to  discern  the  particular  role  of  the  HCFP.  The  policy  dialogue  with  the 
government is not well developed and the HCPF reports issues regarding access to information on public 
finances forecasts, where access to certain requested information sometimes has been refused.   

France  is  a  frontrunner  on  green  budgeting.  Starting  with  the  2020  budget,  the  country  has  been 
scoring  environmentally  and  climate  favourable,  neutral,  mixed  and  unfavourable  expenditures, 

(98)  Key performance characteristics, recent reforms and investments are discussed in Annex 11 ‘Health and health systems’.   

(99)  The quality and the accessibility of the long-term care system are covered in Annex 9 ‘Social policies’. 

40 

FR29.2-0.20.40.4-0.60.029.2FREU24.30.50.30.4-0.30.925.2EUFR29.2-0.70.70.7-0.8-0.129.2FREU24.30.20.60.8-0.41.325.6EUage-related expenditure 2024 (% GDP)change in 2024-2040 (pps GDP) due to:age-related expenditure 2040 (%GDP)pensionshealthcarelong-term careeducationtotalage-related expenditure 2024 (% GDP)change in 2024-2070 (pps GDP) due to:age-related expenditure 2070 (%GDP)pensionshealthcarelong-term careeducationtotal 
 
 
   
 
 
 
considering the six dimensions of the EU Taxonomy. Both budget appropriations and tax expenditures are 
assessed and published as an annex to the budget bill. France has continuously refined and deepened its 
tagging  methodology  and  moved  towards  actively  informing  the  budgetary  process:  Since  the  2024 
budget,  green  budgeting  is  integrated  into  the  budget  negotiation  process  rather  than  only  providing 
transparency ex-post. Detailed notes and explanations on green tagging are publicly shared in the open 
data  portal  of  the  Ministry  for  the  Economy,  Finance  and  Industrial  and  Digital  Sovereignty  (100).  As  per 
France's  2024  finance  law,  green  budgeting  annexes  have  become  mandatory  also  for  the  subnational 
level, including local authorities with more than 3 500 inhabitants. 

Table A1.12:Fiscal Governance Database Indicators 

The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at the country level based 
on i) the legal base, ii) how binding the rule is, iii) monitoring bodies, iv) correction mechanisms, and v) resilience to shocks. The 
Medium-Term Budgetary Framework Index (MTBFI) shows the strength of the national MTBF based on i) coverage of the 
targets/ceilings included in the national medium-term fiscal plans; ii) connectedness between these targets/ceilings and the 
annual budgets; iii) involvement of the national parliament in the preparation of the plans; iv) involvement of independent fiscal 
institutions in their preparation; and v) their level of detail. A higher score is associated with higher rule and MTBF strength. 
Source: Fiscal Governance Database 

(100) https://explore.data.gouv.fr/fr/datasets/679186f95fc439286abed9b5/#/resources/0bd10238-331b-4511-800a-

1e787ee108db 

41 

2023FranceEU AverageCountry Fiscal Rule Strength Index (C-FRSI)12.9814.52Medium-Term Budgetary Framework Index (MTBFI)0.780.73 
 
      
 
 
ANNEX 2: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  France’s  tax  system.  It  includes 
information on: (i) the tax mix; (ii) competitiveness 
and  fairness  aspects  of  the  tax  system;  and  (iii) 
tax collection and compliance.  

France has the highest percentage in the EU 
of  tax  revenues  as  a  proportion  of  GDP,  but 
fiscal  sustainability  is  a  concern.  With  tax 
revenues  equivalent  to  43.8%  of  GDP  in  2023, 
France is significantly above the EU-27 average of 
39%,  despite  this  percentage  for  2023  being 
slightly  below  the  levels  in  previous  years  (2012-
2022).  The  main  source  of  tax  revenue  in  2023 
was  taxes  on  labour  (51.7%  of  all  tax  revenue), 
which  was  close  to  the  EU  average,  followed  by 
taxes  on  consumption  (24.7%  of  all  tax  revenue), 
which  was  below  the  EU  average,  and  taxes  on 
capital  (23.6%  of  all  tax  revenue),  which  was 
above the EU average (Graph A2.1).  

As is the case with the rest of the EU, there 
is  still  scope  in  France  to  make  greater  use 
of  environmental  and  health 
taxation, 
especially  to  strengthen  the  application  of  the 
‘polluter  pays’  principle.  It  is  noteworthy  that 
France  has  no  tax  on  fertilisers  and  pesticides. 
Environmental  and  health  taxes  accounted  for 
around 6% of total tax revenue in 2022. Revenue 
from environmental taxes as a percentage of GDP 
was  2.1%,  close  to  the  EU  aggregate  of  2%.  The 
effective carbon-tax  rate, EUR 87.90 per tonne of 
CO2  equivalent  in  2023,  is  slightly  above  the  EU-
27 average (EUR 84.80).   

Graph A2.1: Tax revenue shares in 2023 

Source: Taxation Trends Data, DG TAXUD 

France  has  high  statutory  and  effective 
corporate tax rates, and statutory corporate-
income tax will temporarily increase in 2025 
for  big  companies.  France’s 
top  statutory 
corporate-income-tax  rate  is  25.8%  (compared 
with  an  EU  average  of  21%)  and  its  forward-
looking  effective  corporate-tax  rate  stands  at 
22.6%, one of the highest in the EU (against an EU 
average  of  18.9%).  France  is  also  levying  an 
exceptional  surtax  on  corporate  income  of  20.6% 
in 2025 for companies with total sales above EUR 
1 billion. This exceptional surtax will rise to 41.2% 
for companies with total sales above EUR 3 billion. 
Some 440 companies are likely to be affected by 
these  surtaxes,  which  will  raise  EUR 7.8  billion.  A 
share-buyback tax for companies headquartered in 
France with turnover greater than EUR 1 billion is 
also  being  created,  and  this  is  expected  to  raise 
EUR 400 million. 

Taxes on production are high in France, even 
though  they  have  decreased  since  2021. 
These  taxes  on  companies  raised  an  amount 
equivalent  to  3.1%  of  GDP  in  2023,  the  second 
highest in the EU,  although this is down from the 
3.6% they raised in France in 2020. Among these 
production taxes, taxes on turnover are particularly 
detrimental  to  competitiveness (101).  The  ‘social 
solidarity  contribution  of  firms’  (C3S)  is  levied  on 
any 
than 
turnover  by  companies  of  more 
EUR 19 million  and  raised  EUR  4.8  billion  in  tax 
revenue  in  2023.  The  ‘contribution  on  the  value 
added  of  firms’  (CVAE)  raised  EUR  5.3  billion  in 
2023, and its gradual  abolition, originally planned 
for 2027, has now been postponed to 2030. 

Tax  expenditures  remain  high  and  only 
marginal  cuts  are  planned  for  2025.  Tax 
expenditures  amounted  to  EUR  82.9  billion  in 
2023,  equivalent  to  6.8%  of  total  tax  revenues. 
France’s  national  Court  of  Auditors  has 
recommended a better evaluation of the efficiency 
of  these  tax  expenditures (102).  The  largest  single 
tax  expenditure,  the  R&D  tax  credit  (Crédit  Impôt 
Recherche,  CIR),  amounted  to  EUR  7.3  billion  in 
2023.  In 2025, adjustments will be made (patent 
costs  and  technological  watch  will  cease  to  be 
considered  as  R&D  costs,  and  additional  support 
for  the  hiring  of  post-doctoral  researchers  will  be 

(101) Ph. Martin et A. Trannoy (2019), Les notes du CAE, Les 

impôts sur (ou contre) la production. 

(102) Ecalle, F. (2024). Tax expenditures country report: France, 

Council on Economic Policies (CEP). 

42 

51.226.921.951.724.623.6Tax revenue shares in 2023, France (outer ring) and EU (inner ring)Taxes on labourTaxes on consumptionTaxes on capital 
 
   
 
 
 
 
 
Table A2.1:  Taxation indicators 

(1) Forward-looking effective tax rate (KPMG).       
(2) A higher value indicates a stronger redistributive impact of taxation. 
(*) EU-27 simple average. 
(**) Forecast value for 2023. For more details on the VAT gap, see European Commission, Directorate-General for Taxation and 
Customs Union, VAT gap in the EU - 2024 report,  https://data.europa.eu/doi/10.2778/2476549  
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, OECD 

discontinued)  ,  which  is  likely  to  lead  to  EUR  400 
million  in  expenditure  savings.  The  innovation  tax 
credit, a scheme reserved for SMEs giving them a 
tax  credit  on  expenses 
to  design 
prototypes  or  install  pilots  of  new  products,  will 
also see its rate lowered from 30% to 20% as of 
2025.  

incurred 

the 

location  of 

the  company  and 

France  has  recently  developed  special  tax 
credits for green investments. In 2024, France 
introduced  tax  credits  for  green  investments  in 
strategic  sectors  (batteries,  solar  panels,  wind 
turbines  and  heat  pumps),  ranging  from  20%  to 
60% of eligible expenditures depending on the size 
of 
the 
investments.  France  also  reformed  its  vehicle  tax 
scheme    by  raising  tax  levels  and  penalties  for 
polluting  vehicles.   The  2025  Finance  Bill 
introduced  an  annual  incentive  tax  aimed  at 
encouraging  the  greening  of 
large  corporate 
vehicle fleets. France also reformed the benefit-in-
kind  scheme  associated  with  the  provision  of  a 
vehicle  to  better  reflect the  actual  part  of  private 
use  of  company  vehicles  and  reinforce  the 
incentive to favour electric vehicles with the lowest 
carbon footprint. 

The  efficiency  of  France’s  CIR  tax  credit 
needs  to be improved. The  CIR  was  not  able  to 
counteract  the  deterioration  in  the  attractiveness 
of  France  as  a  location  for  R&D  by  foreign 
multinational companies. R&D spending by foreign 
multinational  companies  in  France  is  relatively 
lower than that of non-foreign French companies, 
and lower than for the same foreign groups in the 
rest of the world. 

tax  authorities  provide 

France  is  acting  to  decrease  tax  uncertainty 
for  foreign  firms,  by  ensuring  compliance 
costs  are  slightly  below  the  EU  average.  The 
French 
international 
investors  with  a  single  point  of  contact, 
Tax4Business,  responding  in  their  language.  It 
gives foreign companies assurances over the legal 
framework that will be applied to them through a 
written 
tax 
authorities  covering  the  companies’  national  and 
local  taxes.  Business  regulation  is  identified  in 
France,  as  it  is  elsewhere  in  the  EU (103),  as  a 
barrier  to  investment.  The  estimated  cost  of 
complying  with  taxes  in  France  is  close  to the  EU 

communication 

issued  by 

the 

(103) The annual EIB Group Survey on Investment and Investment 

Finance (EIBIS), 2023. 

43 

FRMedian (EU-27)2010202120222023202420102021202220232024Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)42.245.145.843.837.840.239.739.0Taxes on labour (% of GDP)22.222.823.122.719.820.520.120.0of which, social security contributions (SSC, % of GDP)16.014.714.814.512.913.012.712.7Taxes on consumption (% of GDP)10.711.711.310.810.911.210.910.5of which, value added taxes (VAT, % of GDP)6.87.47.57.36.87.37.47.1Taxes on capital (% of GDP)9.410.611.410.47.18.58.78.5Personal income taxes (PIT, % of GDP)7.69.49.89.58.69.69.49.3Corporate income taxes (CIT, % of GDP)2.32.93.42.92.22.93.23.2Total property taxes (% of GDP)4.04.24.13.71.92.22.11.9Recurrent taxes on immovable property (% of GDP)2.92.32.22.01.11.11.00.9Environmental taxes (% of GDP)1.92.22.01.82.52.42.12.0Effective carbon rate in EUR per tonne of CO2 equivalentsNA89.5NA87.9NA86.0NA84.8Tax wedge at 50% of average wage (single person) (*)34.119.220.420.220.433.931.831.531.531.8Tax wedge at 100% of average wage (single person) (*)49.946.947.146.947.240.939.939.940.240.3Corporate income tax - effective average tax rates (1) (*)32.725.222.622.621.319.319.118.9Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)7.910.810.810.08.68.27.97.7Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)4.37.835.532.6VAT gap (% of VAT total tax liability, VTTL) (**)6.06.09.76.67.0FranceEU-27Progressivity & fairnessTax administration & complianceBy tax baseSome tax types 
 
 
  
 
average,  and  slightly  below  the  EU  average  when 
expressed as a percentage of turnover (104). 

The  tax  and  benefits  system  and  the 
progressivity  of  labour  taxation  help  to 
reduce  inequalities,  although  joint  taxation 
holds  back  the  participation  of  second 
earners in the labour market. In 2023, income 
inequality  as  measured  by  the  Gini  index  was 
reduced  by  10  points  thanks  to  taxes  and  social 
transfers  (compared  to  an  EU  average  of  7.7 
points).  The  progressivity  of  labour  taxation  also 
result:  France  has  a 
contributes 
(105) 
comparatively  high 
tax  wedge 
labour 
especially at higher earnings levels, but a relatively 
low  labour  tax  wedge  at  very  low  earnings  levels 
(Graph  A2.2).  Direct  taxes  paid  by  households  in 
the  fifth  quintile  (i.e.  the  highest-earning  20%  of 
households)  take  up  40%  of  their  gross  income, 
the second highest percentage in the EU.  

this 

to 

Graph A2.2: Tax wedge for single and second 
earners, % of total labour costs, 2024 

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

Taxes  on  capital  remain  lower  than  on 
labour, while French taxes on real estate are 
high  compared  with  EU  average.  France  has 
one  of  the  highest  shares  of  recurrent  property 
taxation as a share of total taxation in the EU, at 
4.6% 
in  2023.  Furthermore,  France  has  an 
additional  tax  on  real  estate,  the  ‘impôt  sur  la 
fortune  immobilière’,  for  households  with  at  least 

(104) DG GROW report, 2022,  Tax Compliance Costs SMEs 

(105) The  tax  wedge  is  defined  as  the  sum  of  personal  income 
social-security 
taxes  and  employee  and  employer 
contributions  net  of  family  allowances,  expressed  as  a 
percentage of total labour costs (the sum of the gross wage 
and social-security contributions paid by the employer). 

44 

in 

EUR 1.3 million 
real-estate  assets  with  a 
progressive rate running from 0.5% to 1.5%. Since 
2017,  income  tax  on  dividends,  interest,  capital 
gains  and 
life-insurance  contracts  has  been 
decreased  to  a  flat  rate  of  30%,  well  below  the 
highest  brackets  of  labour  taxation,  at  45%, 
making  capital  income  less  taxed  than  labour 
income, which may lead to increases in inequality. 

Inequality  has  increased  since  2003,  led  in 
particular by an increase in the incomes and 
wealth  of  France’s  wealthiest  households. 
The  incomes  of  the  top  0.1%  of  highest-earning 
households in France have increased yearly in real 
terms  from  2003  to  2022  by  3%  compared  with 
an annual increase of only 0.5% for the rest of the 
population (106).  The  Gini  index  of  market  incomes 
for  households  in  France  increased  from  0.45  to 
0.47  between  2003  and  2022,  mainly due  to  the 
increased  Gini  within  the  top  0.1%  of  incomes, 
within which the Gini increased from 0.28 to 0.40 
over the same period. A temporary surtax in 2025 
on 
the  highest-earning  households  with  a 
reference taxable income above EUR 250 000 for 
a  single  person  (EUR  500 000  for  a  couple),  is 
likely to be paid by  24 000 households and bring 
in EUR 1.9 billion in revenues. 

to  attract 

To  become  more  attractive  to  high  earners 
from  overseas,  France  has  set  up  an 
‘impatriation’  regime.  This  specific  tax  regime, 
foreign  managers  and 
designed 
employees,  enables  income  tax  exemptions  under 
certain  conditions  and  for  a  period  of  up  to  eight 
years  for  newcomers  to  France.  The  budgetary 
cost  of  this  regime  amounted  to  EUR  322  million 
in 2023, for an average benefit of EUR 20 000 per 
beneficiary. 

improve  tax 
France  could  do  more  to 
compliance.    France’s  VAT  compliance  gap  (the 
difference between VAT total tax liability  - VTTL - 
and  VAT  revenue)  was  stable  in  2021  and  2022 
(6%  of  VTTL),  slightly  below  the  EU  average  of 
7.0%  in  2022.  Although  a  smaller  gap  is  an 
indicator of the effectiveness of VAT enforcement 
and  compliance,  there  is  still  room  for  France  to 
improve  in  this  area.  The  VAT  compliance  gap 
remains  substantial  in  absolute  terms.  Amongst 
the risks of non-compliance underlined in the VAT 
gap in the EU 2024 report were: (i)  faster growth 

(106) DGFIP Analysis no 8, Incomes and wealth of the wealthiest 

households in France, January 2025. 

20.441.147.254.247.520253035404550556050100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - FRSingle earner - EU averageSecond earner -  FRSecond earner -  EU average 
   
 
 
in  the  services  sector  in  2022;  (ii)  e-commerce 
growth declining between 2018 and 2022; and (iii) 
a surge in bankruptcy declarations in 2022 (up by 
52.8%). Tax arrears have been stable in France in 
recent  years  (2018-2021),  hovering  between  4% 
total  revenue  collected.  They 
and  4.5%  of 
increased in 2022 (to 7.8%) although they remain 
significantly  below  the  average  for  the  EU-27 
(32.6%).  

45 

 
PRODUCTIVITY 
ANNEX 3: INNOVATION TO BUSINESS  

France  remains  a  strong  innovator (107),  but 
its  position  as  a  scientific  and  technological 
powerhouse  worldwide  is  eroding,  hindering 
its competitiveness. Total R&D intensity (108) fell 
to 2.19% of GDP in 2023, below the EU average of 
2.24%  and  moving  further  away  from  the  target 
of  3%  initially  set  for  2020.  France’s  declining 
scientific  performance  worldwide,  resulting  partly 
from more than a decade of subdued public R&D 
investment,  raises  concerns  over  the  country’s 
ability to continue using its strong science base to 
position  itself  as  a  key  player  in  the  global  tech 
race.  France’s  innovation  performance  is  still 
hindered  by  stagnating  business  R&D  investment 
and  a  lack  of  efficiency  of  public  support  for 
business  innovation.  This,  coupled  with  a  slow 
uptake  of  digital  technologies  by  firms,  weighs 
heavily  on  productivity.  While  France  actively 
supports disruptive innovation and the emergence 
of  new  tech  leaders,  its  venture  capital  market 
may,  despite  its  expansion,  prove  insufficient  to 
meet  the  growing  financing  needs  of  France’s 
vibrant start-up ecosystem.  

Science and innovative ecosystems 

increase  public  R&D  funding  until  2030 (110). 
However,  ongoing  efforts  by 
the  French 
government 
reduce  public  spending  are 
expected to affect the investment pace set in the 
Research  Law,  which  could  weaken  its  ambition 
and impact. 

to 

Business innovation 

Business  R&D  intensity  is  stagnating,  at  a 
level well below that of innovation leaders in 
the  EU  and  worldwide.  Between  2013  and 
2023,  business  R&D  intensity  remained  stable  at 
around  1.44%, 
the 
investment  levels  and  trends  observed  in  other 
strong  R&I  performing  countries  in  the  EU  and 
worldwide (see Graph A3.1).  

in  stark  contrast  with 

Graph A3.1: Business R&D investment (as % of 
GDP), 2013-2023 

to 

is  weakening,  which 

France’s  position  as  a  scientific  powerhouse 
could 
worldwide 
undermine  its  innovative  potential.  Between 
intensity (109) 
2009  and  2022,  public  R&D 
experienced  a  slight  but  steady  decline.  This  has 
the  country’s  scientific 
been  detrimental 
performance  in  the  face  of  increased  global 
competition  especially  from  China,  which  has 
emerged  as  a  leading  scientific  powerhouse.  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  8.8%  in  2021,  below  the  EU  average  of 
9.6%.  To  counteract  this  trend  and  give  fresh 
impetus  to  French  research,  the  Research  Law 
2021-2030 has set a budgetary path to gradually 

(1) 2023 or latest available year 
Source: Eurostat 

In  terms  of  sectoral  breakdown,  business  R&D 
spending  remains  concentrated  largely  in  the 
pharma  and  automobile  sectors  (see Graph  A3.2). 
However,  there  is  discernible  expansion  in  the 
software,  electronic  and  aerospace  &  defence 
sectors. This points to the French economy slowly 
transitioning  towards  more  knowledge-intensive 
sectors (outside pharma), which are expected to be 
given a boost thanks to France 2030 (see below).   

(107) According to the 2024 European Innovation Scoreboard.  

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

percentage of GDP. 

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

percentage of GDP. 

(110) The implementation of the Research Law is a commitment 

under the French recovery and resilience plan. The law is also 
part of the set of reforms and investments underpinning an 
extension of the fiscal adjustment period under France’s 
medium-term fiscal-structural plan.  

46 

00.511.522.53GermanyBelgiumUSAChinaFrance20132023EU average 
 
 
 
   
 
 
Graph A3.2: R&D investment of French companies 
among world’s top 2 000 R&D investors, by 
sector of activity (2018-2023) 

macroeconomic impacts of the plan is expected by 
the  end  of  2025,  as  envisaged  in  France’s 
medium-term fiscal-structural plan. 

France’s  innovation  performance  is  not  on  a 
par with  the  high level  of  public  support for 
business innovation. So far, the large volume of 
public  support  for  business  innovation  –  which  is 
the highest in the EU as a percentage of GDP (115) 
and  relies  significantlyon  a  tax  credit  scheme 
called crédit impôt recherche (CIR) – has not had a 
tangible effect on innovation output, as measured 
Instead,  France’s 
for  example  by  patents. 
international  patenting  activity  has  steadily 
declined  over the  last  decade.  The  CIR  was  found 
to  have  positive  effects  on  small  and  medium-
sized  enterprises  (SMEs)  –  both  in  terms  of  R&D 
activity  and  economic  performance  –  but  no 
significant  effects  on  larger  firms (116).  Looking 
more  specifically  at  output  additionality  (i.e.  the 
effects  of  tax  credits  on  innovation  outputs  such 
as  patents),  a  study  from  the  French  Conseil 
d'Analyse  Economique  showed  that  very  small 
firms generate 1.2 patents per million euro of tax 
credit received, while large firms produce only 0.5. 
This indicates a return 2.5 times higher for smaller 
businesses.  This  negative  relationship  between 
return  on  investment  and  firm  size  is  even  more 
pronounced  when  considering  the  ‘quality’  of 
innovation,  as  measured  for  example  by  the 
number  of  triadic  patents  (which  protect  an 
invention  in  Europe,  the  USA  and  Japan).  In  this 
case,  the  return  is  estimated  to  be  2.9  times 
higher for very small firms. Nevertheless, although 
large firms accounted for just under 3% of all CIR 
beneficiaries in 2021, they benefited from 42% of 
the overall amount of the CIR (117). Despite recent 
recommendations  to  reform  the  CIR (118),  only  a 
technical  adjustment  was  introduced  in  the  2025 

Source: 2024 EU Industrial R&D Investment Scoreboard 

of 

the 

emergence 

Thanks  to  the  investment  plan  France  2030, 
the  country  is  taking  concrete  steps  to 
encourage 
new 
technological  leaders  in  key  sectors  and 
renew 
its  economic  fabric.  France  2030, 
launched  in  2021,  is  mobilising  EUR  54  billion  to 
support  the  whole  research-innovation  continuum 
(from  basic  research  to  industrial  deployment)  in 
key  sectors,  including  high  R&D-intensive  sectors 
such  as  AI,  quantum  and  cloud .  The  investment 
logic of France 2030 is to spend half of the funds 
on ‘emerging’ innovators (111) more likely to foster 
disruptive  innovation  and  the  renewal  of  the 
productive fabric. Particular attention is placed on 
supporting deep tech (112) as well as on industrial-
oriented  start-ups (113),  seen  as  an  important 
potential source of employment and value creation 
throughout  the  country.  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 
in 
greater 
prioritisation of the investments to maximise their 
impact (114).  An  ex-ante  assessment  of 
the 

recommends 

particular), 

but 

(111) Understood as companies with less than 12 years of activity 

(115) 0.445% of GDP, more than twice the EU average of 0.204%.  

or which are doing a radical turnabout. 

(116)

(112) Through the creation of ‘pôles universitaires d’innovation’ (to 

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

encourage the transfer of research results between 
academia and industry) and a dedicated deep tech fund that 
provides equity support to young innovative companies at 
different stages of their development.   

(113) Understood as a start-up that develops product or process 
innovation ultimately involving the serial production of 
goods. 

(114)https://www.gouvernement.fr/sites/default/files/contenu/piece
jointe/2023/06/rapport_devaluation_csia_france_2030_vf_-
_publique.pdf. 

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

(117) Le crédit d’impôt recherche en 2021, études et statistiques, 

available at : https://www.enseignementsup-
recherche.gouv.fr/fr/credit-d-impot-recherche-etudes-et-
resultats-statistiques-46391. 

(118) In a 2022 report, the Council of Mandatory Contributions 
(CPO) examined different scenarios to reform the CIR and 
called in particular for the CIR ceiling to be lowered (to bring 
it closer to that of other OCED countries) as well as a better 
targeting of the CIR towards SMEs and midcaps.  

47 

0%5%10%15%20%25%30%35%Pharma & biotechAutomobileAerospace & defenceSoftware & computer servicesElectronic20182023 
        
 
 
 
budget (119), but no structural reform seems to be 
currently envisaged. More generally, systematising 
the  evaluation  of  tax  aid  schemes  that  support 
innovation could be highly beneficial, as called for 
by the Conseil  des Prélèvements Obligatoires (120), 
a  body  associated  with  the  French  Court  of 
Auditors.  

Indicators  suggest  that  France’s  complex 
knowledge  valorisation  ecosystem  may  not 
be  performing  optimally.  France  continues  to 
score  below  the  EU  average  for  public  R&D 
financed  by  businesses  and  the  share  of  public-
private  co-publications,  while  above 
the  EU 
average, has not progressed significantly over the 
last  decade.  This  reflects  a  limited  inclination 
among  French  businesses  to  engage  in  contracts 
and  collaborations  with  public  research 
labs, 
despite  a  wide 
range  of  structures  and 
instruments  designed  to  support  and  incentivise 
such  cooperation.  The  suboptimal  performance  of 
the  schemes  aimed  at  bridging  the  gap  between 
research  and  the  economy,  such  as  the  Sociétés 
d’Accélération  du  Transfert  de  Technologies 
de  Recherche 
(SATTs) 
Technologique,  was  highlighted 
in  the  2019 
evaluation  report  of  the  Investments  for  the 
Future  Programme  (121).  However,  since  then,  no 
major reform of the SATT model has been carried 
out. In 2023, the ‘pôles universitaires d’innovation’ 
(PUI)  initiative  was  introduced  to  strengthen  local 
innovation  ecosystems,  building  on  existing 
organisations  and  schemes.  Assessing  this  new 
initiative and its articulation with existing actors, in 
particular the SATTs will be key to ensure that the 
newly  established  PUI  contribute  to  improving 
efficiency,    without  adding  further  complexity  to 
the existing landscape. 

Instituts 

and 

the 

Challenges  persist  in  the  digitalisation  of 
the  adoption  of  advanced 
SMEs  and 
technologies 
on 
firms,  weighing 
productivity. French SMEs continue to show poor 
results in basic digitalisation, with only 68.45% of 
SMEs  reaching  at  least  a  basic  level  of  digital 
intensity  in  2024,  up  from  63.53%  in  2022  but 

by 

(119) This adjustment aims to refocus the CIR on R&D by excluding 
expenditure linked to technology watch and intellectual 
property from the eligible expenditure base. 

(120) Ibid. 

still  below  the  EU  average  of  72.91%.  While 
progress has been made, France is failing to close 
the  gap  with  its  EU  peers.  Given  the  size  of  its 
economy, this shortfall puts into jeopardy the EU-
level  Digital  Decade  target  of  90%  of  SMEs 
digitalised  by  2030.  The  main  programme  to 
digitalise SMEs, France Num, provides diagnostics, 
training and funding for SMEs, but mainly targets 
very small businesses (fewer than 10 employees), 
leaving  larger  SMEs  with  less  tailored  support. 
Beyond  basic  digitalisation, 
the  adoption  of 
advanced  technologies  by  French  firms  is  also 
below the EU average. While the uptake of AI has 
picked  up  speed  (rising  to  9.91%  in  2024,  from 
5.88% in 2023), it remains below the EU average 
of  13.48%.  Similarly,  the  adoption  of  data 
analytics and advanced cloud services remains far 
from  the  EU-level  Digital  Decade  target  of  75% 
adoption  by  2030.  A  key  challenge  for  France  is 
therefore 
these  advanced 
technologies  diffuse  across  the  broader  business 
sector 
improve  overall  productivity  and 
to 
competitiveness.   

to  ensure 

that 

Financing innovation 

France  is  nurturing  its  dynamic  start-up 
ecosystem,  which  is  attracting  increasing 
venture  capital  (VC)  investment.  However, 
the  French  VC  market  may,  despite  its 
expansion,  prove  insufficient  to  meet  the 
massive financing needs of scale-ups. The last 
10  years  have  seen  a  six-fold  increase  in  the 
number  of  French  unicorns  (which  reached  42  in 
2024), making France the second-largest producer 
of  unicorns  in  the  EU  after  Germany (122).  This 
growth  is  largely  driven  by  France’s  ability  to 
attract investors and the growing availability of VC 
investment  which,  as  a  percentage  of  GDP,  has 
quadrupled  over  the  last  10  years.  France  has 
been  particularly  active  in  supporting  the  growth 
of  its  VC  market.  Since  2019,  efforts  have  been 
made 
institutional 
investors to support VC funds, including late-stage 
funds, as part of the ‘Tibi’ initiative (123). However, 
relative  to  GDP,  French  VC  remains  undersized 
compared  to  global  competitors  and  European 

in  particular  to  encourage 

(121) « Le PIA, un outil à préserver, une ambition à refonder », 
Comité de surveillance des investissements d’avenir, 
November 2019. 

(122) State of European Tech 2024. 

(123) https://www.tresor.economie.gouv.fr/banque-assurance-
finance/financer-la-iveme-revolution-industrielle. 

48 

 
 
 
peers. This raises concerns over its ability to meet 
the  massive  financing  needs  of  French  firms  in 
their expansion stage.  

than  40 000  students  annually  and 

more 
establishing 1 200 new businesses. 

Innovative talent 

in 

to 

underpin 

developing 

in  the  EU 

insufficient 

leadership.  With 

France  can  count  on  a  rich  talent  pool  for 
R&I,  but  the  availability  of  ICT  specialists 
remains 
its 
technological 
the  second 
highest proportion of new science and engineering 
graduates 
(per  thousand  of  the 
population  aged  25-34),  France  has  a  key 
cutting-edge 
advantage 
technologies.  However,  ICT  specialists  make  up 
only  4.7%  of  the  workforce,  in  line  with  the  EU 
average  but  still  well  below  the  national  Digital 
Decade target of 10% by 2030. In the field of AI 
specifically,  the  French  AI  Commission  considers 
that, to become a key global player, France would 
need  to  attract  between  10%  and  15%  of  the 
3 000  to  5 000  highly  qualified  international 
profiles  likely  to  have  a  significant  impact  on  the 
development of the AI ecosystem (124).  In addition 
to  dedicated  measures  to  attract  foreign  talent, 
the French AI Commission stresses the importance 
of  strengthening  public  research  and  making 
research  careers  in  France  more  attractive  (in 
terms  of  job  security  and  pay),  beyond  the 
measures introduced under the Research Law. 

level 

remains 

secondary 

Entrepreneurship  education  in  France  at  primary 
and 
relatively 
underdeveloped.  However,  progress  was  made  in 
higher  education.  According  to  the  2023  Global 
Entrepreneurship  Monitor,  France  ranks  last  in 
entrepreneurship  education at school  level  among 
inadequate 
the  16  richest  countries,  due  to 
evaluation  mechanisms,  the 
lack  of  national 
coordination  and  the  absence  of  entrepreneurship 
education  from  the  school  curricula.  However, 
efforts 
promote 
been  made 
entrepreneurial  skills  in  higher  education  through 
national  initiatives  such  as  the  PEPITE  (Pôles 
le  Transfert  et 
l’Innovation, 
Etudiants  pour 
l’Entrepreneuriat)  and  SNEE 
(Statut  National 
d’Étudiant-Entrepreneur)  programmes,  supporting 

have 

to 

(124) IA : notre ambition pour la France, Commission de 

l’intelligence artificielle, March 2024. 

49 

 
 
Table A3.1:  Key innovation indicators 

(1) EU average for the last available year or the year with the largest number of country data. 
Source: Eurostat, DG JRC, OECD, Science-Metrix (Scopus database), Invest Europe, European Innovation Scoreboard 

50 

R&D intensity (gross domestic expenditure on R&D as % of GDP)2.232.202.272.212.222.19:2.243.45Public expenditure on R&D as % of GDP0.750.720.740.710.710.71:0.720.64Scientific publications of the country within the top 10% most cited publications worldwide as % of total publications of the country 10.29.18.98.8:::9.612.3Researchers (FTE) employed by public sector (Gov+HEI) per thousand active population3.43.84.04.14.14.2:4.2:International co-publications as % of total number of publications47.954.958.958.758.359.5:55.939.3Business enterprise expenditure on R&D (BERD) as % of GDP1.441.441.491.451.471.44:1.492.70Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP0.340.39:0.340.32::0.400.30Researchers employed by business per thousand active population5.36.16.87.07.17.0:5.7:Patent applications filed under the Patent Cooperation Treaty per billion GDP (in PPS €)4.23.93.53.33.3::2.8:Employment share of high-growth enterprises measured in employment (%)14.619.447.3::::12.51:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::63.53:68.4572.91:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%):::::33.9:33.17:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%):::25.28:22.95:38.86:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%):::6.67:5.889.9113.48:Public-private scientific co-publications as % of total number of publications8.28.78.99.19.29.1:7.78.9Public expenditure on R&D financed by business enterprises (national) as % of GDP0.0350.0340.0340.0320.032::0.0500.020Total public sector support for BERD as % of GDP0.4170.4280.4510.445:::0.2040.251R&D tax incentives: foregone revenues as % of GDP0.2780.2870.2940.283:::0.1020.141BERD financed by the public sector (national and abroad) as % of GDP 0.1390.1410.1580.1620.160::0.1000.110Venture capital (market statistics) as % of GDP (calculated as a 3-year moving average)0.0190.0310.0590.0770.0960.092:0.078Seed stage funding share (% of total venture capital)5.614.29.69.06.96.5:7.3Start-up stage funding share (% of total venture capital)13.630.141.837.437.237.4:44.0Later stage funding share (as % of total venture capital)80.955.748.653.655.956.2:48.7New graduates in science & engineering per thousand population aged 25-34:22.224.024.724.6::17.6:Graduates in the field of computing per thousand population aged 25-34:2.93.94.04.5::3.6:2023EU average (1)USA2024Headline indicatorScience and innovative ecosystemsR&D investment & researchers employed in businesses Public support for business innovationInnovation outputsDigitalisation of businessesAcademia-business collaborationFinancing innovationInnovative talent20222021France201220172020 
 
   
 
ANNEX 4: MAKING BUSINESS EASIER 

France’s business environment has improved 
in  recent  years,  but  there  is  still  room  for 
further  progress.  France  has  implemented  a 
series  of  reforms  to  promote  entrepreneurship, 
scale up businesses and streamline administrative 
processes.  Digital  infrastructure  has  substantially 
improved,  in  line  with  the  Digital  Decade  targets. 
Supply constraints are easing. However, challenges 
such  as  demand  constraints,  economic  policy 
uncertainty,  energy  costs  and  the  non-availability 
of skilled labour continue to impact firms’ activity 
and  investment  decisions.  More  SMEs  face  late 
payments  in  France  than  in  other  Member  States 
and  this  is  disrupting  their  cash  flow.  Regulatory 
restrictions  in  professional  services  and  the  retail 
sector 
remain  significant.  French  businesses 
(particularly  SMEs)  have  yet  to  fully  leverage  the 
growth opportunities of being in the single market. 

Economic framework conditions 

Demand  constraints  weigh  on  business 
activity  and  investment.  Demand  constraints 
(current  and  expected)  are  the  most  significant 
drag  on  activity,  as  perceived  by  60%  of  SME 
managers according to a survey by Bpifrance and 
Rexecode (125).  The  increase  in  the  number  of 
bankruptcies  is  due  to:  demand  constraints;  high 
energy costs; the still relatively high interest rates 
on corporate loans and the obligation to reimburse 
the loans guaranteed by the State granted during 
the  COVID-19  pandemic.  There  were  66 000 
bankruptcies in 2024 (126) – the highest level since 
2010. SMEs continue to limit their investment: only 
43%  of  SMEs 
(down  by 
9 percentage points on 2023).  

in  2024 

invested 

that 

is  harming 
Economic  policy  uncertainty 
leaders 
business  confidence.  56%  of  SME 
consider 
the  current  economic  policy 
uncertainty  is  having  a  strong  impact  on  their 
company’s activity. Businesses are concerned  that 
France’s  fiscal  consolidation  efforts  may  result  in 
increases in taxes and social contributions (127) and 
a reduction in support schemes. This is set against 
level  of 
the  backdrop  of  an  already  high 

(125) Barometre  Bpifrance  Le  Lab- Rexecode,  11/2024,  based on 

interviews carried out in October 2024. 

(126) Banque de France, défaillances, nombre cumulé sur 12 mois. 
(127) A.  Bozio,  E.  Wasmer,  Les  politiques  d’exonérations  de 
cotisations sociales : une inflexion nécessaire, 10/2024. 

51 

compulsory levies on businesses, which accounted 
for  14.1%  of  GDP  in  France  in  2022  (compared 
with  8.6%  in  the  euro  zone) (128).  In  particular, 
taxes  on  production,  which  are  recognised  as 
detrimental 
remain 
significantly  higher  in  France  (at  4.5%  of  GDP  in 
2023 (129))  than  the  EU  average  of  2.4%  of 
GDP (130). However, France does offer a wide range 
of tax incentives (see Annex 2).  

competitiveness, 

to 

to 

A  lack  of  skilled  staff, or the  unsatisfactory 
allocation  of  skilled  workers,  is  also  an 
obstacle to investment, although less so than 
in  the  past.  According 
the  European 
Investment Bank (131), 72% of French firms see the 
non-availability  of  skills  as  an  obstacle 
to 
investment (vs 77% in the EU). France has a lower 
employment  rate  than  the  EU  average  (68%  vs 
70%)  and  full-time  employees  work  fewer  hours 
per  year  than  the  EU  average  (1 673  hours  vs 
1 790 hours) (132), which contributes to the lack of 
skilled  workers.  Workforce  shortages  persist  for 
certain skills and sectors such as the construction 
and  the  manufacturing  sectors  (see  Annex 10). 
However,  the  slowing-down  of  the  economy  has 
also reduced the share of businesses facing labour 
supply  constraints  (13.75%  in  2024  vs  19.7%  in 
2023)  and  it  is  lower  than  in  the  rest  of  the  EU 
(13.75%  in  France  vs  20.16%  in  the  EU  on 
average) (133).  Similarly,  the  share  of  French 
businesses  facing  material  supply  constraints  is 
going  down  (17%  in  2024  vs  26%  in  2023), 
although this is still  higher than in the rest of the 
EU (10% on average) (134). 

Access  to  finance  is  in  line  with  the  EU 
average, but more SMEs in France than in the 
rest  of  the  EU  experience  late  payments. 
Non-availability  of  finance  is  an  obstacle  to 
investment  for  44%  of  French  firms (135),  just 
slightly below the EU average (45%) (see Annex 5). 

(128) IFRAP,  Prélèvements  obligatoires  :  la  France,  lanterne  rouge 

de l’Europe, 4/2024. 

(129) including taxes on individuals. This share of 4.5% is expected 

to decrease in 2024. 

(130) FIPECO, les impôts sur la production, 21/11/2024.  Based on 

Eurostat. 

(131) European  Investment  Bank,  EIB  investment  survey  2024, 
based on interviews carried out between April and July 2024.  
(132) Rexecode,  La  durée  effective  du  travail  en  France  et  en 

Europe en 2023, 12/2024. Based on Eurostat data. 
(133) European Commission, Business and Consumer Survey. 
(134) European Commission, Business and Consumer Survey. 
(135) European  Investment  Bank,  EIB  investment  survey  2024, 
based on interviews carried out between April and July 2024.  

 
 
 
 
 
By contrast,  France is now significantly above the 
late  payments,  which  have 
EU  average  for 
increased since 2021 (136). In 2024, 58% of French 
SMEs  experienced  late  payments  from  private 
customers (48% in the EU) and 28.7% from public 
customers  (16.6%  in  the  EU) (137).  In  addition,  the 
average  business-to-business  payment  delay 
increased  in  2024  and  is  now  17.4  days  (the  EU 
average  is  15.5  days) (138).  Unlike  business-to-
business  payments,  the  delay  in  payments  made 
by public bodies to businesses is decreasing and is 
now  below 
(14.3 days  vs 
15.2 days). However, delays in payments by public 
health  bodies  are  increasing (139)  and  this  is 
significantly  impacting  SMEs.  In  the  absence  of 
late payments, transfers to SMEs could amount to 
EUR 15 billion,  with  EUR 13 billion  coming  from 
large companies (140). 

the  EU  average 

to 

that 

think 

infrastructure  and  especially 

Fewer firms in France than in the rest of the 
transport  and  digital 
EU 
infrastructures  are  obstacles  to  investment. 
According  to  the  EIB  Investment  Survey (141),  37% 
of  France’s  businesses  consider  that  transport 
investment 
is  an  obstacle 
infrastructure 
(vs 45%  in  the  EU)  and  8.8%  consider  it  a  major 
obstacle (vs 13.4% in the EU, see Table A2.1). 39% 
think  digital  infrastructure  is  an  obstacle  (vs 41% 
in the EU). France has made considerable progress 
in  digital 
in 
connectivity.  Coverage  of  fibre  to  the  premises 
(FTTP)  increased  substantially,  by  8 percentage 
points  to  81%  in  2023  (vs  64%  in  the  EU).  FTTP 
coverage 
increased 
considerably to  65% (vs 53% in the  EU). France’s 
recovery  and  resilience  plan  (RRP)  supports  the 
‘France  Très  Haut  Débit’  plan  to  accelerate  the 
deployment  of  fibre  across  the  whole  country  to 
provide  access  to  a  network  of  more  than  100 
Mbit/s.  As  regards  mobile  networks,  overall  5G 
coverage increased to 93% (above the EU average 
of  89%),  and  5G  coverage  on  the  3.4-3.8 GHz 

areas 

rural 

also 

in 

(136) European  Commission,  European  Payment  Observatory, 

p. 55, 12/2024.  

(137) European  Commission  and  European  Central  Bank,  2024 

SAFE survey – conducted in September/October 2024.  

(138) Intrum, European payment report 2024. 
(139) Banque  de  France,  Rapport  de  l’observatoire  des  délais  de 

paiements 2023, 6/2024. 

(140) On  the  basis  of  balance  sheet  analysis  data  for  2022. 
Source :  Banque  de  France,  Rapport  de  l’observatoire  des 
délais de paiements 2023, 6/2024. 

(141) European  Investment  Bank,  EIB  investment  survey  2024, 
based on interviews carried out between April and July 2024. 

is 

awareness 

spectrum band (142) is 65% (above the EU average 
of  51%).  Regarding  the  resilience  of  digital 
cybersecurity 
infrastructure, 
in 
enterprises 
increasing.  The  number  of 
enterprises that experienced ICT security incidents 
leading  to  unavailability  of  ICT  services  due  to 
attack  from  outside  slightly  increased  in  France, 
from 2.36% in 2022 to 2.73% in 2024. It remains 
(3.43%).  93.20%  of 
below  the  EU  average 
enterprises  have  deployed  some 
ICT  security 
measures (just above the EU average of 92.76%), 
but  only  48.13%  have  made  their  employees 
aware of their obligations regarding issues related 
to  ICT  security  –  significantly  below  the  EU 
average of 59.97%.  

Graph A4.1: Making Business Easier: selected 
indicators. 

Share of (1) enterprises, (2) average intra-EU exports and imports in 
GDP, (3) firms, (4) SMEs. 
Sources: (1) EIB IS, (2) Eurostat, (3) ECFIN BCS, (4) SAFE survey. 

(142) The  3.4-3.8 GHz  spectrum  band  is  essential  for  enabling 
advanced applications requiring large spectrum bandwidth. 

52 

58.128.71717.319.747.916.61041.624.5010203040506070from private entitiesfrom public entitiesMaterial shortages as afactor limiting productionEU Trade IntegrationRegulation as a majorobstacle to investment(4) Late payments(3) Shortages(2) SingleMarket(1) RegulatoryburdenShare (%)EU27FR 
 
       
 
Regulatory and administrative 
barriers 

Thanks  to  a  range  of  reforms,  France  has 
improved its business environment, but many  
businesses  still  consider  the  complexity  of 
administrative  procedures  to  be  a  problem 
when  doing  business.  France  has  adopted 
several  laws  since  2017  to  increase  interaction 
between  unions  and  employers (143),  facilitate 
relations  with  the  tax  authorities (144)  and  reduce 
administrative  burden (145).  As  part  of  its  RRP, 
France has also adopted a law on the acceleration 
and  simplification  of  public  action  (ASAP) (146). 
These  reforms  are  yielding  positive  results:  in 
2024,  fewer  firms  than  in  the  rest  of  the  EU 
considered 
to 
investing (19.7% vs 24.5% – see Graph A2.1) (147). 
indicator  on  administrative  and 
The  OECD 
regulatory  burden  corroborates  this  finding  that 
this burden is lower in France than in the OECD on 
average  (1.16  in  France  vs  1.68  in  the  OECD  in 
2023) and much lower than in 2018 (when it was 
1.88 in France vs 1.93 in the OECD) (see Annex 6.) 
But  still,  84%  of  businesses  consider 
the 
complexity  of  administrative  procedures  to  be  a 
problem for their company when doing business in 
France (vs. 66% in the EU) (148).  

regulations  a  major  obstacle 

increase 

Business registrations have boomed in recent 
years,  partly  due  to  the  success  of  the 
microentrepreneur  regime.  France  had  the 
largest 
in  the  number  of  business 
registrations  in  the  EU  between  2015  and  2023 
(+87% vs +20% in the  EU). One  of  the drivers  of 
this  boom  has  been 
the 
microentrepreneur  regime (149),  whose  growing 
popularity  can  be  explained  by  the  administrative 
and  fiscal  ease 
it  offers.  Overall,  however, 
entrepreneurial  framework  conditions  in  France 

the  success  of 

(143) Ordinances  of  22 September 2017  to  reinforce  the  social 

dialogue. 

(144) Law  of  10 August 2018  for  a  State  at  the  service  of  a 

society of trust (ESSOC). 

(145) Law  of  22 May 2019  for  the  growth  and  transformation  of 

businesses (Pacte). 

(146) Law  of  7 December 2020 

for 

the  acceleration  and 

simplification of public action (ASAP). 

(147) European  Investment  Bank,  EIB  Investment  Survey  2024: 

European Union overview, p. 26. 

(148) Businesses' attitudes towards corruption in the EU’ Flash 
Report, Eurobarometer Report, fieldwork: April 2024. 

(149) Bpifrance, focus- 10 ans de création d’entreprises en France. 

53 

appear  to  be  similar  to  those  in  comparable 
countries (150). One of France’s main weaknesses is 
the  lack  of  entrepreneurship  education  at  school 
(see Annex 3). 

France has made tax compliance easier. For a 
business in France in 2019, the total average cost 
of tax compliance across direct and indirect taxes 
was  almost  1.9%  of  its  turnover,  which  was 
slightly  below  the  EU  aggregate  median (151). 
France has also strengthened cooperation between 
businesses  and  tax  administrations.  Under  the 
ESSOC  Law (152),  a  business  is  not  penalised  if  it 
commits  a  mistake  in  its  tax  declaration  for  the 
first  time  and  in  good  faith.  Schemes  have  also 
been  put 
life  easier  for 
businesses. These include personalised tax support 
for SMEs; tax partnerships with large and mid-cap 
companies;  a 
regularisation  procedure  under 
inspection;  and  a  tax  compliance  check  (see 
Annex 2).  

in  place  to  make 

France would benefit from the swift adoption 
and  implementation  of  the  draft  law  on  the 
simplification  of  economic  life.  At  the  end  of 
2023, France conducted an extensive consultation 
to  gather  simplification  suggestions  from  SMEs 
and  very  small  enterprises (153).  Following  this 
consultation, the government presented a proposal 
for  a  law  on  the  simplification  of  economic 
life (154). The  legislative proposal  seeks to  simplify 
administrative  procedures,  enhance  trust  between 
the administration and businesses, and streamline 
regulations. 
to  cut  bureaucracy  by 
strengthening  the  ‘tell  us  once’  principle,  deleting 
or digitising a number of administrative processes, 
and  favouring  declarations  over  authorisations. 
The  proposal  is  currently  being  examined  by  the 
French parliament. It is one of the reforms France 
has  committed  to  carry  out  in  its  medium-term 
fiscal-structural  plan  to  underpin  an  extension  of 
the 
the  adjustment  period.  According 

It  aims 

to 

(150) Global  Entrepreneurship  Monitor,  GEM  Global  Report 
Ordinances  of  22  September  2017  to  reinforce  the  social 
dialogue 2023/2024. 

(151) Tax  compliance  costs  for  SMEs,  European  Commission, 

1/2022, p. 38.  

(152) Law  of  10 August 2018  for  a  State  at  the  service  of  a 

society of trust. 

(153) Make.org.  Rapport  final  de  consultation:  Entrepreneuses, 
pour 

quelles  mesures 

concrètes 

entrepreneurs 
: 
vous simplifier la vie ?, January 2024. 
loi  de  simplification  de 

(154) Projet  de 

la  vie  économique 
législatifs  –  Légifrance, 

(ECOM2409377L)  –  Dossiers 
including the impact assessment, April 2024  

 
 
 
commitment in that plan, the proposed law should 
enter  into  force  in  or  by  Q4 2025.  France  would 
benefit  from  a  swift  adoption  of  the  law  and  its 
accompanying decrees.  

The single market  

SMEs  are  not  fully  exploiting  the  growth 
opportunities  offered  by  the  single  market. 
France  has  the  lowest  integration  rate  into  EU 
trade  in  the  EU:  intra-EU  import  and  export 
volumes  represented  only  17.3%  of  GDP  in  2024 
(vs 41.6% on average in the EU) (see Table A.2.1). 
Intra-EU imports and exports are much lower than 
the  EU  average,  both  for  goods  and  services. 
Several  factors  can  explain  this  low  integration 
rate: a lesser need for French businesses to import 
and  export  due  to  the  large  size  of  the  French 
market;  manufacturing  industry’s  lower  share  of 
GDP;  and  the  lack  of  an  export  culture  and  the 
necessary  skills.  Several  public  initiatives  aim  to 
strengthen  support  for  exporters.  In  2023,  France 
launched 
to 
develop  an  export  culture  in  businesses,  promote 
French  know-how,  and  focus  on  tomorrow’s 
sectors and expanding overseas markets. 

l’export’  scheme (155) 

‘Osez 

the 

into  national 

The  conformity  level  of  transposition  of 
single  market  directives 
into  national 
legislation  and  the  efficiency  with  which 
breaches  of  EU  law  are  handled  under 
SOLVIT  could  be  improved.  France  has  a  very 
good  performance  in  terms  of  transposing  single 
law  on  time 
market  directives 
(ranking  5th  out  of  the  27  Member  States) (156), 
but it could do better in terms of transposing these 
directives correctly (ranking only 18th). In addition, 
the  number  of  infringement  proceedings  is  quite 
high : France had 29 cases vs 24 on average in the 
EU at the end of 2024 (ranking 18th). This number 
is  however  lower  than  before  and  lower  than  for 
Member  States  of  comparable  size.  Concerning 
SOLVIT,  France  resolved  85.8%  of  the  cases  it 
handled  in  2024  as  the  lead  centre  (the  EU 
average  was  84.9%).  However,  the  handling  time 
was  very  long,  which  suggests  that  the  French 
SOLVIT centre has insufficient resources.  

(155) France Diplomatie, Lancement du Plan ‘Osez l’export’. 
(156) European 
Single  Market 

Commission, 

the 

and 

Competitiveness Scoreboard, France, December 2024 data. 

54 

For  several  professions,  regulatory  barriers 
to  entry  and  competition  remain  higher  in 
France  than  in  comparable  countries.  Around 
250  professions  are  regulated  in  France,  which  is 
more  than  the  EU  median.  According  to  the 
European  Commission (157)  and  the  OECD (158), 
regulatory barriers remain higher in France than in 
peer countries for accountants, architects and real 
estate agents. These barriers mostly take the form 
of  shareholding  and  legal  form  requirements (159). 
According to the OECD, the level of the barriers to 
entry  in  service  sectors  was  the  same  in  early 
2023  as  it  was  in  2018.  On  8 February 2023, 
France  adopted  an  ordinance (160)  to  clarify  and 
ensure the consistency of the provisions applicable 
for  setting  up  professional  companies.  The 
objective  is  to  boost  the  development  of  these 
companies and make liberal regulated professions 
more attractive. This ordinance came into force on 
1 September 2024, but some by-laws still need to 
be adopted. 

France  has adopted stringent  restrictions on 
the  operation  and  establishment  of  retail 
shops since 2019. Following the adoption of the 
ELAN,  EGalim 1,  2  and  3,  PACTE  and  CLIMA  laws, 
France  is  the  most  restrictive  Member  State 
regarding  regulatory  frameworks  for  the  retail 
sector (161).  The  high  level  of  restrictions  is  also 
reflected in the OECD PMR indicator, where France 
is  the  4th  most  restrictive  EU  Member  State  for 
retail.  France  adopted  the  EGalim 3  Law in  March 
2023  (162)  and  updated  it  in  November  2023 (163). 
These laws have introduced new rules, notably on 
commercial  negotiations  between  retailers  and 
rebalancing 
suppliers,  with 
negotiating power along the food supply chain and 
providing a fair income to farmers. Retailers must 

the  objective  of 

(157) European  Commission,  Communication  on  updating  the 
in  professional 

reform  recommendations  for  regulation 
services, COM(2021)385, 9 July 2021. 

(158) OECD, Product Market Regulation (PMR) indicators: How does 

France compare?, 2024.  

(159) European  Commission,  Communication  on  updating  the 
in  professional 

reform  recommendations  for  regulation 
services, COM(2021) 385, 9 July 2021. 

(160) Ordonnance  n° 2023-77  du  8 février 2023 

relative  à 

l’exercice en société des professions libérales réglementées. 
(161) European  Commission,  Retail  restrictiveness  indicator (2022 

update), 2024. 

(162) Loi  n° 2023-221  du  30 mars 2023  tendant  à  renforcer 
l’équilibre dans les relations commerciales entre fournisseurs 
et distributeurs. 

(163) Loi  n° 2023-1041  du  17 novembre 2023  portant  mesures 
d’urgence pour lutter contre l’inflation concernant les produits 
de grande consommation. 

 
 
 
an  environmental  clause  and  18.7%  included  a 
social clause (167). 

comply  with  stricter  purchasing  conditions  and 
additional  formalities.  They  must  also  pay  high 
fines  if  they  breach  the  rules.  In  addition,  the 
French  authorities  apply  the  EGalim  laws  to 
economic  operators  established in  other  Member 
States  if  the  products  purchased  are  destined  for 
distribution  on  French  territory.  This  may  risk  to 
prevent 
from  using  single  market 
freedoms  and  consumers  from  benefiting  from 
competitive prices and a larger choice of products.  

retailers 

Public procurement  

in 

of 

level 

competition 

The 
public 
procurement  procedures  is  satisfactory,  but 
there is still room for improvement. The share 
of  direct  awards  is  only  around  2% (164),  which  is 
significantly  below  the  EU  average  of  7% (see 
Table A.2.1). Also on the positive side, the share of 
single bids is largely below the EU median (22% vs 
32%). However, according to the OECD (165), public 
procurement procedures in France are slightly less 
favourable to competition than those in the rest of 
the OECD. For instance, entry requirements are not 
proportional  to  a  tender’s  value  or  complexity. 
However,  France  plans  to  facilitate  businesses’ 
digital  access  to  public  procurement  procedures. 
The  legislative  proposal  for  the  simplification  of 
economic life would require all public procurement 
by  the  State,  its  public  institutions,  hospitals  and 
social  security  institutions  to  be  accessible  on  a 
single digital platform (‘Place’) by 2028. 

the 

targets 

integration 

France  encourages  sustainable  procurement. 
France’s 2022-2025 national  plan for sustainable 
procurement 
of 
sustainable,  circular  and  socially 
responsible 
criteria  into  public  procurement  processes.  It  sets 
the  objective  of  having  100%  of  the  awarded 
contracts including an environmental consideration 
and  30%  including  a  social  consideration  by 
2025 (166). 
the  public 
In  2023,  29.1%  of 
procurement contracts above EUR 90,000 included 

(164) European  Commission,  Public  procurement  data  space 

(PPDS). 

(165) OECD  Product  Market  Regulation 

indicators: 

low-level 

indicators, barriers to trade facilitation and tariff barriers. 
(166) See the relevant country self-reporting on the Commission’s 

website here, p.34. 

(167) Ministères  économiques  et 

financiers,  Recensement 

économique de la commande publique, chiffres 2023.  

55 

 
 
 
Table A4.1:  Making Business Easier: indicators. 

***

*Change in methodology in 2024: reporting late payments from public and private entities separately. 
**The 2024 data on single bids is provisional and subject to revision. Please note that approximately 31% of the total data is 
currently missing, which may impact the accuracy and completeness of the information. Due to missing data, the EU average of 
direct awards data is calculated without Romania. 
Sources: (1) ECFIN BCS, (2) Eurostat, (3) EIB IS, (4) Digital Decade Country reports, (5) Intrum Payment Report, (6) SAFE survey, 
(7) OECD, (8) up to 2023: Single Market and Competitiveness Scoreboard, 2024: Public procurement data space (PPDS). 

56 

POLICY AREA20202021202220232024EU-27 average15.531.342.626.517.010.09.710.719.319.713.820.22.02.63.33.02.52.33.58.111.413.78.813.4-63.473.481.4-78.8-63.473.481.4-64.0-74.488.893.2-89.3Regulatory environment21.921.316.617.619.724.515.111.316.516.817.415.613.08.722.718.514.315.1from public or private entities in the last 6 months43.943.547.357.3--from private entities in the previous or current quarter----58.147.9from public entities in the previous or current quarter----28.716.615.116.519.318.217.341.60.0580.0580.0580.0570.0660.0500.30.60.30.10.50.81.71.51.41.31.20.989.282.588.086.085.884.939.039.036.031.029.024.41819222322-322227.0FranceINDICATOR NAMEInvestment climateShortagesMaterial shortage, firms facing constraints, %1Labour shortage, firms facing constraints, %1Vacancy rate, vacant posts as a % of all available ones (vacant + occupied)2InfrastructureTransport infrastructure as an obstacle to investment, % of firms reporting it as a major obstacle3VHCN coverage, %4FTTP coverage, %45G coverage, %4Reduction of regulatory and administrative barriersImpact of regulation on long-term investment, % firms reporting business regulation as a major obstacle3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment5Payment gap - public sector, difference in days between offered and actual payment5Share of SMEs experiencing late payments, %*6Single MarketIntegrationEU trade integration, % (Average intra-EU imports + average intra EU exports)/GDP2EEA Services Trade Restrictiveness Index7ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, % resolution rate per country8Number of pending infringement proceedings8Competition and transparency in public procurementSingle bids, % of total contractors**8Direct awards, %**8Public procurement 
 
 
      
 
ANNEX 5: CAPITAL MARKETS, FINANCIAL STABILITY AND ACCESS TO FINANCE 

GDP,  while  liabilities  to  foreigners  stood  at  332% 
of GDP, resulting in a net international investment 
position  (NIIP)  equivalent  to  -19%  of  GDP  (see 
Graph  A5.2).  The  net  accumulated  portfolio 
investments, which reached -40% of GDP as of Q3 
2024,  accounted  for  most  of  the  (negative)  NIIP, 
while  net  foreign  direct 
investments,  which 
represented  19%  of  GDP,  helped  reduce  the  NIIP 
deficit. Thus, while the French economy appears to 
be deeply integrated in international capital flows, 
including  as  a  major  provider  of  foreign  direct 
investment,  it  remains  nevertheless  a  net  capital 
importer,  notably  by  means  of  portfolio 
investments at home. 

Graph A5.1: Net savings-investment balance in 
France 

Higher  inflation  and  interest  rates  have 
the  French 
to  maintaining 
contributed 
banking  sector’s  profitability  and  solvency. 
While  French  non-financial  corporations  (NFCs) 
have  suffered  from  the  rise  in  interest  rates  on 
their  loans,  French  banks  continue  to  finance  the 
economy on relatively attractive terms despite the 
rise in interest rates. Like in most Member States, 
households  in  France  do  not  invest  enough  in 
financial assets and, more importantly, equity. The 
gap  with  US  households  is  massive.  This  partly 
explains  why  France,  like  the  EU  in  general,  lags 
behind  the  US  on  access  to  finance,  capital 
markets development, competitiveness, innovation, 
growth  and  geopolitical  power.  Encouraging  the 
build-up  of  universal 
funded  supplementary 
pension schemes would positively contribute to (i) 
the  sustainability  and  adequacy  of  pension 
benefits;  (ii)  investment  in  equity;  (iii)  access  to 
finance; (iv) growth; and (v) innovation. 

Availability and use of domestic 
savings 

in 

The  French  private  sector  saves  a  bit  less 
than it invests and lends to the government. 
In the last decade, the private savings ratio, net of 
fixed capital consumption, exhibited some volatility 
around  its  ten-year  average  of  7.6%  of  GDP.  It 
steeply increased to 10.7% of GDP in 2021 before 
receding  to  6.8%  in  2023  (see  Graph  A5.1).  The 
net  private  investment  ratio,  which  measures  the 
net  contribution  of  the  private  sector  to  capital 
the  country,  evolved  quite 
accumulation 
differently. 
its  ten-year 
It  fluctuated  around 
average of 3.7% of GDP, with a noticeable drop to 
2.6% of GDP in 2020. At the same time, during the 
same  period  the  government  budget  was  in 
regular  deficit  that  averaged  4.6%  of  GDP  with a 
peak  at  8.9%  of  GDP  in  2020.  Thus,  the  high 
positive  balance  between  net  domestic  savings 
and  net 
fully  offset 
government  deficits,  which  resulted  in  structural 
net  borrowing  by  France  from  foreigners  that 
averaged  0.7%  of  GDP,  with  a  peak  of  1.9%  in 
2020. 

investment  did  not 

Consistent  with  its  regular  position  of  a  net 
borrower  from  the  rest  of  the  world,  the 
French  economy  exhibits  a  negative  net 
international  investment  position.  As  of  Q3 
2024, total assets on foreigners reached 313% of 

57 

Source: AMECO. 

Graph A5.2: International investment position of 
France 

Source: ECB. 

Structure of the capital markets and 
size of the financial sector 

The French financial sector is well developed. 
The  market  capitalisation  of  listed  equity  reached 
100%  of  GDP  at  end-2023  (vs  67%  in  the  EU). 

-50510152025302017201820192020202120222023% of GDPPrivate investment, netLending to the governmentPrivate saving, netPrivate saving, grossBorrowing from the rest of the world-400-300-200-100010020030040020172018201920202021202220232024-Q3% of GDPForeign Direct Investment, AssetsPortfolio Investment, AssetsOther investment, AssetsOfficial reserve assetsForeign Direct Investment, LiabilitiesPortfolio Investment, LiabilitiesOther investment, LiabilitiesNIIP 
 
  
 
  
 
 
for  more 

non-financial 

than  90%  of 

Characteristically, 
corporations 
that 
accounted 
capitalisation,  which  reflects  the  extent  to  which 
the  stock  market  in  France  is  geared  towards 
funding  the  non-financial  segment  of  the  real 
economy.  The  outstanding  volume  of  debt 
securities reached 183% of GDP at end-2023, one 
of  the  highest  in  the  EU.  Bonds  issued  by  the 
government  accounted  for  51%  of  the  total.  This 
reflects  the  significant  weight  of  the  gross  public 
debt in the bond market. 

Graph A5.3: Capital markets and financial 
intermediaries in France 

Source: ECB, EIOPA, AMECO. 

Even  though  the  financial  sector  in  France 
remains  dominated  by  banks,  non-bank 
financial 
intermediaries  are  very  much 
developed as well. The French banking sector is 
particularly large. Banks’ assets represented 424% 
of  GDP  in  December  2023  (vs  257%  in  the  EU), 
which  is  the  second  highest  in  the  EU  after 
Luxembourg. The sector employed 566 people per 
100,000 inhabitants (vs 477 in the EU) at the end 
of  2023.  The  network  of bank  branches  providing 
access to banking services and cash is among the 
densest  in  Europe  (one  bank  branch  for  2,049 
inhabitants in 2022 versus 3,484 in the EU), even 
is  progressively  decreasing.  The  French 
if 
banking  sector  is mostly made  of  large, domestic 
and  private  universal  banking  groups.  The  six 
largest French banking groups are universal banks. 
The  four  largest  French  banks  (BNP  Paribas, 
Groupe  Crédit  Agricole,  Société  Générale  and 
Groupe  BPCE)  are  Global  Systemically  Important 
Banks.  The  share  of  domestic  banks  is  very  high 
and  reached  94.6%  in  December  2023.  Most 
banks  are  privately  owned,  the  only  significant 
state-controlled bank being La Banque Postale, the 
sixth  largest  bank  of  the  country.  The  insurance 

it 

58 

sector, with total assets of almost 99% of GDP at 
end-2023, dominates non-bank intermediation. Its 
relatively large size is due to the popularity of life 
insurance in France. The pension funds’ assets are 
much smaller: they  only represent 8% of GDP (vs 
23%  in  the  EU).  Investment  funds  represent  a 
significant  share  of  60%  of  GDP,  above  the  EU 
median. 

Resilience of the banking sector 

investors; 

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  5.9%  in  2023  and  7.1%  in  2024,  (vs 
10.0%  in  the  EU),  profitability  has  remained 
lower  than 
relatively  stable  but  significantly 
elsewhere  in  the  EU.  This  is  due  to:  (i)  the  high 
interest  rate  on  the  so-called  Livret  A  savings 
products  offered  to  retail 
(ii)  the 
predominance  of  fixed-rate  loans  on  the  asset 
side; and (iii) the worst cost-to-income ratio within 
the  EU  (67.4%  in  2023  vs  52.6%  in  the  EU). 
Despite  the  difficult  macroeconomic  environment, 
the  capital  adequacy  ratio  of  French  banks  has 
remained  broadly  stable  over  the  years  and 
reached  19.4%  in  September  2024  (vs  20.1%  in 
the  EU).  The  average  Minimum  Requirement  for 
own  funds  and  Eligible  Liabilities  (MREL)  level  of 
French  banks  stood  at  32.9%  of  Total  Risk 
Exposure Amount (TREA) in December 2023, down 
from  33.2%  of  TREA  in  June  2023.  Against  an 
average  MREL  binding  target  (including  combined 
buffer requirements, CBR) as of 1 January 2024 of 
25.8%  TREA,  no  bank presented  a  MREL  shortfall. 
Credit  quality  remains  relatively  strong,  with  the 
non-performing  loan  ratio  (2.1%  in  September 
2024  vs  1.9%  in  the  EU)  slightly  up  from  its  all-
time  low  of  1.8%  observed  from  March  2022  to 
March 2023. This good credit quality is partly due 
to  the  predominance  of  fixed-rated  loans  on  the 
asset  side.  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 0.5% in 
May  2024  due  to  banks  repaying  their  funding 
under  the  ECB’s  targeted  longer-term  refinancing 
ratio  slightly 
operations.  The 
decreased  to  99.4%  by  September  2024  (vs 
95.5%  in  the  EU),  signalling  a  slight  excess  of 
deposits over loans. 

loan-to-deposit 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250300350400450Listed equity                  Bonds                        Assets by sector% of GDP 
   
French  banks  have  faced  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 from 2% to 
3%  on  1  February  2023,  before  falling  back  to 
2.4%  on  1  February  2025.  The  relatively  small 
spread  between  interest  rates  for  deposits  and 
interest rates for lending, partly due to competition 
between banks on the mortgage market, combined 
with  the  faster  repricing  of  deposits  than  loans, 
has put banks’ margins under pressure. 

are 

individual 

situations 

French  non-financial  corporations 
(NFCs) 
have suffered from the 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,  even  though 
this  vulnerability  is  partly  offset  by  high  cash 
levels and a substantial share of fixed-rate loans, 
although 
highly 
heterogeneous. The NFC non-performing loan ratio 
has gradually increased from a record low of 3.3% 
in  Q3-2022  to  3.9%  in  Q3-2024  (vs  3.5%  in  the 
EU). Corporate bankruptcies have been on the rise 
since  2022  (more  details  in  Sections  2  and  3  of 
the  country  report).  Some  large  corporations,  like 
Casino,  Bourbon,  Latécoère,  Orpea  and  Atos,  have 
entered 
their 
creditors  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 

While  the  correction  in  the  residential  real 
estate market appears to be nearing its end, 
the  commercial  real  estate  sector  continues 
to  weaken.  The  decline  in  interest  rates,  which 

59 

began in June 2024, has led to a rebound in new 
housing  loans  and  a  gradual  stabilization  of 
residential real estate prices in the second quarter 
of  2024,  as  households'  purchasing  power  has 
increased.  Macroprudential  standards  and  the 
structural  characteristics  of  household  credit  also 
help  limit  the  risks  to  financial  stability  posed  by 
this sector. Meanwhile, the commercial real estate 
market continues to contract due to a combination 
of  structural  and  cyclical  factors,  though  the 
French financial system’s exposure to these assets 
remains moderate. 

supervisors  are 

Finally,  structural  risks 
like  cyber  and 
climate change threats continue to present a 
considerable  challenge 
to  all  financial 
institutions.  Climate  risks  continue  to  increase 
and  become  harder  for  financial  institutions  to 
manage.  According  to  the  Banque  de  France, 
financial 
therefore  paying 
increased  attention  to  assessing  and  monitoring 
the  transition  and  physical  risks  associated  with 
climate  change,  notably  through  stress  tests. 
Furthermore,  regulatory  requirements  in  terms  of 
climate  risk  management  and  extra-financial 
disclosures  are  being  strengthened.  The  financial 
system  also  remains  exposed  to  an  extremely 
elevated  risk  of  cyberattacks.  The  threat  of 
is  exacerbated  by  geopolitical 
cyberattacks 
tensions, while artificial intelligence developments 
could make  these  attacks  more  sophisticated  and 
harder to mitigate. 

Resilience of the non-bank financial 
intermediaries 

Insurers’  solvency  has  remained  stable. 
Insurers’ solvency ratio has slightly increased from 
250% in 2023 to 247% in Q3-2024 (vs 247% in 
the  EU).  The  rise  in  interest  rates  has  benefitted 
life  insurers’  solvency  and  profitability.  The  long 
period  of  low  interest  rates  that  prevailed  until 
2022  reduced  the  return  that  life  insurers  could 
offer  to  their  policyholders,  since  bonds  made 
about  60%  of  their  assets.  Higher  interest  rates 
have  allowed  insurers  to  reinvest  their  maturing 
assets  into  bonds  yielding  a  higher  return.  As  a 
consequence,  the  average  return  on  life  insurers’ 
assets  increased  from  2%  in  2022  to  2.2%  in 
2023,  ending  the  almost  continuous  decline 
observed since at least 2015. Thanks in part to the 
higher  return  on  their  assets,  insurers  have  been 

 
able to steeply increase the return rate offered on 
their life insurance contracts from 1.3% in 2021 to 
1.9% in 2022 and finally 2.6% in 2023. To finance 
this,  insurers  also  started  using  up  a  part  of  the 
profit  sharing provision  that  had  been  constituted 
during  the  low  interest  rate  period.  This  reserve 
therefore  dropped 
technical 
provisions in 2022 to 4.5% in 2023. 

from  5.4%  of 

Life insurance has benefited since 2024 from 
large inflows. To offset the low attractiveness of 
traditional  life  contracts  with  guaranteed  interest 
rate during the period of low interest rate, insurers 
had  favoured  the  underwriting  of  unit-linked 
contracts,  which  present  more  attractive  returns 
but  where  the  market  risk  is  borne  by  the 
policyholders.  As  a  result,  life  insurance  growth 
has been essentially supported since 2019 by the 
unit-linked  portfolio,  while  the  contracts  with 
guaranteed interest rate have recorded continuous 
outflows. When inflation and interest rates started 
rising,  some  households  chose  to  surrender  their 
life insurance contracts,  either to finance a house 
purchase,  or 
into 
invest 
comparable,  safe  assets with  a  higher  return,  like 
deposits.  However,  this  trend  has  significantly 
weakened  in  2024.  As  a  result,  net  inflows  have 
risen  sharply  compared  to  2023,  driven  by  a 
combination  of  increased  gross  inflows  and  a 
decline  on  surrenders  on  traditional  life  contracts. 
Life  insurance  inflows  continue  to  benefit  from 
household savings flows, which remain above their 
pre-Covid levels. 

the  proceeds 

to 

(droughts and floods) and approaching the level of 
2017  (hurricane  Irma).  However,  the  evolution  of 
the profit after reinsurance is less volatile since a 
significant  part  of  the  claims  are  absorbed  by 
reinsurers.  In  France,  the  reinsurance  of  natural 
catastrophes  is  supported  by  a  public-private 
partnership  that  benefits  from  a  state  guarantee. 
In  both  2022  and  2023,  the  French  reinsurance 
scheme  has  been  loss-making,  which  is  likely  to 
cause an increase in future reinsurance premiums. 

Sources of business funding and the 
role of banks 

Firms in France rely less than the EU average 
on funding from banks and more than the EU 
average  on  funding  from  capital  markets. 
More specifically, at the end of 2023 bank finance 
through loans constituted 24.2% (vs 27.2% in the 
EU) of all funding sources for French non-financial 
corporations (NFCs), while listed shares and bonds 
represented  30.5%  (vs  23.8%  in  the  EU)  of  all 
funding sources. When expressed in terms of GDP, 
the  overall  level  of  NFC  funding  was  higher  in 
France (282.1% of GDP) than in the EU (230.3%), 
see Graph A5.4. 

Graph A5.4: Composition of NFC funding as % of 
GDP 

Non-life insurance profitability has improved. 
In  2022,  inflation  and  more  frequent  natural 
catastrophes raised the cost of claims in important 
lines  of  business  like  motor  third-party  liability 
insurance  and  fire insurance.  2023  and  especially 
2024 turned out to be better years for profitability 
with  a  combined  ratio  declining  from  100%  in 
2022  to  99%  in  2023  and  finally  96%  in  Q3-
2024. However, the inflation experienced over the 
last  two  years  as  well  as  climate  change  might 
have  long-term  consequences  for  policies  where 
premiums  are  not  revised  annually, 
in 
construction  insurance,  general  liability  insurance 
or income protection insurance.  

like 

Climate  change  remains  one  of  the  main 
risks for non-life insurers. In 2023, the costs of 
claims  due  to  natural  catastrophes  increased  by 
36%,  while  premiums  only  increased  by  6%, 
leading  to  a  steep  deterioration  of  the  combined 
ratio  to  193%,  exceeding  the  144%  of  2020 

(1) Reference period 2023 
Source: Eurostat 

French  businesses  depend  less  on  internal 
financing than their European peers, but also 
more on intragroup financing. According to the 
2024  EIB  Investment  Survey,  58%  of  investment 
needs  of  French  firms  are  covered  by  internal 
funding,  compared  to  an  EU  average  of  66%.  At 
the  same  time,  79%  of  French  firms  believe  that 

60 

050100150200250300FREU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equity 
  
their investment activities over the last three years 
were  about  the  right  amount,  in  line  with  the  EU 
average  (80%).  This  suggests  that  there  is  no 
material  financing  gap  relative  to  investment 
demand.  However,  this  may  not  be  the  case  for 
firms  with  no  or  limited  capacity  for  internal 
funding,  such  as  innovative  start-up  firms  (see 
further below). 

The banking sector plays an important role in 
financing  the  economy.  The  French  banking 
sector  is  particularly  large  and  made  up  of  big, 
domestic  and  private  universal  banking  groups.  In 
an  environment  of  higher  inflation  and  interest 
rates,  the  solvency  of  banks  has  remained 
relatively  stable,  but  their  profitability  has  been 
average (see Table 1). French banks have faced a 
particular  challenge  on  the  funding  side  of  their 
balance sheet, since they have no control over the 
interest rates applied to regulated savings like the 
Livret  A.  Due  to  the  rise  in  interest  rates,  some 
large corporations, like Casino, Bourbon, Latécoère, 
Orpea  and  Atos,  have  entered 
restructuring 
agreements  with  their  creditors  (mainly  banks)  to 
preserve  their  solvency.  This  could  ultimately 
result  in  some  credit  losses  for  the  banks  and  a 
possible tightening of financing conditions. 

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  household 
credit growth in France has plunged from its peak 
of 6.0% in June 2022 (vs 4.5% in the euro area) to 
0.3% in January 2025 (vs 1.3% in the euro area). 
Lending  to  non-financial  corporations  followed  a 
similar pattern and dropped from its peak of 9.3% 
(vs  8.3%  in  the  euro  area)  in  October  2022  to 
2.7% in January 2025 (vs 1.4% in the euro area). 
Interest  rates  on  new  loans  to  SMEs  have  soared 
to  levels  unseen  since  the  global  financial  crisis. 
They  soared  from  1.23%  (vs  1.40%  in  the  euro 
area) in March 2022 to 4.92% in November 2023 
before  receding  to  4.06%  in  January  2025  (vs 
4.12%  in  the  euro  area)  but  remain  among  the 
lowest  in  the  EU.  Interest  rates  on  new  loans  to 
households  for  house  purchases  at  floating  rates 
have  also  increased  significantly  from  1.11%  in 
December  2021  (vs  1.32%  in  the  euro  area)  to 
3.60%  in  December  2023  before  receding  to 
3.12%  (vs  3.14%  in  the  euro  area)  in  January 
2025,  but  they  also  remain  among  the  lowest  in 
the EU. 

Banks  reported  a  slight  tightening  of  credit 
standards  for  NFC  loans  and  a  significant 
loosening  of  credit  standards  for  housing 
loans  in  Q2-2024.  In  the  July  2024  Bank 
Lending  Survey,  French  banks  indicated  that  their 
credit  standards  for  non-financial  corporate  loans 
had  slightly  tightened  in  the  second  quarter  of 
2024.  Banks  also  reported  a  significant  loosening 
of credit standards for housing loans in the second 
quarter  of  2024,  about  four  times  stronger  than 
the  euro  area  average.  Firms’  net  demand  for 
corporate  loans  continued  to  fall  in  Q2-2024  for 
the sixth quarter in a row. The demand for housing 
loans 
eight 
consecutive  quarters  of  sharp  and  continuous 
declines. 

in  Q2-2024  after 

stabilised 

Capital markets and the participation 
of retail investors 

French  capital  markets  are  well  developed. 
The  main  stock  exchange  in  France  is  Euronext 
Paris. The equity market is relatively large in terms 
of  capitalisation  (99.6%  of  GDP  in  2023)  when 
compared  with  the  EU  average  (67.1%  of  GDP), 
but much lower than the US (170.4%). The market 
breadth  of  French  bond  markets  exceeds  the  EU 
average  (2.1  vs  1.5)  and  the  bid-ask  spread  on 
equity  markets is  lower  than  the  EU  average (1.3 
vs  1.6).  The  use  of  equity  by  SMEs  is  relatively 
high,  as  16.4%  of  SMEs  indicated  in  the  2023 
SAFE  survey  that  equity  was  relevant  for  them, 
compared  to  an  EU  average  of  10.1% (168).  SME 
initial public offerings (IPOs) are in line with the EU 
average (0.01% of GDP). 

France has adopted or plans to adopt several 
measures  to  strengthen  the  attractiveness 
of  its  capital  markets.  These  measures  should 
improve  innovative  firms’  access  to  listing,  by 
introducing  multiple-vote  share  structures,  and 
facilitate  the  use  of  capital  increase  operations. 
Other  measures  will  digitalise  trade  finance 
operations  and  shareholder  meetings.  However, 
current political instability, the dire fiscal situation 
and  a  possible  future 
in  taxes  on 
corporate  income  and  on  high  personal  income 
may  reduce  the  attractiveness  of  the  French 

increase 

(168) Data  and  surveys  -  SAFE  -  European  Commission,  2023, 

Results by country, T27. 

61 

 
 
financial  marketplace 
investors. 

for 

institutions  and 

French  households  do  not  invest  enough  in 
financial  assets  and,  more 
importantly, 
equity.  French  households’  financial  assets  were 
equivalent to only 224.8% of GDP in 2023, slightly 
more  than  the  EU  average  (209.4%),  but  much 
less  than  the  US  (435%) (169).  Moreover,  assets 
invested in equity were equivalent to only 95% of 
GDP,  below  the  EU  average  (118%)  and  three 
times 
(334%).  French 
households  invest  relatively  little  in  investment 
funds  and  shares,  while  allocating  a  significant 
portion  to  life  insurance.  However,  the  assets  in 
traditional  life  insurance  are  mostly  bonds,  which 
to  equity 
generate 
investments. 

returns  compared 

the  US 

lower 

lower 

than 

Fostering  investment  in  equity  could  be 
attained through supplementary fully-funded 
pension  schemes.  The  pay-as-you-go  nature  of 
the  public  pension  system  means  that  only  the 
supplementary  private  schemes  invest,  among 
others,  in  high-return  assets  like  equity.  However, 
the  supplementary  private  schemes  are  not 
universal  and  accumulated  rights  often  remain 
limited  for  those  covered.  As  a  result,  they  only 
contribute  to  a  moderate  extent  to  the  total 
pension  income  and  do  not  fully  foster  the 
development  of  capital  markets.  Encouraging  the 
funded  supplementary 
build-up  of  universal 
pension schemes, in addition to the prevailing pay-
as-you  go  system,  would  positively  contribute  to 
fostering  investment  in  equity  while  enhancing 
growth  and  innovation.  The  reform  of  the  French 
retirement savings plan (PER) under the PACTE law 
in  2019  represented  a  step  in  this  direction, 
promoting  broader  access  to  funded  pension 
incentives  and  product 
schemes  through  tax 
simplification, although its scope and uptake could 
still be strengthened to fully realize its potential. 

The role of domestic institutional 
investors 

The  investment  portfolio  of  French  insurers 
is  mostly  composed  of  bond  holdings.  The 
French  insurance  sector,  which  is  large  by  EU 

(169) US figures for 2022. 

standards  (99.3%  of  assets-to-GDP  vs  an  EU 
average of 55.3%), invested 41.2% of its assets in 
bonds  in  Q2-2024  (on  average,  insurers  in  the 
European  Economic  Area  invest  36.9%  of  their 
assets  in  bonds)  (170).  Government  bonds  (with 
domestic  government  bonds  at  59%)  represented 
19.0%  of  the  total  asset  portfolio  (vs  18.9%  for 
insurers  in  the  EEA),  corporate  bonds  22.2%  (vs 
18.0%  for  insurers  in  the  EEA),  equity  14.4%  (vs 
15.9%  for  insurers  in  the  EEA),  investment  funds 
32.4% (vs 35.4% for insurers in the EEA), cash and 
deposits  3.3%  (vs  3.7%  for  insurers  in  the  EEA), 
and  mortgage  and  loans  2.1%  (vs  3.9%  for 
insurers in the EEA). 

The  domestic  pension  fund  industry  has  an 
even  more  conservative  investment  profile 
than French insurers, with a greater focus on 
bonds  and  in  particular  government  bonds. 
The  assets  of  French  pension  funds  were 
equivalent to 7.6% of GDP at the end of 2023 and 
bonds  accounted  for  50.3%  of  these  pension 
funds’  assets  (bonds  on  average  account  for  only 
35.2%  of  pension  fund  assets  in  the  EEA). 
Investment  funds  accounted  for  35.1%  of  the 
assets  (vs  37.9%  in  the  EEA),  government  bonds 
27.9%  (vs  22.8%  in  the  EEA),  corporate  bonds 
22.4%  (vs  12.4%  in  the  EEA),  equity  6.3%  (vs 
19.4% in the EEA) and cash and deposits 3.3% (vs 
4.5% in the EEA). 

The  participation  of  domestic  institutional 
investors  in  providing  funding  for  start-ups 
and  venture  capital  investors  is  relatively 
low.  A  2024  paper  by  the  think  tank  Centre  for 
European  Policy  Studies  showed  that  pension 
funds  in  France  accounted  on  average  for  only 
10%  of  private  equity  and  venture  capital  funds 
raised  annually  by  French  start-ups  between 
2007-2023,  a  figure  that falls  substantially  short 
of the 19% in the Baltic states or +20% shares for 
Nordic  Member  States (171).  Given  the  size  of  the 
French insurance sector, there could be still further 
potential  for  boosting  insurers’  investments  in 
venture  capital,  where  France  can  build  on  its 
successful  Tibi 
the 
economist  Philippe  Tibi).  Since  2019,  the  Tibi 
institutional 
initiative  has  been  encouraging 

(named  after 

initiative 

(170) Source: EIOPA Insurance Statistics. 

(171) Source: Closing the gaping hole in the capital market for EU 

start-ups – the role of pension funds – CEPS. 

62 

 
 
 
investors 
invest 
to 
technology companies. 

in 

the  most 

innovative 

Financing the green transition 

The depth of available venture and 
growth capital 

The  domestic  venture  and  growth  capital 
market is more developed and better able to 
meet the financing needs of innovative firms 
than  the  EU  average.  The  average  value  of 
annual  private  equity 
investment  relative  to 
nominal  GDP  went  up  to  0.91%  in  the  three-year 
period  2021-2023  from  0.64%  in  the  five-year 
period  2015-2020,  above  the  equivalent  EU 
average  (0.6%).  And  the  average  value  of  annual 
venture capital investment relative to nominal GDP 
growth went up to 0.09% in the three-year period 
2021-2023  from  0.05%  in  the  five-year  period 
2015-2020, also above the equivalent EU average 
(0.08%).  Given  the  relatively  sizeable  venture 
capital  (VC)  and  private  equity  (PE)  activity  in 
France, there does not seem to be any significant 
financing  gap  for  early-stage  innovative  firms, 
although  there  is  potential  for  further  increasing 
VC and PE activity in France. 

programmes, 

There  are  some  policies  in  place  to  promote 
start-up and scale-up funding. The French Tech 
Mission was set up in 2013 to help structure and 
grow  the  French  start-up  ecosystem,  both  in 
France  and  internationally.  It  is  responsible  for 
implementing  public  policies  aimed  at  start-ups 
and  bringing  together  this  ecosystem  nationally 
and  internationally.  It  supports  start-ups  through 
various 
Tech 
Next40/120’,  ‘Je  choisis  la  French  Tech’,  ‘French 
Tech  2030’,  ‘French  Tech  Tremplin’  and  ‘French 
Tech  Rise’.  These  programmes  aim  to  support 
companies  that  meet  the  priorities  of  the  French 
government’s  innovation  strategy,  and  to  offer 
them  the  most  comprehensive  range  of  services 
possible:  combining  all  the  levers  of  the  state,  in 
France  and  abroad,  mobilising  the  French  Tech 
ecosystem  and  public  and  private  buyers,  and 
carrying out promotional activities. 

‘France 

like 

Finance 

Programme 

Both  banks  and  capital  markets  play  an 
in  financing  the  green 
important  role 
transition.  In  general,  French  banks  seem  to 
make more effort than their global (and especially 
US)  peers  to  support  sustainable  investment.  The 
main  French  banks  joined  the  Net-Zero  Banking 
Alliance (NZBA)  launched in  April  2021  by  the  UN 
Environment 
Initiative. 
Members of the Alliance committed to phasing out 
GHG emissions from their lending and investment 
portfolios, in order to align with pathways to net-
zero by 2050 or sooner. French banks’ sustainable 
loans  reached  EUR 337 bn  in  2023  (up  from 
EUR 76 bn in 2020 and EUR 216 bn in 2022). Their 
exposure to coal has stabilised at a very low level 
(0.02% of their total  assets in 2023), while loans 
to  the  oil  industry  ecreased  from  EUR 78 bn  in 
2022  to  EUR 66 bn  in  2023,  i.e.  0.73%  of  total 
assets.  On  the  capital  markets,  the  issuance  of 
bonds  with  environmental,  social,  and  governance 
objectives  as  a  share  of  total  bond  issuance 
remained  around  15%,  close  to  its  three-year 
average  and  in  line  with  that  of  most  of  its  EU 
peers (172).  The  share  of  green  bonds  in  the  total 
bonds  outstanding  gradually  increased  over  time 
to reach 3.9% in 2023, in line with the EA average 
of 4.0%. 

Financial literacy 

is  crucial 

The  level  of  financial  literacy  among  the 
French  public  is  average,  despite  initiatives 
to  promote  financial  education.  Financial 
to  promote  retail-investor 
literacy 
in  capital  markets  but  also  to 
participation 
familiarise  SMEs  with  alternatives 
to  bank 
financing.  In  France,  financial  literacy  has  been 
the  educational 
increasingly 
curriculum,  particularly  in  middle  schools.  Since 
2016, the country has adopted a national strategy 
for  economic,  fiscal,  and  financial  education 
(EDUCFI),  with  the  Banque  de  France  designated 
as  the  national  operator  responsible  for 
its 
implementation. A key initiative under this strategy 
is  the  ‘EDUCFI  Passport’,  introduced  to  raise 

integrated 

into 

(172) Source: AFME CMU Key Performance Indicators, Seventh 

Edition, November 2024. 

63 

 
 
Table A5.1:  Financial indicators 

(1) Annualised data 
Credit growth and pension funds EU data refer to the EA average 
Source: ECB, ESTAT, EIOPA, DG FISMA CMU Dashboard, AMECO 

awareness  among  middle  school  pupils  about 
budgeting  and  financial  matters.  As  of  2024,  this 
programme  has  been  extended  to  approximately 
750 000  13/14-year-old  pupils.  Despite  these 
initiatives,  financial  literacy  remains  average.  The 
2023  Eurobarometer  survey (173)  shows  that  only 
17%  of  French  people  have  a  high  level  of 
financial  literacy,  64%  have  a  medium  level,  and 
the remaining 18% have a low level, compared to 
the  EU  average  of  18%  with  a  high  level  of 
literacy,  64% with a medium level,  and 18% with 
a low level. This gives an overall financial literacy 
indicator of 45.0 vs an EU average of 45.5. 

(173) Source: Monitoring the level of financial literacy in the EU - 

July 2023 - Eurobarometer survey. 

64 

20172018201920202021202220232024-Q3EUTotal assets of MFIs (% of GDP)368.8374.1383.2452.5441.0433.5420.8413.7248.4Common Equity Tier 1 ratio14.214.515.216.016.215.816.215.916.6Total capital adequacy ratio17.818.018.619.519.719.419.619.420.1Overall NPL ratio (% of all loans)3.12.72.52.21.91.81.92.11.9NPL (% loans to NFC-Non financial corporations)5.14.43.93.93.53.43.63.93.5NPL (% loans to HH-Households)3.63.22.92.62.32.12.12.22.2NPL-Non performing loans coverage ratio50.450.349.949.049.446.743.943.542.1Return on Equity16.46.56.04.17.16.15.97.110.0Loans to NFCs (% of GDP)42.143.343.751.849.550.147.946.530.0Loans to HHs (% of GDP)58.059.461.067.065.264.561.359.144.5NFC credit annual % growth6.46.45.613.53.88.22.22.40.8HH credit annual % growth6.05.66.34.85.65.21.30.10.7Stock market capitalisation (% of GDP)91.180.796.8100.5116.396.899.797.469.3Initial public offerings (% of GDP)0.360.120.300.050.690.060.01-0.05Market funding ratio59.158.257.856.156.054.053.2-49.6Private equity (% of GDP)0.610.720.630.731.060.940.74-0.41Venture capital (% of GDP)0.040.050.070.060.100.120.06-0.05Financial literacy (composite)------45.0-45.5Bonds (as % of HH financial assets)1.00.80.70.60.60.60.7-2.7Listed shares (as % of HH financial assets)4.74.24.84.75.24.85.0-4.8Investment funds (as % of HH financial assets)6.05.25.24.94.85.75.7-10.0Insurance/pension funds (as % of HH financial assets)40.039.939.638.836.533.633.3-27.8Total assets of all insurers (% of GDP)116.9114.0119.4127.7120.9100.498.699.354.8Pension funds assets (% of GDP)-----7.67.67.623.41-34-1011-1718-2425-27Colours indicate performance ranking among 27 EU Member States.Banking sectorNon-banks sector 
 
 
  
 
ANNEX 6: EFFECTIVE INSTITUTIONAL FRAMEWORK 

in 

technical  expertise 

France’s  institutional  framework  influences 
its competitiveness. France has made efforts to 
increase 
its  public 
administration. However, further work is needed to 
address  the  problems  of  complex  administrative 
procedures  and  fast-changing  legislation  cited  as 
a  hindrance  for  business.  Despite  progress  in 
digitalising public services, including the launch of 
an  app  for  eID  authentication,  France  is  still 
performing  slightly  below  the  EU  average  in  this 
area.  Challenges  persist 
the 
attractiveness of the public sector as an employer. 
The  efficiency  of  the  justice  system  also  faces 
challenges. 

increasing 

in 

Public perceptions 

Graph A6.1: Trust in justice, regional / local 
authorities and in government 

(1) EU27 from 2019; EU28 before 
Source: Standard Eurobarometer surveys 

regional  and 

Trust in government and justice is below the 
EU  average  and  has  deteriorated  further 
local 
in 
(Graph  A6.1).  Trust 
administrations  however  has 
increased.  When 
asked about improvements that can increase trust 
in  France’s  public  administration,  48%  of  citizens 
pointed to more transparency about decisions and 
the  use  of  public  money  (EU:  44%),  41%  to  less 
bureaucracy  (EU:  52%)  and  43%  to  streamlined 
interaction  between  citizens  and  administration 
(EU  28%)  (174).  The  perceived  quality  of  public 

administration  has  deteriorated  in  most  regions, 
although it remains overall above the EU average 
(175). 

Quality of legislation and regulatory 
simplification 

is 

room 

there 

Performance  in  developing  and  evaluating 
legislation  is  above  the  EU  average.  It  is 
stronger for ex post evaluation of legislation than 
impact 
for  public  consultation  and  ex-ante 
assessments.  However, 
for 
improving the oversight and quality controls on ex 
post  evaluation  of  legislation.  There  is  also  scope 
for  strengthening  the  requirements  governing  the 
transparency  and  systematic  adoption  of  public 
consultations  of  both  primary  and  secondary 
legislation  (Graph  A6.2),  as  well  as  to  further 
strengthen 
for  simplifying 
regulation  (table  A6.1).  While  public  consultations 
are  not  mandatory,  effort  has  been  made  to 
involve  civil  society  in  green  transition  policies.  In 
2023,  France  launched  a  broad  series  of  regional 
conferences  with  relevant  public  bodies,  business 
associations 
andnon-government 
organisations (176) to identify ways to meet climate 
objectives.  Low  technical  expertise  at  municipal 
level  was  identified  as  a  key  obstacle  to  green 
transition efforts (177). 

the  mechanisms 

in 

to 
its 

expertise 

increase 
France  has  made  efforts 
technical 
public 
administration.  A  new  state  in-house  consulting 
agency  was  established  as  the  primary  partner 
and  in-house  consultant  for  state  administrations 
and  operators  regarding  public  transformation 
projects. This has reduced consultancy spending by 
two-thirds in the past two years (178). 

(175) Inforegio - European Quality of Government Index 

(176) https://agence-cohesion-

territoires.gouv.fr/sites/default/files/2023-10/circulaire-n-
6420-SG-du-29-septembre-2023---territorialisation-
planification-Yocologique.pdf  

(177) https://agence-cohesion-

territoires.gouv.fr/sites/default/files/2020-
09/En%20détail%20Synthese%20TE%20%26%20VM_mai
%202019.pdf   

(174) Understanding Europeans’ views on reform needs - April 
2023 - - Eurobarometer survey. Country Fact Sheet. 

(178) https://www.transformation.gouv.fr/files/presse/cp-renfort-

competences-agence-conseil-interne.pdf 

65 

00.10.20.30.40.50.60.7AutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSpringAutumnSummerWinterSummerWinterSpringAutumnSpringAutumn2014201520162017201820192020202220232024Justice,  legal system EU27Justice,  legal system FRRegional or local public authorities EU27Regional or local public authorities FRGovernment  EU27Government  FR 
 
        
 
 
 
 
Table A6.1:  France. Selected indicators on administrative burden reduction and simplification 

(1) This table presents a subset of iREG indicators focusing on regulatory costs. The indicators refer to primary legislation. 
Source: OECD (2025), Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025 (forthcoming). 

Graph A6.2: Indicators of Regulatory Policy and 
Governance (iREG) 

timeliness  of 

partners,  with  clear  procedures  and  structures  on 
multiple levels. However, there are concerns about 
the  effectiveness  and 
these 
consultations,  especially  during  times  of  crisis. 
Social  partners have regularly voiced their lack of 
adequate  involvement  in  important  reforms  such 
as the pension system reform in 2023, as well as 
the  lack  of  timely  consultation  in  the  process, 
which 
influence  policy 
decisions.(179) 

limits  their  ability  to 

Efficiency of selected administrative 
procedures 

regulation 
The  OECD  product  market 
licensing 
indicators  show  that  France’s 
system  is  less  burdensome  than  the  EU-27 
average. However, it could still be further aligned 
with  best  practices.  For  example,  although  the 
government  keeps  an  up-to-date  online  inventory 
of  all  permits  and  licences  required/issued  to 

(179) 

For  an  analysis  of  the  involvement  of  France’s  social 
partners at national level in the European Semester and the 
Recovery  and  Resilience  Facility,  see  Eurofound  (2025), 
National-level  social  governance  of  the  European  Semester 
and the Recovery and Resilience Facility. 

Source: OECD (2025), Regulatory Policy Outlook 2025 and 
Better Regulation across the European Union 2025 
(forthcoming). 

Social dialogue 

France has a well-established social dialogue 
tradition,  but  meaningful  participation  of 
social  partners  in  shaping  and  implementing 
reforms and policies is essential. France has a 
strong  framework  for  consultation  of  social 

66 

0.00.51.01.52.02.53.03.54.0Primary lawsSubordinateregulationsPrimary lawsSubordinateregulationsPrimary lawsSubordinateregulationsFR_StakeholderengagementFR_Regulatory ImpactAssessmentFR_Ex-post evaluation oflegislationMethodologySystematic adoptionTransparencyOversight and quality control2021EU-27Ex ante impact assessment of legislationEx post evaluation of legislationIdentify and assess the impacts of the baseline or ‘do nothing’ option.Is required to consider the consistency of regulations and address areas of duplication.Identify and assess the impacts of alternative non-regulatory options.Is required to contain an assessment of administrative burdens.Quantify administrative burdens of new regulations.Is required to contain an assessment of substantive compliance costs.Quantify substantial costs of compliance of new regulations.Compares the impact of the existing regulation to alternative options.Assess macroeconomic costs of new regulations. Periodic ex post evaluation of existing regulations is mandatory.Assess the level of compliance.Government uses stock-flow linkage rules when introducing new regulations (e.g., one-in one-out).Identify and assess potential enforcement mechanisms.A standing body has published an in-depth review of specific regulatory areas in the last 3 years.In the last 5 years, public stocktakes have invited businesses and citizens to assess the effectiveness, efficiency, and burdens of legislation.When developing new legislation, regulators are required to …Yes /  For all primary laws For major primary laws For some primary lawsNo / Never 
     
 
 
   
 
Table A6.2:  Key Digital Decade targets monitored through the Digital Economy and Society Index 

Source: State of the Digital Decade report 2024 

there 

businesses  by  public  bodies, 
is  no 
requirement  for  the  government  to  regularly 
review  it  and  assess  whether  such  licences  and 
permits  are  still  required  or  should  be  withdrawn 
(see  also  Annex  4).  Furthermore,  according  to  a 
report  monitoring  the 
implementation  of  the 
Commission  recommendation  and  guidance  on 
speeding  up  permit-granting  procedures 
for 
infrastructure 
renewable  energy  and 
projects (180)  there  is  scope  for  further  aligning 
national  practices  in  France  with  the  guidance  to 
support  faster  and  shorter  procedures  for  the 
licensing of renewable energy projects.  

related 

Digital public services 

France has scope to improve its digital public 
services  for  citizens  (72.1)  and  businesses 
(79.3),  which  currently  score  below  the  EU 
average  (Table  A6.2).  Nevertheless,  90.8%  of 
French  internet  users  engage  with  e-government 
services,  surpassing  the  EU  average  of  75.0%.  To 
respond to strong public interest in digital services, 
the government is focusing on simplification plans 
and  increased  digital  maturity  to  transition  from 
simple  digitalisation  to  data-driven  user-friendly 
services and rights access.  

France  has  made  considerable  progress  in 
terms of access to e-health records in recent 
years.  It  achieved  an  overall  e-health  maturity 
score  of  79.3  in  2023,  up  from  54.5 in  2022(181), 
which shows solid progression. Flagship projects in 
the  national  recovery  and  resilience  plan  are 
related to health records and the electronic health 
data  space.  France  could  further  improve  its  e-
a 
health  maturity 
functionality  for  authorised  access  to  e-health 
records on behalf of others.  

introducing 

score 

by 

'France 

The country has made progress in rolling out 
eID  cards  and  applications.  In  2024  France 
launched 
identité',  an  app  for  eID 
authentication and digital ID services, as part of its 
RRP.  However,  France  has  not  yet  set  up  and 
notified  eID  schemes  for  legal  persons  under  the 
eIDAS  Regulation(182).  This  means  that  French 
businesses  cannot  authenticate  themselves  to 
access  public  services  provided  by  other  Member 
States,  including  those  enabled  by  the  Once-Only 
Technical System(183), part of the EU Single Digital 
Gateway. 

is 

developing 

France 
necessary 
infrastructure  towards  seamless,  automated 
exchange  of  authentic  documents  and  data 
across the EU. There are still additional  steps to 

the 

(180) European Commission: Directorate-General for 

Energy, Monitoring the implementation of the Commission 
recommendation and guidance on speeding up permit-
granting procedures for renewable energy and related 
infrastructure projects – Final report, Publications Office of 
the European Union,  2025,  link  

(181) European Commission. Digital Decade 2024: Country reports 

(182) European Commission, eIDAS Dashboard. 

(183) European Commission, The Once Only Principle System: A 

breakthrough for the EU’s Digital Single Market 

67 

Digital Decadetarget by 20302022202320242024EU-27Digitalisation of public services169717279100Score (0 to 100)20212022202320232030280797985100Score (0 to 100)202120222023202320303na547979100Score (0 to 100)20212022202320232030Digital public services for businessesAccess to e-health recordsFranceEU-27Digital public services for citizens 
 
 
 
  
 
be taken for France to become technically ready to 
connect to the Once-Only Technical System ((184)).  

Civil service  

The  attractiveness  of  public  administration 
as  an  employer  has  continued  to  decline.  In 
2022,  the  number  of  available  posts  increased. 
However,  the  number  of  new  recruits  joining  the 
state  civil  service  decreased,  with  15%  of  all 
vacancies  remaining  unfilled.  This  marked  a 
historic low. This fall in attractiveness has resulted 
in  very  high  outsourcing  rates  in  certain  fields 
(over 60% in fields such as digital technology (185). 
Combined  with  a  rapidly  ageing  public  sector 
workforce 
administration 
employees are over 49 years of age(186)), there are 
risks to the capacity of the public administration in 
France.  

public 

(42% 

of 

Civil servants in France pursue adult learning 
(FR:  18.6;  EU-27:  18.9).  In  2024,  the  government 
launched  a  comprehensive  training  initiative  for 
senior civil servants in the area of green transition 
(187).  The  proportion  of  women  in  senior  civil 
service  posts  increased  to  36.8%  in  2024  but 
remains  below  the  EU-27  average(188).  Women 
occupy  fewer  posts than  men  in  the  A+  category, 
i.e.  senior  management  and  executive  roles, 
accounting for only 2% of posts in this category.  

Integrity 

consider 

corruption 

Companies 
to  be 
significant  and  a  problem  when  doing 
business, while there are concerns regarding 
anti-corruption  resources  in  the  judiciary.  In 
France, 62% of companies consider that corruption 

(184) European Commission, Once-Only Technical System 

Acceleratormeter 

(185)https://www.economie.gouv.fr/files/files/directions_services/c

for  bribing  a 

is  widespread  (EU  average  64%),  while  42% 
consider  that  corruption  is  a  problem  when  doing 
business (EU average 36%) (189). Moreover, 36% of 
companies  believe  that  people  and  businesses 
caught 
senior  official  are 
appropriately  punished  (EU  average  31%) (190). 
Significant  results  continue  to  be  achieved  in  the 
prosecution  and  adjudication  of  corruption  cases, 
although  concerns  exist  in  relation  to  resources, 
retain 
including 
specialised  investigators  (191).  Some  shortcomings 
also  persist  regarding  the 
investigation  and 
prosecution of foreign bribery,  including corporate 
liability  and  alternative  criminal  measures  for 
companies (CJIPs) (192).  

to  carry  out 

training  and 

Combating  corruption  in  public  procurement 
is  one  of  the  priorities  for  the  prosecution 
authorities,  considering  that  it  is  an  area 
with  a  high  risk  of  corruption.(193)  34%  of 
companies (EU average 27%) think that corruption 
has prevented them from winning a public tender 
or a public procurement contract in practice in the 
last three years (194). Following concerns raised on 
large  public  contracts,  a  draft  law  on  the  use  of 
consulting  companies  for  public  policies  was 
presented  at  the  Parliament,  where  it  remains 
pending (195). 

two 

relevant  associated  draft 

Like  most  Member  States,  France  has 
implemented  a  public  register  for  lobbyists, 
laws 
while 
presented in the second half of 2023 are currently 
still pending in parliament (196). Moreover, although 
guidelines  on  the  register  of 
lobbyists  have 
entered into force, concerns remain regarding top-
ranking officials disclosing lobbying meetings, and 
regarding 
lobbying  activities  and 
lobbyists.  

types  of 

(189) Flash Eurobarometer 543 on businesses’ attitudes towards 

corruption in the EU (2024).   

(190) Ibid. 

(191) See the 2024 country-specific chapter for France of the Rule 

of Law Report, pp. 10-11. 

(192) Ibid.,, p. 11, with further references, and Implementing the 
OECD Anti-Bribery Convention Phase 4 Report: France. 

ge/filiere-numerique-Etat.pdf?v=1698671547 

(193) Ibid., p. 16. 

(186) Eurostat, 2025,  European Union Labour Force Survey. 

(194) Flash Eurobarometer 543 on businesses’ attitudes towards 

(187) https://fte-transition-ecologique.fr/2024/05/22/le-cnrs-a-
linsp-integrer-la-transition-ecologique-dans-la-formation-
des-hauts-fonctionnaires-de-demain/   

corruption in the EU (2024).   

(195) See the 2024 country-specific chapter for France of the Rule 

of Law Report, p. 16. 

(188) European Institute for Gender Equality, 2024. link 

(196) Ibid., pp. 13-14. 

68 

 
 
 
Justice 

the 

The  efficiency  of 
justice  system 
continues  to  face  challenges.  The  disposition 
time in civil and commercial cases at first instance 
had  decreased  between  2021  (495  days)  and 
2022  (333  days).  However,  it  increased  in  2023 
(354  days).  Compared  to  2021,  the  disposition 
time  in  administrative  cases  increased  in  2023 
(322  days  in  2023  compared  to  299  days  in 
2021).  The  quality  of  the  justice  system  is 
considered  to  be  good  overall.  The  lack  of  staff 
does  remain  a  challenge.  However,  a  law  was 
adopted  in  2023  providing  for  additional  posts  in 
the  judiciary  every  year  until  2027.  The  level  of 
digitalisation 
improved  although 
investments  are  being  made  to  address  this.  As 
regards 
independence,  no  systemic 
deficiencies have been reported (197). 

could  be 

judicial 

(197) For more detailed analysis of the performance of the justice 
system  in  France,  see  the  upcoming  2025  EU  Justice 
Scoreboard and the 2024 Rule of Law Report. 

69 

 
 
SUSTAINABILITY 
ANNEX 7: CLEAN INDUSTRY AND CLIMATE MITIGATION 

Despite the adoption of measures to support 
investment  in  clean  industry  and  climate 
mitigation,  France  still  faces  significant 
challenges.  France  has  strong  capabilities  in  low 
carbon technologies, but still struggles with a lack 
of  skills  and  with  administrative  bottlenecks  for 
permitting  clean  industry  projects.  The  country  is 
heavily reliant on imports for critical raw materials 
and  has  recycling  rates  below  EU  averages, 
indicating  a  need  for  further  improvement  in 
securing  supply  chains  and  enhancing  recycling 
practices.  Although  France  has  made  progress  in 
decarbonising 
intensity 
remains  high  in  some  sectors,  and  additional 
climate  policies  are  needed  to  meet  greenhouse 
gas 
targets.  Furthermore,  France's 
circular  economy  and  waste  management 
practices lag behind EU  averages, and there is an 
investment  gap  that  needs  to  be  addressed  to 
meet  circular  economy  and  improve  pollution 
prevention needs, especially concerning water.  

industry,  emissions 

reduction 

its 

Strategic autonomy and technology 
for the green transition 

France  has  a  strong  manufacturing  base  in 
low  carbon  technologies  and  components, 
including  nuclear,  wind,  grid,  and  solar 
technologies (198),  as  well  as  batteries,  while 
it is a growing player for electrolysers. French 
largest  European 
companies  are  among  the 
manufacturers  of  nuclear  equipment,  nuclear 
technologies and smart meters. France has also a 
strong manufacturing base in battery and storage 
lithium-ion  electric 
technologies 
vehicle  batteries),  with  a  manufacturing  capacity 
of  14.5–16.0  GWh/y  (6-7%  of  total  EU  capacity). 
Major  new  French  players  are  emerging,  with 
to  produce 
megafactory  projects  expected 
115 GWh  of  cells  in  the  long  term  to  meet  the 

(specifically 

(198) France’s  three  largest  industrial  Net-Zero  sectors  by  value 
are  wind  power,  with  a  production  amounting  to  EUR  5.7 
billion (6% of total EU production), EUR 2.6 billion (4% of EU 
production) for grid technologies, and EUR 1.4 billion (2% of 
EU  production)  for  solar  energy. 
In  EC,  The  net-zero 
manufacturing industry landscape across the Member States, 
1/2025 

is 

the 

technology,  France 

extensive needs of the automotive sector (199). For 
wind 
fourth  EU 
player (200),  behind  Germany,  Denmark  and  Spain, 
representing  8  to  9%  of  EU  capacity  and  with  a 
manufacturing  capacity  of  approximately  2.5  GW 
for  nacelles,  around  1.7–1.8  GW  for  towers,  and 
3.3-3.5  GW  for  blades  (201).  For  solar photovoltaic 
technology, France has a capacity between 1.7 GW 
and  2.6  GW  (9-13%  of  EU  capacity),  primarily  in 
modules  and  with  marginal  shares  for  cells  (0.1-
0.15  GW)  and  wafers  (0.2  GW)  (202).  For  heat 
pumps, it has the third largest presence in the EU 
with  at  least  16  firms,  but  far  behind  Italy  and 
Germany (203). Last, France represents 1-3% of EU 
capacity  in  the  value  chains  of  electrolysis  and 
fuel cells technologies used to produce hydrogen. 

Interest; 

technologies 

France supports the development of net zero 
industry,  but  the  lack  of  skills  may  be  an 
obstacle.  France  provides  direct  support  for  the 
development  of  clean 
through 
several  programmes:  (i)  for  batteries,  large-scale 
projects are developed, notably through Important 
Projects  of  Common  European 
(ii) 
France’s  recovery  and  resilience  plan  includes 
large investments for hydrogen; (iii) ‘France 2030’, 
a  EUR 54  billion  investment  plan,  targets  French 
industrial  development  in  key  sectors,  including 
EUR  8  billion  for  energy  technology investment in 
the decarbonisation of industry, in hydrogen and in 
small  modular  reactors.  In  addition  to  direct 
support, France has set up a EUR 2.9 bn tax credit 
scheme  for  investment  in  clean  tech  industries. 
However,  a  potential  obstacle 
to  business 
investment  in  clean  industry  is  the  lack  of  skills, 
despite the support under France 2030 to training 
and  (re)skilling  programmes,  particularly  in  the 
electric vehicle batteries sector (204). 

France  is  speeding  up  permitting  for  clean 
industry. In October 2023, France adopted a law 

(199) France,  Ministère  de 

l’économie,  Théma  de 

la  DGE, 

Déploiement de l’électromobilité, 31/10/2024. 

(200)EC, Net zero technologies monitoring dashboard. 

(201) EC,  The  net-zero  manufacturing  industry  landscape  across 

the Member States, 1/2025. 

(202) Idem 

(203) Bruegel, European clean tech tracker, update: 14/7/2024.  

(204) France,  appel  à  manifestations  d’interêt  « compétences  et 

métiers d’avenir, 5/2023. 

70 

 
 
 
 
 
 
 
for  green  industry.  The  law  aims  to  speed  up  the 
permitting  procedures  for  the  construction  of 
factories;  improve  the  procedures  for  industrial 
land  planning  and  brownfield  regeneration;  boost 
private financing for low carbon projects; and take 
better  account  of  environmental  criteria  in  public 
procurement  procedures.  To  implement  the  law, 
several  decrees  were  adopted  in  July  2024 (205) 
that  made  it  possible  to  conduct  the  permit-
public 
granting 
improved 
consultations.  While  permitting  has 
following  the  adoption  of  the 
its 
implementing  decrees,  administrative  capacity 
remains a potential bottleneck. 

parallel  with 

law  and 

process 

in 

Critical raw materials 

France  depends  on  imports  for  many  of  the 
critical  raw  materials  needed  for  the 
development  of the  net  zero industry.  France 
is  among  the  top  three  EU  producers  of  silicon 
tantalum  and  nickel (206).  However,  a 
metal, 
significant number of critical raw materials are not 
produced in France (207). In 2023, the main critical 
raw  materials  imported  by  France  from  non-EU 
countries,  in  terms  of  trade  values,  were  coking 
coal (Australia, United States), aluminium (Russian 
Federation,  Norway,  Switzerland),  and  copper 
(Chile) (208).  France’s 
is 
around the EU average (209) and could be improved 
by  a  further  diversification  of  France’s  sources  of 
supply of critical raw materials. 

import  concentration 

raw  materials. 

France  adopted  a  national  strategy  which 
supports  projects  to  secure  its  supply  of 
critical 
the 
recommendations of the 2022 Varin report, France 
adopted  a  national  strategy  to  secure  the  supply 
of  critical  raw  materials.  Under  this  strategy, 
France  has  (i)  enhanced  the  monitoring  of  supply 

Following 

(205) France,  Loi 

industrie  verte: 

récapitulatif  des  décrets 

d’application, 19/7/2024 

(206) EC, Raw material Information System, country profile France. 
Nickel is produced in New Caldeonia and is mainly exported 
to Asian countries.  

(207) France, Mineralinfo. 

(208) EC, Raw material Information System, country profile France.  

(209) The  import  concentration  index  measures  how  much  a 
country relies on a limited number of sources for a basket of 
critical raw materials. Source: COMEXT.  

71 

resilience; 

chains  and 
(ii) 
their  short-term 
developed  partnerships  with  countries  rich  in  raw 
materials;  and  (iii)  provided  financial  support  for 
the  extraction,  processing  and  recycling  of  critical 
raw  materials.  This  support 
in 
particular  through  the  France  2030  investment 
plan, under which EUR 1 billion has been allocated 
to  a  number  of  projects  targeting  critical  raw 
materials (210).  

is  provided 

The  recycling  of  raw  materials  could  be 
further improved. The recycling rate for e-waste, 
a key source of critical raw material, stood at 77% 
in 2022, below the EU average of 81%. The reuse 
and recycling rate for end-of-life vehicles, at 88%, 
was  around  the  EU  average.  This  points  to  the 
need to avoid the leakage of critical raw materials, 
especially  as  the  car  industry  shifts  to  electric 
vehicles.  Dedicated  funding  has  been  allocated  to 
this  issue  through  various  instruments  (211),  in 
particular under the France 2030 investment plan. 
Many  measures  promoting  reuse  or  increased 
recycling of critical raw materials are implemented 
through extended producer responsibility schemes. 

Climate mitigation 

Industry decarbonisation 

In  France,  the  greenhouse  gas  emissions 
intensity of manufacturing is low and falling, 
but industry still accounts for almost a fifth 
of  total  emissions.  In  2023,  18%  of  France’s 
total  greenhouse  gas  emissions  came  from  the 
manufacturing  sector,  a  share  that  has  remained 
stable  in  recent  years,  just  below  the  EU  average 
of  22 % (212). 
industrial  production 
emitted  310 g  CO2eq  of  greenhouse  gases  per 
euro of gross value added (GVA), somewhat above 

In  2022, 

(210) France, Ministère de l’écomie, Trésor-eco n°351, Les minerais 

dans la transition énergétique, encadré N°2, 10/2024. 

(211) PEPR Recyclage | CNRS 

(212) In  2023.  Manufacturing  includes  all  divisions  of  the  “C” 
section  of  the  NACE  Rev.  2  statistical  classification  of 
economic  activities.  In  the  remainder  of  this  section,  unless 
indicated  otherwise,  data  on  manufacturing  refer  to  the 
divisions  of  the  NACE  section  C  excluding  division  C19 
(manufacture  of  coke  and  refined  petroleum  products),  and 
the  year  2022.  The  source  of  all  data  in  this  section  is 
Eurostat;  data  following  the  UNFCCC  Common  Reporting 
Framework (CRF) are from the European Environment Agency 
(EEA), republished by Eurostat. 

 
 
 
improvement, decreasing by 7% from 1.3 GWh per 
euro of GVA to 1.2 GWh/€. 

Graph A7.2: Manufacturing industry production: 
total and selected sectors, index (2021 = 100), 
2017-2023 

the  EU  average  of  270 g/€.  Since  2017,  the 
intensity  of  France’s 
greenhouse  emissions 
industry has decreased by 15 %, less than the EU 
average  of  19 %.  The  shares  of  France’s 
manufacturing  industry  emissions  coming  from 
energy  and  non-energy-related  sources  in  2023 
(the  latter  of  which  primarily  relate  to  industrial 
processes),  are  balanced  at  51%  and  49%,  while 
in 
the  EU  overall,  energy-related  emissions 
dominate with 57%. 

Graph A7.1: GHG emission intensity of manu-
facturing and energy-intensive sectors, 2022 

Source: Eurostat. 

The  greenhouse  gas  emissions  intensity  of 
manufacturing  in  France  is  low  for  energy 
use,  but  above  the  EU  average  for  industry 
processes  and  product  use (213).  With  115  g 
CO2eq  per  euro  of  GVA  in  2022,  the  energy-
related  emissions  intensity  of  manufacturing  in 
France was about 86% of the EU average despite 
some convergence between 2017 and 2022, when 
it decreased by 10% in France but 16 % in the EU 
overall.  For  industrial  processes  and  product  use, 
the emissions intensity of manufacturing in France 
was  11%  higher  in  2022  than  the  EU  average, 
despite a steeper decline between 2017 and 2022, 
by  26%,  compared  to  the  EU  decrease  of  23 %. 
The  share  of  electricity  and  renewables  in  final 
energy  consumption  of  manufacturing  in  France 
increased  only  slightly  between  2017  and  2022, 
from  42.5%  to  44.3%.  The  energy  intensity  of 
manufacturing  in  France  too  saw  only  a  slight 

(213) For the GHG emissions intensity of GVA related to energy use 
and  industrial  processes  and  product  use  respectively,  GHG 
emissions  are  from  inventory  data  in  line  with  the  UNFCCC 
Common  Reporting  Format  (CRF),  notably  referring  to  the 
source sectors CRF1.A.2 –  fuel combustion in manufacturing 
industries  and  construction  and  CRF2  –  industrial  processes 
and  product  use.  The  CRF1.A.2  data  broadly  correspond  to 
the NACE C and E sectors, excluding C-19. GVA data (in the 
denominator  for  both  intensities)  are  aligned  with  this 
sectoral  coverage.  Therefore,  they  are  not  fully  consistent 
with the data referred to in other part of this section. 

Source: Eurostat. 

Energy-intensive  industries  face  challenges. 
Energy-intensive  industries (214)  account  for  12% 
of  France’s  total  manufacturing  GVA  in  2022,  5 
percentage  points  above  the  EU  average.  Among 
these  sectors,  the  manufacture  of  basic  metals 
had  a  high  greenhouse  emission  intensity  of 
production, with 6.5 kg CO2eq/€ of GVA, above the 
EU  value  overall  of  3.5 kg/€,  ranking  France  third 
highest in the EU in this regard. Business electricity 
prices  have  risen  sharply  (by  57%  in  2023) (215) 
and are now in line with the EU level (see Annex 8 
the  Affordable  Energy  Transition).  Business  gas 
prices  have  also  continued  to  rise  (by  11%  in 
2023) (216) and are above the EU average, putting 
increased  pressure  on  energy-intensive  industries. 
Production  in  the  energy-intensive  industries  has 

(214) Notably,  the  manufacture  of  paper  and  paper  products 
(NACE  division  C17),  of  chemicals  and  chemical  products 
(C20),  “other”  non-metallic  mineral  products  (C23;  this 
division includes manufacturing activities related to a single 
substance of mineral origin, such as glass, ceramic products, 
tiles,  and  cement  and  plaster),  and  basic  metals  (C24).  To 
date,  these  industries  are  energy-intensive  –  i.e.  consuming 
much  energy  both  on  site  and/or  in  the  form  of  purchased 
electricity  –  and  greenhouse  gas  emissions  intensive,  in 
various combinations. 

(215) Excluding VAT. Ministère de la Transition Écologique et de la 
Cohésion  des  territoires,  juillet  2024,  Prix  de  l’électricité  en 
France et dans l’UE en 2023. 

(216) Excluding VAT. Ministère de la Transition Écologique et de la 
Cohésion des territoires, juillet 2024,  Prix du gaz naturel en 
France et dans l’UE en 2023. 

72 

01234567C-C19C17C20C23C24KG CO2eq / €FranceEU-277075808590951001051101151202017201820192020202120222023ManufacturingManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of other non-metallic mineral productsManufacture of basic metals 
  
 
      
 
declined  since  2021,  with  production  of  cement, 
ceramics, glass and lime (16% decrease) and basic 
metals (13% decrease) shrinking the most (217). 

a 

has 

comprehensive 

France 
policy 
framework  to  decarbonise  industry.  The  draft 
national  low  carbon  strategy  (SNBC  3)  sets  an 
objective of 46% reduction of industrial emissions 
by 2030 (compared to 2015), up from 35% in the 
SNBC  2.  France  has  launched  several  funding 
mechanisms  to  support  the  development  and 
deployment  of  green  technologies.  For  example, 
to  accelerate 
the  France  2030  plan  aims 
innovation  in  areas  like  hydrogen,  carbon  capture 
and  storage,  and  energy  efficiency  technologies 
(see  above).  Under  the  plan,  EUR 4.5 bn 
is 
allocated  to  industrial  decarbonisation  for  2022-
2026.  In  November  2023,  the  government  also 
signed  decarbonation  roadmaps  with  50  of  the 
main  industrial  emitters  in  the  country  including 
steel,  cement  or  chemicals  production  plants.  The 
goal is to reduce emissions by 45% in these sites 
by 2030. 

Reduction  of  emissions  in  the  effort  sharing 
sectors 

To  attain  its  2030  target  for  the  effort 
sharing  sectors,  France  needs  to  specify 
further  climate  mitigation  policies  and 
swiftly  adopt  and  implement  the  planned 
measures  (218).  GHG  emissions  from  France’s 
effort  sharing  sectors  in  2023  are  expected  to 
have  been  25.7%  below  those  of  2005,  which  is 
falling  significantly  short  of  its  effort  sharing 
target  of  a  47.5%  reduction.  By  2030,  current 
policies  are  projected  to  reduce  them  by  24.4% 
relative 
levels;  additional  policies 
considered  in  France’s  final  updated  national 
energy  and  climate  plan  are  projected  to  achieve 
reductions  of  a  further  22  percentage  points, 
leaving  a  shortfall  of  1.1  percentage  points 
against  the  target (219).  While  France  could  reach 

to  2005 

(217) Source: Eurostat. 

in  Regulation 

(218) The national greenhouse gas emission reduction target is set 
(the  Effort  Sharing 
(EU)  2023/857 
out 
Regulation).  It  applies  jointly  to  buildings  (heating  and 
cooling); road transport, agriculture; waste; and small industry 
(known as the effort sharing sectors). 

(219) The emissions from effort sharing sectors for 2023 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 

its  target  by  using  domestic  flexibilities  available 
under  the  Effort  Sharing  Regulation,  swift  and 
steady adoption of the full set of measures will be 
critical  given  the  large  gap  between  current  and 
additional measures. 

There is scope to further decrease emissions 
from  road  transport  and  buildings.  Between 
2005  and  2023,  greenhouse  gas  emissions  from 
road transport decreased by 13% in France, while 
they  decreased  by  5%  in  the  EU  overall.  From 
buildings,  they  decreased  by  44%,  more  than  the 
33% seen in the EU overall. At the same time, the 
reduction  of  GHG  emissions  in  these  sectors 
appears to have experienced a worrying slowdown 
most  recently,  deviating  from  the  trajectories 
defined  in  France’s  national  low-carbon  strategy 
(draft  SNBC 3) (220).  If  perpetuated,  this  could 
undermine France’s ability to meet its 2030 effort 
sharing target.   

Graph A7.3: Greenhouse gas emissions in the 
effort sharing sectors, 2005 and 2023 

Source: European Environment Agency 

Sustainable industry 

Circular economy transition 

measures”, WAM) as per France’s final updated national 
energy and climate plan. 

(220) According to Citepa, the organisation in charge to establish 
France’s GHG emissions inventories, GHG emissions from 
road transport decreased by 0.8% year-on-year in 2024, 
following an annual decrease of 3% in the previous year. For 
building, in 2024 GHG emissions reductions amounted to 
1.1% year on year, following a 6.5% decline in the previous 
year. Baromètre du Citepa : première estimation des 
émissions sur l'ensemble de l'année 2024 - Citepa. 

73 

05010015020025030035040045020052023MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
 
 
     
 
Despite  some  positive trends  and initiatives, 
is  room  for  accelerating  France’s 
there 
circular  transition.  Standing  at  17.6%  in  2023, 
France’s  circular  material  use  rate  has  been 
slightly  but  steadily  increasing  over  the  last  four 
years (from 16.2% in 2020), staying above the EU 
average  of  11.8%.  France’s  resource  productivity 
has  been  constantly  higher  than  the  EU  average. 
The country generated EUR 3.71 per kg of material 
consumed in 2023 compared to the EU average of 
EUR 2.22. France is also amongst the top countries 
for  the  uptake  of  EU  Ecolabel (221).  Meeting  the 
packaging reuse targets set by the Anti-Waste law 
(5% in 2025, 10% in 2027) (222), however, remains 
difficult. 

Waste management remains a challenge, and 
France  is  at  risk  of  not  meeting  EU  targets. 
The  rate  of  municipal  waste  generation  has 
remained  static  over  recent  years,  at  535 kg  per 
capita  in  2022,  above  the  EU  average  of  513 kg 
per  capita.  The  recycling  rate  for  municipal  waste 
increased  slightly  from  36%  in  2010  to  41 %  in 
2022 but remained below the EU average of 49 % 
in the same year. France is at risk of not reaching 
the  2025  target  of  55%  reuse  and  recycling  of 
municipal  waste.  The  recycling  rate  of  plastic 
packaging specifically stood at 26% in 2022, well 
below the EU average of 41% and the 2025 target 
of  65%.  The  incineration  rate  in  France  remained 
static  and  stood  at  31%  in  2022.  Between  2010 
and  2022,  the  landfilling  rate  decreased  from 
29% to 23%. 

Current  investment  in  the  circular  transition 
investment 
insufficient.  France’s 
has  been 
needs for the circular economy and waste amount 
to  EUR 26.4  billion  per  year.  Most  of  this,  around 
EUR 23.6  billion  per  year,  is  needed  for  circular 
economy measures in the mobility, food and built 
environment  systems.  A  further  EUR 2.9 million  is 
needed  for  waste  management.  Current  circular 
economy  investments  across  the  economy  reach 
around EUR 19.6 billion per year in France, with a 
further  EUR  2.2  billion  provided  for  waste 

management.  That  leaves  an  annual  investment 
gap of EUR 4.6 billion (223). 

Zero pollution industry 

Air quality in some parts of France continues 
to give cause for concern. Despite the decrease 
in  several  air  pollutants  since  2005,  available 
annual  estimates  (for  2022)  by  the  European 
Environment  Agency(224)  attribute  20  700  deaths 
each year (or 214 200 years of life lost (YLL)) to 
fine particulate matter (PM2.5); 5 000 deaths each 
year (or 51 300 YLL) to nitrogen dioxide (NO2); and 
9 000 deaths each year (or 94 100 YLL) to ozone. 
Exceedances  above  the  limit  values  set  by  the 
Ambient  Air  Quality  Directive  were  registered  for 
NO2 in three air quality zones (225) and for PM10 in 
two  air  quality  zones (226).  The  last  exceedances 
were  confirmed  by  the  EU  Court  of  Justice (227). 
According to reporting under the National Emission 
Reduction  Directive,  France  is  projecting  to  meet 
its commitments for 2030. 

Water pollution is also of concern. France has 
the  sixth  highest  amount  of  emissions  of  heavy 
metals  to  water,  and  is  in  14th  position  for 
emission intensity (below the EU average intensity 
of  0.864 kg 
/  billion  EUR  GVA).  The  main 
contributors  to  emissions  to  water  in  France  are 
the chemical sector for heavy metals, nitrogen and 
total  organic  carbon;  the  pulp  and  paper  industry 
for  phosphorus;  and  the  metal  production  and 
aromatic 
for 
sector 
processing 
hydrocarbons (PAHs). 

polycyclic 

Current investment in pollution prevention is 
insufficient.  In  pollution  prevention  and  control, 
investment  needs  are  estimated  at 
France’s 
EUR 13.2  billion  per  year 
(including  baseline 
investments)  for  the  2021-2027  period.  Most  of 
this,  EUR  9.8  billion  is  needed  for  air  pollution 
control.  The  current  investment  levels  reach  an 

(223) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

(224) EEA, 2024, Harm to human health from air pollution in 

Europe: burden of disease status, 2024, Link. 

(225) ZAG Paris, ZAG Montpellier, and ZAG Lyon. 

(221) European Commission, EU Ecolabel facts and figures, Link. 

(226) ZR Mayotte and ZAG Marseille-Aix. 

(222) La librairie ADEME, Bilan annuel du réemploi des 

(227) Judgment of 28 April 2022, European Commission v French 

emballages: données 2023, Link. 

Republic, C-286/21, C:2022:319. 

74 

 
 
 
estimated  EUR  5.2 billion  per  year,  leaving  an 
annual investment gap of EUR 8 billion (228). 

(228) European Commission, DG Environment, Environmental 

investment needs & gaps assessment programme, 2025 
update. Expressed in 2022 prices. 

75 

 
 
Table A7.1:  Key clean industry and climate mitigation indicators: France 

Source:  Net zero industry: European Commission: The net-zero manufacturing industry landscape across Member States: final 
report, 2025. Automotive industry transformation: Eurostat. Critical raw materials: Eurostat. Climate mitigation: See 
footnotes in the "climate mitigation" section; reduction of effort sharing emissions: EEA greenhouse gases data viewer; European 
Commission, Climate Action Progress Report, 2024. Sustainable industry: Years of life lost due to PM2.5: Eurostat and EEA, 
Harm to human health from air pollution in Europe: burden of disease status, 2024. Air pollution damage: EEA, EU large industry 
air pollution damage costs intensity, 2024. Emissions covered: As, benzene, Cd, Cr, Hg, NH3, Ni, NMVOC, NOX, Pb, dioxins, PM10, 
PAH, SOX. Water pollution intensity: EEA, EU large industry water pollution intensity, 2024. Releases into water covered from 
cadmium, lead, mercury, nickel. Other indicators: Eurostat. 

76 

Strategic autonomy and technology for the green transitionNet zero industryOperational manufacturing capacity 2023- Solar PV (c: cell, w: wafer, m: module), MW100-150 (c), 200 (w), 400-2250 (m)- Electrolyzer, MW60-160- Wind (b: blade, t: turbine, n: nacelle), MW3300-3500 (b), 2400-2500 (n), 1700-1850 (t)- battery, MWh14500-16000Automotive industry transformation201720182019202020212022202320182021Motorisation rate (passenger cars per 1000 inhabitants), %569568569568571570578539561New zero-emission vehicles, electricity motor, %1.181.431.936.649.6913.1416.491.038.96Critical raw materials201720182019202020212022202320182021Material import dependency, %38.637.536.736.037.635.324.222.6Climate mitigationTrendIndustry decarbonisation201720182019202020212022202320172022GHG emissions intensity of manufacturing production, kg/€0.360.350.330.320.330.310.270.340.27Share of energy-related emissions in industrial GHG emissions52.053.852.551.650.349.548.844.842.5Energy-related GHG emissions intensity of manufacturing127.6125.8119.5119.4121.4115.1-158.4132.9and construction, kg/€Share of electricity and renewables in final energy consumption42.542.642.843.542.444.446.143.344.2in manufacturing, %Energy intensity of manufacturing, GWh/€1.311.301.251.261.251.211.101.291.09Share of energy-intensive industries in manufacturing production12.07.3GHG emissions intensity of production in sector [...], kg/€- paper and paper products (NACE C-17)0.490.510.480.460.500.49--0.730.68- chemicals and chemical products (NACE C20)1.261.211.111.141.431.401.29-1.251.26- other non-metallic mineral products (NACE C23)2.122.192.192.302.192.18--2.532.24- basic metals (NACE C24)4.034.894.393.556.586.51--2.793.49Reduction of effort sharing emissions20182019202020212022202320182023GHG emission reductions relative to base year, % -20.2-23.7-25.7- domestic road transport-7.9-8.4-22.2-12.5-9.9-12.81.45.2- buildings-28.2-30.3-32.4-30.0-40.7-43.921.432.92005202120222023TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %401.1320.2306.2297.8-47.5-23.1-1.1Sustainable industryTrendCircular economy transition20182019202020212022202320182021Material footprint, tonnes per person14.314.313.014.213.913.514.715.0Circular material use rate, %19.5      17.1      16.2      15.9      17.5      17.6      11.611.1Resource productivity, €/kg3.0        3.0        3.2        3.1        3.5        3.7        2.12.3Zero pollution industryYears of life lost due to PM2.5, per 100,000 inhabitants387      312      251      314      500      -702571Air pollution damage cost intensity, per thousand € of GVA    25.8          27.5      Water pollution intensity, kg weighted by human factors per bn € GVA    0.6   0.9FranceEU-27FranceEU-27FranceEU-27 
 
 
  
 
ANNEX 8: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  enhancing 
energy  competitiveness  and  affordability, 
while advancing the transition to net zero. It 
examines  the  measures  and  targets  proposed  in 
the final update to the French national energy and 
climate plan (NECP) for 2030. 

Energy prices and costs  

Graph A8.1: Retail energy price components for 
household and non-household consumers, 2024 

target 

France is making progress in its clean energy 
transition,  by  reaching  95%  of  low-carbon 
electricity  production,  with  nuclear  (68%) 
and  renewables,  and  by  reducing  coal  use, 
with a complete phase-out planned for 2027. 
However,  France  did  not  meet  its  renewable 
for  2020 (229)  and  has  not 
energy 
established  one  for  2030  in  its  final  updated 
NECP,  though  it  has  set  ambitious  low-carbon 
emissions  targets.  Increasing  the  deployment  of 
renewables  and  storage  could  boost  investment, 
create jobs, and develop a strong market for clean 
technologies,  while  reducing  the  cost  of  energy. 
Continued 
the  announced 
national electricity grid will, with greater flexibility, 
foster  the  reindustrialisation,  decarbonisation  and 
electrification.  

reinforcement  of 

consumers  while 

France  recorded  an  increase  in  retail  energy 
prices in 2024 compared to the previous year 
for  household 
they 
decreased  for  non-household  and  generally 
remain  close  to  EU  averages.  Between  2023  and 
increased  18.4%  for 
2024,  household  prices 
electricity  and  14.8%  for  gas.  In  opposition,  non-
households’  prices  decreased  of  34.1%  for 
electricity  and  24.5%  for  gas.  Below-EU-average 
non-household  prices  are  largely  driven  by  lower 
network costs and a reduced burden of taxes and 
levies  compared  to  the  EU  average,  with  for 
example  taxes  and  levies  on  electricity  only 
representing 7.8% of the total  price, compared  to 
the EU average of 15.4%. 

(229) Gross final energy consumption (Statistics | Eurostat). In 
2023, with a share of 22.3 % of renewable energy in its 
gross final energy consumption, France was still below its 
2020 binding renewable energy target of 23%.  

77 

(i) For household consumers, consumption band is DC for 
electricity and D2 for gas. Taxes and levies are shown 
including VAT. 
(ii) For non-household consumers, consumption band is ID for 
electricity and I4 for gas. Taxes and levies are shown 
excluding VAT and recoverable charges, as these are typically 
recovered by businesses. 
Source: Eurostat 

Graph A8.2: Monthly average day-ahead wholesale 
electricity prices and European benchmark 
natural gas prices (Dutch TTF) 

(i) the Title Transfer Facility (TTF) is a virtual trading point for 
natural gas in the Netherlands. It serves as the primary 
benchmark for European natural gas prices. 
(ii) CWE gives average prices in the central-western European 
market (Belgium, France, Germany, Luxembourg, the 
Netherlands and Austria). 
Source: S&P Platts and ENTSO-E 

 
 
 
 
 
 
 
 
Flexibility and electricity grids  

In  most  cases,  the  French  network  complied 
with the EU’s 70% minimum available cross-
border  trade  capacity  obligation (230).  France 
is part of the Core (231), Italy North (232) and South-
West  Europe (233)  capacity  calculation  regions 
(CCRs),  which  harmonise  methods  for  calculating 
and  allocating  transmission  capacity  to  reduce 
bottlenecks  and  enhance  cross-zonal  capacity. 
France’s  borders  have  not  been  subject  to  any 
derogation  under  the  70%  minimum  margin 
capacity since 2022 (234).  

capacity  is  crucial  to  better  integrate  renewable 
energy  production  and  enhance  flexibility  and 
market  integration  (especially  with  the  Iberian 
Peninsula,  bearing 
internal 
reinforcements  may  also  be  necessary  in  some 
cases). 

in  mind 

that 

the 

list  and 

The  hydrogen  South-West  Corridor  was  on 
individual 
the  PCI/PMI 
components were granted PCI status in 2023. 
This  transnational  initiative  (involving  Germany, 
Spain, France and Portugal) to interconnect the H2 
networks  from  the  Iberian  Peninsula  to  north-
western Europe could be completed by 2030-2034 
according to its promoters. 

its 

energy 

growth 

countries (235), 

France’s electricity interconnection level was 
in  2024,  slightly  decreasing  as 
5.6% 
renewable 
surpasses 
interconnector development. Although France’s 
electricity  system  is  interconnected  with  six  of  its 
neighbouring 
cross-border 
electricity  interconnection  level  is  currently  below 
the  15%  target  for  2030.  The  implementation  of 
planned  interconnectors  and  adjusting  generation 
capacity  will  contribute  to  meeting  that  target. 
New  cross-border  electricity  projects  are 
in 
progress (236), though some are facing delays (237). 
interconnection 
The  Trans-Pyrenean  electricity 
projects  were  omitted  from  the  French  Network 
Development  Plan's  (NDP)  reference  scenario, 
despite  having  the  status  of  Projects  of  Common 
Interest  (PCIs)  (238). 
interconnection 

Increasing 

(230)https://www.cre.fr/fileadmin/Documents/Rapports_et_etudes/i
mport/Rapport_mise_en_oeuvre_70_Mai2022_en.pdf 

(231) Core is the CCR which covers Belgium, Czechia, Germany, 
France, Croatia, Hungary, the Netherlands, Austria, Poland, 
Romania, Slovenia and Slovakia (and, once connected, 
Ireland). 

(232) France, Italy, Austria and Slovenia are part of the Italy North 

CCR. 

(233) The South-West Europe CCR covers Spain, France and 

Portugal. 

(234) ACER 2024 Market Monitoring report - France experienced 

lower monthly price convergence in 2023 due to export limits 
or constraints. 

(235) Belgium, Germany, Italy, Spain, Switzerland and UK. 
(236)This is notably the case of a first interconnector with Ireland 
(Celtic  Interconnector),  and  additional  capacities  or  capacity 
increases  with  Belgium,  Germany  and  Spain  (for  the  latter, 
Biscay Bay).   

(237)Current commissioning dates for Celtic Interconnector: 2027; 

Biscay Bay: 2028. 

(238) In accordance with the TEN-E Regulation, PCIs should be 

automatically incorporated into the NDP. 

78 

general 

process 

for 
permitting 
The 
infrastructure  projects  remains  complex. 
There  have  been  improvements  and  innovations, 
such  as 
the  streamlining  of  environmental 
authorisations, the setup of a digital platform and 
reforms  to  public  participation.  However,  these 
may not necessarily extend to all types of energy 
projects  (for  instance,  they  may  be  limited  to 
renewable energy generation).  

The  rise 
in  renewables  curtailment  and 
negative  prices  occurrences  in  2023  and 
2024  signal  constraints  on  the  electricity 
grids and the need for enhanced demand side 
flexibility.  The  curtailment  of  renewable  energy 
amounted  to  a  cost  of  EUR 2.2 million  in  2023, 
which  corresponded  to  509 GWh  (i.e. 0.7%  of 
electricity  production) (239).  In  February  2025,  the 
French  electricity  TSO  announced  investments 
worth  EUR 100 billion  in  electricity  grids  by  2040 
(240). 

Limited  flexibility  in  the  French  system  may 
drive  the  need  for  network  investment  and 
increase  consumer  costs,  but  flexibility 
initiatives  could  create  potential  for  off-
peak  demand  management.  In  2024,  France 
counts  with  5.7  GW  of  hydro  pumped  storage 
operational capacity and 255 MW of batteries, but 
it has only 9 MW of thermal storage installed (241). 
France  reports  in  the  final  updated  NECP  that  it 
has  an  objective  of  developing  flexibility  at  the 
levels  of  25  GW  and  35  GW  in  2030  and  2035 

(239)ACER - data on curtailment.  
(240) RTE - transformation of the electricity network by 2040. 
(241)Thermal storage is likely to boost industry’s competitiveness 
with short payback periods and using low electricity prices. 

 
 
 
but  still  far  below  the  47%  of  EU’s  renewables 
share  in  electricity  (245).  In  that  year,  France  had 
about  74.3 GW  (246)  of  renewables  installed  (see 
Graph  A6.2).  France  added  a  record  4.7  GW of 
solar capacity in 2024 vs 2.6 GW in 2023 (mainly 
rooftop  –  74%)  (247)  and  added  1.4  GW  of  wind 
capacity  in  2024,  vs  2.29  GW  in  2023  (248). 
Challenges remain, such as the need to accelerate 
in 
the  permit-granting  process.  The  absence 
France’s  final  updated  NECP  of  a  target  for 
renewable  sources  in  gross  FEC  by  2030 (249) 
creates  uncertainty  for  investors,  developers  and 
local manufacturing companies.  

France’s Renewable Energy Acceleration Law 
introduced provisions related to planning and 
permitting, but most of its implementing acts 
still  have  to  be  adopted.  By  July  2024,  only 
34% of municipalities had designated renewables 
acceleration areas and the rules within these areas 
are  not  fully  aligned  with  the  Renewable  Energy 
Directive.  Clearer  and  faster  permit  deadlines  are 
also  needed  for  projects  outside  those  areas. 
France  lacks  a  one-stop  shop  for  streamlined 
renewable energy permitting process. The Net Zero 
artificialisation 
regional  quota 
limitations  on  batteries  and  renewables,  unlike  it 
does on nuclear projects. 

imposes 

law 

respectively.  It  will  particularly  target  batteries, 
pumped  hydro  stations,  demand-side  response 
and  interconnections,  including  a  new  support 
scheme  for  decarbonised  flexibility  (for  demand-
side response and storage) (242) but it has no plans 
for thermal storage.  

Consumer  empowerment  in  the  electricity 
and  gas  markets  is  at  a  good  level,  even  if 
the share of fixed-price contracts (regulated 
or  not)  held  by  household  consumers 
represents  almost  80%  of  the  market.  60% 
of  household  consumers  have  regulated  fixed-
price  contracts  and  94%  of  final  household 
consumers had smart meters in 2023 (243) (the EU 
average was 80%). 

to 

consumers. 

Further  progress  in  electrification  across 
sectors  is  still  necessary  to  cost-effectively 
decarbonise  the  economy  and  bring  the 
benefits  of  affordable  renewable  and  low-
carbon  energy 
France’s 
electrification  rate,  which  represents  the  share  of 
electricity  in  its  final  energy  consumption  (FEC)  is 
26.6%. This is above the EU average of 22.9%, but 
it has remained largely stagnant in the last decade 
across  different  sectors (244).  Electricity  accounts 
for 35.7% and 36.6% of households and industry’s 
FEC  respectively 
in  the  Effective 
(see  more 
Institutional  Framework  Annex).  Electrification  in 
transport is negligible at 2.5%. 

Renewables and long-term contracts 

energy 

Renewable 
France 
represented  26.2%  of  electricity  generation 
in 2024. This was an increase from 22% in 2023, 

sources 

in 

(242)France’s  regulatory  framework  enables  the  development  of 
flexible  resources  because  it  allows  DSR  (demand-side 
response) and storage to participate in the day-ahead, intra-
day  markets  and  balancing  markets. 
It  also  provides 
congestion  management  services  to  system  operators. 
Aggregators 
can 
(including 
participate in these markets and services. 

independent  aggregators) 

(243)The  roll-out  of  smart  meters  is  progressing  well.  36 million 
low-voltage customers have now been equipped with smart 
meters.  This  will  strengthen  the  role  of  consumers  and 
modernise the network by making it possible to significantly 
increase  the  observability  of  the  low-voltage  network  for 
system operators. 

(244)The  CAGR  (compound  annual  growth  rate)  was  0.3% 
between  2013  and  2023.  The  minimum/maximum  shares 
were 25.9% and 27.6% respectively. 

79 

(245) Yearly electricity data, Ember - In 2024, the share in 

electricity generation of hydropower was 12.4%, of wind 
7.7% and of solar 4.2%. 

(246) Renewable Energy Capacity Statistics 2025 - IRENA  

(247) Solar_Power_Europe_EMO_2024 - The revision of national 

budget could reduce support to renewables. While 
renewables utility large scale is growing and supported by 
auctions, it faces challenges with permitting and land access. 
Agri-PV could unlock significant solar potential, once the 
legislation is finalised. 

(248) Renewable Energy Capacity Statistics 2025 - IRENA. French 
wind farms had a power of 23.5 GW by June 2024 (22 GW 
of onshore wind and 1.5 GW of offshore wind). 

(249)France’s updated NECP does not include an explicit national 
contribution  of  renewable  energy  in  gross  FEC  to  the  EU 
target  by  2030.  Extrapolating  the  provided  data  results  in 
shares  which  remain  below  the  formula  level  set  out  in 
Annex II to the Governance Regulation.  

 
 
 
Graph A8.3: France's installed renewable capacity 
(left) and electricity generation mix (right) 

applying  the  formula  in  Annex I  to  the  recast 
Energy Efficiency Directive (EED) (252). 

France  has  notified 
its  comprehensive 
heating  and  cooling  assessment  to  the 
Commission,  identifying  potential  to  apply 
high-efficiency  cogeneration  and  efficient 
district heating and cooling (253). It has also set 
their  development 
realise 
out  measures 
potential (254). 

to 

France  needs  to  step  up  its  efforts  in  the 
residential  sector  in  order  to  meaningfully 
contribute  to  meeting  its  2030  reduction 
target  for  energy  consumption  by  buildings. 
The  residential  sector’s  FEC  decreased  between 
2022  and  2023  but,  from  a  medium-term 
perspective and applying climate correction, it has 
been  stagnating  since  2015.  The  national  long-
term 
renovation  strategy  envisages  a  22% 
reduction  of  buildings’  energy  consumption  by 
2030  compared  with  2015.  The  individual  deep 
renovations  financed  by  the  national  scheme 
‘MaPrimeRénov’ (partly funded by the RFF (255) did 
not  reach  the  expected  level  in  2024 (256).  It  is 
important  to  ensure  stable  funding  and  rules  for 
the  scheme  to  guarantee  and  support  renovation 

(252)France’s  target  for  cumulative  energy  savings  under  the 
energy  savings  obligation  in  the  recast  Energy  Efficiency 
Directive for 2021-2030 is 91 Mtoe. France’s approach is to 
rely  on  one  measure  (the  white  certificate  scheme)  and  to 
adapt  the  target  set  through  the  scheme  for  the  obliged 
parties  to  achieve  the  Article 8  target.  This  approach  was 
successful for 2014-2020. France may also meet its target 
in  this  way  for  2021-2030,  because  the  scheme  and  its 
target  are  regularly  revised  and  growing.  No  new  measures 
are  foreseen  in  the  final  NECP.  France  is  not  considering 
alternative measures. 

(253)This  is  in  line  with  Article 25(1)  of  the  Energy  Efficiency 

Directive, (EU) 2023/1791. 

(254)Renewable  energy  and  waste  heat  will  play  an  important 
part  in  France’s  heating  and  cooling  policies.  The  Chaleur 
Fund (managed by ADEME since 2009) and the obligation to 
carry  out  a  cost-benefit  analysis  in  the  case  of  new 
installations  and  in  the  event  of  substantial  renovation  will 
play an important part in heating and cooling policies. 

(255)The  French  recovery  and  resilience  plan  (RRP)  is  supporting 
the renovation of 1 750 000 households with EUR 3.1 billion 
(with  MaPrimeRénov)  and  the  renovation  of  40 000  social 
housing units with EUR 500 million. 

(256)91 000 applications validated versus 200 000 expected 

https://www.info.gouv.fr/upload/media/content/.pdf.   Since 
2023, the scheme has experienced significant budget 
fluctuations, including cuts in 2024, and has shifted focus 
towards partial rather than deep renovations. A shortage of 
skilled workers partially contributed to the construction 
sector's limited capacity to perform large-scale deep 
renovations.  

“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Ember 

France  does  not  sufficiently  emphasise  the 
uptake of power purchase agreements (PPAs) 
and the corresponding supporting framework. 
In 2024, France signed 35 renewables PPAs deals 
of 1.48 GW mainly driven by solar PV (almost 900 
MW),  with  an  interesting  trend  of  solar-plus-
storage  PPAs  and  with  a  corporate  seeking  firm 
volumes and mitigation from profile risk (250). 

for 

local  and 

France  has  a  complex  but  supportive 
environment 
citizen-led 
renewable  energy  initiatives,  but  there  are 
no  plans  to  simplify  the  grid  connection 
procedures  and  specific  support 
is  not 
foreseen.  The  legal  status  of  renewable  energy 
communities was clarified in 2023.  

Energy efficiency 

Energy  consumption 
in  France  has  not 
returned  to  pre-COVID  levels,  but  a  post-
COVID  rebound  was  observed  in  2021  for 
both  primary  energy  consumption  (PEC)  and 
final  energy  consumption  (FEC).  In  2023,  FEC 
dropped by -3.97% compared with 2022, reaching 
the level of 129.8 Mtoe. The level of PEC in 2023 
increased  1.8%  year  on  year  to  208.5  Mtoe (251). 
The  levels  of  the  national  contribution  to  2030 
energy  efficiency  targets  provided  in  the  final 
updated  NECP  are  set  in  line  with  the  results  of 

(250) European_PPA_Market_Outlook 2025-pdf 
(251)The  French  economy’s  energy  intensity  increased  slightly  in 
2023 (+0.8% year on year) after a steady decrease of -21% 
during the 10-year period that started in 2014. 

80 

 
 
 
 
demand  while 
that 
renovations  are  truly  targeted  and  efficient,  in 
particular for vulnerable households. 

in  parallel 

controlling 

final 

France’s 

Heating and cooling represented around 78% 
energy 
residential 
of 
consumption  in  2022.  Approximately  720 000 
heat  pumps  were  sold  in  2022  (an  increase  of 
16%  on  2021).  The  installation  of  oil  boilers  has 
been  banned  in  all  buildings  since  2022.  The 
installation of gas boilers has been banned in new 
buildings  since  2025  –  a  ban  was  progressively 
implemented  since  2022  and  will  be  fully 
implemented this year (257). 

Security of supply and diversification  

France has traditionally had a diversified gas 
supplier portfolio that  includes  Russia.  It  has 
significant  LNG 
four 
terminals,  one 
storage  and  one 
regasification  unit  (FSRU).  France  is  also  directly 
connected  to  Norway’s  gas  fields  and  storage 
capacity. 

import  capacity  with 
floating 

Despite its nuclear plants and some progress 
in renewables, France’s overall energy mix in 
2023  remained  relatively  reliant  on  fossil 
fuels.  Fossil  fuels  accounted  for  46%  of  gross 
inland  energy  consumption  (258)  (30.6%  for  oil, 
12.8% for natural gas and 2.6% for coal). Nuclear 
accounted  for  38.6%,  renewables  for  14.7%  and 
non-renewable  waste  for  0.7%  (259).  Low-carbon 
production 
renewable)  has 
reached  the  threshold  of  95%  of  the  electricity 
produced  in  France  for  the  first  time  (nuclear 
for  around  67%  of  electricity 
accounted 
generation) (260). 

(i.e.  nuclear  and 

France  plans  to  continue  operating  the 
existing nuclear fleet of 56 reactors (all PWR 
design  and  with  a 
total  capacity  of 
61.4 GWe) for as long as safety requirements 
are met, while Flamanville 3 EPR reactor was 
connected to the grid at the end of 2024 and 

(257)https://www.ehpa.org/news-and-resources/news/which-

countries-are-ending-fossil-fuel-heaters/. 

(258)Electricity and heat are excluded to avoid double-counting of 

primary energy sources.  

(259)Gross inland consumption (Eurostat). 
(260)Idem. 

a final investment decision is due on the six 
projected  new  nuclear  reactors  by  2026. 
2024  saw  a  rapid  recovery  in  nuclear  generation 
(361.7 TWh), after a historically low level in 2022 
(279.0 TWh)  and a gradual  recovery in 2023. The 
final  French  NECP  highlights  a  contribution  to 
strengthening the EU’s conversion and enrichment 
capacities (261). 

Fossil fuel subsidies  

In  2023,  environmentally  harmful  (262)  fossil  fuel 
subsidies  without  a  planned  phase-out  before 
2030 represented 0.31% (263) of France’s GDP (264), 
below with the EU weighted average of 0.49%. Tax 
measures  accounted  for  69.6%  of  this  volume, 
income/price  support  and  direct  grants 
while 
respectively. 
represented  21.6%  and  8.8%, 
Additionally,  France’s  2023  Effective  Carbon  Rate 
(265) averaged EUR 87.87 per tonne of CO₂, above 
the EU weighted mean of EUR 84.80 (266). 

(261)France aims at using reprocessed uranium for 30% of its 
reactors' uranium needs in the 2030s and it is examining 
plans  to  build  on  French  territory  a  site  to  convert  and 
enrich reprocessed uranium. At present, Russia is the only 
country  in  the  world  that  can  recycle  uranium  for  use  in 
nuclear power plants. 

(262) Direct fossil fuel subsidies that incentivise maintaining or 
increasing in the availability of fossil fuels and/or use of 
fossil fuels. 

(263) Numerator is based on volumes cross-checked with the 

French authorities. For all Member States, it includes public 
R&D expenditures for fossil fuels as reported by the IEA 
(Energy Technology RD&D Budgets) and excludes, for 
methodological consistency, excise tax exemption on 
kerosene consumed in intra-EU27 air traffic. 

(264) 2023 Gross Domestic Product at market prices, Eurostat. 
(265) The Effective Carbon Rate is the sum of carbon taxes, ETS 
permit prices and fuel excise taxes, representing the 
aggregate effective carbon rate paid on emissions. 
(266) OECD (2024), Pricing Greenhouse Gas Emissions 2024 

81 

 
 
 
Table A8.1:  Key Energy Indicators 

Source: Eurostat, ENTSO-E, S&P Platts 

82 

20212022202320242021202220232024Household consumer - Electricity retail price (EUR/KWh)0.1980          0.2130              0.2438              0.2886          0.2314              0.2649          0.2877          0.2879          Energy & supply [%]36.7%46.9%55.8%52.8%36.6%54.3%55.6%47.8%Network costs29.9%30.0%27.0%24.2%26.7%25.3%24.8%27.2%Taxes and levies including VAT33.4%23.1%17.2%23.0%36.7%20.3%19.6%25.0%VAT14.1%14.1%14.2%14.4%14.5%13.4%13.8%14.6%Household consumer - Gas retail price0.0733          0.0919              0.1102              0.1265          0.0684              0.0948          0.1121          0.1128          Energy & supply42.6%49.4%53.7%48.9%43.7%61.0%64.5%53.9%Network costs28.9%24.6%22.0%20.8%22.5%17.3%17.1%18.3%Taxes and levies including VAT28.5%26.0%24.3%30.3%33.8%21.7%18.4%27.8%VAT14.1%14.4%14.3%14.1%15.5%11.6%10.2%13.6%Non-household consumer - Electricity retail price0.0874          0.1205              0.2134              0.1428          0.1242              0.1895          0.1971          0.1661          Energy & supply53.8%67.5%75.5%66.2%43.0%66.5%63.0%55.8%Network costs16.9%14.5%7.6%12.3%15.8%10.7%11.9%15.5%Taxes and levies excluding VAT15.9%2.9%0.9%7.8%30.4%9.9%11.2%15.4%Non-household consumer - Gas retail price0.0338          0.0661              0.0618              0.0463          0.0328              0.0722          0.0672          0.0517          Energy & supply72.4%80.5%80.4%71.7%66.2%77.3%77.3%68.7%Network costs7.9%3.7%3.5%6.3%7.7%3.8%5.3%7.1%Taxes and levies excluding VAT6.8%3.8%3.2%9.3%12.5%6.1%7.3%11.6%Wholesale electrity price (EUR/MWh)108.8275.197.258.2111.0233.299.184.7Dutch TTF (EUR/MWh)n/an/an/an/a46.9123.140.534.420172018201920202021202220232024Gross Electricity Production (GWh)562,481        582,227            571,414            532,891        555,641           475,413        525,660        -Combustible Fuels72,878       57,583           62,070           56,864       58,170          69,874       51,240       -Nuclear398,359     412,942         399,012         353,833     379,361        294,731     338,202     -Hydro55,135       70,472           61,572           67,094       63,947          51,049       60,850       -Wind25,102       29,171           35,416           40,658       37,628          38,963       51,489       -Solar9,587         10,808           12,165           13,189       15,357          19,628       21,823       -Geothermal133             127                128                133             100                114             129             -Other Sources1,288         1,125             1,050             1,118         1,078            1,054         1,926         Gross Electricity Production [%]Combustible Fuels13.0%9.9%10.9%10.7%10.5%14.7%9.7%-Nuclear70.8%70.9%69.8%66.4%68.3%62.0%64.3%-Hydro9.8%12.1%10.8%12.6%11.5%10.7%11.6%-Wind4.5%5.0%6.2%7.6%6.8%8.2%9.8%-Solar1.7%1.9%2.1%2.5%2.8%4.1%4.2%-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%0.4%-Net Imports of Electricity (GWh)-40,129-62,967-57,667-45,039-44,89214,945-50,472-As a % of electricity available for final consumption -8.9%-14.0%-13.0%-10.7%-10.2%3.5%-12.3%-Electricity Interconnection [%]9.4%7.9%8.1%8.5%5.1%5.6%5.0%5.6%Share of renewable energy consumption - by sector [%]Electricity19.9%21.1%22.4%24.8%24.7%27.3%30.0%-Heating and cooling20.6%21.2%22.4%23.4%24.6%27.3%29.9%-Transport8.8%9.0%9.2%9.2%8.1%8.9%10.0%-Overall15.8%16.4%17.2%19.1%19.3%20.4%22.3%-20202021202220232020202120222023Import Dependency [%] 44.4%44.1%51.9%44.9%57.5%55.5%62.5%58.3%of Solid fossil fuels 96.3%73.5%81.6%74.8%35.8%37.2%45.9%40.8%of Oil and petroleum products 98.5%97.1%98.8%98.4%96.8%91.7%97.8%94.5%of Natural Gas 94.7%96.1%109.0%99.5%83.6%83.6%97.6%90.0%Dependency from Russian Fossil Fuels [%]of Natural Gas 18.1%23.7%14.7%13.0%41.0%40.9%20.7%9.3%of Crude Oil8.8%8.9%5.2%0.0%25.7%25.2%18.4%3.0%of Hard Coal33.8%34.8%16.8%0.2%49.1%47.4%21.5%1.0%2017201820192020202120222023Gas Consumption (in bcm)43.1               41.1                  41.9                  38.9               41.3                  37.8               33.4               Gas Consumption year-on-year change [%]-0.2%-4.8%1.9%-7.0%6.1%-8.6%-11.6%Gas Imports - by type (in bcm)46.5               47.1                  53.3                  45.4               45.4                  55.4               46.2               Gas imports - pipeline37.3               36.7                  33.0                  28.4               29.5                  23.2               19.0               Gas imports - LNG9.210.520.317.015.932.327.2Gas Imports - by main source supplier [%]Norway43.9%42.2%39.9%41.0%36.4%31.9%32.4%United States0.0%0.3%3.3%2.4%5.8%23.6%25.6%Russia19.7%21.8%20.7%18.1%23.7%14.7%13.0%Algeria8.1%7.3%6.9%7.8%8.4%8.0%8.8%FranceEU 
 
     
 
ANNEX 9: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

France  is  highly  exposed  to  climate  and 
environmental  risks  and  would  benefit  from 
taking urgent action to build its resilience, as 
underlined  by  several  national  reports.  The 
costs  of  climate-related  damage  are  soaring, 
calling  for  adaptive  policies  and  investments  to 
prepare  the  country  to  manage  temperature 
increases  of  4°  by  the  end  of  the  century. 
Sustainable  water  management  and  biodiversity 
protection  remain  major  environmental  issues.  All 
these  risks  will  have  significant  impacts  on  the 
economy, on competitiveness and on public health. 
France’s  recovery  and  resilience  plan  allocates 
EUR 2.1 billion to the environment and biodiversity, 
including  water  treatment  and  support  for  the 
agricultural transition. 

Climate adaptation and preparedness 

France is facing rising temperatures and sea 
levels,  and  increasingly  frequent  heatwaves, 
droughts  and  forest  fires.  Floods  (both  river 
and  coastal)  are  the  most  widespread  climate-
related  risk,  with  64%  of  the  country  exposed  to 
the  risk  of  flooding,  accounting  for  two  thirds  of 
the extreme events in the country since 1900 (267). 
In  addition,  20%  of  coasts  face  erosion  (268).  The 
country  is  also  exposed  to  storms  and  cyclones 
such  as  cyclone  Chido,  which  hit  the  oversea 
territory of Mayotte in December 2024, the worst 
in  this  territory  in  90  years.  Less  rainfall  in 
summer  and  rising  temperatures  lead  to  more 
frequent droughts, with a projected water shortage 
of  2 billion  m3  by  2050  if  demand  stays  stable 
(269). Over the last decade, the length of heatwaves 
has multiplied fourfold since the 1980s (270). 

The  costs  linked  to  climate-related  damage 
are increasing,  but insurance  coverage  helps 
mitigate  the  impact  on  the  economy  and 
society.  Between  1980  and  2023,  France 
losses 
recorded  EUR 130 billion 

in  economic 

on 

the 

risk 

decade). 

previous 

coverage  across 

caused  by  weather  and  climate-related  extreme 
events.  These  losses  have  grown  fast  in  recent 
years (EUR 45.9 billion over 2014-2024, a 2.4-fold 
increase 
The 
consequences  for  economy  and  society  are 
mitigated  thanks  to  a  relatively  small  insurance 
protection gap (1.5 (271)), reflecting a high share of 
insurance 
categories. 
However,  the  increasing  occurrence  of  insured 
damages and rising costs are creating tension for 
insurance regimes. Between 2020-2023, the costs 
of  climate-related  claims  rose  sharply  on  the 
previous  decade  (272),  with  the  fastest  rising 
climate-related  cost  being  damages  to  buildings 
resulting  from  droughts  (273).  Over  half  of  all 
individual  houses  are  exposed 
to  damages 
resulting  from  the  expansion  and  retraction  of 
clay-rich  soils,  with  an  associated  cost  of 
EUR 43 billion for insurers over 2020-2050 (274). In 
this  context,  the  levy  on  insurance  premiums 
brought  in  to  cover  climate-related  damages 
(‘surprime  CatNat’),  set  by  Ministerial  ruling, 
increased from 12% to 20% for home insurance in 
2025. 

a 

to  manage 

France’s  3rd  draft  national  plan  for  climate 
adaptation  outlines  51  measures  to  prepare 
France 
temperature 
increase (275). It aims to adapt all related policies 
by  2030  and  ensure  that  investments  align  with 
adaptation  objectives.  However,  the  plan  lacks 
investment  measures  and  binding, 
specific 
regularly updated adaptation goals. It does put the 
emphasis on nature-based solutions. 

Climate adaptation action in France receives 
dedicated, but falling, public funding. Created 
in  2022,  the  ‘Fonds  verts’  supports  regional 
environmental  performance  and  adaptation (276). 
Its  budget  for  2024,  initially  EUR 2.5 billion,  was 
cut  by  EUR 430  million  in  the  course  of  the  year 
for  2025  allocates 
and 

the  budget 

law 

(271) Scale of 0 to 4, where 4 represents a very high gap. 

(272) France Assureurs, 2024, Pour une France assurable, Link. 

(267) Vie-publique.fr, 2023, Climat : vers une aggravation des 

(273) France Assureurs, 2021, Impact du changement climatique 

risques naturels?, Link. 

sur l’assurance à l’horizon 2050. 

(268) Ministry of Ecological Transition, 2023, Érosion du littoral: à 

quoi s’attendre et comment s’adapter?, Link. 

(274) French government, 2023, RGA: N’attendons pas que ce soit 
la cata, Rapport de mission du Député Vincent Ledoux, Link. 

(269) Ministry of Ecological Transition, 2023, Sécheresse : à quoi 

(275) The plan aims to get France ready for a 4°C increase by the 

s’attendre et comment s’adapter?, Link. 

end of the century. 

(270) Ministry of Ecological Transition, 2023, Canicule: à quoi 

(276) Ministry of Ecological Transition, 2024, Fonds vert: accélérer 

s’attendre et comment s’adapter?, Link. 

la transition écologique dans les territoires, Link. 

83 

 
 
 
 
 
 
EUR 1.15 billion  to  it.  However  the  2025  budget 
law  provides  for  a  EUR 320 million  top-up  from 
the  ‘Fonds  Barnier’  for  the  prevention  of  natural 
risks  (up  from  EUR 225 million  in  2024)  and 
creates a  ‘Fonds Territoires Climat’. Endowed with 
EUR 200 million, this new fund will grant financing 
to local authorities with an adopted climate plan. 

governance 
but 
levels 

supports 
climate 
Strong 
between 
coordination 
adaptation, 
government 
is  suboptimal.  Central 
government sets the national adaptation strategic 
and  legislative  framework.  Large  intercommunal 
structures are primarily responsible for drawing up 
regional  climate-air-energy  plans.  Some  of  the 
competences needed to implement these plans lie 
with  individual  municipalities,  indicating  the  need 
for  streamlining (277).  Subnational  government 
levels  depend  heavily  on  central  government 
financing, which can affect local project resources. 
In  2023,  only  34%  of  the  population  (10  points 
below  the  EU average)  lived  in municipalities  that 
have  signed  the  EU  Covenant  of  Mayors  for 
Climate and Energy. 

Water resilience 

It 

The rise in water scarcity may affect sectors 
of  the  economy. 
increases  the  risk  of 
intersectoral  conflicts  between  energy  production 
(35%  of  water  consumption),  agriculture  (35%), 
and  residential  water  use  (18%).  The  Water 
Exploitation  Index  Plus  (WEI+)  increased  from  3% 
in 2021 to 4.8% in 2022, with a peak at 11.9% in 
Q3  2022 (278),  but  still  below  the  threshold  for 
water scarcity of 20%. Lower river flows increase 
the  risk  of  curtailment  of  nuclear  electricity 
production,  especially  during  heatwaves  and 
droughts. On a positive note, measures were taken 
under  the  2023  ‘Plan  Eau’  to  increase  water 
efficiency in 50 major industrial sites(279). 

Parts  of  surface  and  groundwater  bodies  in 
France  are  subject  to  water  stress  due  to 

and 

intensive  agriculture,  hydro-morphological 
contamination, 
chemical 
pressure 
affecting  the  resilience  of  agriculture.  The 
assessment  of  the  third  river  basin  management 
plans indicates that the ecological status/potential 
of  surface  water  bodies  has  slightly  deteriorated 
since  the  second  plan,  with  43.6%  classified  as 
having  good  or  high  ecological  status/potential. 
11.9%  of  groundwater  bodies  are  reported  as 
having  poor  quantitative  status  (10.6%  due  to 
excessive  abstractions)  and  32%  fail  to  achieve 
good  chemical  status.  The  top  five  pollutants  are 
pesticides  and  related  metabolites  followed  by 
nitrates, 
total 
chloride, 
trichloroethylene  and 
tetrachloroethylene,  and 
phosphate.  In  June  2024,  a  government  report 
highlighted  the  risks  associated  with  pesticides 
and metabolites in drinking water (280). This report 
confirms  the  recommendations  made  by  national 
in  2011 (281),  evidencing  the 
authorities  back 
intensive  agriculture 
challenge  of  adapting 
practices 
price-related 
disincentives for irrigation and diffuse pollution. 

ammonium, 

adopting 

and 

of 

France’s  wastewater  treatment  remains  a 
cause  for  concern,  with  several  treatment 
plants not yet compliant. In October 2024, the 
Court of Justice of the EU ruled against France for 
failure  to  correctly  implement  the  treatment  and 
monitoring  obligations  of  the  Urban  Wastewater 
Treatment  Directive 
in  78  agglomerations, 
affecting  some  6.3  million  inhabitants.  To  meet 
the various environmental targets under the Water 
Framework  Directive  and  the  Floods  Directive, 
France  has  an 
for  water 
management  (see  Graph  A9.2)  of  EUR 3.9  billion 
per  year (0.15%  of GDP), with  over  half  the  need 
being  for  waste  water  (2.6  billion  per  year). 
Drinking water measures require an investment of 
some  EUR 1.1  billion  per  year  and  the  other 
aspects of the Water Framework Directive  require 
around EUR 292 million per year.  

investment  gap 

(277) Cour des Comptes, 2024, Le rapport public annuel 2024, 

Link. 

(278) EEA, 2025, Water scarcity conditions in Europe, Link. 

(279) Plan d’action pour une gestion résiliente et concertée de 
l’eau | Ministères Aménagement du territoire Transition 
écologique 

(280) Inspection générale des affaires sociales, 2024, Prévenir et 
maîtriser les risques liés à la présence de pesticides et de 
leurs métabolites dans l’eau destinée à la consommation 
humaine, Link. 

(281) Commissariat Général au Développement Durable, 2011, 
Coûts des principales pollutions agricoles de l’eau, Link. 

84 

 
 
 
Biodiversity and ecosystems 

Graph A9.1: Direct dependency(1) on ecosystem 
services(2) of the gross value added generated by 
economic sector in 2022 

and 

country’s 

In addition to water, the state of nature and 
ecosystems  is  a  concern  in  France,  reducing 
the 
economic 
climate 
resilience.  In  2022,  13%  of  the  country’s  land 
was in the  Natura 2000  network (EU-27 average: 
18.6%).  France  has  yet  to  complete  its  Natura 
2000 network and set conservation objectives. The 
share of habitats and species in good conservation 
status over the last reporting period (ending 2018) 
reached 20% and 28% respectively, above the EU 
averages  of  15%  and  27%,  but  still  meriting 
greater  protection.  The  main  factor  impairing  the 
health  of  France’s  soils  is  the  loss  of  organic 
carbon in mineral soils (282), which affects 18% of 
land.  16%  of  land  is  subject  to  unsustainable 
levels  of  soil  erosion  by  water,  wind,  tillage  and 
harvest, representing 53% of cropland area. A high 
concentration  of  nutrients  in  soils  is  another 
damaging  factor,  particularly  in  the  north  and 
north-west 
contain 
concentrations  of  nitrogen  exceeding  50 kg  per 
hectare,  and  10%  of  soils  contain  concentrations 
of phosphorus exceeding 50 mg per kg. 

regions.  16%  of  soils 

This  situation  has  severe  implications  for 
France’s  climate  resilience.  The 
loss  of 
biodiversity  impairs  ecosystems’  ability  to 
provide  services  that  help  mitigate  the 
effects of climate change, such as regulating 
water  cycles,  maintaining  soil  health  and 
storing  carbon. 
It  has  also  economic  and 
financial implications. A note from the Treasury in 
2021 (283)  highlighted the need and the challenge 
to  evaluate  pressure  on  ecosystems  and  their 
economic impacts. In a study commissioned by the 
Banque de France (284), 42% of shares and bonds 
are  highly  dependent  on  at  least  one  ecosystem. 
Graph  A9.1 
sectoral 
dependency  on  ecosystem  services,  with  seven 
economic sectors being fully (100%) dependent. 

the  direct 

illustrates 

(282) De Rosa et. al., 2024, Soil organic carbon stocks in European 
croplands and grasslands: How much have we lost in the 
past decade?, Link. 

(283) Ministry of Economics, Finance and Industrial and Digital 

Sovereignty, 2021, Évaluations économiques des services 
rendus par la Biodiversité, Link. 

(284) Banque de France, 2021, Un ’printemps silencieux’ pour le 

système financier? Vers une estimation des risques 
financiers liés à la biodiversité en France, Link. 

85 

(1) Dependency based on the sector’s own operations, 
excluding value chain operations within countries and across 
international value chains. A high dependency indicates a high 
potential exposure to nature-related shocks or deteriorating 
trends, which means that the disruption of an ecosystem  
service could cause production failure and severe financial 
loss. 
(2) Ecosystem services are the contributions of ecosystems to 
the benefits that are used in economic and other human 
activity, including provisioning services (e.g. biomass 
provisioning or water supply), regulating and maintenance 
services (e.g. soil quality regulation or pollination), and cultural 
services (e.g. recreational activities). 
Source: Hirschbuehl et al., 2025, The EU economy's 
dependency on nature, Link. 

investment  needs 

The 
for  biodiversity  and 
ecosystems  are  estimated  at  EUR 8.9  billion  per 
year  (in  2022  prices)  in  France  over  the  2021-
2027  period.  The  current  level  of  financing  for 
biodiversity is estimated to be EUR 4.3 billion year, 
leaving  a  significant  annual  investment  gap  of 
EUR 4.6 billion (see Graph A9.2). 

0%20%40%60%80%100%AgricultureForestryFishery and acquacultureMining and metalsConstructionWater utilitiesHealthcare deliveryAviation travel and tourismFood beverages and tobaccoSupply chain and transportPublic services and othersElectricityChemical and materials industryElectronicsOil and gasReal estateHeat utilitiesAutomotiveRetail consumer goods and…Information technologyBanking and capital marketsInsurance and asset…Digital communicationsHighMediumLow 
 
   
Graph A9.2: Investment needs and gaps in EUR 
million, in 2022 constant prices 

in  France 

energy and buildings (287). As a result, the share of 
emissions  generated  by  the  agricultural  sector  is 
very  stable.  According  to  data  from  the  Nitrates 
Directive,  12.7%  of  groundwater  monitoring 
stations 
recorded  average  nitrate 
concentrations  above  50 mg/l  between  2016  and 
2019, exceeding the healthy threshold for human 
consumption.  The  livestock  density  index  has 
remained  relatively  stable  for  years,  at  the  EU 
average  of  0.75.  Ammonia  emissions  from 
agriculture  have  also  been  unchanged.  Over  the 
period  2017-2022,  pesticides  were  detected  in 
27% of surface water bodies.  

Source: European Commission, DG Environment, 
Environmental investment needs & gaps assessment 
programme, 2025 update. 

Sustainable agriculture and land use 

France’s  carbon  removals  fall  short  of  the 
level  of  ambition  needed  to  meet  its  2030 
target  for  land  use,  land-use  change  and 
forestry  (LULUCF).  France  increased  its  LULUCF 
net carbon sink between 1990 and 2008 and then 
it  plateaued.  In  2013,  the  carbon  sink  went  into 
sharp  decline  in  a  worrying  trend.  To  meet  its 
2030  LULUCF  target,  additional  carbon  removals 
of  -6.7  million  tonnes  of  CO2  equivalent  (CO2eq) 
are  needed  (285).  The  latest  available  projections 
show  a  gap  to  target  of  13.4  million  tonnes  of 
(286).  Therefore,  additional 
CO2eq 
measures are needed to reach the 2030 target. 

for  2030 

French  agriculture  is  still  a  major  source  of 
greenhouse  gas  emissions  and  continues  to 
have  a  significant  impact  on  air,  water  and 
soils.  In  2023,  the  agriculture  sector  generated 
total  emissions.  Absolute 
17%  of  France’s 
emissions are decreasing (-20% over 1990-2023), 
but  at  slower  pace  than  emissions  from  industry, 

to 

reduce 

land  had 

its  agricultural 

the  plan  aims 

climate  objectives. 

It  allocates  EUR 12.66 billion 

France is transitioning to a sustainable food 
implementing  policies  and 
system  by 
the 
budget 
allocating 
environmental impact of agriculture.  In 2022, 
6.5%  of 
landscape 
features  such  as  woods  and  non-productive 
grasslands,  above  the  EU  average  of  5.6%. 
Organic  farming,  which  reduces  the  use  of 
synthetic fertilisers and pesticides, made up 10.4% 
of  France’s  agricultural  land,  close  to  the  EU 
average of 10.5%, but insufficient to contribute to 
the  EU  25%  target.  The  national  strategic  plan 
implementing  the  common  agricultural  policy  for 
the programming period 2023-2027 aims to bring 
environmental  benefits  and  to  protect  natural 
to 
resources. 
environmental  and 
For 
to  cover  88%  of 
example, 
agricultural 
land  with  good  agricultural  and 
environmental  conditions,  such  as  measures  to 
create  buffer  strips  along  water  courses,  to 
provide 
permanent  grassland  or 
maintain 
minimum  soil  cover  during  sensitive  periods.  This 
is complemented by measures designed to reward 
farmers who commit to more ambitious practices. 
For example, farmers adopting practices that limit 
soil  erosion  or  maintain  organic  matter  such  as 
soil  cover  or  crop  diversification  can  receive  extra 
support.  The  aim  is  for  these  practices  to  cover 
over  74%  of  agricultural  land.  To  preserve  and 
protect  biodiversity, 
the 
inclusion  and  maintenance  of  landscape  features 
on  farms.  It  also  supports  practices  to  protect 
specific  and  biodiversity-rich  areas  such  as  rice 
fields,  salt  marshes  or  wetlands.  France  plans  to 
give  additional  rewards  to  farmers  who  carry  out 
that  support  biodiversity,  such  as 
practices 

the  plan  promotes 

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

Regulation (EU) 2023/839. 

(287) European Commission, 2025, Climate Action Progress Report 

(286) Climate Action Progress Report 2024 COM/2024/498. 

2024, Country Profile France. 

86 

 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000BiodiversityWaterBaselineGap 
   
 
 
reducing or banning the use of pesticides, adapted 
fertilisation and grazing management. 

87 

 
Table A9.1:  Key indicators tracking progress on climate adaptation, resilience and environment 

(1) The data show the average for the timespan 2006-2023 based on EFFIS - European Forest Fire Information System. 
(2) Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2024, Dashboard on insurance protection gap for natural catastrophes. 
(3) van Daalen, K. R. et al., 2024, The 2024 Europe report of the Lancet Countdown on health and climate change: unprecedented 
warming demands unprecedented action, The Lancet Public Health. 
(4) This indicator measures total water consumption as a percentage of the renewable freshwater resources available for a given 
territory and period. Values above 20% are generally considered to be a sign of water scarcity, while values equal or greater than 
40% indicate situations of severe water scarcity. 
(5) European Commission, 2024, 7th Implementation Report from the Commission to the Council and the European Parliament on 
the implementation of the Water Framework Directive (2000/60/EC) and the Floods Directive (2007/60/EC) (Third River Basin 
Management Plans and Second Flood Risk Management Plans). 
(6) For this indicator, the EU average includes figures for the UK under the previous configuration, EU-28. 
(7) European Commission, 2023, EU Bioeconomy Monitoring System dashboards. 
(8) Nitrates can persist in groundwater for a long time and accumulate at a high level through inputs from anthropogenic sources 
(mainly agriculture). The EU drinking water standard sets a limit of 50 mg NO3/L to avoid threats to human health. 
(9) 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. 
Source: Eurostat, EEA. 

88 

Climate adaptation and preparedness:20182019202020212022202320182021Drought impact on ecosystems0.189.677.660.3144.21.916.772.76[area impacted by drought as % of total]Forest fires burned area (1)13 661     13 661     13 661     13 661     13 661     13 661     [ha, annual average 2006-2023]Economic losses from extreme events3 411       5 717       4 770       6 108       8 757       3 130       24 142       62 981       [EUR million at constant 2022 prices]Insurance protection gap (2)----1.50         1.50         [composite score between 0 and 4]Heat-related mortality (3)31            31            31            31            31            [number of deaths per 100 000 inhabitants in 2013-2022]Sub-national climate adaptation action26            25            25            28            28            34            4144[% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:20182019202020212022202320182021Water Exploitation Index Plus, WEI+ (4)2.43.23.53.04.8-4.54.5[total water consumption as % of renewable freshwater resources]Water consumption5 949       6 120       5 993       5 404       6 600       -           [million m3]Ecological/quantitative status of water bodies (5)[% of water bodies failing to achieve good status]Surface water bodies---56%---59%Groundwater bodies---12%---93%Biodiversity and ecosystems:20182019202020212022202320182021Conservation status of habitats (6)20.2-----14.7-[% of habitats having a good conservation status]Common farmland bird index63.8--53.9--72.274.42000=100Protected areas---2828--26[% of terrestrial protected areas]Sustainable agriculture and land use:20182019202020212022202320182021Bioeconomy's added value (7)100 108   100 481   99 507     109 246   634 378     716 124     [EUR million]Landscape features----6              -[% of agricultural land covered with landscape features]Food waste--129129139-[kg per capita]Area under organic farming7.07.78.89.79.97.99-[% of total UAA]Nitrogen balance40.838.0-27.1--[kg of nitrogen per ha of UAA]Nitrates in groundwater (8)18.518.318.519.3--[mgNO3/l]Net greenhouse gas removals from LULUCF (9)24 382-     18 611-     21 354-     19 045-     18 500-     -           256 077-     240 984-     [Kt CO2-eq]FranceEU-27FranceEU-27FranceEU-27FranceEU-27 
 
 
  
 
Graph A10.1: Labour market outcomes 

FAIRNESS 
ANNEX 10: LABOUR MARKET 

shortages  and  mismatches, 

France’s 
labour  market  has  performed 
relatively  well  in  recent  years.  The  general 
employment  situation  has  been  improving  but 
significant  structural  challenges  persist.  The 
underrepresentation  of  certain  vulnerable  groups, 
skills 
regional 
differences and labour market segmentation pose 
risks  for  competitiveness  and  potential  economic 
growth.  As  France  works  towards  achieving  its 
2030  employment  rate  target,  overcoming  these 
challenges,  while  raising  job  quality  is  key  for  a 
more  robust  and  inclusive  labour  market  and  a 
thriving economy. 

levels 

Despite  the  good  performance  of  the  labour 
market overall, structural challenges persist. 
The  employment  and  activity  rates  rose  to 
historically  high 
(75.1%  and  74.5%, 
respectively, in 2024) mainly due to older workers 
increasing their participation in the labour market. 
However,  both  rates  remain  somewhat  below  the 
respective  EU  averages  of  75.8%  and  75.4%  and 
reveal  scope  for  further  efforts  to  achieve  the 
2030  national  employment  rate  target  of  78%. 
The  unemployment  rate  remained  close  to  its 
lowest  level  since  2008,  reaching  7.4%  in  2024 
but it was still well above the EU average of 5.9% 
and  is  expected  to  increase  slightly (288).  Regional 
disparities  are 
considerable,  with  a  11.7 
percentage  points (pps)  difference  between  the 
regions  with  the  lowest  (5.6%  in  Centre  –  Val  de 
Loire)  and  highest 
in  La  Réunion) 
unemployment rates in 2024 (289). Similar patterns 
are  also  observed  for  employment  and  activity 
rates 
long-term 
unemployment  rate  fell  below  the  EU  average  of 
1.9%,  standing  at  1.7%  in  2024.  The  labour 
market  slack  (290)  slightly  decreased  to  14.5%  in 
2024,  but  remains  above  EU  average  of  11.7%, 
corresponding  to  4.7  million  people  facing  an 
unmet supply of employment. 

(17.3% 

Annex 

(see 

17). 

The 

(288) European Economic Forecast, Autumn 2024. 

(289) Data for France do not include Mayotte for methodological 
reasons (risk of non-representativeness of the sample 
because of its limited size). 

(290) The labour market slack is the underutilisation of labour 

resources, including unemployment, underemployment, and 
those available for work but not actively seeking it. 

89 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a] 

Vulnerable  groups,  including  people  who  are 
less  qualified,  people  with  a  migrant 
background  and  persons  with  disabilities 
have  difficulties  accessing 
labour 
market. In 2024, the employment gap for people 
with low-level qualifications (ISCED 0-2) increased 
to 20.9 pps, above the EU average of 16.7 pps. In 
2024, their unemployment rate was 13.5% (vs the 
country's  overall  rate  of  7.4%).  Their  labour 
market  outcomes  are  further  limited  by  the  fact 
that people with lower-level  

the 

qualifications participate less in adult learning (see 
Annex 12). People with a migrant background also 
encounter  greater  difficulties  when  accessing  the 
labour  market.  The  employment  gap  of  people 
born  outside  the  EU  is  slowly  improving,  reaching 
13.1 pps in 2024, but remains higher than the EU 
average  of  9 pps,  particularly  for  non-EU  born 
women (19.3 pps vs 13.7 pps in the EU). In 2023, 
the  employment  rate  of  foreign-born  people 
(65.6%  vs  70.4%  in  the  EU)  was  considerably 
lower than people born in France with one or both 
parents  born  abroad  (72.5%  vs  75.1%  in  the  EU) 
and people born in France with both parents born 
in  France  (77.8%  vs  77.1%  in  the  EU).  Besides, 
they  tend  to  be  more  often  employed  on  fixed-
term  contracts.  In  2024,  the  share  of  temporary 
employment  among  employees  aged  20-64  was 
20.8%  for  non-EU  born,  compared  to  13%  for 
people  born  in  France.  These  gaps  contribute  to 
higher poverty risks (see Annex 11)  and weigh on 

0246810124550556065707580852009201020112012201320142015201620172018201920202021202220232024% of labour force% of populationUnemployment rate 15-74 (rhs)Activity rate 20-64Employment rate 20-64 
 
 
 
 
   
 
 
In  2023, 

productivity  and  competitiveness.  The 
labour 
market  situation  of  persons  with  disabilities  also 
remains  challenging. 
the  disability 
employment  gap  stood  at  22.4 pps,  below  the  EU 
average  of  24 pps,  but  above  the  lower  level  of 
15.7 pps  recorded  in  2018  (EU  23.5 pps).  Labour 
market  challenges  faced  by  underrepresented 
groups  are  further  aggravated  by  inequalities  in 
the  education  system,  with  outcomes  strongly 
influenced  by  socio-economic  background  (see 
Annex 12). To address the employment challenges 
of  vulnerable  groups,  in  December  2023,  the 
government  adopted  the  ‘full  employment  law’, 
overhauling  the  public  employment  service  (PES). 
The  reform  aims to improve the  support  provided 
to job seekers and persons with disabilities. It also 
of 
automatic 
includes 
approximately  1.2  million  minimum 
income 
beneficiaries  with  the  PES  and  ties  the  allowance 
payment  to  the  completion  of  15  to  20  hours  of 
activity per week. Ensuring adequate resources for 
the PES is essential for engaging with and provide 
personalised  guidance  to  the  newly  registered 
minimum-income beneficiaries. 

registration 

the 

Graph A10.2: Employment rate by citizenship 

Source: Eurostat, LFS [lfsa_ergan] 

The 
labour  market  outcomes  for  young 
people  remain  limited.  In  2024,  following  a 
continuous increase over recent years, the activity 
and  employment  rates  for  young  people  (56.8% 
and  48.6%,  respectively,  for  people  aged  15-29) 
were close to the EU average (55.9% and 49.6%). 
However, 
(15-29) 
reached  14.4%  in  2024  (EU:  11.4%),  with  the 
share of young people neither in employment nor 

their  unemployment 

rate 

in  education  or  training  (NEETs)  also  being  above 
the  EU  average  (12.5%  vs  11%).  While  the  share 
of  NEETs  had  been  steadily  decreasing  and 
remained  below  the  EU  average  until  2022,  the 
trend  has  reversed  since  then,  contrary  to  the 
continued  decline  at  EU  level.  These  figures  also 
hide  significant  regional  disparities,  particularly 
between  mainland  France  and 
its  outermost 
regions, where the share of NEETs reached 25% in 
2024.  France  has  made  significant  efforts  to 
tackle  these  challenges  by  supporting  young 
people  through  the  introduction  of  compulsory 
training  for  young  people  aged  16  to  18  and 
through  the  ‘Contrat  d’engagement  jeune’,  which 
implements  the  Youth  Guarantee  programme. 
While  a  significant  number  of  young  people  have 
already  received  support  through  this  programme 
(around  600 000  by  the  end  of  2023),  a  recent 
report  highlighted 
to 
address  the  challenges  encountered  by  the  most 
vulnerable young people related to health, mobility 
and  housing (291).  Similarly,  a  stronger  focus  on 
those  furthest  from  the  labour  market  could  also 
increase 
the  effectiveness  of  apprenticeship 
in 
support  measures.  Significant 
hiring  subsidies  led  to  a  2.6-fold  increase  in  the 
number  of  apprenticeship 
contracts  signed 
annually  in  2023  compared  to  2018 (292).  This 
initiative  is  believed  to  have  contributed  to  the 
recent  rise  in  youth  employment (293).  However, 
evaluations  indicate  that  the  measure  primarily 
benefited 
levels  of 
individuals  with  higher 
qualifications (294). 

insufficient  provisions 

investments 

(291) Conseil d’Orientation des Politiques de Jeunesse, ‘Le Contrat 
d’Engagement Jeune (CEJ) - Suivi et évaluation de sa mise 
en œuvre dans les territoires - 2e rapport d’étape’, February 
2024. 

(292) DARES, ‘Le contrat d’apprentissage’, December 2024. 

(293) INSEE, ‘Une photographie du marché du travail en 2022’, 

Première No 1941, March 2023. 

(294) France Stratégie, ‘Comité d’évaluation du plan France 
Relance – Rapport final, Volume II – Évaluation des 
dispositifs’, January 2024. 

90 

404550556065707580200720082009201020112012201320142015201620172018201920202021202220232024% of population 20-64NationalsEU mobile workersThird countries 
     
 
Graph A10.3: Labour market outcomes of young 
people (15-24) 

Source: Eurostat, LFS [edat_lfse_18, lfsi_emp_a, une_rt_a, 
lfsi_act_a, edat_lfse_20] 

Further support to include vulnerable groups 
in the labour market is key in the light of the 
population. 
working-age 
shrinking 
Demographic  growth  has  been  slowing  in  recent 
years,  partly  due  to  a  declining  fertility  rate, 
leading  to  an 
increasingly  ageing  population. 
However,  the  labour  market  participation  of  older 
workers remains relatively low. Despite significant 
increases  over  the  years, the  employment  rate  of 
older  workers  (55-64)  in  2024,  was  60.4%,  still 
well  below  the  EU  average  of  65.2%,  dropping 
significantly as the age increases; 77% for 55-59-
year-olds  (EU:  76%)  and  38.9%  for  60-64-year-
olds (EU: 50.9%) (295) in 2023. The pension reform, 
adopted  in  2023,  along  with  several  measures  to 
support  older  workers  in  the  labour  market,  is 
expected to boost their participation rate. However, 
it  would  be  beneficial  to  closely  monitor  the 
overall  impact,  including  social  impact,  of  the 
pension reform. 

France’s  recovery  and  resilience  plan  (RRP) 
and  the  European  Social  Fund  Plus  (ESF+) 
provide  comprehensive  support  to  people 
who  are  unemployed  and  inactive.  The  RRP 
supported the reform of PES services, in particular 
to 
improve  personalised  guidance,  allowing 
jobseekers  to  receive  tailored  support  and  the 
development  of  digital  training  courses.  The  ESF+ 

aims  to  provide  support  for  people  to  find 
employment and improve the quality of education 
and  training,  by  investing  in  academic  and  career 
guidance,  while 
regional  ESF+  programmes 
promote  entrepreneurship  and  help  provide 
vocational training to unemployed people. 

Nominal  wage  growth  has  been  relatively 
low,  resulting  in  a  weak  recovery  of  real 
wages. Nominal wage growth is expected to reach 
2.2%  in  2025  (296),  after  4.7%  in  2022,  4.3%  in 
2023 and 3.0% in 2024. Since 2023, wage growth 
in France has been among the lowest in the EU. In 
turn,  real  wages  grew  only  by  0.2%  in  2024  and 
are  expected  to  increase  by  0.9%  in  2025,  after 
declines of 0.5% in 2022 and 1.4% in 2023. This 
represents  a  relatively  weak  recovery  in  real 
wages  over  2024  and  2025,  following  overall 
milder  losses  than  in  most  other  Member  States 
over  2022-2023.  Overall,  by  2025  real  wage 
growth would not be enough to completely offset 
the  losses  incurred  in  2022  and  2023.  Statutory 
minimum  wages  also  rose  by  more  than  12% 
between  January  2022  and  January  2025. 
However,  in  real  terms  this  corresponds  to  a 
decrease  of  0.3%.  At  the  same  time,  since  2023, 
relatively  low  wage  growth  has  contributed  to 
lower  growth  in  unit  labour  costs  than  in  most 
other  Member  States,  and  some  improvement  in 
cost  competitiveness  in  relation  to  other  EU 
Member States. 

In the context of economic stagnation, labour 
market  segmentation  negatively  affects  job 
quality.  Despite  a  slight  decline  since  2022,  the 
share of employees (age 20-64) with a temporary 
contract  remains  above  the  EU  average  and  rose 
from 11.2% in 2020 to 12% in 2024. In addition, 
the  number  of  new  hires  on  short-term  contracts 
(less  than  a  month)  increased  by  3.5%  in  2024, 
while new hires on permanent contracts or in fixed 
contracts  (more  than  a  month)  decreased  by 
3.5% (297).  However,  some  improvements  can  be 
observed, such as the significant drop in the share 
of involuntary temporary employment since 2019, 
reaching 3.7% in 2023 (EU: 3.4%). Young people in 
France  are  more  frequently  offered  short-term 
contracts,  with  38.3%  of  those  aged  15-29  in 
employment  working  on  temporary  contracts  in 

(296)Based on the European Commission Autumn 2024 economic 

forecast. 

(295) ECE report, ‘Employment situation of senior workers in 

(297) URSSAF, share of different types of contracts in new hires, 

France’, January 2025. 

2024. 

91 

01020304050607080051015202530200720082009201020112012201320142015201620172018201920202021202220232024%%Unemployment rate (lhs)Unemployment ratio (lhs)NEET (lhs)In education, training (rhs) 
     
 
 
2023  (EU:  33.3%)  well  above  the  15.3%  among 
(aged  15-64). 
the  working-age  population 
Nevertheless, young people are less likely to work 
part-time  than  their  EU  peers,  although  young 
women  are  working  part-time  twice  as  often  as 
the  evaluation 
young  men.  The 
committee  of  the  2019  unemployment  benefit 
reform (298),  which  introduced  the  bonus-malus 
measure  (299)  to  reduce  excessive  reliance  on 
temporary  jobs  in  some  sectors,  highlighted  a 
systematic reduction in short-term contracts in the 
targeted 
this  measure  was 
implemented. 

sectors  after 

report  of 

Graph A10.4: Employment by type of contract 

(1) Employment (thousand), total, ages 20-64, year-on-year 
change based on non-seasonally adjusted data. Self 
employment is defined as the total of self-employed persons 
and contributing family workers.. 
Source: Eurostat, LFS [lfsq_egaps, lfsq_etgaed] 

Persistent 
labour  and  skills  shortages 
continue  to  hinder  potential  investment  and 
productivity  growth.  Job  vacancy  rates  fell 
across all sectors but remained slightly above the 
EU  average  at  2.5%  in  Q4-2024  (EU:  2.3%).  The 
share  of  employers  reporting  labour  shortages  as 
a limiting factor in production has also decreased 
since  the  end  of  2023,  partly  due  to  the 
deterioration  of  economic  prospects,  dropping  to 
11.4%,  below  the  EU  average  of  18.1%.  While 

(298) DARES, Rapport du comité d’évaluation de la réforme de 
l’assurance chômage initiée en 2019, 3 April 2025. 

skills 

report  difficulties 

recruitment  pressures  are slowly improving,  6  out 
in 
of  10  employers  still 
hiring (300),  especially  in  the  automobile  industry, 
and  in  the  construction  and  care  sectors (301).  The 
lack  of  candidates  with  the  right  skillset  remains 
among  the  main  obstacles  to  recruitment.  The 
government’s commitment to investing in training 
could  help  address 
shortages  and 
mismatches and ultimately improve labour market 
in 
outcomes.  France  is  investing  significantly 
upskilling  and  reskilling  measures  and 
is  a 
frontrunner  with  a  fully-fledged  national  scheme 
for individual learning accounts (compte personnel 
de  formation).  However,  skills  shortages  are  not 
decreasing at the same pace. Evaluations point at 
weaknesses in the adequacy, relevance and quality 
of the available training offers (302). Moreover, the 
number  of 
to 
training  opportunities 
recognised qualifications remains insufficient (see 
Annex 12). 

leading 

The  expansion  of  the  green  and  digital 
sectors  requires  sustained  efforts  to  ensure 
inclusive  transitions.  In  2024,  employment  in 
energy-intensive  industries  remains  relatively  low, 
representing 2.1% of total employment (EU: 3.5%). 
Between  2016  and  2022,  employment  in  the 
environmental  goods  and  services  sector  grew  by 
32.3%,  reaching  2.8%  of  total  employment  (EU: 
3.3%).  The  greenhouse  gas  emission  intensity  of 
France’s workforce has improved, decreasing from 
14.3  tonnes  per  worker  in  2011  to  9.9  tonnes  in 
2023 (EU: 12.3 tonnes). This reflects the progress 
France  has  made 
transition.  
The  percentage  of  the  working  population  (aged 
25-64) with digital skills stands at 66.7%, slightly 
higher  than  the  EU  average  of  64.7%  in  2023, 
while  ICT  specialists  accounted  for  4.8%  of  total 
employment  (EU:  5%  in  2024).  Nevertheless, 
sustained  efforts  would  help  ensure  an  inclusive 
green and digital transition through upskilling and 
reskilling (see Annex 12). 

the  green 

in 

(300) DARES, ’La situation du marché du travail au 3ème trimestre 

2024’, November 2024. 

(301) France Travail, ‘Enquête Besoins en Main-d’Œuvre 2024’, 

2024. 

(299) The bonus-malus is a modulation of the unemployment 

(302) DARES, ’Quatrième rapport du comité scientifique de 

insurance contribution rate with the objective to fight against 
the abusive use of short contracts. 

l’évaluation du Plan d’investissement dans les compétences’, 
2023. 

92 

-800-600-400-200020040060080010002007-Q42008-Q42009-Q42010-Q42011-Q42012-Q42013-Q42014-Q42015-Q42016-Q42017-Q42018-Q42019-Q42020-Q42021-Q42022-Q42023-Q42024-Q4thsPermanent employeesTemporary employeesSelf employmentOverall 
   
 
 
 
 
ANNEX 11: SOCIAL POLICIES 

to 

in 
significant 

recent  years 
and 

Poverty and social exclusion risks have been 
in  France, 
increasing 
reflecting 
persistent 
inequalities.  Vulnerable  groups,  including  single-
parent households, the low skilled, the unemployed 
and  non-EU-born  people  continue 
face 
considerable  challenges,  with  the  situation  being 
systematically worse in the outermost regions (303). 
Worsening  poverty  risks,  overall  and  for  children, 
are  driven  by  inequalities  in  access  to  quality 
education,  insufficient  employment  support  and  a 
strong  intergenerational  transmission  of  poverty. 
Despite  one  of  the  highest  social  protection 
expenditure levels in the EU as well as existing and 
planned policies, further efforts involving targeted 
measures  to  reduce  poverty  and  social  exclusion 
and  improve  the  activation  of  underrepresented 
groups  will  contribute  to  France’s  sustainable, 
inclusive growth and long-term competitiveness. 

Poverty  and  social  exclusion  risks  worsened 
substantially in recent years, despite modest 
improvements between 2022 and 2023. After 
a  slight  decrease  in  2023  (0.3 pps,  i.e.  167 000 
persons),  the  AROPE  (at-risk-of-poverty  or  social 
exclusion)  rate  increased  slightly  by  0.1 pps  in 
2024  (i.e.  68 000  persons) (304).    Contrary  to  the 
EU, the percentage of people at risk of poverty or 
social  exclusion  has  been  steadily  increasing  over 
the  previous  years,  reaching  20.5%  in  2024  (EU: 
21%), with the same trend being  observed across 
all  three  components  of  the  AROPE  indicator.  The 
at-risk-of-poverty  (AROP)  rate  reached  15.9%  in 
2024  (EU:  16.2%),  maintaining  the  upward  trend 
that began in 2017 when it was 13.2% vs 16.9% 
for  the  EU,  despite  a  modest  0.2  pps  decrease 
between  2022  and  2023.  The  share  of  persons 
living  in  households  with  very  low  work  intensity 
reached  8.7%  in  2024  (EU:  7.9%).  The  severe 
material  and  social  deprivation  rate  stagnated  at 
6.6%  in  2024,  above  the  EU  average  of  6.4%. 
Income inequalities persist in France. In 2024, the 
income  received  by  the  richest  20%  was  4.66 
times  higher  than  that  of  the  poorest  20% 
(S80/S20 ratio), with the ratio being the highest in 
the  last  decade  (similar  to  the  EU  average)  . 
Persistent  poverty  risks  are  driven  by  inequalities 

(303) Data for France do not include Mayotte for methodological reasons 
(risk of non-representativeness of the sample because of its limited 
size). The poverty rate in Mayotte reached 77% in 2018 (INSEE). 

(304) Break in time series in 2022, explained by the integration of four 
outermost regions in the data calculation (French Guiana, 
Guadeloupe, La Réunion, Martinique). 

93 

to  quality  education, 

in  access 
insufficient 
strong 
employment 
intergenerational  transmission  of  poverty,  the 
most 
being 
disadvantaged 
disproportionally affected. 

support 

groups 

and 

a 

Graph A11.1: At-risk-of-poverty or social exclusion 
rate and its components 

Source: Eurostat, EU-SILC [ilc_peps01n, ilc_li02, ilc_mdsd11, 
ilc_lvhl11n] 

to  measure 

(the  baseline  year 

Further  measures  may  be  needed  to  reach 
the  2030  national  target  for  poverty 
reduction.  Contrary  to  the  EU  trend,  France 
remains one of the few Member States where the 
AROPE  rate  has  deteriorated  significantly  since 
2019 
the 
achievement  of  the  target),  with  the  number  of 
people  at  risk  of  poverty  or  social  exclusion 
growing  by  around  1  million  in  mainland  France 
(including  130 000  children)  to  reach  a  total  of 
12.7  million 
(including  3.3  million 
children). Further efforts to improve efficiency and 
target  measures  is  crucial  for  achieving  the 
national  target,  which  requires 
lowering  the 
number  of  people  at  risk  of  poverty  or  social 
exclusion by 2.1 million, bringing it to 10.6 million 
by  2030.  This  target,  however,  does  not  include 
France’s  outermost  regions,  which  would  add 
780 000  people  to  the  AROPE  count,  including 
230 000  children.  These  regions  experience  much 
higher  AROPE  rates  than  mainland  France  due  to 
their  isolated  location,  lack  of  accessible  and 

in  2023 

05101520252015201620172018201920202021202220232024% of populationAt-risk-of-poverty or social exclusion rateAt-risk-of-poverty rateSevere material and social deprivationPeople living in low work intensity households 
 
 
     
 
 
affordable 
educational and economic opportunities (305). 

essential 

services, 

and 

fewer 

The risk of poverty or social exclusion among 
children  remains  high.  The  AROPE  rate  for 
children reached 26.2%, above the EU  average of 
24.2%,  despite  a  slight  decrease  since  2022 
(1.1 pp),  similar to  the  overall  AROPE  trend in  the 
EU. In France, 3.5 million children face the risk of 
poverty  or  social  exclusion,  with  children  from  a 
disadvantaged 
remaining  more 
vulnerable to this risk. 

background 

Graph A11.2: Persons at risk of poverty and social 
exclusion, age groups 

Source: Eurostat, EU-SILC [ilc_peps01n] 

Despite  a  high  rate  of  enrolment  in  childcare  for 
children under 3 years of age in France (59.3% in 
2024 vs 39.2% in the EU), inequalities persist for 
the most vulnerable groups, mirroring those in the 
(see  Annex  10).  The  childcare 
job  market 
participation  gap  between  children  at  risk  of 
poverty  or  social  exclusion  and  those  not  at  risk 
was  41.6 pps  in  2024,  significantly  above  the  EU 
average  of  15.8 pps  (in  2023).  The  risk  is  more 
pronounced for children whose parents have a low 
level  of  education  and  are  non-EU-born,  as 
exposure  to  poverty  or  social  exclusion  is  highly 
linked to the education level of parents and carries 
a significant risk of intergenerational transmission. 
Children  from  a  disadvantaged  socio-economic 
background  face  a  high  risk  of  educational 

(305) Observatoire des inégalités, DOM: une grande pauvreté, cinq 
à dix fois plus élevée qu’en métropole, December 2024. 

disadvantages  and  inequality  of  opportunities,  as 
reflected  by  an  underachievement  rate  that  is 
much  higher  than  the  EU  average  for  the  most 
disadvantaged  pupils (306)  (see  Annex  12).  Socio-
economic  status  and 
immigrant  background 
remain strong predictors of pupils’ performance in 
France (307).  To  mitigate  the  impact  of  poverty  on 
children,  France  is  implementing  the  European 
Child  Guarantee  (ECG)  as  part  of  its  2022  action 
plan.  The  2024  implementation  report (308)  shows 
progress  in  some  areas,  e.g.  creation  youth  and 
family  community  support  centres  (“Maison  des 
Familles”),  large-scale  provision  of  breakfasts  in 
overseas 
the  most 
disadvantaged areas. However, further efforts are 
needed,  notably  in  terms  of  housing,  considering 
the level of child homelessness (see below). 

departments  and 

in 

social 

disproportionately  affected 
and 

Some  groups,  namely  non-EU-born  people, 
remain 
by 
exclusion,  while 
poverty 
educational  attainment,  employment  status 
and  household  composition  are  strong 
predictors of poverty risks. In 2024, the AROPE 
rate  for  native-born  people  was  below  the  EU 
average  (16.1%  vs  18%),  while  39.3%  of  people 
born in non-EU countries were at risk of poverty or 
social  exclusion.  This  gap  is  one  of  the  highest  in 
the  EU  (23.2 pps  vs  20.2 pps  in  the  EU).  The 
employment  gap  compared  to  native-born  people 
is  also  high  (see  Annex  10).  20%  of  the  working 
non-EU-born population is at risk of poverty with a 
gap  of  13.3 pps  with  the  native-born,  above  the 
EU  average  of  11.3 pps.  More  than  1  in  4  people 
with  disabilities  faced  a  risk  of  poverty  or  social 
exclusion  in  2024  (28.4%).  While  this  is    slightly 
below  the  EU  average  of  28.8%,  it  is  12.6 pps 
higher 
those  without  disabilities. 
Educational  attainment  and  employment  status 
are key determinants of poverty risks. In 2024, the 
AROPE rate remained at 9.5% for those with high 
educational attainment, while it rose to 31.6% for 
those  with  less  than  lower  secondary  education. 

than 

for 

(306) Cioldi I., Raffy G., Timss 2023 en CM1 : les résultats en 

mathématiques et en sciences restent stables en France, sous la 
moyenne européenne, avec une hausse des inégalités entre filles et 
garçons, Note d’Information No 24.47, 2024. In France, very 
advantaged pupils have an average score in science of 536 points 
vs 453 points for very disadvantaged pupils, a difference of 83 
points. 

(307) OECD, PISA 2022 Results (Volume I): The State of Learning and 

Equity in Education, 2023. 

(308)https://ec.europa.eu/social/BlobServlet?docId=27885&langId

=en 

94 

0510152025302015201620172018201920202021202220232024% of populationChildren (<18y)Working age (18-64) 
      
 
 
Additionally,  young  people  face  high  poverty  risks 
linked  to  relatively  high  unemployment  and  NEET 
(not  in  education,  employment  or  training)  rates 
(see Annex 10), highlighting the need for better job 
market  integration  efforts.  Among  unemployed 
individuals, the risk of poverty and social exclusion 
Furthermore,  household 
stands  at  27.5%. 
composition  and  work 
intensity  significantly 
impact  AROP  rates,  particularly  in  single-parent 
and  very  low  work  intensity  households  (75.2 pps 
gap  between  households  with  very  low  and  very 
high work intensity). Single-parent families are the 
most  vulnerable  to  precariousness,  with  the 
highest poverty rates (39.4% vs 32.7% in the EU) 
and in-work poverty rates (21.3% vs 18.9% in the 
EU).  In  addition,  82%  of  single-parent  households 
are  headed  by  a  woman  with  one  or  more 
children (309),  and  for  30.1%  of  women  (vs  8.5% 
for men) their role as carer is the reason they are 
in  part-time  employment.  Around  EUR 2.3  billion 
from  the  European  Social  Fund  Plus  (ESF+)  will 
support the social inclusion of the most vulnerable 
groups  as  well  as  poverty  prevention  and 
alleviation, 
including  for  children.  Additionally, 
around  EUR 613  million  from  the  ESF+  are 
allocated for food and material assistance for the 
most  vulnerable,  covering  both  mainland  France 
and  the  outermost  regions,  notably  through  the 
national programme for food aid. The 2023-2027 
solidarity  pact  has  been  in  place  since  January 
2024  and  should  contribute  to  tackling  several 
issues, including child poverty and the situation in 
the outermost regions. However, to be effective in 
reducing  the  in-work  poverty  and  risk-of-poverty 
rates, this strategy should strengthen measures to 
improve  the  accessibility  and  quality  of  childcare, 
promote  better  work-life  balance  policies  and 
increase  housing  accessibility  and  affordability,  in 
cooperation with civil society. 

Graph A11.3: In-work poverty rate 

In-work poverty rate - % of employed who have an 
equivalised disposable income below 60% of the national 
equivalised median income. 
Source: Eurostat, EU-SILC [ilc_iw01, ilc_iw05, ilc_iw07, 
ilc_iw02] 

The 
challenges  mentioned  above  are 
exacerbated  in  the  outermost  regions.  The 
AROPE rate is significantly higher in those regions 
than  in  metropolitan  France  and  the  EU  average. 
French Guiana had the highest AROPE rate among 
all  NUTS  (nomenclature  of  territorial  units  for 
statistics)  regions  in  the  EU  in  2024  (59.5%  vs 
48.8% for the second highest rate). Moreover, this 
rate  has 
increased  by  10.3 pps  since  2022, 
contrary to the slight fall for the EU. Similarly, the 
AROPE  rate  reached  39.4%  in  La  Réunion,  39.4% 
in  Guadeloupe  and  30.1%  in  Martinique,  well 
above the national average for France and for the 
Hauts-de-France  region,  which  at  25.6%  is  the 
mainland  region  with  the  highest  AROPE  rate. 
Almost  1  in  5  persons  in  French  Guiana  face 
severe  material  and  social  deprivation,  with  a 
significant increase from 17% in 2022 to 19.8% in 
2024.  Single-parent  households,  the  unemployed 
and  pensioners  are  particularly  vulnerable  in  the 
territories  mentioned,  where  unemployment  rates 
are systematically higher (17.3% in La Réunion vs 
7.4%  in  France  and  5.9%  in  the  EU).  In  French 
Guiana, 32% of single-parent families were at risk 
of  extreme  poverty (310)  (vs  5%  for  metropolitan 
France).  Despite  a  relative  lack  of  data  regarding 

(309) Sénat, ‘Familles monoparentales : pour un changement des 

représentations sociétales’, Rapport d’information No 485, March 
2024. 

(310) INSEE, ‘La grande pauvreté bien plus fréquente et beaucoup plus 

intense dans les DOM’, 2022. 

95 

051015202530200720082009201020112012201320142015201620172018201920202021202220232024% of employedTotalTemporaryPart-timeSingle parents 
 
       
 
Mayotte, the poverty rate is particularly high in this 
region, reaching 77% in 2018, which would further 
increase  the  figures  for  France 
included. 
Approximately  EUR 127  million  from  the  ESF+ 
(2021-27)  will  be  allocated  to  support  social 
inclusion, including measures targeting children, in 
the  five  outermost  regions.  However,  challenges 
point to the need for additional and well-targeted 
anti-poverty measures in these territories. 

if 

led  to  a 

The  housing  market  has  adjusted  slowly  in 
the  context  of  higher  interest  rates,  but 
house  prices  have  increased  over  the  last 
decade,  rising  by  around  26%  since  2015  in 
nominal terms. House prices have been adjusting 
in 2024 (-3.7%) after stagnating in 2023 (-0.4%) 
and  increasing  by  around  6%  in  both  2021  and 
2022.  Higher  interest  rates  and  muted  mortgage 
lending 
in  housing 
transactions  and  building  permits  in  2023  and 
2024.  Housing  transactions  decreased  by  -21.5% 
and  -9.2%  in  2023  and  2024  while  building 
permits  decreased  by  –25.4%  and  –13.8%  in  the 
same  period.  The  decrease  of  both  transactions 
and  building  permits  suggests  that  the  ongoing 
correction in house prices is being reflected in the 
construction sector. At the same time, house prices 
still  show  signs  of  overvaluation  of  around  8%  in 
2024. 

large  decrease 

increased 

Overall  housing  affordability  has  been 
broadly  stable,  but  house  prices  are  high 
compared  to  household  income.  Over  the  past 
decade,  the  standardised  house  price-to-income 
ratio 
regularly  until  2022  before 
correcting and are now below the 2015 level (6% 
lower).  At  the  same  time,  house  price  levels 
compared  to  incomes  are  higher  than  in  most 
other EU countries. Taking into account the cost of 
mortgage  funding,  the  borrowing  capacity  of 
households remained broadly stable over the past 
decade.  While  the  rental  market  is  rather  small, 
the  ratio  of  new  rents  to  incomes  remained  quite 
stable over the last ten years. 

Housing  cost  overburden 
is  a  growing 
challenge,  with  limited  progress  in  reducing 
the  number  of  homeless  people.  In  2024,  7% 
of the population lived in a household where total 
housing  costs  exceeded  40%  of  total  disposable 
income (EU: 8.2%), marking an increase from 5.5% 
in  2019.  For  people  at  risk  of  poverty,  this 
percentage  was  more  than  four  times  higher  and 
rose from 25.2% in 2022 to 27.9% in 2024, while 
it  stagnated  at  3%  for  people  above  the  poverty 

96 

threshold.  Housing  difficulties  are  particularly 
severe for single people (19.9% vs 21.1% for the 
EU),  especially  women  The  number  of  housing 
evictions is also rising, reaching 19 000 in 2023, a 
trend  that  may  be  worsened  by  the  Kasbarian 
law (311). Meanwhile, the demand for social housing 
remains unmet, amid declining public investments 
in  housing (312).  In  2024,  it  was  estimated  that 
350 000  people  were  homeless (313)  (vs  143 000 
in  2012),  including  2 043  children  (vs  1 990  in 
2023  and  927  in  2020).  Approximately  60%  are 
men  and  40%  are  women (314).  Lack  of  access  to 
emergency housing remains a challenge, including 
for 
framework 
implemented  since  2018  (‘Logement  d’abord’) 
aims  at  reducing  homelessness  and  financing 
access  to  social  housing.  The  ESF+  allocated 
around  EUR 15  million  for  initiatives  to  improve 
access 
the 
transition from temporary to permanent housing. 

children (315). 

to  housing, 

facilitating 

strategic 

thereby 

A 

to 

affecting 

Energy  poverty  has  risen  in  recent  years, 
disproportionately 
the  most 
vulnerable  groups.  In  2024,  11.8%  of  the 
population  was  unable  to  keep  their  home 
adequately  warm  (EU:  9.2%).  This  was  more 
pronounced  among  people  at  risk  of  poverty  or 
social exclusion, with 22.4% affected (EU: 19.7%), 
compared to 9.8% of those not at risk (EU: 7.1%). 
According 
the  national  energy  poverty 
observatory,  30%  of  the  population  reported 
suffering from cold during the 2023-2024 winter, 
with  28%  of  cases  attributed 
to  financial 
constraints and 30% to inadequate insulation (316). 
To  tackle  this  challenge,  various  measures  were 
introduced,  including  the  energy  voucher  scheme 
which  offers  financial  support  to  low-income 
households  for  energy  bills,  and  MaPrimeRénov’, 
supported  by  the  Recovery  and  Resilience  Facility, 
which  supports  energy  efficiency  renovations. 
However,  potential  budget  cuts  could  hinder  the 
effectiveness  of  such 
initiatives.  As  far  as 
transport  poverty  is  concerned,  car  affordability 

(311) This law, adopted in 2023, criminalises the occupation of a dwelling 

without right and increases fines for squatters. 

(312) Fondation pour le Logement des Défavorisés, L’état du mal-

logement en France 2025, Rapport annuel No 30, February 2025. 

(313) Ibid. 

(314) OECD Country Notes on Homelessness data. 

(315) UNICEF-FAS, Baromètre Enfants à la rue, August 2024. 

(316) Observatoire National de la Précarité Énergétique, « Tableau 

de bord de l’ONPE 2024 », 2024. 

 
 
does not appear to be a significant issue in France. 
The  stagnant  use  of  public  transport  (15.3%  in 
2011  vs  15.7% 
in  2022),  coupled  with  a 
significant  share  of  the  population  living  in  rural 
areas 
the 
public 
infrastructure 
transportation 
transportation system do not sufficiently meet the 
needs of the population in these areas. 

(33.6%),  may 

suggest 

that 

and 

Regional  disparities  in  accessibility  persist, 
despite  significant  public  expenditure  on 
social  protection  and  health.  Social  protection 
expenditure  (23.8%  of  GDP  in  2022  vs  19.4%  in 
the  EU)  and  health  expenditure  (9.1%  of  GDP  in 
2022 vs 7.6% in the EU) are among the highest in 
the  EU.  However,  structural  challenges  persist, 
notably  regional  disparities  in  access  to  care  (see 
Annex  14)  and  staff  shortages.  The  proportion  of 
the  French  population  reporting  unmet  needs  for 
medical care has been steadily increasing over the 
last decade (4.1% in 2024 vs 2.5% in the EU), with 
lower-income  groups  being  disproportionally 
affected. Additional difficulties regarding access to 
healthcare  services  can  be  observed 
in  the 
outermost regions (317). 

(317) Cour des comptes, ‘La santé dans les outre-mer, une responsabilité 

de la République’, June 2024. 

97 

 
 
 
 
ANNEX 12: EDUCATION AND SKILLS 

Inequalities  in  the  education  and  training 
in  basic  skills,  and  skills 
system,  gaps 
shortages  limit  France’s  innovation  capacity 
and competitiveness.  The French education and 
training system struggles to provide young people 
and adults with the skills they need to successfully 
adapt to the shifts in labour market requirements, 
which  are  driven  by  the  green  and  digital 
transitions. Weaknesses in skills development start 
at  an  early  age,  with  a  large  socio-economic 
performance  gap  in  primary  school,  and  continue 
with almost a quarter of 15-year-olds not meeting 
in  basic  skills.  Strong 
minimum  standards 
inequalities 
of 
education 
disadvantaged pupils without basic skills, reducing 
their  job  and  upskilling  opportunities  later  in  life. 
Although  participation  in  adult  learning  remains 
relatively  high,  inequalities  in  access  to  it  persist, 
particularly  affecting  the  most  disadvantaged 
groups.  The  labour  market  relevance  of  training 
programmes could be improved. These challenges, 
combined  with 
labour  shortages  and  skills 
mismatches,  undermine  France’s  potential  for 
sustainable  and  inclusive  growth.  Improving  the 
quality and inclusiveness of education and training 
would 
France’s 
to 
competitiveness. 

contribute 

boosting 

leave 

half 

in 

leaving  and 

A large share of 15-year-olds do not have a 
sufficient  level  of  basic  skills,  which  weighs 
on  productivity  and  skills  development  later 
in  life.  As  significant  progress  in  reducing  early 
school 
introducing  mandatory 
preschool  has  been  made,  the  focus  now  is  on 
improving  educational  outcomes.  Despite  higher 
spending  per  secondary  school  pupil  than  in  the 
EU-25  on  average,  results  remain  around  the  EU 
average and inequalities are higher (318). Around a 
quarter  of  secondary  school  students  lack  the 
basic  skills  needed  in  maths,  science  and  reading 
to  fully  participate  in  a  knowledge-based  society, 
rising to around 50% among disadvantaged pupils. 
Urban-rural  performance  differences  are  among 
the highest in EU comparison, with pupils in larger 
cities  performing  significantly  better (319). 
In 
addition,  43%  of  eighth  graders  do  not  have  the 
essential  digital  skills  to  navigate  today’s  digital 
world. 

those  of 

According  to  OECD  estimates,  bringing  France’s 
Programme  for  International  Student  Assessment 
(PISA)  results in reading, science and maths close 
to 
top-performing  countries  could 
increase productivity by 2.7% (320). Underachieving 
15-year-olds  are  more  likely  to  have  poor  basic 
skills  as  adults,  undermining  the  effectiveness  of 
upskilling and reskilling measures. According to the 
2023 
International 
for 
(PIAAC), 
Assessment  of  Adult  Competencies 
around 1 in 4 adults has weak basic skills, slightly 
below the OECD average (321). 

Programme 

the 

Math  skills  are  essential  for  the  population 
to  shape  technological  change  but  remain  a 
particular  concern.  French  fourth  and  eighth 
graders  obtained  some  of  the  lowest  results  in 
maths  and  science  among  the  EU-22 (322).  In 
addition,  France  was  one  of  the  countries  where 
performance in primary school  was most  strongly 
to  socio-economic  background.  Top-
related 
performance rates were also lower than the EU-22 
average (323). 

in 

for 

support 

disadvantaged 
Extensive 
learners  exists  but  does  not  reach  them  all. 
The  government  allocates  substantial  additional 
funding  to  disadvantaged  schools 
‘priority 
education  zones’.  This  creates  strong  threshold 
effects  on  schools  outside  these  zones  –  despite 
having similar socio-economic profiles, they might 
not  receive  extra  funding.  An  estimated  70%  of 
disadvantaged  pupils  are  not  schooled  in  ‘priority 
education’,  for  example  in  rural  areas  (the  rural-
urban  performance  gap  in  PISA  is  one  of  the 
highest,  see  above).  While  schemes  exist  to  help 
schools  outside  these  designated  areas  (e.g. 
contrats  locaux  d’accompagnement),  they  do  not 
fully  ensure  that  all  disadvantaged 
learners 
receive  support.  A  more  gradual  allocation  of 
means  as  well  as  strengthened  cooperation  with 
local  actors  (such  as  that  trialled  by  the  cités 
éducatives) could help disadvantaged schools that 
currently  do  not  sufficiently  benefit  from  support 
schemes. 

(318) OECD. Economic Survey France 2024; Education at a Glance 

(322) IEA (2024). TIMSS 2023. 

2024 Country Note France. 

(319) OECD (2023). PISA 2022 Results (Volume I). 

(323) 3% in maths and 4% in science in France, vs 11% and 10% 
in the 22 EU countries participating in TIMSS (fourth grade). 

(320) OECD (2024). Economic Survey France 2024. 

(321) DARES (2024). Compétences des adultes en 2023. 

98 

 
 
 
 
 
 
Graph A12.1: Trends in the low performance rate in 
mathematics in fourth grade (2015-2023) 

Source: TIMSS (2023) 

from 

Salaries  are  below  the  pay  level  of  similarly 
educated  workers,  especially  at  mid-career 
level (326).  Salary  increases  in  recent  years  have 
almost  completely  been  offset  by  inflation (327). 
Voluntary  departures 
the  profession, 
limited  overall,  have  sharply 
although  very 
increased  in  the  last  decade.  There  are  fewer 
applicants, and teacher-entry exams are becoming 
less  selective (328).  A  2023 
job 
satisfaction survey revealed the main concerns for 
teachers  that  need  improvement:  pay,  workload 
and  career  prospects (329).  Larger  class  sizes  than 
the  EU  average  and  higher  student-to-teacher 
ratios  add  to  the  workload (330).  The  demographic 
decline  should  help  to  lower  this  ratio  as  the 
number of teaching posts is maintained stable for 
now. 

large-scale 

(v) 

year; 

academic 

in  some  disadvantaged  areas; 

Recent  measures  to  improve  basic  skills 
could  make  better  use  of  the  wealth  of 
available  data  to  inform  a  long-term  basic 
skills  framework.  The  government  has  made 
considerable efforts to improve basic skills. It has: 
(i)  reduced  class  sizes;  (ii)  increased  funding  for 
(iii) 
schools 
published new competence-based curricula for the 
2025/26 
expanded 
standardised  pupil  evaluations;  (vi)  implemented 
homework  support  and  anti-bullying  measures; 
(vii)  introduced  ability  grouping  in  the  first  and 
second  years  of  lower  secondary  school  and  (viii) 
set  up,  in  2023,  regional  committees  for  basic 
skills  improvement.  However,  frequent  political 
changes  have  led  to  a  sustained  pace  of  reforms 
but  also  resulted  in  insufficient  timeframes  for 
implementation  and  evaluation.  Greater  stability 
could  be  achieved  by:  (i)  getting  more  teachers 
involved in co-designing education policy, ideally in 
a  multi-annual  perspective  and  based  on 
(ii)  setting  up  multi-party 
evaluations;  and 
commissions  to  review  and  advise  on  education 
policy reforms (324). Making these measures part of 
a  multi-annual  basic  skills  strategy  would  ensure 
continuity and a common framework. 

Improving basic skills requires a high level of 
teaching  quality  and  an  attractive  teaching 
profession.  Teachers  in  France  are  less  satisfied 
with  their  job  than  their  peers  in  the  EU (325). 

to 

an 

improve 

potential, 

EU-funded 

continuous 

Around  30  continuous  training  centres  (écoles 
académiques  de  la  formation  continue)  were  set 
professional 
up 
development  (CPD).  To  help  these  centres  fulfil 
their 
project 
recommended  that:  (i)  CPD  needs  to  be  fully 
integrated  into  human  resources  policies  and 
practice;  (ii)  the  training  centres  should  include 
training  for  primary  teachers;  and  (iii)  quality 
assessment  and  evaluation  of  CPD  should  be 
strengthened (331). When planning reforms with an 
impact  on  pedagogical  requirements  (such  as 
ability  grouping), 
training  needs  should  be 
anticipated. 

continued 

The  number  of  students  and  apprentices  in 
vocational  education  and  training  (VET)  is 
efforts  are 
increasing  but 
necessary  to  improve  its  labour  market 
relevance  and 
the  economy’s  growth 
potential.  The  share  of  learners  enrolled  in 
medium-level  vocational  education  (ISCED  3-4) 
has  gradually  risen  in  recent  years,  reaching 
40.9% in  2023, but still below the EU average of 
52.4%.  The  number  of  apprenticeship  contracts 
continues  to  increase  and  reached  over  a  million 

(326) OECD (2024). Education at a Glance. 

(327) OECD (2024). Education at a Glance Country Note France. 

(328) France Stratégie (2024). Travailler dans la fonction publique 

(329) DEPP (2024). Note d’information n° 24.02. 

(330) OECD (2024). Education at a Glance 2024, Tables D2.2 and 

(324) OECD (2020). TALIS 2018 Results (Volume II), p. 61. 

D2.4. 

(325) IEA (2024). TIMSS 2023 International Results in 

Mathematics and Science 

(331) OECD (2024). Cultiver l’excellence dans l’apprentissage et le 
développement professionnel des personnels de l’éducation 

99 

15202530354045FranceEU average%201520192023 
  
 
 
the 

contracts in December 2024 (332), but concerns on 
quality  exist  (see  Annex  10).  In  2024,  82.4%  of 
VET graduates participated in work-based learning 
(EU: 65.3%). However, in 2024, only 73% of recent 
VET  graduates  entered 
labour  market 
successfully  (EU:  80%),  highlighting  the  need  to 
improve  labour  market  relevance.  The  reform  of 
vocational  upper  secondary  schools,  implemented 
since  the  2023/2024  academic  year,  aims  to 
address  this  although  its  impact  still  needs  to  be 
in  work-based 
assessed.  Further 
learning,  particularly 
facing 
barriers to employment (see Annex 10) could help 
tackle  skills  shortages,  improve  young  people’s 
employability  and  contribute  to  productivity  and 
competitiveness. 

investments 
targeting 

those 

Nearly  a  third  of  students  graduate  with  a 
science,  technology,  engineering  or  maths 
(STEM)  degree  at  tertiary  level,  but  more 
graduates  are  needed  to  tackle  climate 
change  and  digitalisation.  The  share  of  STEM 
graduates  was  one  of  the  highest in  the  EU,  with 
30.5%  in  2022  (EU:  26.6%).  However,  only  4.1% 
were  ICT  graduates  (EU:  4.5%).  Among  pupils  in 
medium-level  VET,  36.8%  were  enrolled  in  STEM 
fields  in  2023  (EU:  36.3%).  Improving  young 
people’s  maths  and  science  skills  (see  above) 
would  enable  more  of  them  to  choose  STEM  and 
acquire  the  skills  needed  to  shape  technological 
change.  A  leading  industry  federation  estimates 
that 80 000 jobs in engineering will be needed by 
2030  to  work  on  the  technologies  needed  for the 
green  and  digital  transitions.  However,  1  out  of  5 
positions  risk  remaining  vacant  due  to  a  lack  of 
STEM graduates (333). 

Although  there  is  no  overarching  education 
and training strategy for STEM, various STEM 
initiatives  and  funding  for  projects  exist. 
Funding for STEM education is available under the 
plan  France  2030  initiative  supporting  the  energy 
transition  and  the  development  of  cutting-edge 
technologies.  One  objective  is  to  anticipate  future 
skills and job needs and accelerate the roll out of 
training  programmes.  The  ‘future  competences 
and  jobs’  call  for  projects  supports  education  and 
training  in  strategically  important  sectors,  mainly 
in  STEM  fields.  However,  ongoing  efforts  by  the 

French  government  to  reduce  public  spending  are 
expected  to  affect  the  funding  available  for  this 
initiative, which could lessen its impact. In schools, 
extracurricular  STEM  activities,  such  as  science 
tournaments and hands-on activities, complement 
regular maths and science teaching. Assessing the 
impact of these activities on students’ interest and 
their  achievements  in  STEM  could  inform  more 
strategic support for these fields. 

performance, 

reporting  hiring  difficulties 

requirements.  Two 
to 
expected 
are 

Skills  shortages  continue  to  hinder  France’s 
labour  market 
affecting 
competitiveness  across  many  sectors  of  the 
economy.  The  job  vacancy  rate  is  2.5%  at  Q4 
2024 in France (EU: 2.3%). However, in 2023, 76% 
of French small and medium-sized enterprises still 
reported  difficulties  in  filling  at  least  one  job 
vacancy  (EU:  74%).  These  figures  highlight  the 
need  to  better  align  candidates’  skills  with 
job 
employers’ 
thirds  of 
high 
require 
openings 
qualifications  by  2035 (334)  although 
skills 
shortages  are  affecting  all  skills  levels.  Despite 
some  improvement  in  2024,  the  construction 
sector is still facing significant issues, with 71.5% 
of  companies 
in 
October 2024 (335). Moreover, in 2024, 6 out of 10 
recruiters forecast hiring difficulties, with the lack 
of relevant skills being the second most significant 
factor (336).  To  tackle  skills  shortages,  France  has 
skills 
made 
Plan 
development, 
d’investissement  dans  les  compétences  (PIC).  This 
programme  dedicated  EUR 13.8  billion  to  skills 
between 2018 and 2023. However, as highlighted 
by the French Court of Auditors, the training offers 
do  not  correspond  to  recruitment  needs  for  high-
demand  professions(337).  Only  one  in  four  training 
courses  targeted  a  priority  sector  (ICT,  health, 
construction,  the  green  transition),  and  less  than 
half  targeted  jobs  for  which  recruiters  reported 
hiring  difficulties (338).  Better  targeting  of  priority 
jobs  could  improve  the  impact  of  the  new  2024-
2027 PIC launched at regional level.  

investments 
through 

substantial 

primarily 

in 
the 

(334) CEDEFOP, 2023 Skills forecast, France. 

(335) DARES, La situation du marché du travail au 3ème trimestre 

2024, 2024. 

(336) France Travail, Enquête Besoins en main d’oeuvre 2024, 

2024. 

(337) Cour des Comptes, Évaluation du plan d’investissement dans 

(332) DARES, Le contrat d’apprentissage, 2024. 

les compétences (PIC), 2025. 

(333) Syntec-Ingénierie. (2024). 80 000 nouveaux emplois à 

(338) DARES, Synthèse du 4ème rapport du comité scientifique de 

pourvoir d’ici 2030 dans l’ingénierie 

l’évaluation du PIC, 2023. 

100 

 
 
 
France  is  well  advanced  in  implementing 
individual learning accounts (ILAs): the compte 
personnel de formation enables workers to access 
training  throughout  their  professional  life,  with 
around  1.3  million  training  courses  delivered  in 
2023 (339). Since 2024, a payment of EUR 100 has 
been required to participate in training through the 
ILA  to  make  users  more  accountable.  Although 
this 
specific 
contribution  may  make  access  difficult 
for 
vulnerable groups. To tackle the high level of skills 
shortages,  better  guidance  for  workers  could  be 
given  on  using  their  ILAs,  and  upskilling  and 
reskilling  could  be  incentivised  in  line  with  labour 
market  demands.  The targeted  top-ups  for  digital 
skills  training  co-financed  by  the  Recovery  and 
Resilience Facility are a good example of how this 
could be done. 

exemptions  were 

introduced, 

Labour  market  demand  for  green  skills 
outstrips  supply.  France  promotes  education  to 
sustainable  development  as  a  cross-disciplinary 
subject  across  all  levels  of  education,  and  a 
comprehensive  regulatory  framework  exists  for 
schools.  Pupils  have  a  good  knowledge  of 
sustainable  development  (496.4  score  points  vs 
EU-17 506.7  points (340).  In  2024,  shortages  were 
reported  in  several  occupations  requiring  specific 
skills  related  to  the  green  transition,  including 
forestry  and  related  workers,  civil  engineering 
technicians and roofers (341). Although the number 
of  jobs  in  green  sectors  increased  between  2013 
and  2021  (by  47.2%  vs  18.3%  in  the  EU), 
recruitment  difficulties  persist,  with  a  lack  of 
candidates and skills mismatches among the main 
reasons (342).  Only  46%  of  the  French  population 
believe that their current skills would enable them 
to contribute to the green transition (EU 54%). The 
Just  Transition  Fund  provides  workers  and 
jobseekers in industrial sectors with upskilling and 
reskilling  opportunities  in  those  regions  most 
affected  by  the  transition  to  a 
low-carbon 
economy.  On  digital  skills,  although  above  the  EU 
average in 2023 (55.6%), the share of adults with 
at least a basic level  of digital  skills decreased in 
France (59.7% vs 61.9% in 2021) (see Annex 10). 

(339) DARES, Le compte personnel de formation en 2023, 2024. 

(340) 2022 International Civic and Citizenship Education Study. 

(341) European Labour Authority, EURES Report on labour 

shortages and surpluses 2024, 2025. 

(342) Onemev, Des difficultés de recrutement persistent en 2022 

dans le secteur de l’économie verte, 2023. 

Graph A12.2: Adult participation in learning 

(1) Participation in learning in the last 12 months (excluding 
guided-on-the-job training) 
Source: Eurostat – adult education survey (AES 2022) 

and 

status 

Participation  in  adult  learning  is  relatively 
high,  but  remains  closely  linked  to  age, 
employment 
educational 
attainment. 
In  2022,  49.2%  of  adults 
participated in education and training (EU: 39.5%). 
Despite  a  slight  increase  since  2016  (0.8 pps  vs 
2.1 pps in the EU), France has not made significant 
progress  towards 
its  2030  target  of  65%. 
Participation  decreases  with  age,  with  a  22.2  pps 
gap  between  adults  aged  25-34  and  those  aged 
55-64 (EU: 19.6 pps). Employed people participate 
more  (56.3%)  than  unemployed  (43.2%)  and 
inactive  people  (22.5%).  Highly  qualified  adults 
participate  more  (68.7%)  than  those  with  only 
lower  secondary  education  (23.6%),  who  are  also 
to 
less 
qualifications (343),  even  though  such  programmes 
tend  to  have  better  labour  market  integration 
rates.  The  European  Social  Fund  Plus  supports 
access  to  education  and  training  by:  (i)  helping 
unemployed people access upskilling; (ii) improving 
academic  and  career  guidance  services; 
(iii) 
preventing early school leaving; and (iv) promoting 
the  2030 
apprenticeships.  Progress 
national 
could  be  accelerated  by 
target 
strengthening  measures  for  under-represented 
groups, 
low  qualifications, 
improving  their  labour  market  integration  and 
mobility. 

those  with 

towards 

training 

leading 

likely 

take 

like 

to 

(343) IGAS, Revue des dépenses de formation professionnelle et 

d’apprentissage, 2024 & DARES, Synthèse du 4ème rapport 
du comité scientifique de l’évaluation du PIC, 2023. 

101 

102030405060TotalLow-skilledMedium-skilledHigh-skilled25-3435-4545-5555-64EmployedUnemployedOutside lab. forceEducationAgeEmployment StatusEUFR 
 
  
 
ANNEX 13: SOCIAL SCOREBOARD 

Table A13.1:Social Scoreboard for France 

(1) Update of 5 May 2025. 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 2025 for details on the 
methodology (https://employment-social-affairs.ec.europa.eu/joint-employment-report-2025-0). 
Source: Eurostat 

102 

49,27,759,712,55,94,6675,17,41,7110,720,526,238,922,47,059,34,1Critical situationTo watchWeak but improvingGood but to monitorOn averageAdult participation in learning (during the last 12 months, excl. guided on the job training, % of the population aged 25-64, 2022)Equal opportunities and access to the labour marketSocial Scoreboard for FranceBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2024)Young people not in employment, education or training(% of the population aged 15-29, 2024)Gender employment gap(percentage points, population aged 20-64, 2024)Income quintile ratio (S80/S20, 2024)Dynamic labour markets and fair working conditionsSocial protection and inclusionShare of individuals who have basic or above basic overall digital skills(% of the population aged 16-74, 2023)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2024)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2024)Self-reported unmet need for medical care (% of the population aged 16+, 2024)Disability employment gap (percentage points, population aged 20-64, 2024)Housing cost overburden (% of the total population, 2024)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2024)Employment rate(% of the population aged 20-64, 2024)Unemployment rate(% of the active population aged 15-74, 2024)Long term unemployment(% of the active population aged 15-74, 2024)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2023)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2024) 
 
 
 
  
 
 
ANNEX 14: HEALTH AND HEALTH SYSTEMS 

faces 

health 

system 

France’s 
some 
challenges which need to be addressed if the 
country  is  to  improve  the  health  of  its 
population  and 
fairness,  while 
social 
boosting the competitiveness of its economy. 
The main challenges are: (i) a segmented approach 
to care organisation across primary and secondary 
care; (ii) persistent gaps in access to healthcare in 
specific  areas  known  as  ‘medical  deserts’,  mainly 
due  to  staff  shortages;  and  (iii)  an  insufficient 
focus on disease prevention.   

Life expectancy at birth in France rebounded 
to  its pre-COVID-19 level and was one of the 
highest in the EU in 2023. Women can expect to 
live 5.8 years longer than men, but only about 1.5 
years longer in good health. Treatable mortality is 
one  of  the  lowest  in  the  EU,  suggesting  that  the 
health system is effective. 

Graph A14.1: Life expectancy at birth, years 

future 

improvements.  Two 

inform 
reforms 
included  in  the  recovery  and  resilience  plan  (RRP) 
aimed  at  improving  access  to  health  and  social 
care, taking into account the changing needs of an 
ageing  population:  (i)  a  law  reforming  hospital 
governance;  and  (ii)  a  law  on  social  debt  and 
autonomy,  were  adopted in  2021.  Investments  of 
EUR  4.5  billion  (11.2%  of  the  RRP’s  total  value) 
support  the  construction  and  refurbishment  of 
health and care facilities, and nursing homes, and 
the  further  digitalisation  of  health  services. 
Complementary  investments  worth  around  EUR 
428  million  in  2021-2027,  from  the  cohesion 
policy  funds,  focus  on  health  infrastructure,  e-
health services, health workforce development and 
improving  access  to  healthcare,  especially  for 
vulnerable groups. 

Graph A14.2: Treatable mortality 

Source: Eurostat (demo_mlexpec) 

Age-standardised death rate (mortality that could be 
avoided through optimal quality healthcare) 
Source: Eurostat (hlth_cd_apr) 

The  provision  of  healthcare 
remains 
fragmented  and  hospital-centred,  despite 
recent  efforts  to  strengthen  primary  care 
and care coordination. In 2022, health spending 
per  inhabitant  was  among  the  highest  in  the  EU, 
with the largest share going to inpatient care. This, 
together  with  an  above  average  number  of 
hospital  beds  (473  per  100 000  population  in 
2022), illustrates France’s considerable reliance on 
hospital  care.  To  strengthen  primary  care,  recent 
reforms encouraged: (i) multidisciplinary practices; 
(ii) the decentralisation of decisions on healthcare 
provision; 
financial 
incentives  for  better  care  coordination  and 
prevention; and (iv) an expansion of the roles and 
responsibilities  of  allied  health  professionals.  
Services,  however,  remain  fragmented  with  most 
providers  working  independently  and  with  little 
collaboration between hospital, primary and social 
care  services.  A  more  systemic  evaluation  of  the 
performance  of  the  health  system  would  help 

introduction  of 

the 

(iii) 

France  places  insufficient  focus  on  disease 
prevention.  In  2022,  spending  on  prevention 
accounted  for  4%  of  total  spending  on  health, 
lower than the EU average of 5.5%. Mortality from 
cardiovascular  diseases  and  cancer  is  relatively 
low.  The  suicide  rate  is  higher  than  the  EU 
average,  but  slightly  decreasing.  Public  health 
efforts  have  focused  on  boosting  prevention 
strategies  and  tackling  lifestyle  risk  factors,  but 
the  prevalence  of  daily  smoking  is  one  of  the 
highest  in  the  EU.  Moreover,  excessive  alcohol 
consumption  remains  a  challenge  and  obesity 
(344).  Preventive  health 
rates  are  growing 
consultations are fully reimbursed as of 2024 and 
should  provide  advice  tailored  to  patients’  age 
profiles 
situations.  Mental 
healthcare provision remains hospital-centred with 
limited  availability  in  community  settings.  Recent 

individual 

and 

(344) OECD/European Commission (2024), Health at a Glance: 

Europe 2024 - State of Health in the EU Cycle, Chapter 4. 

103 

83.082.382.482.383.081.380.480.180.681.420192020202120222023FranceEU61.260.359.058.859.491.389.291.793.389.720182019202020212022per 100 000 populationFranceEU 
 
        
        
 
 
 
Table A14.1:Key health indicators 

*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 based on 2022 (or latest 2021) data except for Luxembourg (2017). Doctors’ density data refer to practising 
doctors in all countries except Greece, Portugal (licensed to practise) and Slovakia (professionally active). Density of nurses: data 
refer to practising nurses (EU recognised qualification) in most countries except France and Slovakia (professionally active) and 
Greece (hospital only). **‘Available hospital beds’ covers somatic care, not psychiatric care. ***The EU median is used for patents. 
Source:  Eurostat database; European Patent Office; ****European Centre for Disease Prevention and Control (ECDC) for 2023. 

line.  Another 

reforms  aim  to  improve  the  coordination  of 
services  and  to  increase  access  to  psychologists. 
The  RRP  envisaged  the  setting  up  of  a  suicide 
the 
prevention 
consumption of antibiotics, which in 2023 was well 
above  the  EU  average,  despite  the  recommended 
national target (345) to reduce total consumption by 
27% between 2019 and 2030. France participates 
in 
joint  action  on 
antimicrobial resistance.  

the  EU4Health-funded 

challenge 

is 

Access  to  healthcare  is  somewhat  of  a 
challenge  in  France.  Unmet  medical  needs  are 
higher  than  the  EU  average,  mainly  due  to  costs 
and  waiting  times.  Distance  to  health  facilities  is 
another  key  determining  factor,  as  illustrated  by 
regional  differences  in  unmet  needs,  especially  in 
primary care (see Annexes 11 and 17). Contrary to 
primary  care,  there  are  no  major  inequalities 
between  regions  in  access  to  hospital  care.  The 
French  health  system  provides  a  high  degree  of 
financial protection.  

Shortages  of  health  staff  and  an  unequal 
distribution  of  health  personnel  pose  a 
growing  challenge.  The  density  of  doctors  in 
France (3.2 per 1 000 population in 2021) is below 
the  EU  average  of  4.2  per  1 000.  There  were  8.8 
nurses  per  1 000 population  in  France  in  2021 
(slightly  above  the  EU  average  of  7.6  per  1  000). 
While  the  number  of  health  workers  overall  has 
increased  in  the  last  decade,  the  number  of 
(GPs)  per  capita  has 
general  practitioners 

decreased  –  and  according  to  projections,  this 
trend  will  continue  until  at  least  2028.  The 
responsibilities of nurses in primary care could be 
further expanded following the introduction of the 
advanced  practice  nurse  position 
in  2019. 
However,  the  pay  of  hospital  nurses  is  below  the 
average national wage, and low compared to other 
EU  countries  (346). Despite regulations on planning 
doctors’ geographical distribution, doctors are free 
to  choose  their  place  of  practice.  The  distribution 
of  staff  across  the  country  is  skewed  to  more 
  About  6%  of  the  French 
attractive  areas. 
population,  mostly  in  the  central  region,  live  in 
areas  where  GP  supply  is  considered  insufficient.  
While  the  geographical  distribution  of  specialists 
has  slightly  improved  over  the  past  decade, 
inequalities – especially in access to those who do 
not  charge  additional  fees  to  patients  –  remain 
significant.  Multidisciplinary  group  practices  have 
shown  more  potential  than  financial  incentives  to 
attract  and  keep  doctors  in  areas  considered  as 
‘medical deserts’.  

The  French  health  system  has  the  potential 
to  drive  innovation  and  foster  industrial 
development  in  the  EU  medical  sector  (see 
Annex 3). France reports one of the highest public 
funding 
and 
development  in  the  EU.  This  has  led  to  537 
European  patents  being  granted  to  patentees  of 
French residence in 2023 in the combined areas of 
pharmaceuticals,  biotechnologies  and  medical 
devices (vs the EU-level median of 39) (347). France 

research 

health 

levels 

for 

(345) National target set by the Council Recommendation on 

stepping up EU actions to combat antimicrobial resistance in 
a ‘one health’ approach, 2023/C 220/01. 

(346) Health at a Glance: Europe 2024, pp.196-197. 
(347) European Patent Office, Data to download | epo.org. 

104 

20192020202120222023EU average* (latest year) Cancer mortality per 100 000 population230.7226.6222.6222.4n.a.234.7 (2022)Mortality due to circulatory diseases per 100 000 population 175.5 167.7 169.9 171.6n.a.336.4 (2022)Current expenditure on health, purchasing power standards, per capita3 6623 8024 1794 302n.a.3 684.6 (2022)Public share of health expenditure, % of current health expenditure 83.3 84.6 85.0 84.7n.a.81.3 (2022)Spending on prevention, % of current health expenditure 2.13.15.74.0n.a.5.5 (2022)Available hospital beds per 100 000 population** 500 492 483 473n.a.444 (2022)Doctors per 1 000 population*3.23.23.23.2n.a.4.2 (2022)*Nurses per 1 000 population*n.a.n.a. 8.8n.a.n.a.7.6 (2022)*Mortality at working age (20-64 years), % of total mortality15.314.314.614.114.314.3 (2023)Number of patents (pharma / biotech / medical technology)75875560943453729 (2023)***Total consumption of antibacterials for systemic use,                    daily defined dose per 1 000 inhabitants****25.120.321.524.324.120.0 (2023) 
 
 
 
        
 
reports  holding  among  the  highest  numbers  of 
clinical trials in the EU (348).  

the 

digital 

launched 

There is some room for improving the uptake 
of  e-health.  In  2024,  the  share  of  people 
accessing their personal health records online was 
below  the  EU  average  (25.5%  vs  27.7%).  The 
government 
health 
acceleration  strategy  in  2021  with  a  budget  of 
EUR 734 million. The Ma santé 2022 reform aims 
to: (i) integrate e-health systems into one national 
platform;  (ii)  improve  cyber  security  and  patient 
access  to  e-health  systems;  and  (iii)  make  e-
prescriptions  the  norm  at  the  national  level. 
Significant planned investments under the RRP and 
cohesion  policy  aim 
the  digital 
transformation of the healthcare sector in France. 
France  participates  in  the  EU4Health  joint  action 
on  the  European  Health  Data  Space  and  benefits 
from  a  grant  supporting  digital  infrastructure  and 
secondary use of data in healthcare.  

to  boost 

(348) EMA (2024), Monitoring the European clinical trials 

environment, p. 9. 

105 

 
 
 
 
HORIZONTAL 
ANNEX 15: SUSTAINABLE DEVELOPMENT GOALS 

dimensions 

This Annex assesses France’s progress on the 
Sustainable Development Goals (SDGs) along 
competitiveness, 
of 
the 
and 
fairness 
social 
sustainability, 
macroeconomic stability. 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 
inequalities  and  tackle  climate 
poverty,  fight 
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 
the EU. 

is 

improving  on  all  SDGs  on 
France 
competitiveness  (SDGs 4,  8,  9)  and  performs 
well on SDG 4, but it needs to catch up with 
the  EU  average  on  SDG  8  and  9.  On  SDG4 
(quality education), the share of young adults with 

Graph A15.1: Progress towards the SDGs in France 

France 

growth), 

decreased 

tertiary education increased significantly, but adult 
participation  in learning  decreased  from  19.5%  in  
2019  to  15.2%  in  2024  –  although  remaining 
above the EU average. On SDG 8 (Decent work and 
economic 
its 
investment  rate  to  23.1%  of  GDP 
in  2023 
compared  to  23.7%  in  2022,  while  remaining 
above the EU average of 22.4% and its 2018 level 
(21.9%). In addition, the share of young people not 
in  education,  employment  or  training  increased 
slightly  between  2019  and  2024  (from  12.4%  of 
the  population  aged  15-29  to  12.5%),  while  the 
long-term  unemployment  rate  decreased  (from 
2.3%  of  the  active  population  to  1.7%).  However, 
the  number  of  fatal  accidents  at  work  rose  in 
2022 to 3.49 accidents per 100 000 workers, well 
above the EU  average of 1.66. While  close to the 
EU  average,  the  SDG 9-related  indicators  are 
include  gross 
somewhat 
domestic  expenditure  on R&D  and  R&D  personnel 
(2.2%  of  GDP  in  2018  vs  2.19%  in  2023,  and 
1.53% of the active population in 2018 vs 1.67% 
in  2023).  A  notable  exception  is  the  significant 
improvement  in  the  share  of  households  with 

stagnating.  These 

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 
five 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 28 April 2025. Data refer mainly to the period 2018-2023 or 2019-2024. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

106 

 
 
 
 
 
 
 
internet 

connection 

investments 

high-speed 
(43.8%  of 
households in 2019 to 81.4% in 2023) above the 
EU  average.  The  French  recovery  and  resilience 
plan  (RRP)  includes  several  measures  supporting 
R&D 
in  digital  technologies  and 
infrastructure  and  green  transition,  strengthening 
R&D  projects  of 
innovative  businesses,  and 
preserving R&D employment. However, barriers to 
improve productivity growth in France remain (see 
Further priorities ahead). 

France is improving on five SDGs (SDGs 2, 7, 
9,  12,  13)  related  to  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  and  communities).  France  has  made 
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 6.4 tonnes of CO2 
equivalent  per  capita  in  2018  to  5.4  in  2023), 
reducing the generation of waste and reducing its 
material  and  consumption 
footprint.  France 
notably  reduced  its  CO2  emissions  per  km  from 
new passenger cars from 136 g CO2/km in 2018 to 
96.8  in  2023,  well  below  the  EU  average  (107.6 
gCO2/km). The French 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 2.7% in 2018 
to  4.6%  in  2023)  and  the  proportion  of  the 
population  living  in  households  suffering  from 
noise (up from 18.2% in 2018 to 21.1% in 2023). 
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.  The  RRF  invested  in  water  networks, 
including in France’s overseas departments. 

France is improving on most SDGs related to 
social  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  8.2%  of  the 
population aged 18-24 in 2019 to 7.7% in 2024) 

and  the  higher  tertiary  educational  attainment 
(from  48.2%  of  the  population  aged  25-34  in 
2018  to  53.4%  in  2024).  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.  There  is  also  a  worrying  downward 
trend on some basic education indicators, with the 
share  of  low-achieving  pupils  in  mathematics 
increasing from 21.3% in 2018 to 28.8% in 2022, 
while remaining just below the EU average. France 
is  moving  away  from  the  targets  for  SDG 1  (No 
poverty),  with  more  people  at  risk  of  poverty  or 
social  exclusion 
(rising  from  17.9%  of  the 
population in 2018 to 19.8% in 2023) or living in 
households  with  very  low  work  intensity  (from 
7.5% in 2018 to 9.2% in 2023). France is the EU 
Member  State  that  deviates  the  most  from  its 
2030  poverty  reduction  target  (see  Annex  9). 
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, that reached a 7.7 pp. 
difference in the percentage of population in 2023 
(EU  average  in  2023:  0.2  pp.  difference).  While 
France’s  performance  on SDG 3  (Good  health  and 
well-being)  slightly  improved  overall  in  the  six 
years  between  2017  and  2023,  it  needs  to  catch 
up with the EU average in this area. 

France  is  improving  on  SDGs  related  to 
macroeconomic stability (SDGs 8 and 17) but 
moving  away  from  the  goals  on  SDG 16 
(Peace,  justice  and  strong  institutions).  In 
addition,  it  still  needs  to  catch  up  with  the 
EU  average  on  SDGs  8,  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  3.1  per  100 000  in  2023, 
above the EU average of 2.4. In 2024, 54% of the 
population  (down  from  59%  in  2019)  had  a  very 
or  fairly  good  perception  of  the  independence  of 
the 
justice  system.  The  percentage  of 
the 
population  reporting  crime,  violence  or  vandalism 
decreased  only  slightly  from  14.9%  in  2018  to 
14.7%  in  2023,  compared  to  the  falling  EU 
average (from 11.5% to 10.0%). In terms of global 
partnership,  France  increased  its  financing  to 
developing  countries  (11 625  billion  EUR  in  2018 
vs 16 724 in 2023) and its share of imports from 
these  countries  (2.16%  in  2019  vs  2.76%  in 
2024).  The  general  government  gross  debt  has 
increased  to  113%  of  GDP  in  2024,  which  is 
significantly higher than the EU average of 81%.   

107 

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

108 

 
ANNEX 16: CSR PROGRESS AND EU FUNDS IMPLEMENTATION 

recommendations 

France  faces  structural  challenges in  a  wide 
range  of  policy  areas,  as  identified  in  the 
country-specific 
(CSRs) 
addressed  to  the  country  as  part  of  the 
European  Semester.  They  refer,  among  other 
things,  to  the  budgetary  framework  and  fiscal 
governance,  taxation  policy,  non-discrimination 
and  equal  opportunities,  education  and  skills, 
infrastructure  and 
renewable  energy,  energy 
networks, business environment and research and 
innovation. 

The Commission has assessed the 2019-2024 
CSRs  considering  the  policy  action  taken  by 
France  to  date  and  the  commitments  in  its 
recovery  and  resilience  plan  (RRP).  At  this 
stage,  France  has  made  at  least  ‘some  progress’ 
on 72% of the CSRs (349), and ‘limited progress’ on 
21% (Table A16.2). 

benefits  for  the  economy  and  French  society. 
Project  selection  under  the  2021-2027  cohesion 
and 
policy 
implementation 
gained 
momentum.  

programmes 
of 

accelerated 
has 

has 
projects 

The French RRP contains 73 investments and 
24  reforms  to  stimulate  sustainable  growth, 
accelerate  the  green  and  digital  transitions  and 
make  the  French  economy  more  resilient  as  a 
result  of  investments  in  the  health  sector  and 
skills,  including  higher  education  and  lifelong 
learning.  A  year  before  the  end  of  the  RRF 
timespan,  implementation  is  well  on  its  way  with 
85%  of  funds  disbursed.  At  present,  France  has 
fulfilled  82%  of  the  milestones  and  targets  in  its 
RRP,  making  France  the  most  advanced  Member 
State  in  terms  of  implementation  progress (353). 
Continued efforts are needed to ensure completion 
of all RRP measures by 31 August 2026.  

to 

by 

competitiveness, 

EU funding instruments provide considerable 
resources 
supporting 
France 
investments  and  structural  reforms  to 
environmental 
increase 
sustainability  and  social  fairness,  while 
helping  to  address  challenges  identified  in 
the  CSRs.  In  addition  to  the  EUR 40.3  billion 
funding  from  the  Recovery  and  Resilience  Facility 
(RRF) in 2021-2026, EU cohesion policy funds (350) 
are  providing  EUR 16.8  billion 
to  France 
(amounting  to  EUR 28.5  billion  with  national  co-
financing)  for  2021-2027 (351)  to  boost  regional 
competitiveness  and  growth.  Support  from  these 
instruments  combined  represents  around  2%  of 
2024  GDP (352).  The  contribution  of 
these 
is 
instruments  to  different  policy  objectives 
outlined 
in  Graphs  A16.1  and  A16.2.  This 
substantial  support  comes  on  top  of  financing 
the  2014-2020 
provided 
multiannual  financial  framework,  which  financed 
projects  until  2023  and  has  had  significant 

to  France  under 

France  also  receives  funding  from  several 
other  EU  instruments,  including  those  listed 
in  table  A16.1.  Most  notably,  the  common 
agricultural  policy  (CAP)  provides  France  with  an 
EU  contribution  of  EUR 45.5  billion  under  the CAP 
strategic  plan  for  2023-2027 (354).  A  further 
EUR 1.3  billion  are  available  under  the  Asylum, 
Migration  and  Integration  Fund  (AMIF),  together 
with the border management and visa instrument 
(BMVI)  and  internal  security  funds.  Furthermore, 
operations  amounting  to EUR  2.9  billion (355)  have 
been signed under the InvestEU instrument backed 
by 
to 
financing for riskier operations in France. 

the  EU  guarantee, 

improving  access 

(349) 4% of the 2019-2024 CSRs have been fully implemented, 
21% substantially implemented, and some progress has 
been made on 47%. 

(350) In 2021-2027, cohesion policy funds include the European 
Regional Development Fund, the European Social Fund Plus 
and the Just Transition Fund. The information on cohesion 
policy included in this annex is based on adopted 
programmes with the cut-off date of 5 May 2025. 

(351) European territorial cooperation (ETC) programmes are 

excluded from the figure. 

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

(353) As of mid-May 2025, France has submitted 4 payment 

requests. 

(354) An overview of France’s formally approved strategy to 

implement the EU’s common agricultural policy nationally 
can be found at: https://agriculture.ec.europa.eu/cap-my-
country/cap-strategic-plans/france_en  

applicable. GDP figures are based on Eurostat data for 2024. 

(355) Data reflect the situation on 31.12.2024. 

109 

 
 
 
 
 
 
Graph A16.1: Distribution of RRF funding in France 
by policy field 

training  actions  to  improve  skills  in  strategic 
sectors. In addition, the European Social Fund Plus 
(ESF+)  is  investing  EUR 2 262.5  million  (36%  of 
the ESF+ allocation to France) in skills, focusing on 
improving  labour  market  relevance  and  quality  of 
education  and  training  systems.  The  support 
encompasses  skills  counselling, 
training  and 
designing  of  programmes  and  career  guidance, 
targeting the most vulnerable groups such as low-
skilled and those not in education, employment or 
training.   

(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 circle represents 100% of the RRF funds. 
Therefore, the total distribution to all pillars 
displayed on this chart amounts to 200% of the 
RRF funds allocated. 
Source: European Commission 

Graph A16.2: Distribution of cohesion policy 
funding across policy objectives in France 

Source: European Commission 

Cohesion  policy  funds  aim  to  increase  the 
productivity  and  competitiveness  of  French 
firms and improve the business environment. 
For  example,  the  European  Regional  Development 
Fund  (ERDF)  and  the  Just  Transition  Fund  (JTF) 
provide  support  for  129 400  businesses,  focusing 
on  innovation  and  digitalisation.  Close  to  90 000 
additional businesses and 709 500 households are 
expected  to  gain  access  to  very-high-capacity 
broadband.  Cohesion  policy  funding 
is  also 
mobilised in support of the objectives of Strategic 
Technologies  for  Europe  Platform  (STEP)  with  a 
focus  on  industrial  start-ups  and innovative  SMEs 
with  high  economic  potential,  including  in  their 
pre-industrialization  and  expansion  phase,  and 

in 

rail 

are 

through 

particular 

contributing 

in  France,  for 

infrastructure  and 

to 
funds 
Other 
competitiveness 
instance 
through  open  calls.  The  Connecting  Europe 
Facility  has  supported  strategic  investments  in 
the 
areas  such  as 
modernisation  of  France’s  maritime  and  inland 
waterways  transport  network.  It  also  contributed 
to  energy  market  integration,  the  decarbonisation 
of  the  energy  system  and  the  security  of  energy 
supply, 
electricity 
interconnectivity.  In  the  digital  sector,  it  has 
strengthened  the  capacity,  resilience  and  security 
the 
of 
deployment  of  5G  in  smart  communities  and 
connected 
the 
automated  mobility 
Mediterranean corridor. Horizon Europe has funded 
research and innovation across the spectrum, from 
scientific breakthroughs to scaling up innovations, 
with  the  European  Research  Council  and  Climate, 
Energy and Mobility as top priorities. In France, the 
Technical  Support  Instrument  (TSI)  has  indirectly 
contributed  to  the  reform  of  public  service  in  the 
French  RRP  through  transforming  the  human 
resource function to support the managerial, green 
and digital transitions of public administrations. 

infrastructure,  advanced 

backbone 

along 

to 

the 

in  enhancing 

is  helping  France 

contains  ambitious 
France’s  RRP  also 
business 
improve 
measures 
environment  and  competitiveness.  France’s 
RRP 
the 
digitalisation  of  public  services  for  citizens  and 
businesses.  Measures  covered  by  the  fourth 
payment  request  include  investments  related  to 
the  digitalisation  of  higher  education  and  the 
medical  sector.  France  also  supported 
the 
development  of  key  digital  technologies,  the 
improvement  of  the  government’s  cybersecurity 
capabilities  and  the  modernisation  of  the  digital 
management system for maritime affairs.  

EU  funds  are  playing  a  significant  role  in 
promoting  environmental  sustainability  and 
green transition in France during the current 

110 

Green transitionDigital transformationSmart, sustainable andinclusive growthSocial & territorial cohesionHealth & resilienceNext generationSmarter EuropeGreener EuropeConnected EuropeSocial EuropeEurope closer to citizensJTF specific objective 
   
 
   
for  waste 

seven-year  EU  budget  (multiannual  financial 
framework). EUR 4.5  billion  from  the  ERDF  and 
the  JTF  are  used  to  support  the  green  transition, 
including  energy  efficiency,  renewable  energy, 
disaster  management,  water  management  and 
waste  treatment.  Additional  production  capacity 
for  renewable  energy  should  reach  943 MW,  and 
the  additional  capacity 
recycling 
3.4 million  tonnes  a  year.  Access  to  clean  water 
and  sanitation  is  a  key  challenge  for  the  French 
outermost regions, and the ERDF is investing over 
EUR 300 million in this sector. This support aims to 
give access to clean water to over 350 000 people 
and  to  connect  around  100 000  people  to 
through  key 
treatment  facilities, 
wastewater 
projects  such  as  the  DOM  Water  Plan  in  French 
Guiana,  the  desalination  plant  at 
Ironi  Bé in 
Mayotte  and 
the  Etang-salé  drinking  water 
production  unit  in  La  Réunion.  The  ERDF  also 
invests 
the  outermost 
regions, for  instance  by  providing  EUR 37  million 
for  the  Caribus  project,  developing  the  first  bus 
lanes  for  public  transport  in  Mayotte,  or  for  the 
transformation  of  the  Marigot  Ferry  Terminal  in 
Saint-Martin  into  a  multimodal  hub.  France’s  CAP 
strategic  plan  allocates  EUR 4.1  billion  (41%  of 
rural  development  funding)  to  environmental  and 
climate  objectives  and  EUR 8.5  billion  (25%  of 
direct  payments) 
to  eco-schemes  supporting 
biodiversity,  organic  farming  and  sustainable 
practices.  For  example,  extra  support  is  available 
for  farms  implementing  practices  that  limit  soil 
erosion  or  maintain  organic  matter  such  as  soil 
cover  or  crop  diversification.  To  preserve  and 
protect  biodiversity, 
the 
inclusion  and  maintenance  of  landscape  features 
on farms. 

the  Plan  promotes 

in  clean  mobility 

in 

France’s  RRP, 
including  the  REPowerEU 
chapter, has a comprehensive set of reforms 
and  investments  for  the  green  transition.  As 
part  of  the  measures  covered  by  payment 
requests  submitted  over  the  past  year,  France 
included:  several  measures  that  promote  energy 
efficiency  through  the  renovation  of  buildings; 
support  to  sustainable  transport  through  the 
renovation  and  creation  of  public 
transport 
lanes,  tracks  or  railways;  and  the 
reserved 
completion  of 
regulatory  studies  aiming  at 
creating  low  GHG  emission  zones  in  cities,  as 
provided  by  the  Climate  and  Resilience  Law 
(2021). 

a 

This 

year. 

people 

increasing 

the  ERDF 

facilitating  proper 

Promoting  fairness,  social  cohesion  and 
improving  access  to  basic  services  are 
among  the  key  priorities  of  EU  funding  in 
supports 
instance, 
France.  For 
healthcare infrastructure, 
or 
modernising the capacity of facilities serving over 
includes 
420 000 
EUR 125 million  supporting  improved  access  to 
healthcare  infrastructure  in  the  French  outermost 
regions, for instance by increasing the capacity of 
in  Martinique,  benefitting 
healthcare  facilities 
326 000  people  a  year.  It  also  helps  reduce 
disparities  in  education  in  the  outermost  regions, 
by co-funding projects such as the creation of the 
Academic Health Training Centre at the University 
of  French  Guiana.  The  ESF+  fosters  active 
inclusion, 
labour  market 
integration  for  those  currently  least  integrated 
social 
(EUR 1.8 billion).  The  ESF+ 
inclusion for the most vulnerable people, including 
children  and  access  to  affordable  housing  and 
essential  services  in  mainland  France  and  in  the 
outermost  regions  (EUR 383.9  million).  Among 
their interventions, ESF+ programmes will  support 
at  least  3 million  people  not  in  employment, 
32 200  people  who  are  homeless  and  214 400 
people  with  a  disability.  In  2024,  the  Technical 
Support  Instrument  (TSI)  helped  France  to  gain  a 
better  understanding  of 
some  populations, 
including  vulnerable  groups,  to  improve  their 
digital  financial  literacy,  pilot  a  comprehensive 
approach  to  mental  health  in  schools  and  to 
consolidate  and  implement  the  roadmap  for  the 
environmental transition of the General Delegation 
for Employment and Vocational Training. 

supports 

France’s  RRP  contains  several  reforms  and 
investments  related  to  fairness  and  social 
policies.  As  part  of  the  measures  covered  by 
payment  requests  submitted  over  the  past  year, 
France  continues  to  support  the  modernisation  of 
health  care,  including  the  construction,  energy 
renovation  and  modernisation 
of  medical 
establishment.  France  also  invested  in  improving 
river 
it  a  credible 
alternative to road freight transport. 

infrastructure 

to  make 

111 

 
 
Table A16.1:Selected EU funds with adopted allocations - summary data (million EUR) 

(1) The cut-off date for data on disbursements under the RRF is 31 May 2025. 
(2) Cohesion policy 2014-2020 allocations include REACT-EU appropriations committed in 2021-2022. 
(3) These amounts relate only to disbursements made from 2021 onwards and do not include payments 
made to the Member State before 2021. Hence the figures do not comprise the totality of payments 
corresponding to the 2014-2020 allocation. The cut-off date for data on disbursements under EMFAF and 
EMFF is 29 April 2025. The cut-off date for data on disbursements under cohesion policy funds, AMIF, 
BMVI and ISF is 5 May 2025. 
(4) AMIF - Asylum, Migration and Integration Fund; BMVI- Border Management and Visa Instrument; ISF - 
Internal Security Fund. 
(5) Expenditure outside the CAP strategic plan is not included. 
(6) The cut-off date for data on EARDF disbursements is 5 May 2025. The information on EAGF 
disbursements is based on the Member State declarations until March 2025. Disbursements for the Direct 
Payments (EAGF) started in 2024. 
Source: European Commission 

112 

Instrument/policyDisbursed since 2021   (1)             RRF grants (including the RepowerEU allocation)30 868.4RRF loans0 Instrument/policyAllocation 2014-2020 (2)Allocation 2021-2027 Disbursed since 2021 (3)    (covering total payments to the Member State on commitments originating from both 2014-2020 and 2021-2027 programming periods) Cohesion policy (total)17 782.316 775.012 066.5European Regional Development Fund (ERDF)11 133.29 070.47 404.4European Social Fund (ESF, ESF+) and the Youth Employment Initiative (YEI)7 613.66 674.74 342.5Just Transition Fund (JTF)1 030.0 319.6European Maritime, Fisheries and Aquaculture Fund (EMFAF) and the European Maritime and Fisheries Fund (EMFF) 588.0 567.1368.4Migration, border management and internal security - AMIF, BMVI and ISF (4) 779.21 278.5608.9The common agricultural policy under the CAP strategic plan (5)Disbursements under the CAP Strategic Plan (6)Total under the CAP strategic plan15 472.9European Agricultural Guarantee Fund (EAGF)13 438.0European Fund for Agricultural Development (EAFRD)2 034.9Allocation 2021-2026 45 548.535 509.310 039.240 269.90FisheriesMigration and home affairsAllocation 2023-2027 
 
 
     
 
Table A16.2:Summary table on 2019-2024 CSRs 

(Continued on the next page) 

113 

FranceAssessment in May 2025*Relevant SDGs2019 CSR 1Some 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 anymoreSDG 8, 16Usewindfallsgainstoacceleratethereductionofthegeneralgovernment debt ratio. Not relevant anymoreSDG 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 progressSDG 8, 16Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimes,withtheviewtoenhancetheirfairnessand sustainability.Substantial progressSDG 82019 CSR 2Some progressFoster labour market integration for all job seekers, ensure equal opportunities with a particular focus on vulnerable groups including people with a migrant backgroundSome progressSDG 8, 10and address skills shortages and mismatches.Some progressSDG 42019 CSR 3Some progressFocus investment-related economic policy on research and innovation (while improving the efficiency of public support schemes, including knowledge transfer schemes), Some progressSDG 9, 10, 11renewable energy, energy efficiency and interconnections with the rest of the Union, Some progressSDG 7, 9, 10, 11, 13and on digital infrastructure, taking into account territorial disparities.Substantial progressSDG 9, 10, 112019 CSR 4Substantial progressContinue to simplify the tax system, in particular by limiting the use of tax expenditures, further removing inefficient taxes and reducing taxes on production. Substantial progressSDG 8, 9, 10, 12Reduce regulatory restrictions, in particular in the services sector,Limited progressSDG 8, 9and fully implement the measures to foster the growth of firms.Not relevant anymoreSDG 8, 92020 CSR 1Substantial progressInlinewiththegeneralescapeclause,takeallnecessarymeasurestoeffectivelyaddressthepandemic,sustaintheeconomyandsupporttheensuingrecovery.Wheneconomicconditionsallow,pursuefiscalpoliciesaimedatachievingprudentmedium-termfiscalpositionsandensuringdebtsustainability,while enhancing investment.Not relevant anymoreSDG 8, 16Strengthentheresilienceofthehealthsystembyensuringadequatesuppliesofcriticalmedicalproductsandabalanceddistribution of health workers, and by investing in e-Health.Substantial progressSDG 32020 CSR 2Substantial progressMitigate the employment and social impact of the crisis,Substantial progressSDG 1, 2, 8, 10 including by promoting skills Some progressSDG 4and active support for all jobseekers.Some progressSDG 82020 CSR 3Some progressEnsure the effective implementation of measures supporting the liquidity of firms, in particular for small and medium-sized enterprises.Not relevant anymoreSDG 8, 9 Front-load mature public investment projectsSubstantial progressSDG 8, 16and promote private investment to foster the economic recovery.Substantial progressSDG 8, 9Focusinvestmentonthegreenanddigitaltransition,inparticularon sustainable transport,Some progressSDG 11clean and efficient production and use of energy,Some progressSDG 7, 9, 13energy (infrastructures)Some progressSDG 7, 9, 13and digital infrastructuresSubstantial progressSDG 9as well as research and innovation.Some progressSDG 9 
 
 
  
 
Table (continued) 

(Continued on the next page) 

114 

2020 CSR 4Some progressContinue to improve the regulatory environment,Limited progressSDG 8, 9reduce administrative burdens for firmsSome progressSDG 8, 9and simplify the tax system.Substantial progressSDG 8, 9, 10, 122021 CSR 1Not relevant anymoreIn2022,usetheRecoveryandResilienceFacilitytofinanceadditionalinvestmentinsupportoftherecoverywhilepursuingaprudent fiscal policy. Preserve nationally financed investment.Not relevant anymoreSDG 8, 16Wheneconomicconditionsallow,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringfiscalsustainability in the medium term. Not relevant anymoreSDG 8, 16At the same time, enhance investment to boost growth potential.Payparticularattentiontothecompositionofpublicfinances,onboththerevenueandexpendituresidesofthebudget,andtothequalityofbudgetarymeasuresinordertoensureasustainableandinclusiverecovery.Prioritisesustainableandgrowth-enhancinginvestment,inparticularinvestmentsupportingthegreenanddigital transition.Not relevant anymoreSDG 8, 16Giveprioritytofiscalstructuralreformsthatwillhelpprovidefinancingforpublicpolicyprioritiesandcontributetothelong-termsustainabilityofpublicfinances,including,whererelevant,bystrengtheningthecoverage,adequacyandsustainabilityofhealthand social protection systems for all.Not relevant anymoreSDG 8, 162022 CSR 1Substantial progressIn2023,ensureprudentfiscalpolicy,inparticularbylimitingthegrowthofnationallyfinancedprimarycurrentexpenditurebelowmedium-termpotentialoutputgrowth,takingintoaccountcontinuedtemporaryandtargetedsupporttohouseholdsandfirmsmostvulnerabletoenergypricehikesandtopeoplefleeingUkraine.Standreadytoadjustcurrentspendingtotheevolvingsituation.Not relevant anymoreSDG 8, 16Expandpublicinvestmentforthegreenanddigitaltransitions,andforenergysecuritytakingintoaccounttheREPowerEUinitiative,includingbymakinguseoftheRecoveryandResilienceFacilityand other Union funds.Not relevant anymoreSDG 8, 16Fortheperiodbeyond2023,pursueafiscalpolicyaimedatachievingprudentmedium-termfiscalpositionsandensuringcredibleandgradualdebtreductionandfiscalsustainabilityinthemediumtermthroughgradualconsolidation,investmentandreforms.Not relevant anymoreSDG 8, 16Reformthepensionsystemtoprogressivelyunifytherulesofthedifferentpensionregimestoenhanceitsfairnesswhileunderpinning its sustainability.Substantial progressSDG 82022 CSR 2Proceedwiththeimplementationofitsrecoveryandresilienceplan,inlinewiththemilestonesandtargetsincludedintheCouncilImplementing Decision of 13 July 2021.SwiftlyfinalisethenegotiationswiththeCommissionofthe2021-2027cohesionpolicyprogrammingdocumentswithaviewtostarting their implementation.2022 CSR 3Some progressAddresstheshortageofskillsbyraisingtheshareofpeoplewithbasic skills, providing additional work-based learning options andSome progressSDG 4improvingthelearningoutcomesofallstudents,inparticularbyadaptingresourcesandmethodstotheneedsofdisadvantagedstudents and schoolsLimited progressSDG 4, 8, 10andbyimprovingtheworkingconditionsandcontinuoustrainingofteachers.Some progressSDG 4RRP implementation is monitored by assessing RRP payment requests and analysing reports published twice a year on the achievement of the milestones and targets. These are to be reflected in the country reports. Progress on the cohesion policy programming documents is monitored under the EU cohesion policy. 
 
 
  
 
Table (continued) 

(Continued on the next page) 

115 

2022 CSR 4Some progressReduce overall reliance on fossil fuels.Some progressSDG 7, 9, 13Acceleratethedeploymentofutility-scaleanddecentralisedrenewableenergiesthroughincreasedpublicinvestmentandbyfacilitatingprivateinvestment,includingbyfurtherstreamliningpermittingproceduresandensuringadequatestaffingofauthorising administrations.Limited progressSDG 7, 8, 9, 13Improvethepolicyframeworktoincentivisethedeeprenovationofbuildings.Limited progressSDG 7, 8, 9Expand energy interconnection capacity.Some progressSDG 7, 9, 132023 CSR 1Some progressWinddowntheemergencyenergysupportmeasuresinforce,usingtherelatedsavingstoreducethegovernmentdeficit,assoonaspossiblein2023and2024.Shouldrenewedenergypriceincreasesnecessitateneworcontinuedsupportmeasures,ensurethatthesearetargetedatprotectingvulnerablehouseholdsandfirms,fiscallyaffordable,andpreserveincentivesforenergysavings.Substantial progressSDG 8, 16Ensureprudentfiscalpolicy,inparticularbylimitingthenominalincreaseinnationallyfinancednetprimaryexpenditurein2024tonot more than 2.3%.No progressSDG 8, 16PreservenationallyfinancedpublicinvestmentandensuretheeffectiveabsorptionofRRFgrantsandotherEUfunds,inparticular to foster the green and digital transitions.Full implementationSDG 8, 16Fortheperiodbeyond2024,continuetopursueamedium-termfiscalstrategyofgradualandsustainableconsolidation,combinedwithinvestmentsandreformsconducivetohighersustainablegrowth, to achieve a prudent medium-term fiscal position.No progressSDG 8, 16Furtherimproveframeworkconditionstofacilitateinvestmentandinnovation.Some progressSDG 8, 162023 CSR 2Proceedwiththesteadyimplementationofitsrecoveryandresilienceplanand,followingtherecentsubmissionoftheaddendum,includingtheREPowerEUchapter,rapidlystarttheimplementationoftherelatedmeasures.Proceedwiththeswiftimplementationofcohesionpolicyprogrammes,inclosecomplementarityandsynergywiththerecoveryandresilienceplan.2023 CSR 3Some progressAddresstheshortageofskills,inparticularbyprovidingadditionalwork-basedlearningoptionsandraisingtheshareofpeoplewithbasic skills.Some progressSDG 4Adaptresourcesandmethodstotheneedsofdisadvantagedstudentsandschoolsinordertomaketheeducationandtrainingsystem more equitable and inclusive.Some progressSDG 4, 8, 10Improvetheworkingconditionsandinitialandcontinuoustrainingfor teachers.Limited progressSDG 4, 8, 102023 CSR 4Some progressReduce overall reliance on fossil fuels.Some progressSDG 7, 9, 13Acceleratethedeploymentofrenewableenergies,focusinginparticularonwind,solarandgeothermalsourcesandbiogas,includingthroughsmall-scalerenewableenergyproductionandthepromotionofcollectiveself-consumption,andpromoterelatedstoragetechnologies,throughincreasedpublicinvestment,byfacilitatingprivateinvestment,andaddressingpermittingbottlenecks.Limited progressSDG 7, 9, 13Further upgrade electricity transmission and distribution grids.Some progressSGD 7,9, 13Increase cross-border electricity interconnections.Some progressSGD 7,9, 13Furtherimprovethepolicyframeworktoincentivisethedeeprenovationofbuildingsandthedecarbonisationofheatingsystems,withaparticularfocusonlow-incomehouseholdsandonbuilding stock with the lowest energy performance.Some progressSGD 7,9, 13Buildasupportingregulatoryenvironmenttoincreaseinvestmentinclean-techmanufacturing,includingbysimplifyingandspeedingup permitting.Substantial progressSGD 7,9, 13Stepuppolicyeffortsaimedattheprovisionandacquisitionofskills and competences needed for the green 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. 
 
 
  
 
Table (continued) 

Source: European Commission 

116 

2024 CSR 1Some progressSubmit the medium-term fiscal-structural plan in a timely manner.Full implementationSDG 8, 16InlinewiththerequirementsofthereformedStabilityandGrowthPact,limitthegrowthinnetexpenditurein2025toarateconsistent,interalia,withputtingthegeneralgovernmentdebtonaplausiblydownwardtrajectoryoverthemediumtermandreducingthegeneralgovernmentdeficittowardsthe3%ofGDPTreaty reference value.Some progressSDG 8, 16Reducethecomplexityofthetaxsystembybettertargetingtaxexpenditures,removingtheleastefficientonesandlimitingtheiroverall budgetary impact.Limited progressSGDs 8, 10, 12Continuetheeffortstoenhancethequalityofbudgetarymeasures,includingbysettingupquantitativetargetsforexpendituresavingsinbudgetaryplanningwithintheestablishedframeworkforspending reviews.Some progressSDG 8, 162024 CSR 2Continuewiththeswiftandeffectiveimplementationoftherecoveryandresilienceplan,includingtheREPowerEUchapter,ensuringcompletionofreformsandinvestmentsbyAugust2026.Acceleratetheimplementationofcohesionpolicyprogrammes.Inthecontextoftheirmid-termreview,continuefocusingontheagreedpriorities,whileconsideringtheopportunitiesprovidedbytheStrategicTechnologiesforEuropePlatforminitiativetoimprovecompetitiveness.2024 CSR 3Limited progressFurtheraddressskillsshortages,includingingreentransitionoccupations,andfosterparticipationintraining,inparticularamongthe low-skilled.Some progressSDG 4Improve the performance and equity of the education system.Limited progressSDGs 4, 10Strengthentheteachingprofession,includingbyimprovingworkingconditions and training.Limited progressSDG 42024 CSR 4Limited progressImprovethebusinessenvironmentbyreducingtheadministrativeburden.Limited progressSGDs 8, 9FosterbusinessR&Dintensity,includingbybettertargetingpublicsupport schemes.No progressSDG 9Acceleratetheenergytransitionbydeployingrenewableenergiesfaster,includingbyadoptingsecondarylegislation,settingupthe‘renewablesaccelerationareas’andpromotingstoragetechnologies.Limited progressSDG 7, 9, 13RRP implementation is monitored through the assessment of RRP payment requests and analysis of the bi-annual reporting on the achievement of the milestones and targets. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. 
 
 
 
 
  
 
ANNEX 17: COMPETITIVE REGIONS 

In  recent  years,  territorial  differences  have 
become more pronounced in France, in terms 
of  GDP  growth,  demographic  trends,  firms’ 
agglomerations,  public  services  and  housing. 
Economic  activities  are  concentrated  in  some 
regions,  which  also  encourage  people  to  move 
there, while other regions in the north, centre and 
east, and outermost regions, lag behind. 

France  experienced  slow  growth  in  GDP  per 
head  between  2014  and  2023,  with  an 
average  annual  growth  rate  of  0.8%,  below 
the  EU  average  of  1.6%.  Therefore,  France’s 
GDP  per  head  as  a  share  of  EU  average  declined 
from  108%  in  2013  to  99%  in  2023.  Regional 
disparities  are  significant,  with  no  clear  signs  of 
territorial 
convergence,  and  all  metropolitan 
entities  are  growing  below  the  EU  average  pace 
over  the  same  period.  While  no  metropolitan 
French  region  was  below  75%  of  the  EU  average 
in  2012,  five  territories  (NUTS  2)  fell  below  this 
threshold  in  2023  (Corse,  Limousin,  Franche-
Comté,  Lorraine  and  Picardie),  with  two  getting 
closer  to  it  (Auvergne  and  Languedoc-Roussillon) 
(Table A17.1). 

French  outermost  regions  have  among  the 
lowest  GDP per  head in  the  EU.  Although  they 
grew  faster  than  the  national  average  between 
2014  and  2023 
the  exception  of 
(with 
Guadeloupe), their GDP per head still ranges from 
28% to 69% of the EU average and the challenges 
posed  to  their  development  remain  very  severe 
(Table  A17.1).  Mayotte,  the  EU’s  poorest  region, 
faces  major  additional  challenges  due to massive 
destruction caused by cyclone Chido. 

Agglomeration  attracts  working-age  people 
from  less  dynamic  regions,  affecting  the 
long-term  economic  growth  prospects  of 
these  regions.  In  terms of  national  average,  the 
working-age  population  (aged  20-64)  in  France 
declined  less  than  the  EU  average  between  2014 
and  2023  (-0.08%  per  year  compared  to  -0.24% 
for  the  EU).  However,  this  masks  significant 
regional  differences. A decline of the working age 
population well above the EU average is observed 
in  particular  in  the  north,  centre  and  east  as  well 
as  in  two  outermost  regions  (Guadeloupe  and 
Martinique).  A  stabilisation  or  positive  trend  was 
recorded  for  some  attractive,  dynamic  areas  in 
metropolitan  France 
(Ile-de-France,  Bretagne, 
Aquitaine, Midi-Pyrénées, Rhône-Alpes, Languedoc-
Roussillon,  Corse,  Pays  de  la  Loire,  and  Provence-

Alpes-Côte  d’Azur),  as  well  in  three  outermost 
regions,  Guyane,  La  Réunion  and  Mayotte,  the 
latter suffering from specific migration challenges 
(Table A17.1). 

Competitiveness 

Despite an overall downward trend in recent 
years  and  persistent  regional  variations, 
labour  productivity  remains  well  above  the 
EU  average.  This  is  the  case  at  national  level 
(117%  of  the  EU  average  in  2022)  and  for  most 
regions,  ranging  from  151%  in  Île-de-France  to 
in  Corse,  Basse-Normandie, 
95%  or  under 
Martinique, Guyane and Mayotte. 

is 

(356), 

(human 

Significant  regional  polarisation  is  observed 
for  all  the  main  drivers  of  productivity 
trends 
sectoral 
capital 
specialisation,  R&D  investment  and  digital 
infrastructure), with few leading regions and 
many  stagnating  or  lagging  areas.  Tertiary 
educational  attainment 
relatively  high  at 
national  level  (43.4%)  but  below  the  EU  average 
(36.1%) in areas like Corse, Picardie, Lorraine, and 
Île-de-France,  Rhône-
In 
Champagne-Ardenne. 
Alpes  and  Midi-Pyrénées,  over  47%  of  the 
population  aged  25-64  holds  a  higher  education 
in 
degree,  compared 
lower 
to  much 
outermost  regions 
like  Guyane,  La  Réunion, 
Guadeloupe, Martinique and Mayotte. Furthermore, 
the  2022  Programme  for  International  Student 
Assessment  (PISA)  study  assessing  the  basic 
maths,  science  and  literacy  skills  of  15-year-olds 
revealed  that  urban-rural  performance  gaps  are 
among the highest in the EU, with pupils in larger 
cities  performing  significantly  better.  High-tech 
employment exceeds the EU average only in a few 
areas  (Île-de-France,  Midi-Pyrénées  Rhône-Alpes 
and  Franche-Comté)  with  rates  below  2%  in 
Poitou-Charentes. 
Champagne-Ardenne 
Provence-Alpes-Côte  d’Azur  and  Corse  excel  in 
knowledge-intensive 
(over  50%  of 
employment)  despite  below-average  high-tech 
employment.  R&D  spending  as  a  percentage  of 
regional GDP is in line with EU averages, with high 

industries 

rates 

and 

(356) Human capital encompasses knowledge, skills and 

competences, highlighting the importance of education, 
training and experience in building a workforce that drives 
economic growth, innovation and productivity. 

117 

 
 
 
 
 
Table A17.1:Selection of indicators at regional level in France 

(1) University of Gothenburg 
(2) DG REGIO and JRC calculation based on European Alternative Fuels Observatory (EAFO), Eurostat, TomTom and 
Eco-Movement 
Source: Eurostat and JRC 

universities,  corporate  headquarters,  and  research 
institutes  positions  this  region  as  a  national  and 
European  innovation  leader.  Territories  such  as 
Rhône-Alpes, Alsace, Midi-Pyrénées, and Provence-
Alpes-Côte  d’Azur  are  also  strong  innovators, 
leveraging  specialised  sectors  like  biotechnology, 
aerospace  and  knowledge-intensive  industries,  as 
well  as  connectivity  to  global  markets.  However, 
this  underscores  the  challenges  faced  by  other 
territories,  particularly  in  rural  and  peripheral 
areas, as well as in less dynamic areas (the centre 
and east of the country, the outermost regions and 
Corse),  where  access  to  funding,  infrastructure, 
and  skills  for  innovation  is  more  limited.  These 
disparities  are  compounded  by  differences  in 
industrial 
and 
bases, 
connectivity to global markets. 

urbanisation 

levels, 

expenditure  in  Midi-Pyrénées  (4.4%  as  total  R&D 
terms  of  business 
in 
spending  and  3.0% 
expenditure R&D – BERD (357)), Rhône-Alpes (3.0% 
total,  2.2%  BERD),  Franche-Comté  (3.0%  total, 
2.5%  BERD),  and  Île-de-France  (2.9%  total,  2.0% 
BERD) and low levels in the outermost regions and 
parts  of  northern  France.  Low-tech  sector 
concentration  and 
limited  R&D  contribute  to 
subdued productivity in some regions, while others 
struggle  despite  positive  indicators.  Access  to 
broadband is equal to or below 75% in areas like 
Limousin,  Corse,  and  Guadeloupe,  with  no  region 
except Île-de-France exceeding 90% in 2021. Daily 
internet  use  is  below  85%  in  several  territories, 
including  Franche-Comté  and 
the  outermost 
regions. 

is  also 
A  strong  territorial  polarisation 
observed as regards competitiveness, despite 
most regions being above or close to the EU 
average,  as  measured  by  the  Regional 
Competitiveness Index 2.0 (Map A17.1). At the 
forefront,  regions  such  as  Île-de-France  dominate 
in  R&D  spending,  patent  filings,  and  access  to 
skilled  labour.  The  concentration  of  world-class 

(357) Business Enterprise R&D. 

118 

GDP per head (PPS)Productivity - GDP per hour worked (PPS)Real productivity growth (per hour worked)European Quality of Government Index (1)Net migration of population aged 15-39Working age population (20-64) growthEmployment rate 20-64Youth employment rateAt-risk-of-poverty or social exclusionAccess to alternative fuel infrastructure (2)Greenhouse gas emissionsGreen employ-ment - in sustainable but competitive sectorsIndex EU-27 = 100Index EU-27 = 100Average annual % changeEU-27=0Average annual net crude migration rate (%)Average annual change per 1000 residents of same age% of population aged 20-64% of population aged 15-24% of total populationUrban centersRural areasUrban centersUrban clustersRural areasNumber of electric vehicles charging points within 10 kmtCO2eq. per person% of total employment202320222013-20222024 2015-192014-202320242024202420232023202320232023202220232020European Union (27 MS)1001000.9-0.375.835.021.099.641.884.160.130.82877.115.1France991170.30.075.134.620.599.641.893.968.940.24435.624.0Ile de France166151-0.10.025.60.177.031.519.999.850.895.878.952.018442.4Centre-Val de Loire841020.20.38-7.1-0.578.638.316.010034.592.467.438.5577.1Bourgogne821060.70.46-8.7-0.774.833.519.010045.798.578.041.5647.113.1Franche-Comté731030.70.49-7.5-0.577.943.318.010031.793.472.438.7305.713.4Basse-Normandie82950.00.58-10.0-0.576.639.917.710042.893.166.929.6506.812.4Haute-Normandie851130.30.43-7.7-0.573.436.019.510041.892.470.838.9877.912.5Nord-Pas de Calais821060.30.45-7.1-0.469.634.526.610049.793.676.849.62057.813.5Picardie711090.40.20-6.9-0.673.433.423.610041.594.882.250.8467.911.3Alsace891090.30.570.6-0.177.440.617.09849.589.371.954.31465.215.3Champagne-Ardenne891131.10.21-9.6-0.873.932.921.810032.897.378.540.37810.17.2Lorraine711050.50.36-6.2-0.672.232.223.610047.788.873.244.3619.96.6Pays de la Loire881040.60.780.40.377.743.117.110041.494.461.842.3917.1Bretagne831040.80.81-2.70.178.236.914.610043.393.365.039.6599.0Aquitaine861020.10.745.70.478.741.618.49638.688.056.633.11105.015.0Limousin73960.60.58-5.6-0.775.236.620.810032.289.364.524.9407.63.8Poitou-Charentes821020.60.56-3.8-0.375.237.518.710039.986.263.336.6427.510.9Languedoc-Roussillon781010.00.202.00.370.329.126.799.644.290.764.249.51274.812.7Midi-Pyrénées891030.30.575.70.477.133.821.099.445.187.661.232.81845.516.4Auvergne771030.90.68-1.0-0.574.142.219.410033.489.768.037.3577.314.0Rhône-Alpes1001120.10.482.90.376.837.217.799.743.395.068.040.22034.420.6Provence-Alpes-Côte d’Azur911200.90.12-1.10.172.928.621.810044.390.961.033.81814.9Corse7394-0.40.4412.30.471.717.624.910024.188.850.627.1435.6Guadeloupe661060.8-0.96-31.7-0.961.013.539.43.457.6Martinique69950.8-0.51-33.1-1.267.318.830.13.345.9Guyane4286-2.8-0.960.31.651.111.459.51.94.4La Réunion63960.90.01-19.60.357.523.739.43.25.5Mayotte28913.0-1.174.43.90.145.4Access to healthcareAccess to primary education 
 
 
      
 
Map A17.1:  Regional Competitiveness Index 2.0, 
2022 edition 

Social fairness 

Improving  access  to  basic  services  such  as 
healthcare  and  affordable  housing  and 
mitigating  the  risk  of  poverty  and  social 
exclusion,  particularly 
in  the  outermost 
regions,  would  increase  balanced  regional 
development.  There  are  significant  regional 
differences in access to healthcare between urban 
and  rural  areas.  In  some  territories  with  lower 
population  density,  only  slightly  above  50%  of 
population can quickly access the nearest hospital 
(specifically  Corse,  Limousin,  Auvergne,  Franche-
Comté  and  Poitou-Charentes) 
(Table  A17.1). 
Limited  healthcare  services,  caused  also  by  the 
relative scarcity of doctors, result in a higher share 
of  people  with  self-reported  unmet  needs  for 
medical  examination  in  France  than  in  the  EU  – 
4.1%  compared  to  2.5%  in  2024.  This  gap  in 
unmet  health  needs  is  observed  for  every  degree 
of  urbanisation  (cities:  4.0%  in  France  against 
2.6%  at  EU  level;  towns  and  suburbs:  4.0%  in 
France against 2.1% at EU level; rural areas: 4.3% 
in  France  against  2.8%  at  EU  level).  Access  to 
primary schools is more problematic in rural areas, 
with less than one third of children living close to 
primary  schools  located  in  rural  areas  of  Basse-
Normandie,  Limousin,  Midi-Pyrénées  and  Corse 
(Table  A17.1).  In  the  outermost  regions,  doubled 
isolation 
long 
distances  to  access  essential  services,  including 
health and education. 

in  archipelagos  often  means 

living 

Housing-cost  overburden,  measured  by  the 
percentage  of  the  population 
in 
households  where  the  total  housing  costs 
represent  more  than  40%  of  disposable 
income, has increased over the last decade in 
all  types  of  territories.  It  is  much  higher  in 
cities  (9.4%)  than  in  rural  areas  (3.9%),  in  2024. 
Data  at  NUTS 3  level  (Map A17.2)  shows  that 
affordability  is  an  issue  particularly  in  the  capital 
region, southern coastal regions, and some Alpine 
areas. Housing affordability is also aggravated by 
increasing  energy  poverty,  which is more  acute  in 
France  compared  to  the  EU  average  (See  Annex 
11).  Rates  of  energy  poverty  are  particularly  high 
in  the  north  (Nord-Pas  de  Calais  –  14.1%,  the 
north-east  (Lorraine  –  13.3%  and  Champagne-
Ardenne  –  13.0%)  and  Corse  (13.6%).  Housing 
affordability 
in 
outermost regions. For instance, only 40.7% of the 
population in Guyane owned their dwelling (versus 

remains  a  major  challenge 

Source: DG REGIO, JRC based on Eurostat 

clusters 

regional 

Tailored  policies  with  a  strong  territorial 
focus would help leverage the more dynamic 
regions’  sectoral  competitive  advantages 
and  strong  performance,  unlocking  untapped 
potential  across  all  territories.  Stepping  up 
collaboration  within 
and 
increasing cross-regional partnerships could create 
additional  synergies  across  industries  and  ensure 
equitable  access  to  innovation  financing.  Scaling 
up  niche  expertise,  such  as  Bretagne’s  maritime 
aerospace 
technology 
capabilities, 
could 
consolidate  and  amplify  value  chains  and  boost 
competitiveness  beyond  regional  and  national 
boundaries. Prioritising tailored talent development 
and  aligning  education  with  regional  needs  also 
integrating  digital 
remain  key,  as  well  as 
transformation  and  green  innovation  into  existing 
strengths. This would ensure alignment with global 
improve  access  to  funding  and 
trends  and 
to 
international  markets  for 
medium-sized enterprises. 

Midi-Pyrénées’ 
adjacent 

regional  small 

or 
into 

sectors 

and 

encouraging 

Improving  the  digital  connectivity  of  lagging 
targeted 
territories 
partnerships  with  leading  areas  could  help 
harness  them  to  more  dynamic  ones.  To  this 
end,  leveraging  existing  national  initiatives  like 
‘Territoires  d’Industrie’ 
combine 
expertise  and  resources  and  stimulate  innovation 
ecosystems. 

could  help 

119 

 
 
 
 
 
to 

the 

in  sea 

exposed  to  climate  change-related  risks  (see  also 
Annex  9).  Western  coastal  areas  are  particularly 
vulnerable 
level,  while 
rise 
Mediterranean  regions  face  droughts,  heatwaves 
and  wildfires.  Mountainous  areas,  such  as 
Auvergne-Rhône-Alpes,  are  affected  by  glacial 
retreat  and  water  shortages.  Urban  regions, 
including  Île-de-France,  experience  heat  islands 
and  infrastructure  strain,  while  the  outermost 
regions  face  risks  of  severe  tropical  storms  and 
hurricanes. 
adaptation  measures, 
including  sustainable  water  management  and 
resilient  infrastructure,  are  essential  to  address 
these challenges. 

Tailored 

Significant  opportunities  in  relation  to  the 
green  transition,  which  could  be  more 
systematically  exploited,  are  also  available 
to  French  regions. 
In  particular,  untapped 
renewable energy potential exists in territories like 
d’Azur, 
Midi-Pyrénées, 
Bretagne  (significant  solar,  wind,  and  tidal  energy 
resources),  in  the  outermost  regions  (particularly 
wind),  as  well  as  in  eastern  regions  and  in 
Bourgogne-Franche-Comté  (geothermal  potential) 
(Map  A17.3).  Policy  actions  to  loosen  regulatory 
bottlenecks  and  address  investment  gaps  would 
help unlock this potential. 

Provence-Alpes-Côte 

63.6% average in France), and 65% of people with 
in 
foreign  nationalities 
Mayotte. 

lived  in  a  tin  house 

Map A17.2:  House prices relative to income, 2019 

Source: European Commission, Mapadomo 

regions 

These  trends  aggravate  the  risks  of  poverty 
or  social  exclusion  in  numerous  areas,  even 
though  the  share  of  people  at  risk  was 
slightly  around  the  EU  average  in  2024  (see 
also  Annex  11).  Outermost 
face 
particularly  severe  challenges,  with  poverty  rates 
substantially above the national and EU averages, 
ranging from 30.1% to 59.5%. Some metropolitan 
regions  also  have  a  high  proportion  of  residents 
experiencing social and material deprivation (Nord-
Pas  de  Calais,  Languedoc-Roussillon  and  Corse) 
contributing  to  around  a  quarter  of  the  adult 
population  being  at  risk  of  poverty  or  social 
exclusion. 

Sustainability 

French  regions  face  significant  challenges 
and 
to 
sustainability. On the one hand, France is highly 

opportunities 

relation 

in 

120 

 
 
 
 
Map A17.3:  Untapped potential for solar, wind and 
hydro power, 2019 

Source: JRC 

gas 

emissions 

and 
Greenhouse 
concentrations  of  particulate  matter 
in 
France  are  below  the  EU  average.  This  is  due 
in particular to the intensive use of nuclear power 
in  the  national  energy  mix.  Values  of  greenhouse 
gas emissions above the EU average in 2023 were 
recorded  specifically  in  Haute-Normandie,  Nord-
Pas  de  Calais,  Picardie,  Champagne-Ardenne, 
Lorraine,  Bretagne,  Limousin,  Poitou-Charentes 
and  Auvergne.  Most  of  these  territories  benefit 
from  support  provided  under  the  Just  Transition 
Fund. 

121