COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION on the economic, social, employment, structural and budgetary policies of France
Date: 2026-06-03
Institutions: European Commission, Reform and Investment Task Force
Subjects: France, budget policy, defence policy, economic policy, economic recovery, economic reform, employment policy, fiscal policy, social policy, stability pact

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.6.2026  SWD(2026) 210 final  COMMISSION STAFF WORKING DOCUMENT 2026 Country Report - France Accompanying the document Recommendation for a COUNCIL RECOMMENDATION  on the economic, social, employment, structural and budgetary policies of France {COM(2026) 210 final}  
 
 
 
 
 
 
 
 
 
 
 
ECONOMIC DEVELOPMENTS AND KEY POLICY 
CHALLENGES 

112.6% of GDP in 2024, the government debt 
ratio is projected to reach 118.1% in 2026. 

Structural challenges keep calling 
for decisive action 

Price  competitiveness  keeps  improving, 
but  labour  productivity  growth  remains 
weak.  France’s 
favourable  performance 
compared  with  other  EU  Member  States 
continued  in  2024  and  2025,  especially  in 
terms  of  unit  labour  cost  and  GDP  deflator-
based  real  depreciations.  However,  France’s 
world  export  market  shares  declined  again  in 
2024,  mainly  due  to  the  relatively  weak 
demand in its main  markets (e.g. Europe)  and 
the underperformance of its key export sectors 
(e.g.  automotive  and  aeronautics).  Moreover, 
French  companies,  especially  SMEs,  do  not 
appear to fully exploit EU single market export 
Labour 
opportunities 
productivity  gathered  further  momentum  in 
2025 as temporary factors, that have weighed 
on  it  since  2020,  continued  fading.  However, 
labour  productivity  growth  remains  hindered 
by low capital deepening and almost stagnant 
total  factor  productivity.  The  latter  would 
strongly  benefit  from  increased  investment  in 
private  research  and  development,  business 
digitalisation  and  further  capital  and  skills 
accumulation (see Section 2). 

Annex 

(see 

5). 

A  significant  margin  for  improvement  in 
non-price 
remains. 
competitiveness 
Persistent  gaps 
in  adopting  advanced 
technologies,  geographical  specialisation  on 
nearby,  less  growing  markets  and  industrial 
goods perceived  as embedding a weak value-
France’s 
for-money 

keep  weighing  on 

and 

political 

uncertainty 
Economic 
continued  to  weigh  on  growth  in  2025. 
Real  GDP  grew  by  0.8%  in  2025,  down  from 
1.2%  in  2024.  The  negative  impact  from  the 
necessary  fiscal  consolidation  was  partly 
offset  by  less  restrictive  monetary  policy. 
Domestic  demand  strengthened  due 
to 
recovering  investment  and  accelerating  public 
consumption.  Private  consumption  slowed 
down,  pushing  the  households’  saving  rate  to 
18.2%  of  their  gross  disposable  income.  In 
turn,  the  positive  contribution  to  growth  by 
inventories was largely offset by the negative 
contribution of net exports. 

In 2026, economic activity is expected to 
remain  subdued,  mainly  due  to  the 
increase in energy prices. GDP growth is set 
to  stay  at  0.8%  in  2026,  dragged  by  the 
fallout  of  the  conflict  in  the  Middle  East,  as 
well as fiscal consolidation. Domestic demand 
and  net  exports  should  contribute  positively. 
Private consumption is set to remain sluggish, 
with  only  a  moderate  decline  in  the  high 
households’  saving 
rate.  However,  public 
consumption  and  investment  are  projected  to 
add 
payroll 
employment  is  set  to  decline,  leading  to  a 
further  increase  in  the  unemployment  rate, 
which is expected to reach 8.3% in 2026. 

impulse. 

Private 

further 

The  general  government  deficit  remains 
high,  while  public  debt  keeps  rising. 
France’s  general  government  deficit  declined 
from  5.8%  of  GDP  in  2024  to  5.1%  in  2025, 
as  a  result  of  revenue-increasing  measures 
and  spending  cuts  of  around  0.5%  and  0.3% 
of  GDP,  respectively.  Interest  payments  on 
government  debt  rose  further  by  0.2  pps,  to 
2.2%  of  GDP,  due  to  high  primary  deficit  and 
higher  borrowing  costs.  For  2026,  the  general 
government  deficit  is  expected  to  remain  at 
5.1%  of  GDP,  with  the  fiscal  adjustment 
mainly  relying  again  on  revenue-increasing 
measures.  Interest  payments  are  set  to  keep 
rising  to  2.6%  of  GDP.  After  edging  up  to 

2 

 
 
Box 1:  UN Sustainable Development Goals (SDGs)  

France is improving on all SDGs related to productivity (SDGs 4, 8 and 9), but is moving 
away  from  several  goals,  including  No  poverty  (SDG  1),  Good  health  and  well-being 
(SDG 3), Peace, justice and strong institutions (SDG 16), Partnerships for the goals (SDG 
17) and several SDGs related to environmental sustainability (SDGs 6, 11 and 14).  

Out of the 17 indicators, 11 SDGs remain below the EU average. These relate to social 
fairness (SDGs 1, 3, 7, 8 and 10), environmental sustainability (SDGs 2, 7, 9, 11 and 14) 
and macroeconomic stability (SDGs 8, 16 and 17) (see Annex 17).  

competitiveness (1).  Moreover, 
investment 
barriers  persist,  including  policy  uncertainty, 
skilled 
regulatory 
burdens (see Annexes 5 and 11 and Section 2). 

labour  shortages,  and 

Non-financial corporations’ debt edged up 
again  and  remains  high,  above  the  euro 
area  average.  In  2025,  it  rose  by  1.5  pp,  to 
92.30% of GDP, increasing the risk to hamper 
investment  and  undermining 
companies’ 
resilience 
to  negative  shocks.  Corporate 
bankruptcies  continued  rising,  by  3.5%  in 
2025,  reaching  record  highs  (2),  partly  due  to 
the  phasing  out  of  emergency  measures  to 
support  companies’  liquidity.  While  this  trend 
may  remove  non-viable  companies  and  has  a 
positive effect on labour productivity and long-
term  growth,  it  could  raise  unemployment  in 
the  short  term.  Non-performing  loans  (NPL) 
remained  broadly  stable  at  a  low  level  (2.1% 
in  2025),  but  further  increases  in  corporate 
bankruptcies  could  lead  them  to  increase  and 
might strain French banks’ profitability.  

The  labour  market  weakened  in  2025, 
with  employment  growth  slowing  and 
payroll  employment  stagnating.  Despite 
support  programmes  being 
employment 
rate  held 
the  employment 
scaled  back, 

the 

Evaluate 

"Can  We 

(1)  See  for  instance  Julien  Burton  and  Magdalena  Kizior 
(2021) 
Non-Price 
Competitiveness  of  French  Products  Based  on  Export 
Data?", European  Economy  -  Economic  Briefs 064, 
Directorate-General Economic and Financial Affairs (DG 
ECFIN),  European  Commission,  or  Rexecode-SKEMA 
study  on  competitiveness:  French  exports  appeal… 
Except when it comes to price. June 2025.  

(2)  Défaillances  d'entreprises  -  2025-12,  Banque  de 
France,  February  2026.  Défaillances  d'entreprises  - 
2025-12 | Banque de France. 

3 

historical highs (75.6% in 2025-Q4), while the 
activity rate also reached a record high (81.6% 
in  2025-Q4).  However,  unemployment  rose  to 
7.9%  by  2025-Q4  and  is  expected  to  reach 
8.3%  in  2026,  exceeding  EU  and  euro  area 
averages.  Employment  growth  will  remain 
modest  alongside  only  slight  productivity 
gains,  and  it  is  concentrated  in  the  main 
metropolitan areas.  

Fiscal consolidation needs call for 
decisive improvements in the 
quality of public finances 

trend 

Bringing  public  debt  on  a  sustained 
remains  a  major 
downward 
challenge.  Under 
its  medium-term  fiscal 
structural  plan  (MTP)  for  2025-2029,  France 
committed  to  place  debt  on  a  downward 
trajectory by limiting expenditure growth, thus 
reducing the deficit below 3% of GDP by 2029, 
in line with its Excessive Deficit Procedure (see 
Annex 2). This would imply an improvement of 
the  structural  primary  balance  of  2.6  pps  of 
GDP between 2025 and 2029 (see Graph 1.1). 
However, political gridlock during the adoption 
of  the  budget  for  2026  watered  down  the 
deficit  reduction  plans  for  this  year,  and 
political uncertainty is expected to persist until 
presidential  elections  in  mid-2027,  further 
complicating  the  meeting  of  medium-term 
commitments going forward. Abiding by these 
commitments  is  essential  as,  according  to 
Commission’s  debt  sustainability  analysis, 
France  keeps  facing  high  fiscal  sustainability 
in  the  medium  term  and  medium 
risks 
sustainability  risks 
term.  A 
the 
in 
comprehensive  and  consistent  fiscal  strategy 

long 

 
 
 
on  both  the  revenue  and  expenditure  sides  is 
needed  to  meet  the  medium-term  fiscal 
targets and boost potential growth. 

Decisive action is needed to reduce public 
spending in a lasting manner and improve 
its  efficiency.  Public  expenditure  in  France 
has  been  on  an  upward  trend  for  decades.  In 
2025,  it  was  the  second  highest  in  the 
Eurozone (57.2% of GDP). Almost 60% of this 
is  earmarked 
to  social  protection  and 
healthcare, with pensions representing around 
25%  of  the  total.  High  public  expenditure  in 
France  raises  efficiency  concerns,  while  also 
requiring  a  high  overall  tax  burden,  which 
weighs  on  economic  efficiency  and  raises 
acceptability concerns. 

Graph 1.1: French fiscal effort 

jointly  with  greater  social  and  economic 
resilience. 

France  has  temporarily  suspended  the 
2023  pension  reform.  At  around  14.6%  (3) 
of  GDP  in  2023,  the  level  of  expenditure  on 
public  pensions  in  France  is  relatively  high 
compared  with  other  Member  States.  Among 
other  elements,  the  2023  pension  reform 
gradually  increased  the  statutory  retirement 
age  from  62  to  64  years  and  sped  up  the 
increase of the required contribution period to 
Its 
receive  a  full  pension  to  43  years. 
suspension  until  January  2028  clearly  entails 
a  worsening  of  the  general  government 
budget  balance  until  the  mid-2030s,  and  a 
its  MTP,  France 
public  debt 
committed to preserve the impact of the 2023 
pension  reform  on  the  financial  sustainability 
of  the  system  over  the  period  2026-2040. 
fiscal 
Further 
sustainability  of  the  pension  system  remain 
relevant  for  France,  while  ensuring  fairness 
and enhancing its contribution to employment 
and potential growth. 

improvements 

increase. 

the 

In 

in 

than 

The tax mix could be made more growth-
friendly  by  shifting  the  tax  burden  away 
from production factors, while preventing 
deficit  increases.  The  tax  burden  in  France 
remains significantly  higher 
the  EU 
average.  In  2025,  tax  revenues  in  France 
represented 44.3% of GDP, against 39.9% for 
the EU-27 on average. The implicit tax rate on 
labour  is  among  the  highest  in  the  EU  (at 
38.8% in 2024, against 37.1 in the EU) (4) and 
so  are  labour  taxes  borne  by  employers.  In 
turn, taxes on production, which are especially 
detrimental to growth, amounted to EUR 129.0 
bn  (4.4%  of  GDP) in  2024,  compared  with  an 
average  of  2.4%  in  the  EU-27  and  1.0%  in 
Germany.  In 2024, production taxes on labour, 
namely  total  wage  bill  and  payroll  taxes,  and 

(3)  This  figure 

includes  old-age,  early,  survivor  and 

disability pensions. 

(4)  France  stands  out  in  particular  for  the  tax  wedges  for 
earnings  above  the  average,  which  amplifies  the  risks 
of  low-wage  traps,  by  disincentivising  wage  increases 
and investments in skills. See Data on Taxation Trends. 
European Commission tax and benefits database.  Data 
on  Taxation  Trends  -  Taxation  and  Customs  Union  - 
European Commission.  

(1) Fiscal effort measured as the change in the structural 
primary balance. 
Source: Ameco. 

Spending reviews can prove instrumental 
to  permanently  reduce  public  spending 
its  quality.  A  more 
while  enhancing 
ambitious  and  effective  spending 
review 
strategy  with  enhanced  saving  commitments 
with  respect  to  those  in  the  French  MTP  is 
needed.  Apart  from  contributing  to  fiscal 
consolidation,  this  would  strengthen  France’s 
growth  potential  by  helping  channel  public 
resources  to  more  growth-friendly  policies. 
These  would  include  investment  in  research 
and  development  (R&D),  innovation,  industry 
and  knowledge,  also  providing  an  additional 
impulse  to  the  green  and  digital  transitions 

4 

-1.0-0.50.00.51.01.520252026202720282029Outturn/forecastMTFSP% GDP 
   
 
production taxes on capital, especially taxes on 
land, buildings and other structures, accounted 
for  1.3  and  0.8  pps  of  GDP  above  the  EU 
average,  respectively.  However,  consumption 
taxes are relatively  low in the French tax mix, 
despite  being  less  distortive  and  having  the 
potential of raising considerable revenues due 
to  their  large  tax  base.  Reducing  the  tax 
burden  on  labour  (including  social  security 
contributions)  and  productive  capital,  while 
including 
raising 
environmental 
help 
taxes 
support competitiveness.  

consumption 

taxes, 

could 

Reducing  and  rationalising  fiscal  and 
social tax expenditures ambitiously would 
support  a  growth-friendly  tax  shift.  The 
numerous fiscal and social tax expenditures (5) 
increase  the  complexity  of  the  tax  system, 
imply  a  heavy  budgetary  burden  and 
contribute  to  the  risk  of  low-wage  traps  (see 
section  4).  Fiscal  and  social  tax  expenditures 
are  estimated  at  around  EUR  170  bn  (almost 
6%  of  GDP) in  2025.  (6)  The  2025-2029  MTP 
commits  to  rationalising,  better  targeting  and 
reducing  fiscal  and  social  tax  expenditures  by 
EUR  8  bn  (less  than  0.2%  of  GDP)  between 
2025  and  2027.  This  amount  also  includes 
expenditure  savings  stemming  from  spending 
reviews.  In  view  of  the  sizeable  consolidation 
needs  ahead,  efforts  on  this  front  need  to be 
considerably  stepped  up.  Based  on  a  regular 
and 
their 
comprehensive  evaluation  of 
efficiency  and  usefulness, 
reducing  and 
rationalising fiscal and social tax expenditures 
would  help  avoid  increases  in  statutory  rates 
and to broaden tax bases. This would be key to 
underpin  a  comprehensive  fiscal  strategy 
geared  towards  enhancing  potential  growth 
and  the  overall  efficiency  of  the  tax  system, 
while supporting fiscal consolidation.  

improve 

of 
redundant 

is  associated  with  an 

streamlining 
would 

administrative 
Further 
structures 
the 
effectiveness  of  public  policies  while 
contributing  to  fiscal  consolidation.  The 
coexistence  of  many  administrative  layers  in 
increased 
France 
This 
entanglement 
responsibilities. 
generates 
and 
operational 
(7),  without  necessarily 
coordination  costs 
improving the quality of the services provided 
to 
citizens  and  businesses.  High 
administrative  complexity  and  overlapping 
financial 
competences 
relationships  across  government  actors  that 
reduce the transparency of public intervention, 
complicating  the  assessment  of  its  efficiency 
the  effective 
and,  ultimately,  hampering 
steering of spending and revenues in line with 
budgetary commitments (8).  

complex 

imply 

the 

Defence spending in France is on the rise, 
with additional support from the EU. Total 
government spending on defence amounted to 
1.8%  of GDP in 2024 and 1.9% GDP in 2025 
and  is  forecast  by  the  European  Commission 
to  be  2.1%  of  GDP  in  2026  (see  Annex  2). 
Investment  in  defence  is  receiving  support 
from  the  EU.  France  has  requested  EUR  15.1 
billion  in  EU  loans  under  Security  Action  for 
Europe  (SAFE)  for  defence  procurement,  as 
part  of  the  European  Commission’s  ReArm 
Europe  Plan.  In  addition,  following  the  mid-
term  review  of  cohesion  policy,  France  has 
allocated  EUR  101  million  to  defence-related 
priorities. 

(5)  Tax expenditures are legislative or regulatory provisions 
that deviate from a ‘tax standard’ and result in a loss of 
tax revenue. 

(6)  Finances  publiques  :  État  des  lieux  et  analyse  de 
controverses.  Étude  du  Conseil  économique,  social  et 
environnemental  sur  proposition  de  la  commission  de 
l'Économie et des finances. Rapporteurs : Claire Tutenuit 
et Benoît Garcia. February 2026. 

(7)  Ravignon,  B. 

(2024)  Coûts  des  normes  et  de 
l’enchevêtrement  des  compétences  entre  l’État  et  les 
collectivités 
:  évaluation,  constats  et  propositions. 
Rapport  de  Boris  Ravignon  sur  le  coût  du  millefeuille 
administratif  –  Presse  –  Ministère  des  Finances.  See 
also  Décentralisation:  Le  temps  de 
la  confiance. 
Rapport  d’Éric  Woerth  au  Président  de  la  République, 
May 2024. 294470.pdf. 

(8)  Cour des comptes (2020) “Les finances publiques : Pour 
une réforme du cadre organique et de la gouvernance”, 
Rapport public thématique, November 2020. 

5 

 
 
 
 
Increasing housing supply would 
help mitigate pressures on the 
housing market 

France  faces  severe  housing  supply 
constraints,  especially  in  high-demand 
tourist  hotspots. 
urban  areas  and 
Transaction  volumes  rose  by  12.5%  to  951 
000  in  the  year  to  December  2025.  Since 
2021,  the  number  of  building  permits  has 
declined,  with  building  permits  per  1  000 
people falling by 15.3% in 2024 to 370.5 m², 
just  above  the  EU  average  (364.3).  Land-use 
local 
regulations, 
authorities, 
supply 
elasticity (9), with a strong heterogeneity in the 
building permits refusal rates.  

partly 
contribute 

controlled 
to 

low 

by 

The rental market experiences significant 
pressure,  with  constrained  supply  and 
substantial  demand,  in  both  social  and 
intermediate  housing  sectors  as  well  as 
in  the  private  sector.  Anecdotal  evidence 
suggest a fall in the turnover rate and in rental 
listings.  Meanwhile,  the  demand  for  rental 
properties has continued to rise. This pressure 
on the rental market hinders higher education 
and job mobility decisions and further impacts 
the  most  vulnerable  ones  (see  Section  4  and 
Annexes  16  and  18).  The  expansion  of  short-
term  rentals,  even  up  to  more  than  270%  in 
Iarger  cities,  has  unfold  at  the  expense  of 
long-term  rental  properties,  further  reducing 
long-term 
increasing 
housing  prices  and  rents.  The  2024  “Loi  Le 
Meur”  strengthened  local  authorities’  powers 
to  govern  short-term  rentals  and  to  preserve 
residential housing stock.  

availability, 

rental 

High  and  complex  housing  taxation  and 
hinder  market 
expenditures 
tax 
efficiency.  Housing  taxation 
is  higher  in 
France  (EUR  99.2bn in  2024  or  3.4%  of  GDP) 

(9)  GENG  N.,  «  Fundamental  Drivers  of  House  Prices  in 
Advanced  Economies 
»,  Working  Paper,  2018; 
CHAPELLE  G.,  EYMEOUD  J.B.  and  WOLF  C.,  Land-use 
regulation  and  the  housing  supply  elasticity:  evidence 
from  France,  2023,  No  2023-08,  Thema  Working 
Papers,  THEMA,  CY  Cergy-Paris  University,  ESSEC  and 
CNRS. 

prices 

rather 

housing 

in  most  other  developed  countries. 
than 
Numerous  and  costly  tax  expenditures  (EUR 
15.9  bn  in  2024)  modify  agents’  incentives, 
increasing 
than 
quantities  (10).  High  transactions  taxes  reduce 
the  efficiency  of  housing  and  job  market 
allocation.  For  sellers,  the  capital  gains  tax 
regime, in particular the deductions for length 
retention  and 
of  ownership,  encourages 
reduces  housing turnover.  The  vacant  housing 
tax  could  be  raised  beyond  areas  under 
housing stress to incentivise utilisation. Wealth 
taxation  primarily  targets  housing  property, 
exempting financial wealth (11). In addition, the 
property  tax  is  disconnected  from  economic 
value and regressive for homeowners (12). As a 
result, a reform of the property tax base could 
increase  local  government’s  revenue  while 
improving redistributive fairness.  

Challenges in ensuring economic 
security and industrial sovereignty 
persist 

France  faces  persistent  challenges  in 
ensuring economic security and industrial 
recovery.  Although  policy  efforts  are  under 
way,  industrial  activity  continued  to  slow  in 
2025  amid  political  uncertainty,  regulatory 
burdens,  strong  international  competition  and 
geopolitical 
largely 
decarbonised  electricity  mix,  France’s  overall 
energy mix still relies on  imported fossil fuels 
for  around  60%  of  consumption,  nuclear  is 
also  dependent  on  uranium  imports,  and 
France  remains  highly  dependent  on  imports 

tensions.  Despite  a 

(10)  Some housing tax expenditures include the former 

“Pinel scheme” (€1.5 bn in 2024), the Prêt à taux zero 
(€0.8bn) and reduced VAT rate for renovation works 
(€3.1bn) or social housing (€2.0bn). 

(11)  Conseil  des  prélèvements  obligatoires,  2023,  Pour  une 
fiscalité  du  logement  plus  cohérente ;  Conseil  des 
prélèvements 
les 
principales distorsions de l’imposition du patrimoine. 

obligatoires, 

Corriger 

2025, 

(12)  André  M.  and  Meslin  O.,  2023,  Les  ménages  au 
patrimoine immobilier le plus élevé paient relativement 
moins  de  taxe  foncière  que  les  ménages  les  moins 
dotés, Insee Analyses n°91, 18/12/2023 ; Olivier Meslin, 
Etude des propriétés redistributives de la taxe foncière 
sur les propriétés bâties, 17/11/2023. 

6 

 
 
 
of  critical  raw  materials  (see  Annex  5).  In 
addition, 
the  manufacturing  sector  faces 
persistent  skills  shortages  and  mismatches, 
particularly 
in  technical  and  STEM-related 
occupations,  which  continue  to  weigh  on 
labour market performance (see Section 4). 

and 

domestic 

Accelerating  policy  initiatives  towards  a 
industrial  basis  could  help 
stronger 
support  decarbonisation,  resilience  and 
strategic  autonomy  objectives.  Initiatives 
such as the 2023 Green Industry Law and the 
‘France 2030’ investment programme (EUR 54 
billion)  support  key  sectors,  including  electric 
mobility and a broad range of low-carbon and 
green  technologies.  France  is  boosting  efforts 
to  secure  supply  of  critical  raw  materials 
through 
international 
investments 
in  extraction,  processing,  and 
recycling  (see  Annex  5).  The  EU’s  trade  policy 
provides the external  framework  necessary  to 
sustain these ambitions. By  leveraging the EU 
Critical  Raw  Materials  Act  and  a  growing 
network of strategic trade partnerships, the EU 
helps ensuring a stable and sustainable access 
to the inputs needed for green technologies. In 
addition, 
'Battery 
Valley',  uniting  gigafactory  projects  and 
securing  over  EUR  9  billion  in  investments, 
the  advantages  of  effective 
showcase 
territorial 
coordinated 
and 
governance 
planning  (13)  (see  Annex  18),  as  well  as 
facilitated access to industrial land. Replicating 
these  conditions  are  vital to  expand industrial 
projects 
ahead, 
(see 
accelerating 
Section  3),  supporting  post  ‘France  2030’ 
investments,  and  streamlining  permitting  via 
the  Green 
to 
decarbonise industry and strengthen economic 
security. 

Industry  Law  are  crucial 

industrial  electrification 

like  Dunkirk's 

nationwide. 

initiatives 

Looking 

Regional disparities are increasing 

Territorial  disparities  are  increasing  due 
to  diverging  trajectories  in  population 
dynamics  and  economic  performance. 

(13)  See rapport-dunkerque-laboratoire-dun-renouveau-

industriel.pdf. 

7 

Over  the  past  20  years,  the  number  of 
metropolitan  departments  with  a  GDP  per 
capita  (in  Purchasing  Power  Standards)  below 
75% of the EU average has increased from 2 
to  36.  In  France’s  traditional  heavy  industry 
regions  in  the  North  and  North-East,  the 
industrial  transition  has  caused  economic 
vulnerabilities,  contributing  to  high  youth 
outmigration  and  undermining  residents’  right 
to stay. Demographic decline, driven by limited 
employment 
reduced 
opportunities 
accessibility  to  services,  also  affects  fragile 
rural areas, particularly those along the North-
East-Central axis and within the Massif Central 
departments.  At  the  same  time,  the  social 
peripheries  of  metropolitan  areas  present 
disadvantages, 
severe 
including  high  unemployment  and  high  rates 
of people not in work, employment or training 
(NEET).  

socio-economic 

and 

French outermost regions face persistent 
structural  vulnerabilities.  GDP  per  capita 
ranges  from  69%  of  the  EU  average  in 
Martinique  to  just  30%  in  Mayotte,  the  EU's 
poorest  region.  Land-use  planning  and  the 
reinforcement  of  administrative  capacity  for 
design, 
public 
particularly  in  Mayotte  and  French  Guiana 
represent key challenges for France to reduce 
regional  disparities  in  outermost  regions  (see 
Annex 18). 

investment 

policy 

and 

funding 

instruments 

competitiveness, 

EU 
provide 
considerable  resources  to  France.  They 
support investments and structural reforms to 
environmental 
increase 
sustainability,  skills,  social 
fairness  and 
security,  while  helping  to  address  challenges 
identified in the CSRs. Key instruments include 
the  Recovery  and  Resilience  Facility  (see  Box 
2)  and  Cohesion  policy  funds  (see  Box  3).  In 
addition, the Common Agricultural Policy (CAP) 
allocates EUR 66.3 billion to France for 2021-
2027,  while  EUR  567  million  are  allocated 
under  the  Common  Fisheries  Policy  (CFP).  A 
further EUR 1.1 billion are available under the 
Asylum, Migration and Integration Fund (AMIF), 
together  with  the  Border  Management  and 
Visa 
Internal 
Security Fund (ISF). Other EU programmes also 
support 
for 
instance  through  open  calls  under  Horizon 
Europe and the Connecting Europe Facility. 

(BMVI)  and  the 

competitiveness 

in  France, 

Instrument 

 
 
Box 2: 

Key achievements of the RRF  

France’s  recovery  and  resilience  plan  (RRP)  represents  a  total  budget  of  EUR  40.27  billion, 
corresponding to 1.43% of GDP, aimed at supporting reforms and investments contributing to the 
green  and  digital  transitions,  strengthening  economic  resilience,  and  addressing  long-standing 
structural challenges identified in the European Semester. 

As of 4 May 2026, EUR 34.13 billion (around 85% of the total allocation) have been disbursed 
to France following the satisfactory fulfilment of 149 milestones and targets. Implementation has 
progressed  steadily,  with  a  growing  number  of  reforms  and  investments  already  fulfilled  and 
delivering real results on the ground.  

In addition to the French RRP’s direct impact, France benefited from positive spillovers estimated at 
EUR  18.4  billion,  due  to  the  increase  in  exports  from  France  generated  by  the  hike  in  demand 
from  the  implementation  of  national  RRPs.  For  France,  the  positive  spillovers  mostly  concern 
industrial  and  services  sectors,  such  as  wholesale  trade,  legal  activities,  or  accounting  and 
consulting.  

Highlights and impacts of the plan 

•  Revising  thermal  regulation  of  new  buildings  (RE2020).  The  revision  amends  the 
existing thermal regulation to reduce GHG emissions of new buildings, improve their energy 
performance and adapt them to climate change.  

• 

•  Promulgating  the  climate  and  resilience  law.  The  law  contributes  to  2030  GHG 
emissions  reduction  targets  by  providing  climate  and  environmental  measures  across 
sectors from transport to agriculture and sustainable consumption.  
Implementing  the  research  programming  law.  The  law  aims  to  strengthen  research 
funding  and  organisation,  improve  the  attractiveness  of  scientific  jobs,  and  enhance  the 
interactions of research with the economy and society.  
Investing in energy renovation of housing. This includes energy renovation of 40 000 
social  housing  and  1.15  million  private  households  receiving  subsidies  under  the 
‘MaPrimeRenov’.  

• 

•  Developing  access  to  digital  training  capacity  for  higher  education.  More  than 
1 400 000  students  who  are  enrolled  in  higher  education  in  France  receiving  access  to 
digital training capacities. 
Investing in the digitalisation of healthcare. This includes 40 million patients having a 
national electronic health record and a secured health email address. 

• 

8 

 
 
 
 
Box 3: 

Contribution of cohesion policy funds 

EU  cohesion  policy  funding  supports  France’s  efforts  to  increase  competitiveness, 
environmental  sustainability  as  well  as  skills  and  social  fairness.  In  2021-2027,  EU 
cohesion policy funds (14) are providing EUR 16.7 billion (amounting to EUR 28 billion with national 
co-financing)  to  France.  The  amount  of  selected  projects  corresponds  to  70.3%  of  the  total 
allocation as of March 2026, with additional calls in the pipeline. 

• 

Innovation, business environment and productivity. Nearly EUR 3.6 billion are allocated 
for  research  and  innovation,  SMEs  competitiveness  and  digitalisation.  European  Regional 
Development  Fund  (ERDF)  projects  selected  under  the  2021–2027  programmes  are  already 
supporting  over  100  000  businesses  to  boost  research  and  technology  transfer,  promote 
innovation, and enhance business competitiveness.  

•  Decarbonisation,  energy  affordability  and  sustainability.  Around  EUR  3.7  billion  are 
earmarked  for  decarbonisation  and  clean  transition  projects.  On  waste  management  alone, 
ERDF-co-financed projects are expected to generate an additional waste-recycling capacity of 
over 3 million tonnes by 2029. Investments in water  infrastructure are particularly significant 
in  outermost  regions,  where  Mayotte  alone  receives  EUR  47.5  million  in  ERDF  to  improve 
access  to  drinking  water  and  its  preservation  and  EUR  30  million  to  develop  wastewater 
collection and treatment. 

•  Skills,  quality  jobs  and  social  fairness.  EUR  2.3  billion  are  allocated  to  improving  the 
labour  market  relevance  and  quality  of  education  and  training  systems.  The  Just  Transition 
Fund  (JTF)  will  also  fund  human  capital  investments,  notably  by  upskilling  and  reskilling 
workers and jobseekers for work in green sectors (EUR 308 million). The ESF+ also  promotes 
active and social inclusion, including of children (EUR 2.2 billion), in mainland France and in the 
outermost regions. EUR 646 million are allocated to addressing material deprivation, through 
food and material assistance. 

The mid-term review (15) reinforced cohesion policy’s contribution to emerging strategic priorities, 
reallocating  nearly  EUR  535  million,  of  which  43%  (EUR  230  million)  is  dedicated  to 
competitiveness,  through  support  for  critical  technologies,  over  one  third  (EUR  178  million)  to 
affordable  housing,  19%  to  defence  and  the  remaining  5%  will  strengthen  better  water 
management. Outermost regions’ programmes fully contribute to the mid-term review reallocation 
with EUR 123 million, of which EUR 69 million are reallocated to housing. Overall, increased mid-
term  review  funding  to  social  and  affordable  housing  under  ERDF  programmes  will  ultimately 
benefit  more  than  76  000  households.  Under  the  European  Social  Fund  Plus  (ESF+),  France 
reallocated  EUR  89  million  to  new  priorities.  Reprogrammed  funds  will  support  skills  training  for 
the development and manufacturing of critical technologies of Strategic Technologies for Europe 
Platform (STEP), as well as enhancing civil preparedness. 

(14)  ERDF, ESF+, the Cohesion Fund (CF) and JTF. 

(15)  The mid-term review is carried out halfway through the 

2021-2027 programming period. It is a formal 
assessment process required under Article 18 of the 
Common Provisions Regulation that aims to assess the 

implementation of programmes and, where necessary, 
propose adjustments to improve their performance, 
ensure their relevance in light of new and emerging 
needs and keep them aligned with other EU policies. 

9 

 
 
 
 
 
 
INNOVATION, BUSINESS ENVIRONMENT AND 
PRODUCTIVITY 

business 

diffusion 

strengthen 
promote 
and 

France  received  in  2025  CSRs  (country-
specific  recommendations)  to  further 
simplify regulation, reduce administrative 
burden  and  regulatory  restrictions  on 
businesses,  in  particular  in  the  services 
R&D 
sector, 
of 
intensity, 
SME 
innovation, 
digitalisation. Overall, France has made very 
little  progress  on  all  these  recommendations 
and  structural  challenges  remain.  The  high 
regulatory  and  administrative  burden  are  a 
growing  concern  for  businesses,  while  the 
stagnating  business  R&D  intensity,  at  a  level 
well below that of innovation leaders in the EU 
and  worldwide,  as  well  as  the  low  uptake  of 
digital 
labour 
technologies  still  hamper 
productivity. 

improve 

the EU level in the early 2000s. As temporary 
factors  having  weighed  on  labour  productivity 
growth  in  recent  years  started  to  fade  away, 
labour  productivity  growth  picked  up  in  2024 
and  2025,  and  is  expected  to  expand  by 
almost  1%  in  2026.  Yet,  poor  total  factor 
productivity (TFP) growth is set to keep reining 
in overall labour productivity in the short term. 
In the medium term, total factor productivity is 
expected  to  reap  the  benefits  from  the  full 
effects  of  recent  and  planned  reforms  and 
investments  (notably  as  part  of  the  “France 
the  Research 
2030”  plan  and 
Programming  Law)  materialising  to  support 
upskilling and reskilling of the labour force, the 
digital  and  green  transition,  and  state-of-the-
art  R&D.  Nevertheless,  further  and  continued 
efforts  on  this  front  are  needed  to  provide  a 
decisive impulse to total factor productivity. 

through 

Addressing  these  challenges  will  require 
an  ambitious  reform  agenda  towards  a 
business environment more supportive of 
innovation  and  competitiveness.  Between 
2017  and  2020,  France  had  adopted  several 
reforms  to  improve  business  environment, 
including  to 
interaction  between 
unions and employers, facilitate relations with 
the  tax  authorities  and  reduce  administrative 
burden. However, the challenges highlighted in 
the 2025 CSR remain and are weighing on the 
French 
overall 
economy. 

competitiveness  of 

increase 

the 

Labour productivity growth in 
France remains lacklustre  

in 

sectors 

high-growth 

Business  demography  has  been  dynamic 
but  has  not  translated  into  reallocations 
towards 
and 
registrations  have 
businesses.  Business 
significantly  increased  in  France  in  recent 
years (+15.3% between 2021 and Q4 2025 vs 
12.5%  in  the  EU) (16).  They  were  particularly 
in 
logistics, 
transport  and 
dynamic 
administrative  services,  as  well  as 
in 
hospitality  and  food,  driven  by  the  rise  of 
digital platforms and the growing demand for 
delivery  and  mobility  services (17)  (see  Annex 
5).  However,  this  rise  was  mainly  due  to  the 
increase in self-managed micro-entrepreneurs, 
whose  survival  rate  after  three  years  is  also 
lower.  According  to  a  study  from  Insee,  less 
than  3  out  of  10  micro-entrepreneurs 
registered in 2018 were still active under this 

by 

poor 

back 

Labour  productivity  growth  in  France  is 
held 
factor 
productivity  growth.  Despite  at  112.7%  of 
the  EU  level  in  2025  (measured  as  GDP  per 
hour  worked 
labour 
productivity  has  dropped  from  over  130%  of 

in  PPS),  France’s 

total 

(16)  Eurostat,  [sts_rb_q__custom_19150216],  Codes  NACE: 

B-S_X_O_S94. 

(17)  France’s 

reply 

to 

the  European  Commission’s 

questionnaire, December 2025. 

10 

 
 
 
regime  five  years  later (18).  Their  income  is 
also  lower  than  that  of  employees  or  other 
independent workers (see Section 4).  

R&D intensity is stagnating 
despite sizeable public support 

Despite  receiving  a  CSR  in  2025,  France 
has  not  made  progress  on  strengthening 
business R&D intensity. Total R&D intensity 
was  stable  at  2.18%  of  GDP  in  2024,  below 
EU  average  and  the  target  of  3%  initially  set 
by  the  Lisbon  strategy  and  the  Europe  2020 
strategy  for  2020.  Both  business  and  public 
R&D intensity are low. Since 2011, public R&D 
intensity  has  experienced  a  slight  but  steady 
decline (from 0.76% of GDP to 0.70% of GDP 
in  2024,  slightly  below  the  EU  average  of 
0.72%)  while  private  R&D  has  stagnated 
around  1.44%  of  GDP  in  2024,  slightly  below 
the EU average of 1.49% and in stark contrast 
trends 
with 
observed in peer countries. In turn, the lack of 
adequately  skilled  workers  remains  a  major 
barrier to recruitment, while skills gaps hinder 
France’s  capacity  to  fully  benefit  from  the 
emerging  opportunities  driven  by  the  twin 
transition  (see  Annex  11).  Skill  shortages 
innovation  and 
hinder 
and 
digitalisation 
businesses,  which 
labour 
productivity growth and competitiveness.  

the  diffusion  of 
all 

sectors 
in  turn  affects 

levels  and 

investment 

across 

the 

The  2025  CSR  recommended  that  France 
improve  the  targeting  of  R&D  support. 
Progress  has  been  limited  in  this  area.  The 
main  mechanism,  the  research  tax  credit 
(‘Crédit  d’impôt  recherche,  or  CIR’),  amounted 
to EUR 7.8bn in 2024 and is projected  to rise 
to  EUR  8.0bn  in  2026  (0.3%  of  GDP)(19). 
However,  this  support  has  not  significantly 
improved 
intensity. 
innovation  or  R&D 
Empirical  evidence shows the CIR boosts R&D 

and 

such 

direct 

increasing 

larger  firms,  without 

activity  and  economic  performance  of  SMEs 
but  has  little  impact  on  large  enterprises’ 
investment  and  innovation  output  (see  Annex 
4). A study by Bunel and Sicsic (20) found that 
the CIR generates windfall effects, particularly 
for 
large 
companies’  R&D.  They  suggest  that  other 
research 
measures, 
as 
in 
expenditures,  might  be  more  effective 
fostering 
of 
promoting 
for 
innovation, 
fundamental 
research  and  disruptive 
innovations,  while 
potentially  incurring  the  same  or  lower  costs 
for  public  finances.  While  the  CIR  was 
reformed in the 2025 budget, the changes did 
not  prioritise  smaller  firms,  so  they  are 
unlikely  to  boost  R&D  efforts.  Better-targeted 
public  support  could  strengthen  R&D  intensity 
by focusing on SMEs, mid-cap companies, and 
start-ups,  which 
financial 
constraints. 

face  greater 

especially 

diffusion 

Graph 2.1: Business R&D investment (as % of 
GDP), 2014-2024 

Source: Eurostat 

The  investment  plan  “France  2030”  has 
disruptive 
efficiently 
promoted 
innovation  and 
in 
strategic  sectors,  but  its  future  beyond 
2027 is uncertain. France is accelerating the 
phasing-out 
2030” 
the 
programme (21).  The  2026  budget  has  cut 

industrial  recovery 

“France 

of 

(18)  D. Richet, Insee, 2025, Micro‑entrepreneurs registered in 
2018: less than three out of ten were still active under 
this regime five years later. 

(19)  France's overall public support for business R&D was at 
0.42% of GDP in 2023, compared to the EU average of 
0.2% in 2022. 

(20)  Bunel, S. and Sicsic, M., 2024, Les incitations fiscales à 
la  recherche  etdéveloppement  et  à  l’innovation  :  état 
des  lieux,  effets  et  alternatives,  Sciences  Po  LIEPP 
Working Paper n°163, 2024-04-17. 

(21)  In  January  2026,  EUR  44  billion  had  been  committed 
out  of  the  total  commitments  planned  until  2028  of 
EUR  54  billion.  Source:  information  provided  by  France 

11 

00.511.522.53GermanyBelgiumUnited StatesChinaFrance20142024EU average 
 
   
 
 
funding  for  France  2030  by  EUR  1.1  bn.  Its 
expiry risks exacerbating reliance on the CIR. A 
mid-term evaluation indicates sizeable impact 
on  GDP  and  employment,  although  a 
could  be 
streamlining  of 
envisaged.  Both  commitments  and  payments 
under  France’s  recovery  and  resilience  plan 
(RRP)  will  also  be  phased  out.  The  lack  of 
disruptive 
funding 
innovation risks stalling industrial renewal and 
long-term growth. 

the  support 

channelled 

towards 

concerns  about  France's  capacity  to  retain  its 
talents  and  to  continue  leveraging  its  science 
base  to  position  itself  as  a  key  player  in  the 
global  tech  race.  Some  15 000  graduates,  or 
from 
around  10%  of  young  graduates 
engineering  schools  and  15%  of  graduates 
from  management  schools  expatriate  each 
year (24).  These  concerns  are  reinforced  by 
France's  deviation  in  2025  from  the  public 
R&D spending trajectory set in the Multiannual 
Programming Law on Research. 

A streamlined ecosystem to 
strengthen the diffusion of 
innovation 

Accelerate reform to address 
France’s business environment 
challenges 

public 

research 

In  2025,  France  received  a  CSR  to 
promote  the  diffusion  of  innovation  and 
to  make  the  ecosystem  that  supports 
collaboration  between  academia  and 
business more effective. Progress has been 
limited in this area. The knowledge valorisation 
system,  that  is  the  collaboration  between 
academia, 
and 
businesses,  could  be  more  effective  and 
streamlined.  A  wide  range  of  organisations 
and  instruments  have  been  introduced  to 
support 
in 
cooperation, 
overlapping and multilayering. This  complexity 
of  the  ecosystem  was  noted  by  the  French 
Court  of  Auditors  in  2018 (22)  and  by  the 
‘Inspection générale des finances’ in 2024 (23). 
between 
Contracts 
businesses  and  public  research  labs  remain 
limited.  

collaboration 

resulting 

such 

labs 

and 

The  low  R&D  intensity  is  undermining 
scientific  performance  at  a  time  of 
intensifying  international  competition.  As 
innovation  hinges  on  scientific  breakthroughs, 
the  declining  trend  in  R&D  intensity  raises 

simplify 

regulation  and 

France  has  yet  to  make  further  progress 
to 
reduce 
administrative  burden.  Regulations  are  a 
growing  concern  for  businesses.  A  significant 
in  France 
27%  and  26%  of  businesses 
considered 
labour  market  regulations  and 
business regulations to be a major obstacle to 
investment  in  2025.  The  data  has  increased 
compared  with  2024.  The  procedures  relating 
to  cessation  of  payment,  cessation  of  activity 
and legal proceedings are the most complex to 
carry out (25) (See Annex 5). 

The  law  on  simplifying  economic  life  has 
been  adopted.  Among  other  measures,  the 
law  facilitates  businesses’  access  to  public 
procurement, eases the setting up of industrial 
and 
infrastructure  projects  and  facilitates 
energy  transition  projects.  It  also  introduces 
‘enterprises  test’  and  a  dedicated  body,  the 
associating 
Council 
representatives of businesses, to test the new 
and modified norms. 

Simplification 

for 

The  availability  of  digital  public  services 
for  the  public  and  businesses  has 

for  the  assessment  of  the  2025  CSR  3(3),  31/1/2026. 
The  2026  budget  has  further  reduced  the  payments 
possible under France 2030 in 2026 by 1.1 bn EUR. 

(22)  Cour des comptes, Les outils du PIA consacrés à la 
valorisation de la recherche publique, March 2018. 

(24)  Fédération Syntec, Fuite des cerveaux : la Fédération 
Syntec alerte sur l’hémorragie continue des talents 
qualifiés, une menace directe pour l’innovation et la 
compétitivité françaises, 1 October 2025. 

(23)  Inspection générale des finances, Évaluation des 

(25)  France’s 

reply 

to 

the  European  Commission’s 

dispositifs Carnot, December 2024. 

questionnaire, December 2025. 

12 

 
 
 
improvements 

stagnated (see Annex 7). It scores below the 
EU  level  for  both  the  public  and  businesses, 
highlighting room for improvement (26). Access 
to digital public services is particularly poor for 
from  other  EU 
people  and  companies 
countries.  In  addition,  more  than  50%  of 
to  a  Eurobarometer  survey 
respondents 
suggest 
to  digital  public 
administration services (27). This could be done 
by  advancing  the  digital  transformation  and 
simplifying  administrative  processes  around 
users’  needs  as  well  as  promoting  user-
friendly guidance combined with quick support. 
Advancing  towards  digital  data  governance 
thanks 
principle, 
interconnection of registers or pre-filled forms 
is  also  key  to  ensure  seamless  digital  public 
services, including cross-border. 

once-only 

the 

to 

Barriers to the EU single market 
persist 

intra-EU  trade 

Despite  the  2025  CSR  on  reducing 
regulatory  restrictions  on  businesses, 
regulatory and administrative barriers to 
the 
in  goods  persist. 
Businesses report that packaging and labelling 
rules – environmental labelling, packaging and 
complex  administrative  requirements  related 
to  Extended  Producer  Responsibility 
(EPR) 
burdens (28). 
scheme 
Ineffective  application  of  mutual  recognition 
and fragmented product compliance rules also 
affect trade in goods.  

compliance 

create 

France  has  among  the  most  restrictive 
regulations on trade in services in the EU 
and  has  taken  no  major  step  in  2025  to 
simplify its regulatory framework in that 
in 
area.  Restrictive  regulations  on  trade 

(26)  European Commission, Digital Decade 2025: 

eGovernment Benchmark 2025 | Shaping Europe’s 
digital future. 

(27)  European Commission, Flash Eurobarometer 567 / 568 
on satisfaction with administrative services (2026). 

(28)  Business Europe, report 2025 Examples-of-Single-

Market-barriers-–-Striving-for-greater-harmonisation-
of-packaging-legislation-to-prevent-market-
barriers.pdf. 

for 

Area 

reduce 

services 

opportunities 

the  EU  average). 

for 
the 
services 
businesses in France to access a wide range of 
services  and may  harm their  competitiveness. 
The  figure  which  applies  to  France  in  the  the 
Organisation’s  for  Economic  Co-operation  and 
intra-European 
(OECD’s) 
Development 
Economic 
trade 
(EEA) 
restrictiveness  index (29)  is  among  the  highest 
in  the  EU  (0.065  for  France  in  2025  against 
0.068  for  the  highest  value  in  the  EU  and 
0.050 
France’s 
restrictions  to  intra-EEA  trade  are  particularly 
high  in  air  transport,  architecture,  distribution 
services, legal services, accounting, rail freight 
and 
indicator, 
computed  by  the  OECD,  is  around  median 
among  the  EU  countries.  However,  regulatory 
barriers  to  entry  and  competition  that  also 
apply  to  domestic  firms  remain  higher  in 
in  comparable  countries  for 
France  than 
several professions (30). Furthermore, France is 
the  most 
restrictive  EU  Member  State 
regarding regulatory frameworks for the retail 
sector (31).  Easing  administrative  requirements 
in  the  implementation  of  posting  of  workers 
rules  could  reduce  regulatory  fragmentation 
within  the  EU  single  market,  facilitate  cross-
border job mobility and boost competitiveness, 
without undermining workers’ protections. 

road  freight.  France  PMR 

export 

import 

SMEs  are  not  fully  exploiting  the  growth 
opportunities  offered  by  the  EU  single 
market.  France  has  the 
lowest  rate  of 
integration into EU trade among EU countries. 
Intra-EU 
volumes 
and 
represented  only  17.1%  of  GDP  in  2025  (vs 
40.7%  on  average  in  the  EU)  (see  Annex  5). 
France’s  integration  rate  is  much  lower  than 
the  EU  average  both  for  goods  and  services. 
This  can  be  explained  by  several  factors:  the 
large  size  of  the  domestic  market,  the 
manufacturing  industry’s  lower  share  of  GDP, 
the  poor  non-price  competitiveness 
(price 
competitiveness  has  improved  thanks  to  a 

(29)  European  Commission  staff  calculation  based  on  the 

OECD, intra-EEA STRI database, 11/2/2025. 

(30)  OECD, Product Market Regulation (PMR) indicators: How 

does France compare?, 2024. 

(31)  European Commission, Retail restrictiveness indicator 

(2022 update), 2024; OECD, Product Market Regulation 
(PMR) indicators: How does France compare?, 2024. 

13 

 
 
 
lower  inflation  and  labour  cost  growth),  and 
the lack of skills. 

Late payments to businesses, particularly 
SMEs,  weigh  on  their  cash  positions (32). 
28%  of  SMEs  in  France  say  that  they  have 
been  experiencing  late  payments  from  public 
organisations (vs 15.9% in the EU) (see Annex 
5).  Public  entities  in  the  overseas  territories 
are  greatly  exceeding  the  30-day  regulatory 
ceiling.  Public  hospitals  are  paying  with  long 
and  increasing  delays.  In  the  public  works 
sector,  85%  of  companies  report  payment 
delays  from  public  authorities  (33)(34).  They 
also complain about unfair payment practices. 
55% of SMEs say that they do not participate 
in  public  procurement  procedures  out  of  fear 
of not being paid on time. 

Progress on boosting business 
digitalisation needs to continue 

In  2025,  France  received  a  CSR  to 
improve  SME  digitalisation,  including  by 
improving  the  effectiveness  of  existing 
public  support  measures.  The  digitalisation 
of  SMEs  and  adoption  of  advanced  digital 
technologies in France is gaining traction while 
still  below  the  EU  average  (see  Annex  4).  In 
2025,  69.44%  of  French  SMEs  had  a  basic 
level of digital technologies intensity,  up from 
51.97%  in  2023  but  still  well  below  the  EU 
average (71.39% in 2025). France has seen an 
advancement  in  the  deployment  and  use  of 
digital 
technologies,  with  clear  progress 
toward  full  5G  and  fibre  coverage,  although 
regional  disparities  persist  in  the  country’s 
broadband  coverage,  with  rural  or 
lower 
density  areas  accounting  for  79%  of  the 
unconnected total (see Annex 18). Despite this 

(32)  Part of the barriers highlighted in the Single market 
strategy (‘Terrible Ten’) and the 2026 Annual Single 
Market and Competitiveness Report. Web pages: Single 
market strategy; The 2026 Annual Single Market and 
Competitiveness Report - Internal Market, Industry, 
Entrepreneurship and SMEs.  

(33)  France’s reply to the European Commission’s 

questionnaire, December 2025. 

(34)  Sénat, rapport n°376, 11/2/2026. 

good  coverage  overall,  businesses  tend  to 
adopt  less  key  digital  technologies  (artificial 
intelligence  (AI),  data  analytics  and  cloud)  in 
France than in the EU. Key bottlenecks of SME 
digitalisation  include  a  lack  of  expertise  and 
skills,  cybersecurity  concerns,  and  financial 
constraints, particularly due to unclear returns 
on  investment  (see  Annex  4).  Digital  adoption 
gaps,  (lower  adoption  in  SMEs  and  higher  in 
large  firms),  are  one  of  the  factors  slowing 
productivity  growth  and  competitiveness  in 
France.  Accelerating  SME  digitalisation  is  key 
to meet EU 2030 digital targets. 

France  focuses  on  AI  to  improve  the 
digitalisation  of  the  whole  business 
sector. ‘France Num’ remains the main public 
tool supporting basic SME digitalisation, acting 
mainly  as  a  network  of  stakeholders  involved 
in  digital  transformation.  The  new  plan  ‘Osez 
l’IA’ aims at deploying AI technologies in large 
in  turn  contributing  to 
firms  and  SMEs, 
digitalisation (35).  However, 
is  neither 
targeted  at  SMEs,  nor  focused  on  basic 
digitalisation. 

it 

Ample private financial assets 
could be better channelled to meet 
equity financing needs 

capital 

sector 
it  faces  challenges 

is 
France's  venture 
growing,  yet 
in 
meeting  the  financing  needs  of  scale-
ups (36). The past decade saw a sixfold surge 

(35)  The plan is based on three pillars: (1) informing 
businesses via a network of AI ambassadors, (2) 
training 15 million professionals and (3) helping 
companies in identifying adapted AI solutions and 
funding instruments for their AI projects. 

(36)  J. KUKIES and C. NOYER, Financing innovative ventures 
in Europe. Recommendations to close the scaleup 
financing gap, deepen the Savings and Investment 
Union and strengthen Europe’s competitiveness, 
January 2026; Fratto, C., Gatti, M., Kivernyk, A., Sinnott, 
E., & van der Wielen, W. (2024). The scale-up gap: 
Financial market constraints holding back innovative 
firms in the European Union, European Investment Bank. 
https://doi.org/10.2867/382579. 

14 

 
 
 
in  the  number  of  French  unicorns (37),  making 
France the EU's leading unicorn producer after 
Germany (38).  Private  equity  activity 
is 
relatively  strong  (0.88%  of  GDP  in  2024, 
compared  to  0.46%  in  the  EU),  and  venture 
capital  investment  reached  0.07%  of  GDP  in 
2024,  but  it  remains  insufficient  to  meet  the 
growing needs of high-growth companies and 
scale-up  financing.  The  value  of  venture 
capital investment in French firms lags behind 
global  and  European  peers  and 
remain 
insufficient  for  scale-ups,  with  investments 
stagnating around 0.7% of GDP in 2024.  

The  French  economy  holds  untapped 
potential  to  expand  venture  capital 
institutional 
through 
investments 
investors.  With  a  100%  assets-to-GDP  ratio 
in its insurance sector, compared  with 53% in 
the  EU  in  Q2-2025,  France  has  room  to 
encourage  insurers'  investments  in  venture 
capital  and  private  equity.  By  leveraging  the 
‘Tibi 
encouraged 
institutional  investors  to  invest  in  the  most 
innovative technology companies at a minimal 
cost for public finances (39), France could boost 
these  sectors  and  address  the  participation 
gap among institutional investors.  

Initiative’,  which  has 

French  households  invest  relatively  little 
in  financial  assets  and  equity.  In  2024, 
their  financial  assets  were  221%  of  GDP, 
slightly  above  the  EU  (212%)  but  far  below 
the  US  (446%).  Equity  investments  were  only 
108%  of  GDP,  above  the  EU  average  (91%) 
but  nearly  three  times  lower  than  the  US 
(291%).  French  households  prefer  low-risk, 
liquid  assets,  particularly  life  insurance,  which 
benefits  from  tax  incentives.  Redirecting  even 
a  small  portion  of  these  savings  towards 
equity-based  investments  could  help  bridge 
France’s innovation funding gap.  

(37)  A privately owned start-up company, which has reached 

a valuation of $1 billion or more. 

(38)  State of European Tech 2024. A unicorn is a privately 

held startup valued at over $1bn. 

(39)  Inspection Générale des finances, Evaluation de 

l’initiative Tibi, 27 November 2025. 

15 

 
 
 
DECARBONISATION, ENERGY AFFORDABILITY AND 
SUSTAINABILITY 

to 

and 

(CSRs) 

including 

buildings 

France  received  in  2025  country-specific 
recommendations 
reduce 
greenhouse  gas  (GHG)  emissions  in  the 
transport 
sectors, 
accelerate  the  deployment  of  renewable 
energy  projects,  promote  demand-side 
flexibility  and  storage,  and  ensure 
sufficient  investment  in  electricity  grid 
capacity, 
cross-border 
interconnections.  Steps  have  been  taken  to 
promote  demand-side  flexibility  and  storage, 
the 
but  significant  challenges  persist 
in 
remaining  policy  areas.  France’s 
limited 
electricity  system  flexibility  coupled  with  its 
current  electricity  oversupply  and  stagnant 
frequent 
demand, 
negative  prices,  inefficient  use  of  available 
renewable  energy  production  through  the 
curtailment  of 
renewables,  and  nuclear 
modulation,  which  in  turn  results  in  high 
system  costs.  Increasing  the  electrification  of 
end uses would be a cost-effective solution to 
decarbonise  the  French  economy,  absorb 
electricity  surpluses  and  lower  system  costs. 
Water  scarcity  is  also  an  increasing  concern 
given its potential economic impact. 

increasingly 

leads 

to 

slowdown 

decarbonisation 
in 
The 
observed in 2024 continued in 2025, with 
GHG  emissions  falling  by  only  1.5%  in 
2025(40)  (down  from  1.8%  in  2024),  well 
below the 4.2% annual reduction required 
to meet the 2030 targets set in the draft 
third  low-carbon  strategy  (SNBC-3)  (41). 
All sectors are off track, with the largest gaps 
in  buildings  (4.7  pps) (42)  and  transport  (3 

pps) (43).  Progress  is  also  hindered  by  lagging 
renewable  deployment, 
slow  permitting, 
limited  non-fossil  flexibility  and  storage,  and 
insufficient 
electricity 
cross-border 
interconnections. 

Graph 3.1: Emissions compared with 2030 
target trajectory under the third low-carbon 
strategy 

Source: Citepa 

Boosting energy efficiency in 
buildings and industrial 
decarbonisation 

In 2025, France received a CSR to reduce 
its  reliance  on  fossil  fuels  in  buildings, 
stepping  up  energy  efficiency  and  deep 
renovations. Since then, limited progress has 
been  observed  with  the  building  sector's  GHG 
in 
emissions  decreasing  by  only  1.5% 
2025 (44). To align with the SNBC-3 trajectory, 
France needs to boost the efficiency of energy 
renovations to achieve greater energy savings 

(40)  Baromètre des émissions - Citepa ; Résultats baromètre 

- 2025 prévisionnel (April 2026). 

(41)  Vers la 3e Stratégie nationale bas-carbone (SNBC 3) | 
Ministères Aménagement du territoire Transition 
écologique. 

as compared with the estimated 6.2% yearly 
reduction required to reach the 2030 target. 

(43)  Citepa estimates a 1.4% reduction in yearly emissions 
in the transport sector in 2025 as compared with the 
estimated 4.4% yearly reduction required to reach the 
2030 target. 

(42)  Citepa estimates a 1.5% reduction in yearly emissions 
in the residential and tertiary buildings sector in 2025 

(44)  See Footnote 21. 

16 

-4.4%-5.3%-6.2%-4.6%-1.4%-3.5%-1.5%-1.5%-7%-6%-5%-4%-3%-2%-1%0%TransportIndustryBuildingsTotal (withoutLULUCF)Average annual rate required to achieve SNBC targetsChange between 2024 and 2025 
 
 
 
   
 
energy-saving  certificate  period,  raising  some 
uncertainty  about  their  ability  to  deliver  on 
2026-2030  targets  and  align  with  the  draft 
third low-carbon strategy.  

is 

and 

expanding 

Progress in heating and cooling is uneven. 
France 
gradually 
decarbonising its district heating networks (49), 
thanks to the continued support of the ‘Fonds 
Chaleur’  (see  Annex  9).  By  contrast,  the  heat 
pump  market  has  been  declining  since  2023 
(see  Annex  9),  partly  due  to  uncertainty  and 
associated  with 
‘stop-and-go’ 
MaPrimeRénov  (MPR).  Ensuring  stable  and 
predictable  support  for  heat  pumps,  while 
low-carbon  district 
continuing 
in  accelerating 
heating,  will  be  essential 
decarbonisation. 

to  expand 

effects 

The governance of industrial and climate 
policies remains fragmented between the 
State  and  local  and  regional  authorities. 
While  the  State  sets  strategies  and  major 
funding, local and regional authorities manage 
local economic development, certain subsidies, 
and territorial energy planning (50). Although it 
allows  for  local  specificities  to  be  taken  into 
account,  such  fragmentation  and  overlap  of 
responsibilities can lead to inconsistencies and 
delays,  particularly  for  projects 
involving 
multiple  actors,  such  as  industrial  clusters, 
making  coordination  between  national  and 
sub-national  levels  a  key  factor  for  industrial 
decarbonisation. 

Accelerating renewable energy 
deployment alongside flexibility 
and infrastructure investments  

Among clean energy sources, accelerating 
the  deployment  of  renewable  energy 
remains a major challenge for France, as 
highlighted  in  the  2025  CSR.  In  2024,  the 
share of renewable energy sources in France’s 

(49)  Source: Eurostat [nrg_ind_ren] Share of energy from 

renewable sources. 

(50)  OECD A Territorial Approach to Climate Action and 

Resilience (EN) (page 130). 

and accelerate the phase-out of fossil fuels in 
the heating and cooling sector. 

conditions 

to  access 

The  main  scheme  supporting  household 
energy  renovations  has  lacked  stability, 
preventing  France  from  returning  to  its 
trajectory.  MaPrimeRénov,  co-funded  with 
EUR 3.2 billion by the Recovery and Resilience 
Facility  (RRF),  has  been  suspended  twice  and 
has  undergone  near-constant  adjustments  to 
subsidy  levels,  the  type  of  work  eligible,  and 
income 
financing. 
Compared with 2022, France’s budget funding 
has  been  reduced  from  EUR  3.1  billion  to  2.3 
billion  in  2025.  This  reduction  is  offset  by  a 
substantial  shift 
towards  energy  savings 
(see  below),  which  helped 
certificates 
maintaining  the  overall  funding  over  the 
period  (at  circa  EUR  3.8  billion  in  2025).  This 
instability has been harmful to households and 
businesses,  slowing  France’s  progress 
in 
energy  renovations,  which  is  not  on  track  to 
meet the 2030 objectives (see Annex 9). 

(CEE) 

Shifting to energy savings certificates (45) 
for  housing  renovation  may  prove  less 
effective (46).  The  planned  large-scale  shift 
of  MaPrimeRénov  to  the  energy  savings 
increasing 
certificates 
administrative  complexity  while  making 
it 
more  difficult  to  deliver  on  actual  energy 
savings (47).  As  costs  are  passed  on  to 
consumers  through  their  energy  bills  (48),  this 
system  entails  less  redistribution  between 
customers.  Suppliers  already  struggled  to 
meet  less  ambitious  targets  in  the  previous 

risks 

(45)  The  CEE  scheme 

is  a  market-based  mechanism 
requiring  energy  and  fuel  suppliers  to  meet  energy 
targets  by  financially  supporting  energy 
savings 
efficiency  measures 
energy 
renovation  and  energy  efficiency  and  fuel  switching  in 
transport).  

(including 

building 

(46)  Risk were already identified in 2024 by the French Court 
of  Auditors  and  the  General  Inspector  of  Finance  Cf. 
https://www.ccomptes.fr/fr/publications/les-certificats-
deconomies-denergie-0  and  2023-M-095-04  Rapport 
CEE PUBLIC.pdf. 

(47)  According  to  the  French  Court  of  Auditors,  these  gains 
are overestimated by at least 30% for 2022 and 2023. 

(48)  EUR 6 billion are passed on to consumers through their 
energy  bills.  According  to  the  French  Court  of  Auditors, 
the impact on household energy bills was 154 EUR/year 
in 2024 and could reach EUR 450 from 2026 onward. 

17 

 
 
 
final  energy  consumption 

reached 
gross 
23.2%, exceeding the 2020 target, albeit with 
a four-year delay. This level remains below the 
26.8%  target  set  in  France’s  national  energy 
planning  documents (51).  Despite  a  modest 
increase 
installed  renewable  electricity 
capacity  in  2025  (5.4  GW  compared  with  4.7 
GW  in  2024),  France  is  not  on  track  to  meet 
third 
the  EU  2030 
multiannual  energy  programme  (PPE-3) (53), 
without 
in 
significant 
deployment (see Annex 9). 

target (52)  nor 

acceleration 

the 

in 

a 

for 

France  has  made  progress  in  energy 
planning,  but  implementation  challenges 
remain.  After  years  of  consultations  that 
created  uncertainty  and  economic  pressure, 
the  government  adopted  its  third  multiannual 
energy  programme  (PPE-3)  in  February  2026, 
setting  renewable  targets  by  technology  for 
2030  and  2035.  However,  these  targets  are 
lower than in the draft version, particularly for 
onshore  wind  (where  repowering  is  prioritised 
solar 
installations)  and 
over  new 
photovoltaics  (54),  despite  France’s  potential. 
Implementation  remains  challenging  due  to 
regulatory and industrial constraints. The 2023 
Law 
Renewable 
(included  in  the  recovery  and  resilience  plan 
(RRP))  is  still  only  partially  implemented  (55), 
‘renewables 
with  key  measures  such  as 
in  all 
acceleration  zones’  not 
territories (see Annex 9). Permitting procedures 
remain  complex  and  lengthy (56),  particularly 
due  to  the  absence  of  a  one-stop  shop  and 
additional  constraints  from  the  ‘Net  Zero 
Artificialisation’  Law.  Delivering  PPE-3  targets 
will  also  require  timely  tenders  for  wind  and 
solar,  which  represents  a significant  industrial 
challenge  to  strengthen  EU  manufacturing 

Acceleration 

finalised 

Energies 

(51)  rac-obs-2025-v3-web.pdf (page 4). 

(52)  According to the EU regulation, France’s indicative 

contribution to the EU 2030 target is 44%. 

(53)  See ppe3.pdf. 

(54)  Revised down from 65–90 GW in the March draft of 
PPE-3 to 55–80 GW by 2035 in the adopted version. 

(55)  Around one quarter of the required implementing acts 
are still pending, in particular the decree establishing 
monitoring indicators. 

(56)  Trésor-Éco n° 382 (Février 2026), " Les enjeux 

économiques du soutien aux énergies renouvelables 
électriques" (page 5). 

capacities  in  key  technologies  such  as  solar 
panels and wind turbines. 

regions  due 

Regionalising  energy  programming 
is 
essential  to  provide  clear  guidance  for 
renewable  energy  deployment.  Renewable 
potential  differs  across 
to 
variations  in  sun,  wind,  water,  and  biomass 
resources. The current regionalisation of PPE-3 
is  not  yet  finalised,  limiting  investor  visibility 
on  projects  development.  This  is  particularly 
critical  for  the  outermost  regions,  which  face 
isolated  grids,  high  import  dependence,  and 
specific 
requiring 
tailored  decentralised  renewable  generation 
and storage solutions (see Annexes 9 and 18). 

vulnerabilities, 

climate 

Further  efforts  are  needed  to  increase 
non-fossil  flexibility  and  storage.  While 
some  steps  have  been  taken  including  an 
increase  in  installed  battery  capacity  in  2025 
(57)  and  measures  to  strengthen  demand-side 
response,  in  particular through  the  revision  of 
peak  and  off-peak  tariff  structures  to  be 
implemented 
2027, 
progressively 
additional action will be required to limit costly 
renewable  electricity  curtailment  and  nuclear 
modulation (see sub-section below). 

until 

Progress 
in  electricity  grid  capacity 
investments is uneven. France is advancing 
towards  its  projected  investment  needs  in 
energy  infrastructures,  especially  electricity 
grids,  but  delivery  will  depend  on  sufficient 
industrial  and  human  capacity,  including  skills 
and cable production and supply. At the same 
time, 
interconnection  remains  significantly 
below  the  2030  target,  at  5.44%  compared 
with the 15% target (see Annex 9). 

Reducing system costs and 
decarbonising the economy by 
boosting the electrification of end 
uses 

France 
the 
electricity  system,  driving  system  costs. 

inefficiencies 

faces 

in 

(57)  Solutions stockage électricité - Accès aux données | RTE. 

18 

 
 
 
electrification  plan (59)  aims  at  increasing  the 
share of electricity in final energy consumption 
to  38%  by  2035.  Achieving  this  objective  will 
require  rapid  implementation  and  adequate 
funding.  

Transitioning to sustainable 
transport 

The  reduction  of  GHG  emissions  in  the 
transport  sector  remains  a  challenge  as 
highlighted 
in  the  2025  CSR.  Road 
transport  remains  the  largest  source  of  GHG 
emissions,  with  a  modest  reduction  of  1.4% 
recorded  in  2025  compared  with  2024  (60), 
falling  short  of  the  4.4%  annual  reduction 
needed 
to  comply  with  France's  2030 
objectives. A major factor is the dominance of 
road  freight,  which  is  above  EU  average 
(86.2% vs 75% for the EU - see Annex 8). 

Infrastructure  improvements  and  modal 
shifts are crucial to addressing transport 
emissions.  While  rail 
infrastructure  sees 
progress,  the  share  of  freight  carried  by  rail 
has  seen  a  modest  decline  since  2023  (see 
Annex  8).  Challenges  include  the  declining 
quality  of  current  networks  and  the  need  for 
substantial  investment,  with  additional  EUR 
300 million per year in the short term (61) (see 
Annex  8).  In  addition,  no  national  strategy 
exists  for  inland  waterways,  which  stagnated 
in  share  since  2023.  A  recently  tabled  draft 
law  to  enable  long-term  investment  planning 
aims to address these issues, with investment 
programming for modal shift in freight as well 
as electrification infrastructure for heavy-duty 
vehicles.  The  rapid  adoption  of  programming 
documents  and  implementation  of  ensuing 
measures 
for  clearer 
direction. 

remains  essential 

(59)  See Électrifions la France ! Pour une énergie moins 
chère, plus souveraine et plus durable – Presse – 
Ministère des Finances. 

(60)  Citepa estimates : Nouvelle estimation des émissions 
de l’année 2025 par le baromètre prévisionnel du 
Citepa - Citepa 

(61)  Rapport-Ulysse_1403_Word 

Increasingly  frequent  negative-price  events 
(513  hours  of  negative  prices 
in  2025, 
in  2024)  continued 
compared  with  352 
curtailment  of 
renewables  and  nuclear 
modulation  are  driving  high  system  costs  and 
reduce the business case for the development 
of  renewable  energy  projects.  In  2025,  an 
additional  0.8  TWh  of  electricity 
from 
renewable sources were curtailed as compared 
to 2024, reaching 2.5 TWh. In comparison, the 
curtailment  of  509  GWh  of  renewables  in 
2023  amounted  to  EUR  2.2  million.  This 
reflects  limited  system  flexibility,  stagnating 
demand and the current electricity oversupply, 
notably  driven  by  a  rebound  in  the  nuclear 
fleet and solar expansion (see Annex 9). 

France’s largely fossil-free electricity mix 
is  an  opportunity  to  decarbonise  and 
ensure  long-term  energy  sovereignty.  In 
2025,  it  reached  94.8%  of  clean  sources 
(67.7% nuclear, 27.1% renewables), but rising 
curtailment 
renewable 
integration  and  could  limit  its  future  share, 
which  is  a  concern  in  view  of  the  estimated 
decline in nuclear production by 2050 (58).  

constraining 

is 

Increasing  electrification  of  end  uses  is 
central  to  fully  leverage  France’s  clean 
electricity  mix.  France’s  electricity  share  in 
its  final  energy  consumption  is  above  EU 
average (26.5% in 2024 vs 23.4% for EU) but 
has  remained  stagnant  over  the  last  decade. 
Significant  electrification  potential  remains 
untapped  in  high-emitting  sectors  such  as 
transport  which  represents  a  third  of  France’s 
emissions  and  has  a  negligible  electrification 
rate  of  2.5% 
(see  Annex  9).  Expanding 
electrification  of  end  uses  -  through  electric 
industrial 
pumps, 
vehicles, 
electrification  (see  Annex  8)  -  would  create 
additional  demand  for  electricity,  support  the 
integration  of  renewable  sources  and  cost-
effectively decarbonise the French economy. In 
this  context,  the  recently  presented  national 

heat 

and 

(58)  See page 35, Graph 6, of the French Court of Auditors 
report on the maintenance of the French nuclear fleet 
https://www.ccomptes.fr/sites/default/files/2025-
11/20251117-S2025-1528-Maintenance-parc-
electronucleaire-EDF-en-France.pdf 

19 

 
 
 
The  demand  and  supply  of  low-emission 
vehicles  show  promising  trends,  but 
further  progress  is  needed.  Zero  emission 
vehicles  made  up  20%  of  new  passenger  car 
registrations in 2025 (up from 16.9% in 2024) 
and modest growth is also visible across other 
segments  (see  Annex  8).  Public  incentives  for 
low-emission  vehicles,  such  as  support  to 
purchase  clean  vehicles  (also  included  in  the 
RRF)  and  the  social  leasing  scheme  have 
shifted towards energy savings certificates (62) 
rather 
than  direct  subsidies,  which  has 
translated into higher subsidies for households 
in  2026  due  to  the  current  market  prices  for 
these certificates. Recent initiatives include an 
annual  incentive  tax  on  the  purchase  of  low-
emission  vehicles  introduced  in  March  2025, 
applicable  to  companies  that  do  not  meet  a 
rising  quota  in  their  fleet  (18%  in  2025). 
However, efforts are still needed for France to 
reach  its  2030  objectives  of  66%  of  electric 
passenger  cars  and  50%  of  electric  heavy-
duty vehicles in new acquisitions (which would 
represent  15%  and  10%  in  the  entire  fleets 
respectively)  (63).  To  that  end,  the  national 
electrification plan places transport at its core 
and  aims  at  accelerating  electric  vehicles 
uptake while strengthening domestic industrial 
capacity (64). 

Further  regulatory 
improvements  and 
more  effective  tax  provisions  could 
accelerate low-emission vehicle adoption. 
The parameters for the tax framework on CO2 
emissions  and  vehicle  weight  penalties  have 
been  strengthened  in  2026.  However,  more 
comprehensive  measures  could  be  leveraged 
to  disincentivise  combustion  engine  vehicles. 
Electric  heavy-duty  vehicles  are  not  exempt 
from  road  tolls,  and  the  external  costs  of 
heavy-duty  vehicles’  CO2  emissions  are  not 
internalised (65) 
sufficiently 
tolls, 
highlighting  areas  where  France  can  further 

in 

(62)  See Footnote 26. 

(63)  2025- Projet SNBC 3 compress-Partie 

1_Vfin_vdef_clean_clean COMPRESS.pdf. 

(64)  The plan combines strengthened demand-side 

measures such as support for vehicles acquisition and 
the scaling-up of the social leasing. 

support  a  comprehensive  move  towards  low-
emission transport (see Annex 8). 

Addressing environmental and 
climate vulnerabilities to ensure 
sustainable growth 

In 

(see 

recent 

solutions, 

nature-based 

Strengthening  adaptation  and  protecting 
the forest carbon sink remain central for 
years,  France  has 
France. 
strengthened  its  adaptation  framework  and 
emphasised 
in 
particular  through  the  adoption  of  the  third 
National  Climate  Change  Adaptation  Plan 
(PNACC-3)  in  2025,  followed  by  a  decree  in 
January 2026 integrating into national law the 
trajectory  for  climate 
reference  warming 
Effective 
Annex  10). 
adaptation 
stronger 
require 
implementation 
integration  of  adaptation 
territorial 
into 
planning frameworks and improved multi-level 
governance  (see  Annexes  10  and  18).  At  the 
same 
improving 
France’s  forest  carbon  sink  remains  a  major 
challenge,  as  it  has  declined  in  recent  years 
due  to  climate-related  pressures  such  as 
droughts,  fires,  and  pest  outbreaks.  Balancing 
the demand and supply of forest biomass and 
better  targeting  forest  renewal  subsidies  are 
key  to  boosting  the  resilience  of  the  carbon 
sink (see Annex 10). 

time,  maintaining  and 

will 

Water  scarcity  is  increasing  economic 
pressures,  highlighting  the  need  for 
stronger  coordination  and  investment. 
Water  scarcity  is  increasingly  a  concern  given 
its  economic  impact,  with  an  estimated  24–
26%  of  France’s  gross  output  exposed  to 
surface  water 
risks  and  drought  costs 
exceeding EUR 5 billion (66) in 2022 (see Annex 
10).  France’s  heavy  reliance  on  water  for 
electricity  production  -  both  hydropower  and 
nuclear  cooling  -  also  exposes  the  energy 
are 
system 
acknowledged  and  starting  to  be  addressed 
through  the  3rd  National  Climate  Change 
Adaptation Plan (PNACC-3). At the same time, 

risks,  which 

climate 

to 

(65)  Les péages perçus sur le territoire français. 

(66)  thema_essentiel_37_secheresse_2022_avril2025.pdf. 

20 

 
 
 
tensions  between  water-intensive  sectors 
(agriculture, industry and energy) underline the 
need  for  stronger  local  coordination,  yet  the 
January  2026  moratorium  on  water  policy 
decisions  limits  action  and  weakens  local 
authorities’  capacity  to  manage  resources.  In 
parallel,  water  networks  face  a  significant 
investment  gap  of  around  EUR  4.6  billion  per 
year  (67),  thereby  placing  increasing  pressure 
on  local  authorities’  budget  to  maintain  and 
adapt infrastructure. 

regions (68) 

Water  pressures  in  France  shows  strong 
sectors. 
regional  disparities  across 
Intensive 
face 
agricultural 
significant  nitrate  and  pesticide  pollution 
affecting  drinking  water  sources,  often 
worsened  by  droughts,  while  large  urban  and 
industrial  regions (69)  experience  pressures 
linked  to  high  demand  and  multiple  pollution 
sources, including urban runoff, heavy metals, 
industrial  solvents,  PFAS  (synthetic  ‘forever 
chemicals’),  hydrocarbons  and  microplastics. 
Groundwater  conditions  are  also  uneven (70), 
with some areas experiencing strong recharge 
and  others  facing  persistently  low  levels  and 
local  risks  of  shortages  (see  Annexe  18).  In 
addition, major infrastructure and service gaps 
remain  in  outermost  regions,  where  reliable 
access 
to  drinking  water  and  sanitation 
continues  to  be  a  challenge  despite  recent 
investment programmes such as the overseas 
departments’ water plan (PEDOM, 2016-2024, 
partly financed by the RRF). 

(67)  See Banque-des-territoires-Observatoire-sur-eau-

2025.pdf. This investment gap concerns networks only 
and does not take into account the additional EUR 5.3 
bn required for the depollution and restoration of water 
bodies (see 2024-11-05_CFE_Etude-Fncmt-
Eau_Synthese_Livret.pdf). 

(68)  See Qualité des eaux superficielles et souterraines en 
France - État des connaissances en 2025 | Données et 
études statistiques. 

(69)  See Assessment and recommendations: Adapting the 
Paris Metropolitan Area to a Water-Scarce Future | 
OECD. 

(70)  See Nappes d’eau souterraine au 15 février 2026 | 

BRGM. 

21 

 
 
SKILLS, QUALITY JOBS AND SOCIAL FAIRNESS 

In 2025, France received country-specific 
recommendations (CSRs) to address skills 
shortages, improve educational outcomes 
and  reduce 
in  education, 
inequalities 
strengthen  the  teaching  profession,  and 
prevent  and  reduce  child  poverty.  While 
measures  are  being  implemented  to  improve 
teachers  training,  as  well  as  to  increase  the 
in  organising  early 
role  of  municipalities 
childhood  education  and  care  (ECEC),  their 
impact  remains  to  be  evaluated.  Challenges 
highlighted  in  the  2025  CSR  remain  and 
additional  challenges  require  further  policy 
response,  particularly  in  reducing  barriers  to 
employment for young people and addressing 
rising poverty for the working age population. 

has  worsened, 

faces 
labour  market  still 
France’s 
comparatively 
participation, 
low 
particularly  among  young  people,  and 
despite  lower  unemployment,  the  risk  of 
poverty or social exclusion has worsened. 
Limited progress has been made in addressing 
skills shortages in strategic sectors, as training 
systems  remain  insufficiently  aligned  with 
labour  market  needs  and  key  programmes 
have  been  scaled  down.  Furthermore,  youth 
requiring 
unemployment 
attention. Education outcomes remain strongly 
correlated  with  students’  socio-economic 
background  while  declining  performance  and 
technology, 
low 
engineering  and  maths  (STEM)  reduce  future 
employment 
learning 
opportunities. Multiple barriers to employment 
persist,  including  limited  access  to  housing, 
mobility  and  early  childhood  education  and 
care  (ECEC)  services.  Limited  progress  has 
been made in addressing child poverty and in-
increased.  Furthermore, 
work  poverty  has 
territorial  disparities  in  social  outcomes  have 
worsened, especially in outermost regions, and 
persistent  labour  shortages  and  fragmented 
to  affordable 
provision  hamper  access 
healthcare  services,  including  in  fragile  rural 
areas. 

enrolment 

prospects 

science, 

and 

in 

Lowering barriers to employment, 
improving the labour market 
integration of young people, and 
ensuring quality jobs 

Despite  having  received  a  dedicated  CSR 
in 2025, skills gaps and labour shortages 
continue  to  weigh  on  France’s  labour 
market  performance.  Reported 
labour 
shortages  have  eased  but  remain  elevated  in 
sectors  such  as  manufacturing,  construction, 
healthcare  and  social  services  (71).  While 
recruitment difficulties eased slightly in 2025, 
companies 
important  hiring 
report 
difficulties, driven by both a lack of adequately 
skilled 
(manufacturing, 
construction) 
unattractive  working 
conditions (agriculture, construction, social and 
care  services).  These  professions  often  offer 
limited  career  progression  and  access  to 
training  opportunities,  contributing  to  the 
persistence of labour shortages (72). 

candidates 
and 

still 

security 

incentives 

contribution 

Risks of low-wage traps persist in France. 
Social 
exemptions 
targeted  at  low-wage  employees  are  likely  to 
have  contributed  to  wage  compression  and 
have  weakened 
in 
upskilling  (73), by  reducing prospects  of  career 
reform  of  social 
progression.  The  2025 
exemptions,  which 
security 
simplifies  and 
the  existing 
schemes  represents  a  first  step  towards 
addressing the risk of low-wage traps. Efforts 
to  reduce  disincentives  to  wage  progression, 

contribution 

rationalises 

invest 

to 

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

2026’, 2026. 

(72)  France Stratégie, “Qualité de l’emploi: une question de 
métiers ?”. Note d’analyse n°130, décembre 2023.  

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

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

22 

 
 
 
concern  (76)  (see  Annex  16),  while  frequent 
adjustments to the energy renovation schemes 
have  lowered  take-up.  (see  Section  3  and 
Annex 10). Territorial disparities are important, 
and  shortages  of  affordable  housing  affect 
first  the  most  vulnerable  groups  (see  Annex 
18). 

but 

social 
involvement 

Stronger  involvement  of  social  partners 
in  France  could  support  more  inclusive 
and  effective  labour  market  reforms. 
France’s multi-level social dialogue framework 
partners 
is  well-structured, 
frequently  cite 
in 
insufficient 
major  reforms.  Trade  unions  have  a  high 
coverage rate (98%), but low density (10.1%), 
below the OECD  average  (77).  The  ‘Conférence 
Travail 
in 
December  2025, 
strengthen 
collaboration  on  employment  issues,  but  its 
impact  on  working  conditions  will  depend  on 
higher engagement of social partners. 

Retraites’, 
seeks 

launched 

Emploi 

to 

Despite  significant  investments,  young 
people  still  face  barriers  to 
labour 
market  inclusion  especially  those  with  a 
low  socio-economic  background.  Despite 
substantial  programmes (78)  supported  by  the 
Resilience  and  Recovery  Facility  (RRF),  youth 
unemployment remains above the EU average 
and is on the rise (19.7% vs 15.2% in the EU). 
in  education, 
those  not 
The  share  of 
employment  or  training  (NEET)  is  also  high 
in  the  EU),  and  rising 
(12.7%  vs  11% 
especially 
regions. 
in  France's  outermost 
Tighter  criteria  have  resulted  in  a  5%  decline 
in  new  enrolments 
in 
2025 (79). Young people (15-29) are also more 
likely  to  be  employed  on  temporary  contracts 
and  typically  secure  their  first  job  seven 
months  after  completing  their  initial  training. 
Their  labour  market  outcomes  remain  closely 

in  apprenticeship 

(76) The share of people living in households with arrears on 
mortgage, rent or utility bills (10.6%) exceeds the EU 
average (9.2%) and has risen by 2.2 pps since 2019. 

(77) OECD data on employer organisation and trade union 

density (2019). 

(78)  Measures supporting youth employment include ‘1 

jeune, 1 solution’, the ‘Contrat d’engagement jeune’ and 
the apprenticeship subsidies. 

(79)  DARES, « Le contrat d’apprentissage », 2026. 

may  need  to  be  supplemented  by  labour-
market-relevant  adult  learning  opportunities, 
especially  for  low-skilled,  young  and  older 
workers  to  improve  employability  and  reduce 
the risk of low-wage entrapment. 

France  faces  challenges  in  ensuring  the 
quality  of  available  jobs.  France  faces 
terms  of  working 
in 
some  challenges 
conditions, particularly long working hours and 
the rising share of fatal accidents at work (see 
Annex  11).  While  the  shares  of  temporary 
involuntary  part-time  have 
contracts  and 
fallen  in  recent  years,  they  remain  above  the 
EU  average 
(particularly  among  young 
workers).  The  share  of  the  self-employed  at 
risk of poverty has increased significantly (see 
Annex  12).  Job  opportunities  vary  across 
territories,  in  particular  for  young  people,  and 
are especially lacking in the outermost regions, 
in  fragile  rural  areas,  in  territories  undergoing 
industrial  transition  and  also  in  distressed 
urban peripheries (see Annex 18). Some areas 
transport 
lack  sufficient  and/or  efficient 
options for residents to get to their workplace. 

for 

vulnerable 

Access  to  affordable  housing  represents 
a  considerable  barrier  to  labour  market 
integration 
groups. 
Pressure  on  social  housing  is  considerable, 
with  2.6  million  households  on  waiting  lists, 
while  supply  has  been  sluggish.  Although  the 
law  ‘Solidarités  et  Renouvellement  Urbain’ 
(SRU) (74)  has  helped  expand 
the  social 
housing  stock,  in  particular  in  urban  areas,  a 
significant  share  of  concerned  municipalities 
has not reached the legal threshold. Concerns 
also  remain  regarding  the  governance  and 
transparency of the social housing system (75). 
In  the  private  market,  housing  supply  is 
particularly limited in urban and tourist areas, 
further  tightened  by  the  rapid  expansion  of 
short-term  rental  platforms  (see  Section  1). 
Poor housing quality and energy poverty are a 

(74)  https://www.ecologie.gouv.fr/politiques-

publiques/larticle-55-loi-solidarite-renouvellement-
urbain-sru 

(75)  Rapport public annuel 2026 sur la cohésion territoriale 
et attractivité des territoires, Cour des comptes (vie-
publique.fr/files/rapport/pdf/302553.pdf ). 

23 

 
 
 
less likely to participate in adult learning, while 
their  employment  gap  is  widening.  Further 
efforts  could  focus  on  better  targeting  these 
groups  and  strengthening  and  broadening 
measures to address the obstacles they face. 

Reducing poverty, ensuring equal 
access to childcare services and 
addressing territorial disparities 

Poverty has increased in France in recent 
years.  France  is  significantly  deviating  from 
its  2030  national  poverty  reduction  target, 
both  for  the  overall  population  and  for 
children. Between 2019 and 2025, the number 
of  people  in  AROPE  increased  by  1.43  million 
in  mainland  France  (including  +300  000 
children). Including France’s outermost regions 
in  the  figure  would  add  0.7  million  people  in 
2025.  Homelessness  is  also  on  the  rise, 
particularly for children, pointing to the relative 
lack of effectiveness of the Housing First plan, 
launched in 2018. France has introduced a set 
of  initiatives  under  the  Solidarity  Pact,  yet 
implementation remains fragmented and their 
impact  is  left  wanting.  Meanwhile  the  poverty 
reduction 
impact  of  social  transfers  has 
declined, in part due to changes in housing and 
family benefits, although it is still significantly 
stronger than the EU average (see Annex  12). 
The  at  risk  of  poverty  (AROP)  rate  among 
unemployed  remains  high  (42.9%  in  2025), 
partly  due  to  the  unemployment  benefit 
reform. Potential adverse effects of the 2023 
‘France  Travail’  and  of  the  unemployment 
benefit  reforms  on  poverty  need  to  be 
monitored (83). 

Although  employment  remains  a  key 
in-work 
factor  for  escaping  poverty, 
poverty has risen in recent years. Despite 
a  drop  in  unemployment  from  2015 to  2023, 
the risk of poverty or social exclusion in France 
has not improved, highlighting that many jobs 

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

to 

(81),  such  as  a 

linked  to  educational  attainment  and  field  of 
training (80). Additional barriers prevent access 
to  employment 
lack  of 
affordable  housing  adapted  to  students  and 
young  workers  needs  (see  Annex  16)  and 
transport  options,  due 
limited  public 
transport  availability  (82)  and  high  cost  of  the 
driving  licence  (see  Annex  12).  Addressing 
these obstacles, in particular by improving the 
targeting,  consistency,  and  awareness  of 
existing schemes, improving access to housing 
and  mobility  options  and  better  aligning 
trainings  to  employers’  needs  could  improve 
labour  market  integration  and  reduce  labour 
shortages. 

Further  efforts  are  needed  to  boost  the 
employment  of  older  workers. 
The 
employment 
rate  of  older  workers  has 
improved by 2.2 pps since 2023, particularly in 
the context of the 2023 pension reform, which 
gradually  increases  the  legal  retirement  age, 
although  the  suspension  of  the  reform  may 
slow  down  this  positive  trend.  An  October 
2025  law  transposing  the  social  partners’ 
agreement on older workers employment aims 
at  promoting  their  continued  employment, 
their return to work, and facilitating the end of 
their 
impact  on 
its 
employability 
is  yet  to  be  seen.  Further 
measures  may  be  needed  to  increase  their 
participation in training. 

careers.  However, 

Less  qualified  people  and  non-EU  born 
people  also  face  barriers  to 
labour 
market  integration.  Non-EU  born  people 
continue to face significant barriers in the light 
of  limited  measures  specifically  addressing 
the  challenges  they  face.  Barriers  include 
educational 
language 
attainment  and  risks  of  discrimination.  This 
results  in  a  high  poverty  risk  for  this  group 
(number of people at risk of poverty  or social 
exclusion  or  ‘AROPE’  rate  of  39.3%  in  2025). 
People  with  low-levels  of  qualifications  are 

constraints, 

low 

(80)  INSEE, « Formations et emploi », 2025. 

(81)  Cour des Comptes, ‘Rapport annuel 2025 sur les 
politiques publiques en faveur des jeunes’, 2025. 

(82)  Cour des comptes, ”Rapport public annuel 2026, 

Cohésion territoriale et attractivité des territoires”, 
2026. 

24 

 
 
 
(‘micro-entrepreneurs’). 

fail  to  alleviate  poverty  (84).  Since  2022,  in-
work  poverty  has  worsened  by  1.2  ppt, 
exceeding  the  EU  average  in  2025  (8.7%  in 
France  against  8.3%  in  the  EU),  with  a  sharp 
rise  among  the  self-employed  (+4.3ppt)  and 
households  with  children  (rising  from  8.6%  in 
2022  to  9.8%  in  2025  and  from  21.4%  to 
22%  for  lone  parent).  This  coincides  with  the 
recent  increase  in  the  number  of  solo-self-
employed 
Their 
average  monthly 
income  was  EUR  670, 
against  EUR  4030  for  other  independent 
workers. This difference is partly explained  by 
a 
in 
lower  number  of  hours  worked 
average (85) (1421 hours per year) than that of 
other  independent  workers  (2151  hours  per 
year) (86), but that is close to the legal working 
time  of  1607  hours  for  employees).  Factors 
such  as  employment  status,  contract  types 
and 
involuntary  part-time  work,  which 
disproportionately  affects  women,  are  closely 
in-work  poverty  (87).  Furthermore, 
tied  to 
studies  suggest  the  unemployment  benefit 
reform 
sustainable 
employment, particularly for young people (88). 
Improving  the  availability  of  quality  jobs, 
reinforcing  access  to  training  and  addressing 
low-wage  traps,  and  monitoring  the  situation 
of  solo-self-employed  could  help  reduce  in-
work poverty. 

fostered 

has 

not 

Child poverty remains a pressing issue in 
France,  amid  weaker  impact  of  social 
transfers. In 2025, France received a CSR to 
prevent and reduce child poverty, but progress 
has been limited. The risk of poverty or social 
exclusion  of  children  has  strongly  increased 
since  2019  and  remained  above  the  EU 
average in 2025 (27.5% vs 24.3% in the EU). 
Limited  uprating  to  inflation  and  changes  to 
eligibility  conditions,  including  in  the  2026 
budget  have  weakened  the  effectiveness  of 

(84)  CNLE, “Analyse de l’évolution de la pauvreté et de l’
exclusion sociale entre 2015 et 2022”, 2025. 

family  benefits,  while  housing  benefits  have 
declined.  Single-parent  families,  particularly 
those  headed  by  mothers,  face  specific 
barriers  to  employment,  and  their  in-work 
poverty  rate  is  the  highest  (22%),  above  the 
EU 
of 
(20.5%). 
intergenerational  transmission  of  poverty  is 
high, 
educational 
linked  with  social 
outcomes  are  strongly 
backgrounds (89). 

particularly 

because 

average 

The 

risk 

Access  to  early  childhood  education  and 
labour 
remains  unequal  while 
care 
shortages  may  undermine  the  quality  of 
childcare.  Households  face  multiple  barriers 
to  access  ECEC,  especially  before  the  age  of 
3 (90),  alongside  concerns  over  childcare 
quality.  Uneven  supply  across  the  territory 
leaves  a  fifth  of  the  demand  unmet  (91). 
Despite a 2025 reform, France is not on track 
to  meet  its  goal  of  creating  200  000  new 
places  by  2030.  The  sector  suffers  from 
significant 
labour  shortages,  due  to  the 
profession’s  declining  attractiveness  (92).  As 
recommended  in  the  2025  CSR,  providing 
affordable,  high-quality  childcare  services  is 
essential  to  support  mothers’  labour  market 
integration  and  address  child poverty,  as  care 
duties  often  restrict  women’s  availability  to 
work full time. 

These challenges are particularly acute in 
the  French  outermost  regions.  The  AROPE 
rate 
in 
reaches  an  average  of  41.3% 
outermost  regions,  20.5  pps  above  mainland 
France.  The  share  of  people  living  in  jobless 
households is higher (29.5% in Guyane), while 
the 
is 
significantly lower. Despite measures targeting 
the  outermost  regions  under  the  ‘Solidarity 
Pact’,  implementation  challenges  persist  and 
the scope of interventions remains insufficient 
to  address  structural  obstacles  (see  Annexes 
11  and  18).  Designing  targeted  measures  for 

coverage  of 

childcare 

services 

(85)  A significant share of micro entrepreneurs hold several 

(89)  HCSP, « La pauvreté en héritage », 2026. 

jobs. 

(86)  Insee, Emploi et revenus des indépendants 2025. 

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

enfant’, 2024. 

(87)  CESE, « Lutter contre la précarité professionnelle par 

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

une économie plus inclusive ». 2026.  

2025”, 2025. 

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

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

2026’, 2026. 

25 

 
 
 
not covered by the scheme  (95). Using student 
assessment  data  and  differentiated  teaching 
methods  at  school  level  (see  Annex  13)  could 
also  improve  performance  and  better  address 
special  needs.  Systematic  evaluations  and 
evidence-based  strategy  could  contribute  to 
greater effectiveness of measures. 

the 

include 

teaching 

profession, 

In  line  with  the  2025  CSR  to  strengthen 
the 
important 
challenges remain to improve the working 
conditions  of  teachers  as  well  as  the 
quality  of  their  training.  The  education 
system suffers from the low attractiveness of 
the  teaching  profession,  as  fewer  candidates 
sit 
recruitment  exams,  and  more 
permanent  teachers  leave  (96).  Contributing 
factors 
inadequate  pay,  working 
conditions,  lack  of  recognition,  or  limited  job 
mobility  (see  Annex  13).  According  to  the 
latest TALIS survey (97), France lags behind the 
EU  in  teachers’  evaluations  of  their  initial 
education  (ITE)  and  continuous  professional 
development (CPD), with unmet training needs, 
especially  in  AI  usage  (see  Annex  13).  The 
2025 initial education reform coincided with a 
rise  in  exams  applications  and  is  expected  to 
contribute to an increase in the attractiveness 
of 
the  2022 
Continuous  Professional  Development  reform 
has  not  yet  significantly  improved  coverage, 
access  and  quality  of  training  (98).  Increasing 
the  focus  of  these  reforms  on  content  and 
quality  could  boost  job  satisfaction,  improve 
basic  skills  teaching,  and  better  support  low-
performing pupils. 

the  profession.  However, 

Despite  investments  in  skills,  efforts  are 
needed  to  better  align  training  with 
labour  market  demands,  to  reduce  the 
fragmentation  of  skills  intelligence  and 
reach vulnerable groups. In 2022, 49.2% of 

(95)  Cour des Comptes. (2025). L’éducation prioritaire, une 

politique publique à repenser. 

(96) France Stratégie, “Travailler dans la fonction publique - 

Le défi de l’attractivité”. Décembre 2024. 

(97)  OECD (2025). Results from TALIS 2024 - Country notes: 

France 

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

the  outermost  regions  and  recognising  their 
specificities could reduce territorial disparities. 

Enhancing basic skills and adult 
learning to support fairness and 
competitiveness 

Skills  challenges  are  rooted  in  the  weak 
performance  of  the  French  education 
system, specifically in an insufficient and 
unequal  level  of  basic  skills  and  STEM. 
While  overall  Programme  for  International 
Student  Assessment  (PISA)  (93)  results  are 
around  the  EU  average,  they  highlight  a 
significant  decline  in  basic  skills  proficiency, 
and France counts a high and increasing share 
of  low-achievers  (15-year-olds)  in  science, 
maths  and  reading,  much  above  the  15% 
target  of  low-achievers  by  2030.    Equity  in 
terms  of  basic  skills  has  decreased  over  the 
last  decade,  while  top  performance  has 
deteriorated  particularly  in  maths  (see  Annex 
13).  Efforts  to  promote  STEM  enrolments  at 
upper  secondary  and  tertiary  levels,  paired 
with improving top performance from an early 
age, could help curb the declining performance 
and low enrolment in STEM (94), in a context of 
important anticipated shortages of STEM skills 
in industry and strategic sectors. 

for 

to 
and 

Existing  support 
low-performing 
learners does not reach all those in need, 
improve 
despite  a  2025  CSR 
outcomes 
educational 
reduce 
inequalities 
  Educational 
in  education. 
outcomes  remain  strongly  linked  with  socio-
economic  background,  hindering  the  future 
learning opportunities of disadvantaged pupils. 
To  provide  more  effective  support,  more 
flexible criteria for disadvantaged schools and 
reforming the map of priority education areas 
(‘réseaux d’éducation prioritaire’)  are essential 
as 70% of disadvantaged pupils are currently 

(93)  Performance trends | OECD. 

(94)  European Commission (2025). Education and training 

monitor. Country report, France. 

26 

 
 
 
doctor-to-population  ratio,  an  ageing  General 
Practitioners 
insufficient 
workforce, 
replacement  rates,  and  a  projected  nursing 
these 
workforce 
training 
challenges 
pipelines,  expanding  multidisciplinary  primary 
care  and  better  integrating  advanced  practice 
nurses and allied professionals. 

shortfall. 
Addressing 
require  strengthening 

More  efficient  allocation  of  health 
spending  may  help  reduce  fragmentation 
of  care  and  rising  financial  pressures. 
Healthcare  delivery  is  fragmented  and  overly 
hospital-centred,  causing 
inefficiencies  and 
higher costs. Shifting resources from hospitals 
to  outpatient  and  coordinated  community-
based  services,  supported  by  interoperable 
digital  systems  and  ‘telemedicine’  can  help 
curb  rising  costs.  Emphasising  prevention  and 
increasing the use of generics and biosimilars 
would  further  reduce  long-term  costs  and 
improve population health. 

adults engaged in training, standing above the 
EU  average,  yet  progress  towards  the  2030 
target of 65% is slow. Participation in training 
is  particularly  low  among  people  with  a  low-
level  of  skills,  and  people  in  precarious  jobs. 
Reduced  funding  for  the  Skills  Investments 
Plan  (PIC)  in  the  2026  budget  may  reduce 
incentives  to  participate  for  these  groups  (99), 
while  concerns  over  insufficient  alignment  of 
training with labour market needs persist (see 
Annex  13).  Basic  digital  and  numeracy  skills 
decline  with  age,  and  participation  in  adult 
learning drops sharply after 50, increasing the 
risk  of  skills  obsolescence.  STEM  enrolment 
remains  below 
limiting 
France’s  ability  to  meet  growing  demand  in 
Fragmented 
technology-driven 
governance  and  limited  outreach  reduce  the 
effectiveness 
programmes, 
especially  for  vulnerable  groups  in  priority 
urban  districts  (100)  and  outermost  regions. 
Further  efforts  to boost  the  labour  market 
relevance of vocational education and training 
(VET)  programmes  are  also  needed.  A 
involving 
comprehensive 
businesses  could  align  education  and  training 
systems  with  employers’  needs, 
turn 
boosting competitiveness. 

the  EU  average, 

strategy, 

training 

sectors. 

skills 

of 

in 

Addressing workforce shortages 
and improving care delivery to 
improve access to healthcare and 
spending efficiency 

The  health  system  faces  significant 
challenges  that  affect  health  outcomes 
and  equity  of  access.  Access  to  healthcare 
remains  uneven  due  to  persistent  workforce 
shortages,  uneven  distribution  of  health 
professionals and the growing share of people 
living  in  medical  deserts  (9.3%).  Unmet  need 
for  care  has  increased  in  the  last  years,  to 
above  the  EU  average,  especially  in  rural 
areas.  This  issue  is  compounded  by  a  low 

(99) INSEE, Formation et Emploi, 2025 ; Cour des Comptes, 

Évaluation du plan d’investissement dans les 
compétences (PIC), 2025. 

(100)“Quartiers prioritaires de la politique de la ville”. 

27 

 
 
KEY FINDINGS 

In  areas  covered  by  existing  CSRs,  France 
would benefit from: 

support measures to increase the uptake 
of basic digital technologies; 

•  strengthening  budget  consolidation 
efforts  by  reducing public  spending in 
a  lasting  manner,  while  improving  its 
efficiency  by  means  of  an  ambitious  and 
effective  spending  review  strategy,  with 
significant saving commitments; 

•  Pursuing further improvements in the 
fiscal  sustainability  of  the  pension 
system,  while  ensuring  fairness  and 
enhancing  its  contribution  to  employment 
and potential growth; 

•  simplifying 

burden 

regulation, 

further 
digitalising  public  services,  reducing 
administrative 
and 
restrictions  on  businesses,  especially 
tackling regulatory  barriers in the services 
sector,  including  in  the  retail  sector,  and 
removing  unnecessary  and  burdensome 
packaging  and  labelling  rules  for  traded 
goods; 

• 

• 

• 

reducing  administrative  complexity  to 
eliminate redundant operational costs and 
the  effectiveness  of  public 
improve 
policies 
fiscal 
in  order 
consolidation needs; 

to  support 

fostering  business  R&D,  particularly  by 
reforming the research tax credit to better 
target  SMEs,  could  boost 
innovation, 
increase  R&D  output,  and  generate 
savings; 

finding a successor to France 2030 to 
promote  disruptive  innovation  across  the 
entire  research-innovation  continuum  and 
support  economic  security  and  industrial 
sovereignty in key strategic sectors; 

•  accelerating 

the  digitalisation  of 
SMEs  thanks  to  dedicated  public 

28 

•  making 

further 

progress 

to 
decarbonise  the  economy,  including  by 
taking additional measures to decarbonise 
the  transport  sector,  stepping  up  energy 
efficiency  and  reducing  reliance  on  fossil 
fuels in buildings; 

•  accelerating  the  deployment  of  low-
carbon  energy  projects,  including  by 
stepping  up  investment  in  renewable 
energy  and  electricity  storage,  as  well 
as  grids  and 
interconnectors,  while 
finalising  the  designation  of  ‘acceleration 
areas’  and  strengthening  administrative 
capacity,  particularly  at  regional  and  local 
levels; 

•  promoting 

human 

capital 
development  by  addressing  barriers 
to  employment, 
in  particular  for 
young  people  and  by  reducing  skills 
mismatches, 
increasing 
participation  in  training  for  people  with 
low-level  skills  and  older  workers,  and 
improving  the  labour-market-relevance  of 
training  by  promoting 
education  and 
enrolment 
technology, 
in 
engineering and maths (STEM) subjects; 

including  by 

science, 

•  promoting  equity  and  quality 

in 
education, 
including  by  strengthening 
basic  skills  at  all  levels,  ensuring  that 
all 
enhanced 
disadvantaged  pupils,  and  by  tackling 
teacher  shortages  through  better  working 
conditions  and  professional  development 
opportunities; 

reaches 

support 

•  preventing  and  combating 

in-work 
and  child  poverty  by  reviewing  family 
and  housing  benefits,  promoting  quality 
jobs,  especially  for parents,  and  access  to 
disadvantaged 
quality 

childcare 

for 

 
 
resilience  planning  by  all  government 
levels; 

• 

improving  access  to  healthcare  by 
expanding  multidisciplinary  primary  care, 
improving regional distribution of services, 
stepping up prevention and more efficient 
allocation of resources; 

•  strengthening administrative capacity 
and  land  planning  in  the  outermost 
regions  to  boost  policy  implementation 
and the impact of investments. 

households,  and  by  reducing  territorial 
disparities  in  access  to  opportunities  and 
services. 

In other areas, France would benefit from: 

consumption 
taxes, 

•  shifting  taxes  away  from  production 
and 
factors 
to 
while 
environmental 
rationalising  fiscal  and  social  tax 
expenditures 
their  cost, 
improve  the  economic  neutrality  of  tax 
regime  and  increase  their  efficiency  in 
order to stimulate medium-term growth; 

reduce 

to 

• 

increasing  housing  affordability  by 
including 
supply, 
increasing 
investments for social and affordable 
fiscal 
housing  while 
social 
sustainability, 
housing  governance,  reducing  housing  tax 
expenditures,  simplifying  administrative 
procedures in construction; 

preserving 
the 

improving 

the 

industrial 

•  supporting  the  regions  most  affected 
by 
transition  and 
demographic  decline  through  integrated 
interventions  to  promote  diversification 
including 
to 
address bottlenecks, skilling and reskilling, 
local 
the  provision  of  essential 
and 
services; 

infrastructure  upgrades 

• 

• 

• 

start-ups  and 

improving access to finance for SMEs 
scaleups  by 
and 
encouraging  greater  participation  from 
both  institutional  and  retail  investors  to 
invest in equity and venture capital; 

implementing an electrification of end 
uses  plan,  including  objectives  across 
sectors,  especially  in  high  GHG  emitting 
sectors; 

improving  local  water  governance  to 
manage  competing  uses,  bridging 
investment 
water 
gaps 
infrastructures,  safeguarding  water 
quality  from  agricultural  and  industrial 
pollution  in  order  to  reduce  the  economic 
impact  of  water  scarcity,  while  ensuring 
integration  of  climate 
the  effective 

in 

29 

 
ANNEXES 

 
 
 
 
LIST OF ANNEXES 

A1.  CSR implementation 

Fiscal 

A2.  Fiscal developments and debt sustainability 

A3.  Taxation 

Productivity 

A4. 

Innovation to business 

A5.  Single market and industry 

A6.  Savings, investment and access to finance 

A7.  Effective institutional framework 

Sustainability 

A8. 

Industry decarbonisation, circularity and climate mitigation 

A9.  Affordable energy transition 

A10.  Climate adaptation, preparedness and environment 

Fairness 

A11.  Labour market 

A12.  Social policies 

A13.  Education and skills 

A14.  Social scoreboard 

A15.  Health and health systems 

A16.  Housing 

Horizontal 

A17.  Sustainable development goals 

A18.  Competitive regions 

A19.  Transport 

LIST OF TABLES 

A1.1. 
A2.1. 
A2.2. 
A2.3. 
A2.4. 
A3.1. 

CSR implementation and Commission assessment 
Projected change in age-related expenditure in 2025-2040 and 2025-2070 
Supplementary pension schemes - Scope for expansion 
Fiscal governance database indicators and public accounting maturity 
Implementation of reforms and investments underpinning an extension 
Taxation Indicators 

33 

36 

41 

41 

46 

50 

50 

56 

67 

74 

79 

79 

86 

92 

99 

99 

103 

107 

112 

113 

117 

124 

124 

127 

135 

35 
41 
42 
43 
44 
46 

 
 
 
Key innovation indicators 
Single Market and Industry 
Savings and Investments Union summary diagnostic 
Statistical Annex 
France. Selected indicators on better regulation practices for primary legislation 
Digital Decade key performance indicators: availability of digital public services 
Key clean industry and climate mitigation indicators: France 

A4.1. 
A5.1. 
A6.1. 
A6.2. 
A7.1. 
A7.2. 
A8.1. 
A10.1.  Key Adaptation Indicators 
A14.1.  Social Scoreboard for France 
A15.1.  Key health indicators 
A18.1.  Main development trends, challenges and the concentration of resources 
A18.2.  Key regional indicators (at NUTS 2 level) for France 
A19.1.  ERTMS deployment in France. 

LIST OF GRAPHS 

Primary spending evolution and compositional change 
Tax revenue by economic function in 2024, FR (outer ring) and EU-27 (inner ring) 
Tax wedge for single and second earners as a % of total labour costs, 2025 
Share of publications in the top 10% most-cited publications worldwide, 2010-2020. 
Business R&D investment (as % of GDP), 2014-2024 
R&D investment of French companies among world top 2000 R&D investors, by sector of activity (2018-2024) 

Composition of NFCs’ funding 
Capital markets and financial intermediaries 
Composition of HHs’ financial assets 
Trust in justice, regional/local authorities and in government 

Greenhouse gas emissions in the effort sharing sectors, 2005, 2023, and 2024 
Electricity and gas prices for household and non-household consumers, first half of 2025 
Low-carbon electricity generation vs. electricity wholesale prices, 2025 
France’s installed renewable capacity vs electricity generation mix 

A2.1. 
A3.1. 
A3.2. 
A4.1. 
A4.2. 
A4.3. 
A5.1.  Manufacturing industry production: total and selected sector, index (2021=100), 2015-2024 
A6.1. 
A6.2. 
A6.3. 
A7.1. 
A7.2.  Most time-consuming aspects of service delivery 
A8.1. 
A9.1. 
A9.2. 
A9.3. 
A11.1.  Key labour market indicators 
A11.2.  Labour market outcomes of young people 
A12.1. 
In-work poverty (% of employed) 
A12.2.  Population at risk of poverty and social exclusion (%) 
A13.1.  Enrolment in medium-level vocational education 
A15.1.  Life expectancy at birth, in years 
A15.2.  Treatable mortality 
A16.1.  House prices and housing loans in FR since 2008 
A16.2.  Borrowing cost for house purchase in FR and the EA since 2013 
A16.3.  House supply indicators in FR since 2005 
A16.4.  Housing affordability selected indicators 
A17.1.  Progress towards the SDGs in France 
A19.1.  France's road fatalities per million, 2024 
A19.2.  Road fatalities and the 2030 target 

LIST OF MAPS 

A18.1.  GDP per head compared to the EU average 
A18.2.  Net youth migration in France, ages 15-39, 2014-2023 (NUTS 3) 
A19.1.  TEN-T Cross-Border & National Priority Sections in France. 

34 

54 
65 
66 
72 
74 
75 
84 
97 
111 
114 
127 
128 
135 

40 
45 
47 
49 
50 
50 
62 
66 
67 
68 
73 
74 
80 
85 
86 
88 
98 
99 
104 
105 
108 
112 
113 
117 
117 
117 
122 
123 
136 
136 

127 
130 
136 

 
 
 
 
 
35 

 
 
ANNEX 1: CSR IMPLEMENTATION  

Table A1.1:  CSR implementation and Commission assessment 

(Continued on the next page) 

36 

France faces challenges in a wide range of policy areas, as identified in the country-specific recommendations (CSRs). France  was recommended, among other things, to simplify regulation, strengthen business R&D intensity, promote diffusion of innovation, promote SMEs digitalisation, accelerate the reduction of greenhouse gas emissions, accelerate the deployment of renewable energy projects, promote demand-side flexibility and storage technologies, ensure sufficient investment in electricity grid capacity, further address skills shortages, improve educational outcomes, strengthen the teaching profession and prevent and reduce child poverty. The Commission has assessed the degree of implementation of the 2025 CSRs considering the policy action taken by France to date*. To do so, the Commission has taken into account the information provided by France in its [Annual Progress Report – not received yet] as well as other information sources. This annex provides summary information on the policy actions taken or planned by France for each CSR. More detailed information on these actions is included in the relevant chapters and other annexes of the report. *CSR 2 is not assessed in CeSaR. RRP 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, to be reflected in the country reports. Progress with the cohesion policy is monitored in the context of the Cohesion Policy of the European Union. Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress  1.1 Reinforce overall defence and security spending and readiness while ensuring debt sustainability in line with the European Council conclusions of 6 March 2025. Total general government defence expenditure in 2026 is projected at 2.1% of GDP, corresponding to an increase of 0.2 ppt. compared to 2024.  Total general government defence expenditure in 2027 is projected at 2.2% of GDP, corresponding to an increase of 0.4 ppt. compared to 2024.  Substantial progress 1.2 Adhere to the maximum growth rates of net expenditure recommended by the Council on 21 January 2025, with a view to bringing an end to the situation of an excessive deficit. Annual and cumulated deviations in 2025 amounted to 0% of GDP and -0.3% of GDP, respectively. Annual and cumulated deviations in 2026 projected to 0.1% of GDP and -0.2% of GDP, respectively. The EDP is held in abeyance. Substantial progress 1.3 Implement the set of reforms and investments underpinning the extended adjustment period as recommended by the Council on 21 January 2025. Based on the information provided by France in its Annual Progress Report, the Commission finds that the implementation of the key steps of the reforms and investments that were due by 30 April 2026 seems to be broadly on track. However, the 2023 pension reform, on which a report is due by end-2027, has been suspended until January 2028 and the recasting of the exemptions of social security contributions around the minimum salary have yielded lower savings than committed. See table A.2.4 in Annex 2 of the Country Report.  Substantial progress 3.1 Further simplify regulation, reduce administrative burden and In mid-April 2026, the law on simplifying economic life was adopted. This law aims to reduce administrative burden for private companies. The law establishes a Council for Simplification for Enterprises, attached to the Prime Minister, that will include  Some progress  
 
 
 
     
 
Table (continued) 

(Continued on the next page) 

37 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress  representatives of businesses. It will carry out ‘tests entreprises’, i.e. deliver opinions on draft laws, ordinances, regulatory texts and draft EU acts that have an impact on businesses. It also eases setting up of industrial and infrastructure projects and data centres. The law facilitates energy transition projects, businesses’ access to public procurement and business transfers for small undertakings.   3.2 regulatory restrictions on firms, in particular in the services sector. The adoption of the law simplifying the economic life includes provisions that will allow SMEs to put a term to their damage insurance contract any time after the first anniversary of the contract. The law also includes provisions that should increase the transparency of banking fees and costs for very small enterprises. But those measures are limited compared to the scope of the CSR. In particular, France has taken no measure to reduce restrictions in the retail sector and for regulated professions.  Limited progress 3.3 Strengthen business R&D intensity by better targeting public support schemes that incentivise business R&D and No significant measure announced, adopted or implemented.  No significant reform to foster business R&D has been announced, nor any step to design an investment plan that will succeed to France 2030.   No progress 3.4 promote diffusion of innovation, and by making the ecosystem that supports collaboration between academia and businesses more effective. No comprehensive reform has been announced to enhance the efficiency or streamline France’s knowledge valorisation ecosystem. Among the multiple schemes in place to strengthen academia-business linkages, the Institut Carnot programme underwent a revision in 2026 (primarily to adjust eligibility rules). A review of the governance and financing model of the French Sociétés d'Accélération de Transferts de Technologies (SATT) and more broadly to improve technology transfer at local level was launched in 2025 with the objective of a new organisational set up by 2027.  Limited progress 3.5 Improve SME digitalisation, including by improving the effectiveness of existing public support measures dedicated to this objective. France introduced a new plan 'Osez l'IA' in July 2025, which aims at diffusing AI technologies in 100% of large firms and 80% of SMEs. While the plan is not specifically targeted at SME digitalisation it will contribute to the digitalisation of the whole economy through AI diffusion.  Limited progress 4.1 Accelerate the reduction of greenhouse gas emissions by removing barriers and providing incentives to While France has measures in place to incentivise low-emission vehicles these measures were broadly already in place when France Transport law tabled in February 2026 (aims to redirect the full revenue from future motorway concessions into the Limited progress  
 
 
     
 
Table (continued) 

(Continued on the next page) 

38 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress  increase the demand and supply of low-emission transport modes and vehicles, received the 2025 CSR, such as measures to encourage the electrification of company fleets. Some existing instruments based on CEE (certificats d’économie d’energie) (such as support to purchase clean vehicles, the social leasing scheme) have benefitted from higher subsidies for households in 2026 due to the current market price for certificates, while tax incentives penalising cars according to emissions and weight have been increased as of January 2026. France adopted in February 2026 its third multiannual energy programme (PPE-3), which includes electrification targets for the transport sector and a clean mobility strategy. national transport investment fund (Agence de financement des infrastructures de transport de France (AFITF), covering all modes, including rail, waterways, and public transport networks). The electrification plan presented by the Prime Minister mid-April puts transport at its core to accelerate the deployment of electric mobility, which require rapid implementation and adequate funding. 4.2 by stepping up energy efficiency and reducing reliance on fossil fuels in buildings through incentivising deep renovations. No new measures adopted. Limited increase in the number of deep renovations with MPR (MaPrimeRenov), and very far from the national low carbon strategy (SNBC) target. Strengthened shift towards energy saving certificates ‘CEE’ (certificats d’économie d’énergie) in the Budget Law 2026 (increased replacement of the subsidy scheme MaPrimeRenov by CEE) Limited progress 4.3 Accelerate the deployment of renewable energy projects including by further streamlining permitting procedures and by completing the setting up of the 'renewables acceleration areas'. No new measures adopted. Adoption of the third multiannual energy programme (PPE 3) in February 2026, setting specific targets per renewable energy technology which are below the draft PPE-3, indicating less ambition in terms of deployment of renewables. France installed more new renewable energy source capacity in 2025 than 2024 (in particular on solar), but is not on track to align with the EU’s collective target for renewable energy by  2030.  Some progress 4.4 Promote demand-side flexibility and storage technologies, and France's Transmission System Operator (RTE) launched carbon-free flexibilities calls for tender (August 2024) for 2025 and S1 2026. Adoption of two decrees to manage renewable energy power plants’ curtailment under negative prices. Revision of the peak/off-peak scheme to shift consumption to daytime, helping absorb the solar duck curve and ease evening demand peaks.  Some progress 4.5 ensure sufficient investment in electricity grid capacity France's Transmission System Operator (RTE) adopted its 10-year investments plan, representing 100 bn EUR over the next 15 years  Some progress 4.6 including in cross-border No new measures, nor  Some progress  
 
 
     
 
Table (continued) 

(Continued on the next page) 

39 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress  interconnections. interconnections projects 5.1 Further address skills shortages by supporting access to training for low-skilled and older people and improving the labour market relevance of the training offer. The budget allocation of the main training schemes has been decreased in the 2026 budget.  Alignment of the training offer with labour market needs remains limited. The law of 24 October 2025 transposing national interprofessional agreements in favour of the employment of experienced employees introduces new measures to support access to reskilling opportunities, notably for senior workers.    Some progress 5.2 Improve educational outcomes and reduce inequalities in education including by ensuring that all disadvantaged students benefit from improved educational support. No significant new measures taken in the area of the CSR, apart from the ‘Collège en progrès’ programme to be implemented in 800 middle schools with the highest concentrations of academic underachievement. However, its scope remains limited and it is not implemented yet.  Limited progress 5.3 Strengthen the teaching profession, including by 5.4 improving working conditions and initial and continuous training of teachers. France has introduced a reform of initial training of teachers,  which is currently being implemented.   Some measures have been taken to strengthen the digital skills of future teachers, and 9th grade teachers received career guidance training in 2025, but ongoing continuous training initiatives fail to drive systemic reform. No measures were taken to improve other aspects of the working conditions of teachers.  The 2026 budget acted the suppression of 4000+ teachers’ posts, partly justified by the demographic decline. Yet the potential to reduce size classes has not been fully exploited.  Some progress 5.4 Prevent and reduce child poverty, by removing barriers that hinder parents' labour market integration and access to quality early childhood education and care for the most disadvantaged households. No measures were recently adopted to support families’ income. On the contrary, since 1/3/2026 families with two children will receive the top-up for older children when the second child reaches 18 instead of 14, reducing the duration of the benefit and the number of households receiving it.  Despite an adjustment of the childcare funding (CMG) in September 2025, concerns remain regarding both access and quality of the childcare offer. A reform of early childhood public service has been introduced in 2025. A reform has been announced with an objective to rationalise social benefits and reduce non-take up. The proposal for an "Allocation sociale unique" (single social allowance) could be introduced in 2026 Limited progress  
 
 
     
 
Table (continued) 

Source: France’s reporting and Commission assessment 

40 

Recommendation text Main measures adopted or implemented  By 30 April 2026  Preparatory steps/ credibly announced measures By 30 April 2026 Assessment of progress  However, effectiveness in increasing ECEC participation for the most disadvantaged households has not been evaluated.   
 
 
 
 
 
 
 
 
 
 
 
 
   
 
FISCAL 
ANNEX 2: FISCAL DEVELOPMENTS AND DEBT SUSTAINABILITY 

This annex discusses selected topics in public 
finances  and  developments  on 
fiscal-
structural  CSRs  addressed  to  France  in  July 
2025.  These  include  a  call  to  reinforce  defence 
spending  and  adhere  to  the  maximum  growth 
rates  of  net  expenditure,  in  line  with  the  Council 
Recommendation of 21 January 2025. 

endorsing 

On 21 January 2025, the Council adopted the 
Recommendation 
France’s 
medium-term  fiscal-structural  plan.  The  plan 
includes  a  fiscal  adjustment  over  seven  years.  At 
the  same  time,  the  Council  also  adopted  a 
Recommendation  under  Article  126(7)  TFEU  to 
correct  the  excessive  deficit  in  France  by  2029 
(101)(102).  

Graph A2.1: Primary spending evolution and 
compositional change 

Source:  Eurostat 
Note: Based on economic literature, the categories considered 
to have higher growth impact include education, R&D, health, 
transport and communication (See Barbiero and Cournede 
(2013), Gemmel et al. (2016), Lupu et al (2018), Cepparulo 
and Mourre (2020) and OECD (2025)).   

Developments in government balance, 
debt and public expenditure (103) 

France’s  government  deficit  amounted  to 
5.8%  of  GDP  and  the  government  debt-to-
GDP ratio  amounted  to  112.6%  at  the  end 
of 2024.  In  2025,  France’s government  deficit 
dwindled to 5.1% of GDP, mainly due to revenue-
increasing  measures  of  around  0.5%  of  GDP, 
whereas expenditure-decreasing measures, mainly 
on  public  consumption  and  social  transfers, 
amounted  to  almost  0.3%  of  GDP. Based  on  the 
Commission  2026  Spring  Forecast,  France’s 
general  government  deficit  is  set  to  remain  at 
5.1%  of  GDP 
the  general 
government  deficit,  at  unchanged  policies, 
is expected  to  increase  in  2027,  to  5.7%  of  GDP, 
increase  of 
the  projected 
mainly  due 
expenditure 
GDP, 
of 
57.8% 
remaining above the EU average. 

in  2026.  After, 

to 

to 

Public  investment  is  set  to  remain  broadly 
stable  at  a  relatively  high  share  of  GDP. 
investment  was  preserved  during  the 
Public 
pandemic and increased slightly in the aftermath. 
Between 2025 and 2027, it is expected to remain 
at  around  4.3%  of  GDP,  slightly  above  the  4.2% 
registered in 2019 and despite the phasing out of 
RRF support.  

While  expenditure  with  a  higher  impact  on 
GDP had remained broadly stable over three 
decades, it has slightly increased since 2019. 
This  may  be  related  with  the  impact  of  the  RRF, 
facilitating  a  more  quality-based  fiscal  strategy. 
Zooming in on the composition of spending, social 
protection  accounts  for  the  largest  share  of  total 
expenditure  (above  40%),  followed  by  health, 
economic affair and general public services above 
10%  of 
total  spending.  Since  2019,  other 
economic  affairs  spending  has  increased  strongly 
(see  Graph  A2.3).  Spending  on  transport  housing, 
communication,  environment  R&D,  and  defence 
has risen more modestly, with the rise in defence 

(101) OJ C, C/2025/659, ELI: EUR-Lex - 32025H00659 – EN – 

EUR-Lex. 

(102) Compliance by France with the maximum growth rates of net 
expenditure recommended by the Council is assessed in 
COM(2026)200. 

(103) Figures underpinning fiscal surveillance (net expenditure 
growth) are provided in the Fiscal Statistical Tables 
(SWD(2026)200) providing background data relevant for the 
assessment of the budgetary policies of the Member States. 

41 

510152035404550200720082009201020112012201320142015201620172018201920202021202220232024a) Evolution (% of GDP)Primary expenditureSpending with higher impact on GDP (rhs)-0.60-0.40-0.200.000.200.400.600.80EducationPublicorderCultureHealthGeneralservicesSocialprotectionInterestspendingEnvironmentDefenceR&DHousingCommunicationTransportOther economicb) Compositional change 2024-2019 (% of total spending) 
 
 
   
 
 
 
 
spending  reflecting  recent  security  developments. 
By  contrast,  spending  on  health  and  education 
expenditure  has  declined.    This  trend  deserves 
attention,  as  these  categories  are  generally 
considered growth-friendly spending.  

pension  and  education  spending,  which  offset  the 
expected  rise  in  healthcare  and  long-term  care 
the  highest 
spending.  France  currently  has 
spending 
items  of  all 
levels  on  age-related 
Member States.  

in  2024  and 

France  has  a  high  tax  burden,  with  a 
significant  weight  of  taxes  that  may  hinder 
economic  growth.  At  44.3%  of  GDP  in  2025, 
total  tax  revenues  (including  compulsory  social 
security  contributions)  in  France stand  well  above 
the  EU-27  (39.9%).  Revenues  rose  to  52.1%  of 
GDP in 2025 and are expected to increase further, 
to  52.3%,  in  2026  according  to  the  Spring  2026 
Forecast  (104).  The  implicit  tax  rate  on  labour,  at 
38.8% 
labour  taxes  borne  by 
employers  are  also  high  compared  with  the  EU 
average.  Moreover,  taxes  on  production  (4.4%  of 
GDP),  deemed  highly  detrimental  to  economic 
activity, are twice as high as in the euro area and 
the  European  Union,  whereas  consumption  taxes, 
less distortive and with a broad tax base, including 
environmental  taxes,  are  relatively  low  in  the  tax 
mix in France (see Annex 3). In turn, the numerous 
fiscal and social tax expenditures contribute to the 
complexity  of  the  tax  system  and  imply  a  heavy 
budgetary burden of almost 6% of GDP in 2025.  

committed 

Public pension spending as a share of GDP is 
projected to decline by about 0.5-1 pp. in the 
long term. By 2070, public pension outlays would 
represent  around  13.5%  of  GDP,  compared  to  an 
EU  average  of  about  12%.  In  its  medium-term 
fiscal-structural  plan,  France 
to 
preserve  the  impact  of  the  2023  pension  reform 
on  the  financial  sustainability  of  the  system  over 
the  period  2026-2040.  The  reform  increased  the 
statutory retirement age from 62 to 64 years and 
speeded up the increase in the contribution period 
required  to  receive  a  full  pension,  to  43  years. 
However, 
the 
implementation  of  these  two  main  pillars  was 
suspended until January 2028 and it is not certain 
that 
this 
it  will  be 
commitment at risk. 

re-activated,  placing 

the  budget 

for  2026, 

in 

Supplementary pension schemes can enhance 
the  resilience  of  the  pension  system  by 
diversifying  retirement  income  sources.  In 

Table A2.1:  Projected change in age-related expenditure in 2025-2040 and 2025-2070 

Source: 2024 Ageing Report (EC/EPC). 

Cost of ageing 

in  France 

Total  age-related  spending 
is 
projected to remain about stable, both in the 
medium term and the long term, though at a 
level above  the  EU  average  (see  Table  A2.1). 
The overall stability is due to a projected decline in 

France,  however,  their  uptake  remains  limited:  by 
end-2024,  private  pension  assets  amounted  to 
around  13%  of  GDP  while  participation  covered 
around  42%  of  the  working-age  population  (105). 
This  coincides  with  rising  medium-term  public 
pension  spending  pressures  and  a  projected 
decrease  in  the  replacement  rate  by  1.1 pps. 

(104) Data retrieved from the AMECO database (https://economy-

finance.ec.europa.eu/economic-research-and-
databases/economic-databases/ameco-database_en)  

(105) Source:  OECD  Pension  Market  in  Focus  2025.  The  highest 
participation rate in at least one supplementary pension plan 
is reported. 

42 

FR29.2-0.10.40.3-0.50.129.2FREU24.30.50.30.4-0.30.925.2EUFR29.2-0.70.70.7-0.70.029.2FREU24.30.20.60.8-0.31.325.6EUageing-related expenditure change in 2025-2070 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotalageing-related expenditure change in 2025-2040 (pps GDP) due to:ageing-related expenditure pensionshealthcarelong-term careeducationtotal 
 
 
 
      
 
 
 
 
 
 
Table A2.2:  Supplementary pension schemes - Scope for expansion 

Source: European Commission. 

between  2025  and  2040 
A2.2) (106). 

(Tables  A2.1  and 

Public healthcare expenditure is projected to 
be  8.4%  of  GDP  in  2025  (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.  

Public  expenditure  on  long-term  care  is 
projected at 1.9% of GDP in 2025 (above the 
EU  average  of  1.7%)  and  is  expected  to 
increase by 0.3 pps of GDP by 2040 and by a 
further 0.4 pps of GDP by 2070. 

National fiscal frameworks 

The High Council of Public Finance (HCFP) has 
a  relatively  narrow  mandate,  focusing  on  the 
core  tasks  of  assessing  forecasts  and  monitoring 
specific  aspects  of  the  compliance  with  fiscal 
rules.  Despite  the  requirement  in  the  Regulation 
473/2013  that  euro  area  IFIs  should  produce  or 
endorse  the  macroeconomic  forecast,  the  HCFP 
reports having the mandate of only assessing the 
macroeconomic forecast underlying the budgetary 
plans  of  the  government.  The  HCFP  is  deeply 
embedded in the National Audit Office (NAO), with 
staff working part time for both the HCFP and the 
NAO and its funding flowing from the overall NAO 
budget.  While  allowing  the  HCFP  to  benefit  from 
the influence of the Court, this arrangement could 
make  it  more  difficult  to  develop  a  clear  IFI 
identity and for the public to discern the particular 
role  of the HCFP. The freedom to communicate is 
significantly  curtailed  by  the  limit  on  when  the 
is  allowed  to  publish.  Although  some 
HCFP 
outreach  activities 
the 
communication  strategy  nor  the  policy  dialogue 

take  place,  neither 

with  the  government  is  well  developed.  The  HCFP 
reported some issues with access to information in 
recent years, mainly related to the lack of detail in 
the information provided. It reports that there are 
no MoUs in place with key information providers. 

Spending  reviews  have  provided  useful 
intellectual  input  but  are  not  yet  a  decisive 
fiscal instrument. Since 2023, under the banner 
of  the  Assises  des  finances  publiques,  spending 
reviews  have  become  an  institutionalised  multi 
annual  tool.  Recent  spending  reviews  have  been 
targeted,  looking  into  specific  spending  areas. 
Around EUR 10 billion savings have been identified 
and  included  in  the  budgetary  plans  for  2025-
2026. 

level.  France 

France is an early-mover on green budgeting. 
Starting  with  the  2020  budget,  the  country  has 
been scoring environmental and climate effects of 
the  budget,  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.  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,  making  France  a  frontrunner  at 
subnational 
is  moving  towards 
actively  informing  the  budgetary  process  rather 
than  only  providing  transparency  ex-post.  This 
includes  since  2024  the  submission  each  year  to 
Parliament  of  a  Multiannual  Green  Transition 
Financing  Strategy  (SPAFTE),  setting  out  strategic 
priorities to ensure that all stakeholders step up to 
fund  the  green  transition  in  France  over  the  next 
years. This also includes a structured dialogue with 
civil  society.  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. (107) France 
is a frontrunner on ex post evaluations, assessing 

(106) The  (gross)  replacement  rate  refers,  depending  on  data 
availability,  to  both  public  and  private  pensions.  It  is  based 
on projections from the 2024 Ageing Report. 

(107) Budget vert | budget.gouv.fr 

43 

Assets in 2024 (% GDP)Participation in 2024 (% working-age population)FR12.9-1.142.4FREU32.4-2.855.9EUGross replacement rate at retirement: (pps change 2025-2040)  
 
 
 
      
 
 
Table A2.3:  Fiscal governance database indicators and public accounting maturity 

(1) The Country Fiscal Rule Strength Index (C-FRSI) shows the strength of national fiscal rules aggregated at country level based 
on i) the legal basis, 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. 
The score for public accounting reflects the degree of maturity in relation to the International Public Sector Accounting Standards 
(IPSAS). Countries with an accounting maturity of 70% or more in relation to IPSAS are deemed to apply accrual accounting. For 
more information, see the report on public accounting in the EU (COM(2025)746 and accompanying Staff Working Document 
SWD(2025)396). 
Source: Fiscal Governance Database, European Commission 

all  six  environmental  objectives  of 
Taxonomy for sustainable activities. 

the  EU 

layers 

redundant 

operational 

Overlapping  administrative  layers  in  France 
and 
generate 
coordination  costs.  The  coexistence  of  multiple 
administrative 
is  associated  with  an 
increased  entanglement  of  responsibilities  and 
imply  complex 
relationships  across 
government  bodies.  However,  many  times  they 
entail  redundant  costs  without  improving  the 
quality  of  the  services  provided.  Such  complexity 
hinders  the  effective  steering  of  expenditure  and 
revenues in line with budgetary commitments. 

financial 

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

call 

from 

The  CSRs 
for 
for  France  also 
implementing  the  set  of  reforms  and 
investments  underpinning  the  extension  of 
the adjustment period. This set is composed of 
commitments 
commitments 
extending  previously  existing  RRP  measures,  as 
well  as  some  additional  commitments  of  reforms 
into  account 
and 
the 
in  the  Annual  Progress 
information  provided 
Report,  Table  A2.4  shows  the  implementation 
status of the set of reforms and investments due 
in 2025 and the first half of 2026. 

investments.  Taking 

the  RRP, 

44 

2024FranceEU AverageCountry Fiscal Rule Strength Index (C-FRSI)14.4014.81Medium-Term Budgetary Framework Index (MTBFI)0.780.722025 Public accounting maturity of general government90%65% 
 
        
 
Table A2.4:  Implementation of reforms and investments underpinning an extension 

The progress of each backward-looking key step (i.e., those scheduled for completion by 30 April 2026) is either classified as 
either ‘completed’ or ‘factual information is provided’. The status of forward-looking key steps in 2026 not yet completed remains 
blank and those due after December 2026 and the end of the plan do not appear in the table, as these will be assessed by the 
Commission in future APRs Country Reports.  
* 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 7.14a 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 and 2026 budgets. 
(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. 
Source:  Annual Progress Report of France and Commission’s assessment. 

45 

MeasureKey stepsRecommended implementation dateCOM assessment 2026 Reform of the unemployment insurancestep 1.1: Entry into force of new provisionsQ4 2022Completed *Reforms under the Research programming lawstep 2.1: Increase of R&D endowments by compared to 2020Q3 2025Under 5th RRP payment request still pending, thus not assessedstep 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 2025Completedstep 4.1: Financing decisions linked to projects financed under RRPQ4 2024Completed *step 4.2: Ex ante assessment report of macroeconomic impacts of overall planQ4 2025Completed *step 4.3: Commitment of the whole envelope of the planQ4 2026Q2 2025Completed (1) **Q2 2026Q3 2025Completed (1) **Q3 2026Q3 2025CompletedQ3 2026Reformoftheunemploymentinsurancefollowingnegotiations between social partnersstep 6.1: Entry into force of the new rules stemming from the negotiation among social partnersQ2 2025Completedstep 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 2027The reform was  suspended until January 2028.step 8.1: First reduction of the exemptions from health and family contributions, to yield at least EUR 2.5 bn additional savingsQ1 2025Completed but with slightly lower savings: 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.step 8.2: Pursuit of reduction of the exemptions from health and family contributions, to yield at least EUR 2.5 bn additional savingsQ1 2026A reform was implemented in 2026, simplifying the system of exemptions but without additional savings as set out in the commitmentsstep 9.1: Entry into force of the lawQ4 2025CompletedQ4 2025CompletedQ4 2026step 9.3: Annual report on impactQ4 2026Q3 2025CompletedQ3 2026Q3 2025CompletedQ3 2026Investments under the multiannual plan France 2030ReformsundertheLawontheaccelerationofrenewable energy productionReformofthecontributionratetotheCaisseNationaledeRetraitesdesAgentsdesCollectivitésLocales (CNRACL)Reformofthegeneralreductionsinsocialsecuritycontributions relative to the minimum wage (SMIC)ReformsunderthenewLawonsimplificationofthebusiness environmentReformsandinvestmentsundertheLawongreenindustrysteps 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 supportReform of tax and social expendituressteps 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)step 9.2: Annual adoption of implementing decreesstep 5.1: Conduct annual spending reviewsstep 5.2: Effective integration of results of spending reviews in the annual draft budgetstep 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)Reformsstemmingfromtheevaluationofthequalityof public spending via reinforced spending reviews 
 
   
 
ANNEX 3: TAXATION 

This  annex  provides  an 
indicator-based 
overview  of  France’s  tax  system.  It  includes 
information  on  the  tax  mix,  on  competitiveness 
and fairness aspects of the tax system, and on tax 
collection and compliance. In the area of taxation, 
the  2025  country-specific  recommendations  for 
implementing  the  set  of 
France  recommend 
reforms  and 
the 
extended adjustment period for France’s medium-
term  fiscal-structural  plan,  which  highlighted 
challenges  in  tax  expenditures  evaluation  and 
rationalisation. 

investments  underpinning 

France has one of the highest percentages in 
the  EU  of  tax  revenues  as  a  proportion  of 
GDP,  but  fiscal  sustainability 
is  still  a 
concern.  With  tax  revenues  equivalent  to  43.5% 
of  GDP  in  2024,  France  is  significantly  above  the 
EU-27  average  of  39.4%,  despite  a  continuous 
narrowing  of  the  gap.  The  main  sources  of  tax 
revenue  in  2024  were  taxes  on  labour  (51.5%  of 
all  tax  revenue),  which  was  in  line  with  the  EU 
average,  followed  by  taxes  on  consumption 
(24.7%  of  all  tax  revenue),  which  was  below  the 
EU average, and taxes on capital (23.7% of all tax 
revenue),  which  was  above  the  EU  average  (see 
Graph A3.1). 

Graph A3.1: Tax revenue by economic function in 
2024, FR (outer ring) and EU-27 (inner ring) 

Source: Taxation Trends Data, DG TAXUD 

France  has  high  statutory  and  effective 
corporate income tax (CIT) rates (108). France’s 
top statutory CIT rate is 25.8% (compared with an 
EU  average  of  21.2%)  and  its  forward-looking 
effective  average  corporate-tax  rate  stands  at 
26.0%  in  2024,  one  of  the  highest  in  the  EU 
(against  an  EU  average  of  19.3%).  Due  to  fiscal 
constraints,  the  temporary  increase  of  corporate 
large  companies  will  be 
income 

taxes  for 

(108) Data on Taxation Trends - Taxation and Customs Union - 

European Commission, March 2026. 

maintained  in 2026 and the phasing out  of taxes 
on production is maintained to occur only in 2030.  

Since  2025  France  has  been  levying  an 
exceptional  surtax  on  corporate  income.  The 
rate  is  (i) 20.6%  for  companies  with  total  sales 
above  EUR 1 billion,  and  (ii) 41.2%  for  companies 
with total sales above EUR 3 billion. For 2026, the 
threshold  for  total  sales  of  the  first  of  the  two 
taxes  has  been  increased  to  EUR 1.5 billion.  The 
tax  is  expected  to  raise  EUR 7.3 billion (109).  The 
‘CVAE’  tax  on  corporate  added  value  raised 
EUR 4.8 billion  in  tax  revenue  in  2024.  This  tax 
concerns 
over 
EUR 0.5 billion, but is set to be abolished in 2030. 

firms  with 

sales 

total 

France  has  numerous, high  production taxes. 
The  Montaigne 
Institute  barometer  calculated 
them  as  second-highest  in  their  EU  sample,  at 
3.8% 
in  2023,  compared  to  an  average  at 
2.5% (110).  The  reform  of  the  CVAE  tax  in  2022 
slightly  decreased  the  cost  of  production  taxes 
(3.9%  in  2022).  However,  other  recent  production 
taxes increases have partially offset the decreased 
CVAE (such as the property contribution tax (‘CFE’) 
and  the  transport  compensation  tax  increases. 
France  has  a  wide  range  of  production  taxes,  on 
property,  wages  and  other  assets,  general  and 
sectoral. 

France  has  created  new  capital  taxes  and 
modified  others  to  target  tax  avoidance  by 
wealthy  individuals.  A  new  tax  on  financial 
assets,  applicable  to  passive  assets  held  by 
holding  companies,  has  been  created  for  holding 
assets  with  a  minimum  value  of  EUR 5 million 
controlled by an individual or a family with at least 
50%  of  passive  income.  Taxed  assets  are  non-
operating  assets,  excluding  financial  securities 
(shares,  bonds)  and  cash  from  the  tax  base.  The 
expected 
is 
from 
EUR 100 million.  The  Dutreil  pact (111)  will  also  be 
amended:  the  tax  relief  will  exclude  assets  not 
exclusively  used  for  business  purposes.  This  aims 
to  prevent  the  transfer  of  personal  assets 

this  measure 

revenue 

(109) Draft Finance bill for 2026, text for which the government 

assumes responsibility under Article  49.3 of the Constitution, 
21 January 2026. 

(110) Institut Montaigne, ‘European Production Tax Barometer 

2025’, April 2025. 

(111) A French tax incentive designed to facilitate the transfer of 
family businesses by exempting 75% of the value of the 
company’s shares from inheritance or gift taxes. 

46 

51.526.821.651.524.723.7Taxes on labourTaxes on consumptionTaxes on capital 
 
      
 
 
 
 
Table A3.1:  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 2024. EU-27 refers to the median value. For more data on tax revenues as well as the methodology 
applied, see the Data on Taxation Trends webpage. 
Source: European Commission, OECD, ISORA. 

belonging  to  business  owners  during  the  transfer 
of a family business. Furthermore, beneficiaries of 
the  Dutreil  exemption  will  now  have  to  retain  the 
received  assets  for  six  years,  instead  of  the 
current four, to qualify for this tax advantage. 

The  balance  across  the  different  sources  of 
tax  revenue  is  overall  similar  to  the  EU 
average,  but  there  is  scope  for  making  the 
tax  structure  more  growth-friendly  while 
contributing  to  the  fiscal  sustainability 
objective.  Fair  and  well-designed  consumption 
taxes can release the pressure on labour taxation 
while  supporting  other  policy  objectives,  such  as 
the protection of the environment.  

in 

industrial 

investments 

corporate  fleets.  In  February  2026,  a  new  law 
extended  the  tax  credits  adopted  in  2024  to 
attract 
green 
technologies from France-based undertakings until 
December  2028 (113).  On  the  other  hand,  excise 
duty  reductions  on  fuel  for  commercial  transport 
represented  an 
and  agricultural/forestry  use 
expenditure  amounting  to  EUR 2.9 billion  in  2024. 
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). There is still scope to 
improve existing and introduce new environmental 
taxes  focused  on  resource  use  and  pollution.  This 
would  generate 
revenue  and  send  stronger 
environmental price signals in line with the polluter 
pay principle (see Annex 8) (114). 

Revenues  from  environmental  taxes  have 
decreased  in  recent  years.  In  2024,  revenue 
from environmental taxes as a percentage of GDP 
stood at 1.9% (up from 1.8% in 2023), below the 
EU  average  of  2.1%  (Table  A3.1).  In  2023,  total 
was 
environmental 
EUR 46.6 billion (112).  The  2025  Finance  Bill 
incentives  aimed  at  greening 
introduced  tax 

revenue 

tax 

(112) Revenues from energy and transport taxes constituted, 
respectively, around 79.8% and 13.0% of the total 
environmental tax revenues while revenues from resources 
and pollution taxes amounted to around 1.0% and 6.2%, 
respectively (source: Eurostat) 

47 

(113) The C3IV tax credit for investments in the green industry 

covers four sectors: batteries, wind power, solar panels, and 
heat pumps. The rate is 20% in general, 30% for medium 
firms and 40% for small firms, further top-ups can be 
obtained for certain regions. 

(114) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU's economic governance framework, 
2025. 

2019202220232024202520192022202320242025Tax structureTotal taxes (including compulsory actual social contributions) (% of GDP)45.445.943.943.539.939.739.039.4Taxes on labour (% of GDP)23.123.122.522.420.620.119.920.3of which, social security contributions (SSC, % of GDP)14.814.914.614.713.012.712.713.0Taxes on consumption (% of GDP)11.711.410.810.811.210.910.510.6of which, value added taxes (VAT, % of GDP)7.27.57.37.17.17.47.17.1Taxes on capital (% of GDP)10.611.410.610.38.18.78.58.5Personal income taxes (PIT, % of GDP)9.59.89.59.49.69.49.39.6Corporate income taxes (CIT, % of GDP)2.83.42.92.92.63.23.23.1Total property taxes (% of GDP)4.64.13.73.42.22.11.91.8Recurrent taxes on immovable property (% of GDP)3.02.22.02.01.21.00.90.9Environmental taxes (% of GDP)2.32.01.81.92.62.12.12.1Effective carbon rate in EUR per tonne of CO2 equivalentsnana87.9nanana84.8naTax wedge at 50% of average wage (single person) (*)24.821.922.022.122.132.431.631.531.531.6Tax wedge at 100% of average wage (single person) (*)45.344.944.744.644.740.139.739.939.940.0Corporate income tax - effective average tax rates (1) (*)35.024.224.226.020.019.219.019.3Difference in Gini coefficient before and after taxes and cash social transfers (pensions excluded from social transfers) (2) (*)8.510.810.09.67.88.07.97.8Outstanding tax arrears: total year-end tax debt (including debt considered not collectable) / total revenue (in %) (*)4.07.88.8na31.832.630.7naVAT gap (% of VAT total tax liability, VTTL) (**)6.85.15.67.410.57.38.2naEU-27FranceProgressivity & fairnessTax administration & complianceBy tax baseSome tax types 
 
 
 
      
 
The  tax  and  benefits  system  and  the 
progressivity  of  labour  taxation  help  to 
reduce  inequalities.  In  2024,  income  inequality 
as  measured  by  the  Gini  coefficient was  reduced 
by  9.6 points  due  to  taxes  and  social  transfers 
(compared  to  an  EU  average  of  7.8 points)  (115). 
The impact of social transfers (excluding pensions) 
on poverty reduction has been declining in the past 
years (see Annex 12). 

France  has  a  comparatively  high  labour  tax 
wedge (116)  especially  at  higher  earnings 
levels, but a relatively low labour tax wedge 
at  very  low  earnings  levels  (see  Graph A2.2). 
While  a  relatively  low  tax  wedge  at  low  earnings 
can support entry into employment, high marginal 
tax  rates  (‘wage  traps’)  can  reduce  incentives  to 
increase  one’s  earnings  from  low  levels  (see 
Annex 11). 

At  the  same  time,  joint  taxation  holds  back 
the  participation  of  second  earners  in  the 
labour market. The tax wedge of second earners 
earning  67%  of  the  average  wage  (at  42.9%)  is 
significantly  above  the  EU  average 
(38.5%), 
weakening  employment 
incentives  for  second 
earners.  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. 

Temporary  contributions  for  high  incomes 
are maintained. The CDHR differential tax on the 
highest  incomes,  introduced  in  2025,  has  been 
extended  until  the  deficit  falls  below  3%  of  GDP. 
This  tax  sets  a  minimum  tax  rate  of  20%  for 

(115) The  Gini  coefficient  measures  the  extent  to  which  the 
distribution  of  income  within  a  country  deviates  from  a 
perfectly  equal  distribution.  A  coefficient  of  0  expresses 
perfect equality where everyone has the same income, while 
a coefficient of 100 expresses full inequality where only one 
person has all the income. 

(116) The  tax  wedge  is  an  indicator  of  the  tax  burden  on  labour 
that  can  be  assessed  at  various  levels  of  earnings.  It  is 
defined as the sum of personal income taxes, employee and 
employer  social-security  contributions,  as  well  as  other 
mandatory contributions, expressed as a percentage of total 
labour costs (the sum of the gross wage and social-security 
contributions  paid  by  the  employer).  Tax  wedge  data  in  the 
2026  country  reports  are  based  on  the  EUROMOD  model, 
calculated  by  the  Joint  Research  Centre  of  the  European 
Commission,  while  in  the  past  country  reports  they  were 
based  on  the  OECD  tax  and  benefit  model.  While  the 
underlying  methodology  is  very  similar,  differences  in  the 
assumptions  can  lead  to  different  results  between  both 
models.  

couple  with  an  expected 

households  with  incomes  exceeding  EUR 250 000 
per year for a single person and EUR 500 000 for 
a 
revenue  of 
EUR 650 million  for  2026.  The  revenue  for  2025 
turned  out  to  be  only  EUR 400 million,  against 
EUR 1.9 billion initially budgeted, possibly showing 
the effects of tax planning behaviour (117). 

Graph A3.2: Tax wedge for single and second 
earners as a % of total labour costs, 2025 

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

to  TEs  amount 

The  high  number  of  tax  expenditures  (TEs) 
contributes  to  the  complexity  of  the  French 
tax  system  and  represents  substantial 
foregone  revenue.  Foregone  revenues  in  2024 
to  EUR  89.4 billion, 
due 
representing  3.1%  of  GDP  and 
reached 
EUR 91.8 billion in 2025 exceeding the initial 2025 
budget  by  EUR 6.7 billion,  mainly  due  to  the 
increased  Dutreil  pact  cost  of  EUR 4.2 billion (118). 
For  2026  TEs  are  budgeted  at  EUR 88.3 billion 
(2.9%  of  GDP).  The  number  of  TEs  has  kept  on 
increasing  since  2018  (from  457  in  2018  to  474 
in  2025).  In  the  draft  budget  2026,  the main  TEs 
included  the  research  tax  credit  (EUR 7.8 billion), 
home  employment  (EUR 6.4 billion),  the  Dutreil 
pact  (EUR 5 billion),  and  reduced  VAT  in  the 
restaurant sector (EUR 4.2 billion). 

A rationalisation of TEs  was carried out, but 
to  a  lesser  extent  than  initially  planned. 
there  are 
Furthermore, 
exemptions  from  social  security  contributions. 

in  addition 

to  TEs, 

(117) Le Monde, article of 21 January 2026 « Budget : le sidérant 

fiasco de la taxe sur les hauts revenus » 

(118) Voies_et_moyens_Tome_2_2026.pdf 

48 

22.135.444.751.642.9202530354045505550100150Tax wedge, % of total labour costsEarnings as % of the average wageSingle earner - FRSingle earner - EU averageSecond earner -  FRSecond earner -  EU average 
 
      
 
community  fraud (126)  were  estimated  at  around 
EUR 3 billion  in  France  (0.1%  of  GDP).  European 
Commission estimates suggest a relatively low CIT 
tax  compliance  gap 
in  France.  Based  on  a 
methodology  developed  by  the  Joint  Research 
Centre which relies on a top-down approach using 
national accounts data, the CIT compliance gap of 
France  was  at  around  6.6%  of  collected  CIT 
revenues in 2015, the eighth lowest figure among 
available  Member  States’  estimates (127).  Tax 
arrears slightly increased over the period of 2018 
to  2023  to  8.8%  of  total  net  revenue.  While  they 
in  2023  compared  to  2022,  they 
increased 
remained  significantly  below  the  unweighted  EU-
27 average (30.7%). 

file 

their 

companies 

The data indicates that there is still room for 
improvement  in  France  with  regards  to  the 
digitalisation  of  tax  returns.  In  2023,  France 
reported  an  e-filing  rate  of  96%  for  CIT,  slightly 
below the EU average of 97.1% (128). This indicates 
that  not  all 
taxes 
electronically.  The  e-filing  rates  for  personal 
income tax returns (86.8% in 2023) are below the 
EU  average  (87.1%).  Recent  data  for  France  e-
filing rates for VAT returns is not available. France 
does  provide  pre-filling  facilities  for  personal 
income  tax  returns,  contributing  to  reducing  the 
burden  of  tax  compliance  and  providing  greater 
tax  certainty  for  individual  taxpayers  and  the  tax 
administration. Pre-filling of VAT returns in France 
is still subject to development. The entry into force 
of  new  e-invoicing  and  e-reporting  rules  was 
originally  scheduled  for  1 July 2024  for  large 
enterprises. However, the new timetable maintains 
a joint entry into force of the e-invoicing obligation 
and  the  e-reporting  obligation  from  1 September 
2026 for large and medium-sized companies, and 
from  1 September  2027  for  SMEs  and  micro-
enterprises. France does not offer any kind of pre-
filling for CIT returns. 

Social  expenditures  reached  EUR 87.7 billion  in 
2025, representing 2.9% of GDP, the bulk of which 
coming  from  exemptions  related  to  the  health 
insurance  system (119).  General  exemptions  from 
social  contributions  had  been  increasing  from 
1993  to  2019,  although  they  have  been  limited 
for  high  salaries  since  2026 (120).  On  the  other 
hand,  the  2026  budget  law  did  keep  the  10% 
deduction on retirement pensions (initially planned 
for  removal)  in  the  calculation  of  income  tax. 
France  has  good  comprehensive  reporting (121)  on 
TEs (122),  but  the  procedure  for  evaluating  them 
could be improved.  

France  is  improving  its  capacity  to  estimate 
the size of its tax gaps (123). The French tax gap 
team  was  created  in  2024.  France  produces  and 
publishes a VAT gap, which will be complemented 
with a CIT gap report in 2026. Its VAT-compliance 
gap remains below the EU average of 9.5% of VAT 
total  tax  liability  and  is  the  eighth  lowest  VAT-
compliance  gap  among  EU  Member  States  in 
relative  terms.  This  indicates  a  relatively  strong 
performance  overall.  The  size  of  the  shadow 
economy  in  France  is  below  the  EU  average.  In 
2022, the shadow economy in France represented 
14.2%  of  its  GDP.  This  ratio  is  3.4 percentage 
points  below  the  EU-27  unweighted  average, 
despite the increasing trend in recent years. (124) 

a 

developed 

digital 
France 
has 
in  recent  years, 
transformation  strategy 
improving  IT  tools  in  the  tax  registration, 
assessment  and  collection.  France  performs 
relatively well in terms of VAT collection (125). 
In  2023,  VAT  losses  due  to  missing  trader  intra-

(119) Conseil économique social et environnemental, finances 

publiques : état des lieux et analyse des controverses, 2026 

(120) According to the ‘Réduction générale dégressive unique’ 

decree. 

(121) Évaluations des voies et moyens - Tome 2 - Dépenses 

fiscales | budget.gouv.fr 

(122) https://www.taxexpenditures.org/2026/01/19/tax-

expenditures-the-situation-in-france-and-international-
comparisons/  

(123) European Commission, Directorate-General for Taxation and 

Customs Union, Mind the gap - 2025 report.  

(126) MTIC fraud is a form of VAT fraud that exploits VAT-free 

(124) Schneider, F. and Asllani, A (2022). Taxation of the Informal 
Economy in the EU, study commissioned by the European 
Parliament. 

cross-border trade within the EU. 

(127) A European approach to measuring losses in corporate tax 

revenues - Publications Office of the EU 

(125) EUR-Lex - 52022DC0137 - EN - EUR-Lex 

(128) ISORADATA.ORG 

49 

 
 
 
PRODUCTIVITY 
ANNEX 4: INNOVATION TO BUSINESS  

France  remains  a  strong  innovator  (129)  but 
its  position  as  a  scientific  and  technological 
powerhouse  worldwide  is  eroding,  hindering 
its  competitiveness.  Total  R&D  intensity  fell  to 
2.18%  of  GDP  in  2024,  below  EU  average  and 
moving  further  away  from  the  target  of  3% 
initially  set  for  2020.  France’s  declining  scientific 
performance,  resulting  partly  from  more  than  a 
decade of subdued public R&D investments, raises 
concerns  as  to  the  country’s  ability  to  continue 
leveraging its strong science base to position itself 
as a key player in the global tech race. As reflected 
in  the  2025  country-specific  recommendations 
(CSR),  France’s  innovation  performance  remains 
hindered by stagnant business R&D investments, a 
lack  of  efficiency  in  public  support  for  business 
innovation,  and  a  complex  knowledge  valorisation 
ecosystem.  This,  coupled  with  insufficient  basic 
digitalisation  of  SMEs,  weighs  on  productivity. 
While  France’s  vibrant  startup  ecosystem  is  a 
major  asset,  bolstered  by  proactive  policy 
measures, the expiry of France 2030 in 2027 and 
lack of sustained funding for disruptive innovation 
mean  that 
long-term 
industrial  renewal  and 
growth are at risk.  

Excellent science  

is  weakening,  which 

France’s standing as a scientific powerhouse 
worldwide 
could 
undermine its long-term innovative capacity. 
Since  2011,  public  R&D  intensity  has  experienced 
a  slight  but  steady  decline (130),  which  has  been 
detrimental to the country’s scientific performance 
amid  intensifying  international  competition.  A  key 
indicator of this trend is France’s proportion of the 
world’s  top  10%  most-cited  publications,  which 
has steadily decreased since 2010 and dropped to 
8.4%  in  2022,  below  the  EU  average  of  9.4%. 
While this partly reflects broader global shifts, and 
in  particular  China’s  rapid  ascent  as  a  scientific 
superpower,  other  strong  innovators  (131)  have 
managed  to  maintain  or  even  slightly  increase 

(129) According to the 2025 European Innovation Scoreboard  

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

percentage of GDP 

(131) As per the classification of the 2025 European Innovation 

their share (see graph A4.1). To give fresh impetus 
to French research, the Research Law 2021-2030 
has  set  a  budgetary  path  to  gradually  increase 
public  R&D  funding  until  2030.  However,  its 
effects  will  take  time  to  materialise  and  may 
prove  insufficient  to  fully  reverse  the  downward 
trend.  More  alarmingly,  the  mid-term  review 
clause of the Law (‘clause de revoyure’), activated 
in  2025  against  the  background  of  tight  fiscal 
constraints,  could  lead to adjustments  which  may 
jeopardise  the  Law’s  investment  trajectory  and 
ambition. 

Graph A4.1: Share of publications in the top 10% 
most-cited publications worldwide, 2010-2020. 

Source: DG Research and Innovation, based on Science-Metrix 
data using the Scopus database. 

(the  country  has  one  of 

Restoring  the  attractiveness  of  research 
careers 
requires  sustained  efforts.  The 
proportion of public researchers in the population, 
while  at  the  level  of  the  EU  average,  remains 
relatively  modest  when  compared  to  France's 
seemingly  abundant  pool  of  human  resources  for 
the  highest 
R&I 
proportions  of  new  science  graduates  per 
thousand  population  aged  25-34  in  the  EU).  This 
reflects, in part, the deteriorating attractiveness of 
academic  careers,  which  have  grown  increasingly 
precarious  over  the  last  15  years.  Between  2006 
and  2023,  the  age  at  which  young  researchers 
secure  a  stable  position  has  increased  by  an 
average  of  24  months  (in  a  research  institution) 
and  32  months  (in  a  university)  (132).  Under  the 
Research  Law, measures have  been  introduced to 
make  research  careers  more  attractive  through 
better 
recruitment 
channels,  such  as  the  ‘chaires  de  professeurs 
junior’  (CPJ).  However,  these  remain  limited  in 
scope.  The  ongoing  mid-term  review  of  the 

remuneration  and  new 

Scoreboard.  

(132) L’état de l’emploi scientifique en France, édition 2025. 

50 

02468101214162020 (citation window: 2020-2022)2010 (citation window: 2010-2012) 
 
 
 
       
 
 
 
Research Law may offer an opportunity to assess 
the  effectiveness  of  these  measures  and  make 
adjustments based on identified gaps and evolving 
needs. 

Graph A4.3: R&D investment of French companies 
among world top 2000 R&D investors, by sector 
of activity (2018-2024) 

Business innovation 

Business  R&D  intensity  is  stagnating  and  is 
at  a  level  well  below  that  of  innovation 
leaders  in  the  EU  and  worldwide.  Business 
R&D  intensity  has  remained  stagnant  for  over  a 
decade,  at  around  1.44%,  in  stark  contrast  to  the 
investment  levels  and  trends  observed  in  other 
countries with strong R&I performances in the EU 
and globally (see graph A4.2).  

Graph A4.2: Business R&D investment (as % of 
GDP), 2014-2024 

Source: Eurostat 

In  terms  of  sectoral  breakdown,  R&D 
investment  of  French  companies  remains 
markedly  concentrated  in  the  pharma  and 
(see  graph  A4.3). 
automobile 
is  discernible, 
Progression 
however,  hinting  that  the  French  economy  is 
slowly  transitioning  towards  more  knowledge-
intensive sectors (outside pharma). 

ICT  sector 

sectors 

in  the 

Source: 2025 EU Industrial R&D Investment Scoreboard 

‘France  2030’ 

investment  plan 

is 
The 
fostering disruptive innovation and industrial 
renewal,  but  uncertainty  remains  over  the 
sustainability  of  funding  beyond  2027. 
‘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  the  digital 
fields  (133).  A  core  feature  of  the  plan  is  its 
investment  logic,  whereby  50%  of  the  funds  are 
allocated  to  ‘emerging’  innovators,  defined  as 
companies  with  less  than  12  years  of  activity  or 
undergoing a radical strategic shift likely to foster 
disruptive  innovation  and  the  renewal  of  the 
productive fabric. The interim evaluation of France 
2030  of  June  2023  identified  sizeable  expected 
macroeconomic  effects  (134),  particularly  in  terms 
of  GDP  and  employment,  but  recommended  a 
investments  to 
stronger  prioritisation  of  the 
maximise impact (135). This led to a reprioritisation 
of  funding  towards  key  sectors  as  from  2025, 
including quantum technologies, cybersecurity and 
space. In the absence of an announced successor, 
France  2030  will  be  progressively  wound  down 
and expire over the next two years (see Annex 5) 
the  sustainability  of 
raising  concerns  about 
funding for high-risk/high-reward innovation.  

(133) Significant investments are planned in key digital 
technologies such as AI, quantum and cloud. 

(134) An ex ante assessment of these macroeconomic impacts is 

due in 2026. 

(135)https://www.gouvernement.fr/sites/default/files/contenu/piece

-
jointe/2023/06/rapport_devaluation_csia_france_2030_vf_-
_publique.pdf  

51 

00.511.522.53GermanyBelgiumUnited StatesChinaFrance20142024EU average0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%HealthAutomotiveAerospace & DefenceICTEnergy20182024 
       
       
 
the 

France’s  innovation  performance  is  not  on  a 
par with  the  high level  of  public  support for 
business innovation, which relies primarily on 
tax  credits.  So  far,  the  large  volume  of  public 
support  for  business  innovation  (which  is  the 
second-highest in the EU as a percentage of GDP 
(136)  and  is  mainly  based  on  a  tax  credit  scheme 
called  crédit  impôt  recherche  (CIR)  (137))  has  not 
had  a  tangible  effect  on  technological  innovation 
output,  as  measured  by  patents.  Rather,  France’s 
international  patenting  activity  has  steadily 
declined  over 
last  decade.  Looking  at 
innovation  output  more  broadly,  France  ranks 
slightly  below  EU  average  on  the  Innovation 
Output  Index  2024  (138),  a  composite  indicator 
which  aims  at  measuring  a  country’s  capacity  to 
innovation, 
derive  economic  benefits 
including  through  the  creation  of  knowledge-
intensive  jobs.  France’s  CIR  was  found  to  boost 
SMEs (both in terms of R&D activity and economic 
performance)  but  no  significant  effects  on  larger 
firms (139).  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  the  number  of  patents  varies  from  1.2  per 
EUR  million  of  tax  credit  received  for  very  small 
enterprises  to  0.5  for  large  firms,  a  return  2.5 
times  higher  (140).  Yet,  large  firms  continue  to 
benefit  disproportionately  from  the  CIR  (141).  In 
contrast to the CIR, direct support to business R&D, 
loans 
through  diverse  types  of  grants  and 
operated  by  Bpifrance  and  mainly  targeting  SMEs 
(142),  was  found  to  have  a  significant  positive 
impact  on  both  business  R&D  expenditure  and 

from 

(136) 0.44% of GDP in 2023, against an EU average of 0.17%. 

(137) The CIR is projected to reach around EUR 8 billion in 2026. 

(138) European Commission: Joint Research Centre, Bello, M., 

Katsinis, A., Lopez Alvarez, J., Ravanos, P. and Smallenbroek, 
O., Tracking country Innovation Performance: The Innovation 
Output Indicator 2024, 
https://data.europa.eu/doi/10.2760/4449831, JRC141343. 

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

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

(140) Renforcer l’impact du Crédit Impôt Recherche, Philippe 

Aghion, Nicolas Chanut, Xavier Jaravel, septembre 2022. 

(141) in 2021, although large firms accounted for a bit less than 
3% of all CIR beneficiaries, they benefited from 42% of the 
overall amount of the CIR. Source: L’état de l’enseignement 
supérieur de la recherche et de l’innovation en France, 
édition 2025. 

(143).  Despite 
broader  economic  performance 
recommendations to reform the CIR (144), including 
the  2025  CSR  on  strengthening  business  R&D 
intensity  by  better 
targeting  public  support 
schemes,  the  2025  budget  introduced  only  a 
limited technical adjustment of the CIR (145). While 
this  adjustment  is  expected  to  generate  small 
budgetary  savings,  it  does  not  aim  at  focusing 
support  more  strongly  on  smaller  firms  and  is 
therefore  unlikely  to  contribute  to  enhancing 
business R&D efforts.  

engage 

limited 
to 

complexity  of 

cooperation.  The 

among 
contracts 

Indicators  suggest  that  France’s  complex 
knowledge  valorisation  (146)  ecosystem  may 
not  be  performing  optimally.  France  continues 
to  score  below  the  EU  average  for  business-
financed public R&D and the proportion of public-
private  co-publications,  while  above 
the  EU 
average,  has  stalled  over  the  last  decade.  This 
inclination 
reflects 
French 
and 
in 
businesses 
collaborations  with  public  research  labs,  which 
persists  despite  a  wide  range  of  structures  and 
instruments  designed  to  support  and  incentivise 
the 
such 
ecosystem, resulting from the progressive layering 
of entities since the launch of the first investment 
for  the  future  programme  in  2010,  was  noted  by 
the  French  Court  of  Auditors  in  2018  (147).  Since 
then,  no  comprehensive  structural  reform  has 
been undertaken. In response to the CSR 2025 on 
improving  the  efficiency  of  the  system  supporting 
academia-business 
linkages,  a  review  of  the 
governance  and  financing  model  of  the  French 
Sociétés 
de 
in  2025. 
Technologies  (SATTs)  was 
However,  it  has  not  yet  produced  concrete  policy 
outcomes.  A  2025  information  report  from  the 
National  Assembly  called  for  clearer  coordination 
between the SATTs and other entities, notably the 
‘university  innovation  hubs’  (PUI),  launched  in 

de 
launched 

d’Accélération 

Transfert 

(143) Le soutien structurel à l’innovation dans France 2030, Théma 

DGE n°32, juillet 2025. 

(144) See country report 2025. 

(145) This technical adjustment aimed at refocusing the CIR on 
R&D expenditure only, by excluding expenditure linked to 
technology watch from the list of eligible expenses.  

(146) Defined as the process of transforming data, know-how and 

research results into social and economic value.  

(142) 80% of the support provided through these schemes 

benefits SMEs. 

(147) Cour des comptes, Les outils du PIA consacrés à la 
valorisation de la recherche publique, mars 2018. 

52 

 
 
 
(148). 
2023  to  structure  regional  ecosystems 
Looking  ahead,  the  success  of  the  PUI  will  hinge 
on  their  ability  to  improve  efficiency,  without 
the  existing 
adding 
complexity 
landscape.  A  first  evaluation  of  the  PUI 
is 
scheduled for summer 2026. 

further 

to 

technologies 

The  digitalisation  of  SMEs and  adoption  of 
advanced  digital  technologies in  France  is 
gaining  traction  while  still  below  the  EU 
average. In 2025, 69.44% of French SMEs had a 
basic level  of digital intensity, up from 51.97% in 
the  EU  average 
2023  but still  well  below 
(71.39% in  2025). Businesses  also  tend  to  adopt 
fewer key digital 
(artificial 
intelligence  (AI),  data  analytics,  cloud)  in  France 
than in  the  EU,  which  contrasts  with  the  presence 
of  a  dynamic  ecosystem  of  startups  in  Paris, 
specialised,  in  areas  including  in  AI.  Trying  to 
identify  the  drivers  of  this  sub-par  performance, 
to several 
the  France  Num  barometer points 
bottlenecks in the digitalisation of SMEs, including 
a 
cybersecurity 
concerns  and  general  financing  constraints  with 
a 
unclear 
macroeconomic  point  of  view, the  National 
Productivity Board (NPB) identifies digital adoption 
gaps  across  firm  sizes  (lower  adoption  in  SMEs, 
higher  in  large  firms)  as  one  of  the  factors 
constraining 
and 
competitiveness.  Given  the  size  of  the French 
economy,  accelerating  SME  digitalisation  will  be 
key to  meeting  the  EU  2030  target  of  90%  of 
SMEs with basic digital intensity.  

lack  of expertise and 

investments. 

productivity 

growth 

return 

skills, 

From 

on 

France  is  counting  on  AI  to  improve  the 
digitalisation of the whole businesses sector. 
France  Num remains the  main  tool  supporting 
basic  SME  digitalisation,  particularly  for  very 
(VSEs),  acting  mainly  as 
small enterprises 
a network of stakeholders 
in  digital 
transformation (institutional actors, public advisers 
and  service  providers).  The  new plan  ‘Osez l’IA’, 
the  2025  country-specific 
which 
recommendation  on  improving  SME  digitalisation, 
including  by 
the  effectiveness  of 
existing  public  support,  aims  at  diffusing  AI 
technologies  in  100%  of  large  firms  and  80%  of 

improving 

involved 

relates 

to 

(148) Rapport d’information sur les dispositifs de valorisation de la 

recherche et leur financement (n°1693), Assemblée 
nationale, juillet 2025. 

53 

SMEs (149). However, the plan is neither specifically 
focused  on  basic 
targeted  at  SMEs  nor 
digitalisation,  although  it  will  contribute  to  the 
digitalisation  of  the  whole  economy  through  AI 
diffusion. Several 
report readability 
operators 
problems  with  the numerous existing  forms  of 
support  for  digitalisation  and  innovation  and  call 
for them to be better structured.   

Entrepreneurial dynamism 

is  nurturing  a  vibrant  startup 
France 
ecosystem  which 
is  attracting  growing 
venture  capital  (VC)  investment.  However, 
French  VC  remains  too  small  to  meet  the 
massive financing needs of France’s booming 
tech industry. Over the past decade, the number 
of French unicorns has surged sixfold, reaching 42 
in  2024  –  making  France  the  leading  unicorn 
producer  in  the  EU  after  Germany  (150).  This 
success is partly driven by the growing availability 
of  VC,  which,  as  a  percentage  of  GDP,  has 
quadrupled over the last decade. France has been 
particularly  active  in  supporting  the  growth  of  its 
VC market. Since 2019, efforts have notably been 
undertaken  to  encourage institutional  investors to 
support  VC  funds,  including  late-stage  funds,  as 
part  of  the  Tibi  initiative  (151).  The  evaluation 
conducted  by  the  Inspectorate  of  Finances  in 
October  2025  concludes  that  this  initiative  has 
delivered  measurable  results, 
increasing  both 
capital  commitments  and  the  number  of  funds  in 
the  French  tech  ecosystem,  while  helping  sustain 
investor  engagement  during  adverse  market 
conditions at a very low cost to the public budget 
(152). However, relative to GDP, French  VC remains 
smaller  than  that  of  global  competitors  and  EU 
innovation  leaders  and  may  prove  insufficient  to 
meet the massive financing needs of scaleups. To 
sustain the momentum of the French startup and 

(149) The plan is based on three pillars: (1) informing businesses 
via a network of AI ambassadors, (2) training 15 million 
professionals and (3) helping companies in identifying 
adapted AI solutions and funding instruments for their AI 
projects. 

(150) State of European Tech 2024 

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

(152) Evaluation de l’initiative Tibi, Inspection Générale des 

Finances, Octobre 2025. 

 
 
 
scaleup  ecosystem,  the  Inspectorate  of  Finances 
recommends strengthening and extending the Tibi 
initiative beyond 2026.  

France’s  deep  tech  sector  is  thriving,  but  its 
continued  growth  hinges  on  deeper  private 
investment  and  strategic  policy  support.  In 
2024,  France  ranked  second  in  Europe  for  deep 
tech  VC  funding,  trailing  only  the  UK  and 
surpassing  Germany  (153).  This  momentum  stems 
from  proactive  policy  initiatives,  including  the 
2019  deep  tech  plan  and  targeted  support  under 
France  2030.  However,  a  study  by  the  French 
Directorate-General  for  Enterprises  warns  that  at 
least EUR 30 billion in funding will be  required by 
2030  to  nurture  deep  tech  startups  and  cultivate 
leaders.  To 
globally  competitive  technological 
meet this gap, the report emphasises the need to 
attract  private  capital  -  particularly  for  growth-
stage  funding  -  by  mobilising  new  investors 
(institutional,  retail,  banking,  sovereign  wealth 
funds) 
incentives  and  public  policy 
measures  such  as  redirecting  retail  savings  to 
deep tech-focused funds. 

through 

the 

While  France  has  established  itself  as  a  top 
destination  for  foreign  startup  founders, 
further  efforts  are  needed  to  expand  its  ICT 
talent pool, a critical foundation to underpin 
its technological leadership. Thanks to tailored 
policies  designed  to  attract  startup  talent,  France 
third  most  attractive  OECD 
ranks  as 
destination  for  foreign  startup  entrepreneurs, 
behind  Canada  and  the  United  States  (154).  Its 
French  tech  ticket  programme  supports  non-
French  founders  with  funding,  incubation  and 
mentorship,  while  the  French  tech  visa  offers  a 
receive  a  four-year 
fast-track  procedure 
to 
residence  permit 
long  period 
compared  to  other  countries),  accessible  to  both 
founders  and  their  employees.  Despite  these 
efforts,  France’s 
could  be 
undermined  by  a talent  gap  in  the  ICT  sector.  ICT 
specialists account for only 4.8% of the workforce, 
in line with the EU average, but still well below the 
national  Digital  Decade  target  of  10%  by  2030 
(see also Annex 11). In the field of AI specifically, 
the  French  AI  Commission  considers  that,  to 
become a key global player, France would need to 

tech  ambitions 

relatively 

(a 

(153) The 2025 European Deep Tech report, March 2025, 

Dealroom. 

(154) What are the top OECD destinations for startup talents? 

OECD Policy Brief, 2023. 

attract  between  10%  and  15%  of  the  3 000  to 
5 000  highly  qualified  international  profiles  likely 
to  have  a  notable  impact  on  the  development  of 
the AI ecosystem.  

Teacher 

explicitly 

education. 
do 

in  general  secondary  education, 

Entrepreneurship education in France largely 
occurs  indirectly  via  cross-curricular  and 
often  extracurricular  activities  at  secondary 
school,  while  it  is  more  firmly  embedded  in 
competence 
higher 
frameworks 
include 
not 
entrepreneurship  education,  which  is  integrated 
across  curricula  rather  than  through  dedicated 
subjects,  notably  via  the  cross-curricular  area 
‘methods  and  tools  to  learn’  in  the  curriculum  for 
students  aged  6–16,  covering  elements  such  as 
‘mobilising  resources’  and  ‘self-awareness’  (155). 
Top-level  authorities  support  a  whole-school 
approach 
in 
particular  through  the  updated  2024  Parcours 
local 
Avenir,  which  strengthens 
businesses  through  company  visits  and  project-
based 
practical 
entrepreneurial  experiences  remain  optional  and 
in  upper  secondary 
are 
education,  with 
lower 
secondary  and  none  in  primary  education.  By 
contrast,  entrepreneurship  is  actively  promoted  in 
higher  education  through  national  initiatives  such 
as L’esprit d’entreprendre and the student centres 
for 
innovation,  transfer  and  entrepreneurship 
(PEPITEs  -  Pôles  Etudiants  pour  l’Innovation,  le 
Transfert  et  l’Entrepreneuriat)  (157),  which  provide 
structured  entrepreneurial  pathways  and  support 
for students and recent graduates. 

largely  concentrated 

limited  exposure 

links  with 

However, 

learning 

(156). 

in 

(155) European Commission / EACEA / Eurydice, 2025, 

Entrepreneurship education at school in Europe – 2025. 
Eurydice Report. 

(156)https://www.education.gouv.fr/bo/16/Hebdo43/MENB163378

5C.htm  

(157) http://www.enseignementsup-

recherche.gouv.fr/cid79223/presentation-des-pepite-poles-
etudiants-pour-innovation-transfert-
entrepreneuriat.html#Qu_est-ce_qu_un_PEPITE  

54 

 
 
 
 
Table A4.1:  Key innovation indicators 

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

55 

R&D intensity (GERD as % of GDP)2.18*2.222.272.222.182.18:2.243.44Public expenditure on R&D as % of GDP0.78*0.750.740.710.700.70:0.720.64Scientific publications of the country within the top 10% most-cited publications worldwide as % of total publications of the country 11.029.89.018.38:::9.4412.31Researchers (FTEs) employed by public sector (Gov+HEI) per thousand active population3.30*3.74.04.14.34.3:4.3:International co-publications as % of total number of publications46.4452.8159.1458.3959.2661.48:57.24:Business enterprise expenditure on R&D (BERD) as % of GDP1.381.441.491.471.441.44:1.492.69Business enterprise expenditure on R&D (BERD) performed by SMEs as % of GDP0.32::0.320.32::0.470.3Researchers employed by business per thousand active population55.76.87.17.47.3:5.9:Patent Cooperation Treaty patent applications per billion GDP (in PPS€)3.653.693.192.96:::2.812.2Employment share of high-growth enterprises measured in employment (%):::0.31*0.62::0.87:SMEs with at least a basic level of digital intensity% SMEs (EU Digital Decade target by 2030: 90%)::::51.97:69.4471.39:Data analytics adoption% enterprises (EU Digital Decade target by 2030: 75%)::::33.90:39.2739.85:Cloud adoption% enterprises (EU Digital Decade target by 2030: 75%)::::22.95:36.4646.69:Artificial intelligence adoption% enterprises (EU Digital Decade target by 2030: 75%)::::5.889.9118.1619.95:Public-private scientific co-publications as % of total number of publications7.848.588.879.289.229.21:7.62:Public expenditure on R&D financed by business enterprise (national) as % of GDP0.03*:0.030.040.02::0.060.02Total public sector support for BERD as % of GDP0.43:0.450.430.44::0.21:R&D tax incentives: foregone revenues as % of GDP0.280.280.290.270.27::0.100.16Business enterprise expenditure on R&D (BERD) financed by the public sector (national and abroad) as % of GDP 0.15:0.160.160.17::0.11:Venture capital (market statistics) as % of GDP (calculated as a 3-year moving average)0.0230.0220.0590.0960.0990.088:0.06:Seed stage funding share (% of GDP)0.0010.0030.0060.0070.0070.007:0.01:Start-up stage funding share (as % of GDP)0.0040.0040.0250.0360.0390.037:0.03:Later stage funding share (as % of GDP) 0.0170.0160.0290.0530.0530.044:0.03:New graduates in science & engineering per thousand population aged 25-3419.5520.8824.0224.6422.8422.96:16.82:Graduates in the field of computing per thousand population aged 25-343.362.853.94.554.224.46:3.84:2022France202020102015Headline indicatorPublic science baseR&D investment & researchers employed in businesses Public support for business innovation Innovation outputs Digitalisation of businessesAcademia-business collaborationVenture capitalInnovative talent2023EU average (1)US20242025 
 
       
 
ANNEX 5: SINGLE MARKET AND INDUSTRY 

that 

have 

supported 

significant 

challenges, 

to  business 

While  France’s  business  environment  still 
reform 
presents 
momentum  has  weakened  and  major  public 
plans 
business 
investment  are  coming  to  an  end.  Although 
business  demographics  have  been  dynamic,  this 
has  not  resulted  in  a  shift  towards  high-growth 
sectors  and  companies.  Small  and  medium-sized 
enterprises (SMEs) have not yet fully leveraged the 
growth opportunities of being in the Single Market 
and  are  expanding  more  slowly  than  in  other 
Member  States.  Business  investment  fell  below 
the EU average in 2024 and industry slowed down. 
Obstacles 
investment,  such  as 
economic policy uncertainty,  limited availability of 
skilled  labour,  energy  costs,  insufficient  demand 
and  administrative  burden,  continue  to  impact  on 
firms’ decisions. The implementation of the law on 
simplifying  economic  life  could  help  reduce  the 
administrative  burden  as  recommended  by  the 
2025 CSR (3) (158), which calls on France to further 
simplify 
reduce 
administrative  burden  and  regulatory  restrictions 
on  firms,  in  particular  in  the  services  sector  (159). 
However,  no  significant  measure  has  been 
adopted  or  announced  to  reduce  restrictions  in 
regulated professions and retail trade. In addition, 
regulatory and administrative barriers to intra EU-
trade  in  services  and  goods  persist.  Regarding 
public  investment  to  support  business  innovation 
and  green  transition,  the  commitments  of  the 
France  2030  programme  are  declining  (160),  while 
France’s recovery and resilience plan (RRP) will end 
soon (161). 

regulation,  as  well  as 

to 

(158) COUNCIL  RECOMMENDATION  on  the  economic,  social, 
employment,  structural  and  budgetary  policies  of  France, 
1/7/2025. 

(159) Restrictive  and  diverging  national  services  regulations  are 
one  of  the  ten  Single  Market  barriers  that  should  be 
addressed  as  a    priority  (European  Commission,  The  Single 
Market:  our  European  home  market  in  an  uncertain  world, 
21.5.2025). 

(160) In January 2026, EUR 44 billion had been committed out of 
the total commitments of EUR 54 billion planned until 2028. 
Source:  information  provided  by  France  for  the  assessment 
of the 2025 CSR 3(3), 31/1/2026. 

(161) Member  States  have  until  31  August  2026  to  complete 
milestones  and  targets  of  their  national  recovery  and 
resilience plans. 

56 

Business dynamics 

Business  demography  has  been  dynamic  but 
has not translated into reallocations towards 
high-growth  sectors  and  firms.  Business 
registrations have significantly increased in France 
in  recent  years  (+15.3%  between  2021  and 
Q4 2025  vs  12.5%  in  the  EU)  (162).  They  were 
particularly  dynamic  in  transport  and  logistics,  in 
administrative  services,  as  well  as  in  hospitality 
and  food,  driven  by  the  rise  of  digital  platforms 
and the growing demand for delivery and mobility 
services (163). One of the drivers of this boom has 
been the success of the microentrepreneur system 
(164),  whose  popularity  can  be  explained  by  its 
administrative and fiscal  ease. Alongside  the high 
number  of  registrations,  business  bankruptcies 
more  than  doubled  between  2021  and  the  third 
quarter of 2025 (an increase of 157% vs 77% in 
the  EU),  starting  from  a  low  point  in  2021.  This 
increase in the bankruptcy rate is in part due to a 
post-Covid  mechanical  catch-up  effect,  combined 
with  factors  specific  to  each  sector  (165).  While 
France  exhibits  relatively  high  business  churn,  it 
lags  behind  in  terms  of  high-growth  firms.  This 
suggests  that  business  reallocations  are  not 
predominantly  occurring  in  the  most  dynamic 
sectors. 

SMEs are growing more slowly than in other 
Member States. SMEs represent only 42% of the 
value  added  (against  53.6%  in  the  EU)  (166).  In 
2024, SME real added value declined by 1.0% (vs 
0.2%  in  the  EU).  This  can  be  partly  explained  by 
the  lower  economic  growth  in  France  compared 
with the other Member States, but also by the lack 
of innovation of French SMEs and their low level of 
inclusion  in  global  value  chains.  Another  obstacle 
for  scaling  up  could  stem  from  regulations  (see 
section on business environment below). 

While  public  investment  has  continued  to 
grow over the last years and is above the EU 

(162) Eurostat, [sts_rb_q], Codes NACE: B-S_X_O_S94. 

(163) France’s  reply  to  the  European  Commission’s  questionnaire, 

December 2025. 

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

(165) France’s  reply  to  the  European  Commission’s  questionnaire, 

December 2025. 

(166) European  Commission,  2025  SME  Fact  sheet,  estimates  for 

the year 2024. 

 
 
 
 
 
 
average,  business 
investment  has  been 
decreasing  and  is  below  the  EU  average. 
Public  investment  represented  4.4%  of  GDP  in 
2024  (against  3.7%  in  the  EU),  up  from  4.2%  in 
2023.  Business  investment  represented  12.3%  of 
GDP in 2024 (against 12.6% in the EU), down from 
12.7%  in  2023  (Table  A5.1).  The  fall  of  business 
investment  in  2024  (-2.4%  (167))  was  particularly 
sharp  in  the  construction  sector  and  to  a  lesser 
extent  in  the  manufacturing  sector,  partly  due  to 
the  macroeconomic  environment.  Foreign  direct 
investment also decreased in 2024: the number of 
foreign  establishment  and  expansion  projects  fell 
by  14%  and  the  job  creation  generated  by  those 
projects fell by 27%, a downward trend also seen 
in the UK and Germany (168). France lost its ranking 
as first country hosting direct investment flows in 
the  EU  but  ranked  second  after  Luxembourg  (169). 
In  2025,  business  investment  stabilised  (+0.2%, 
after  -2.4%  in  2024).  The  recovery  is  primarily 
driven  by  services,  in  particular  information  and 
communication (170). 

Productivity  levels  in  construction  and  the 
retail  trade  are  still  below  the  pre-Covid 
crisis.  Most  sectors  have  recovered  the  labour 
productivity  levels  they  had  at  the  end  of  2019, 
except  the  construction  and  retail  trade  sectors 
(171).  The  loss  of  productivity  in  the  construction 
sector comes from a mix of structural and cyclical 
factors: 
innovation  and  digitalisation, 
shortage of skilled labour, fall of activity linked to 
rising  interest  rates  and  costs  of  material  and 
energy  without  a  proportional 
in 
employment.  The  productivity  of  the  retail  trade 
sector has also fallen since 2019 (172). Businesses 
in the retail trade are struggling to invest for their 
digital and green transitions, while they are facing 
higher  costs,  competition  from  e-commerce  and 

reduction 

lack  of 

(167) France’s  reply  to  the  European  Commission’s  questionnaire. 

December 2025. 

(168) EY,  Baromètre  de  l’Attractivité  de  la  France  2025  |  EY  - 

France, 15 May 2025. 

(169) France’s  reply  to  the  European  Commission’s  questionnaire, 

December 2025. 

(170) France’s  reply  to  the  European  Commission’s  questionnaire, 

December 2025. 

(171) Value  added  per  full-time  equivalent  employment.  Source: 
INSEE,  quoted  by  France  in  its  reply  to  the  European 
Commission’s questionnaire, December 2025. 

(172) Conseil national de la productivité, 5th report, 5/2025. 

foreign  platforms  and  a  shortage  of  skills  and 
labour (173). 

Business environment 

to 

main 

obstacle 

The 
business 
investment has  become  uncertainty  about 
the future. According to the 2025 EIB investment 
survey (174), 50% of businesses in France consider 
uncertainty  about  the  future  to  be  a  major 
obstacle  to  investment.  This  is  higher  than  in  the 
EU  (47%)  and  significantly  higher  than  in  2024 
(44%  in  France  and  in  the  EU).  Businesses  are 
concerned  that  fiscal  consolidation  efforts  may 
result  in  an  increase  in  compulsory  levies  and  a 
reduction  in  support  schemes.  This  is  set  against 
the  backdrop  of  an  already  high 
level  of 
compulsory  levies  on  businesses,  even  net  of  aid 
received.  In  2024,  the  compulsory  levies  on  non-
financial  corporations,  net  of  aid 
received, 
represented  20.4%  of  the  value  added  of  those 
non-financial  corporations  (175).  It  was  the  third 
highest  share  in  the  European  Union.  More  than 
two  thirds  of  managers  of  SMEs  and  VSEs  think 
that better visibility of public finances is needed to 
fully  restore  the  confidence  of  managers.  The 
international  context 
factor  of 
uncertainty,  even  if  it  comes  second  only  to  the 
domestic context (176). 

is  also  a 

Other  obstacles  to  business  investment  are 
lack  of  skilled  staff,  energy  costs  and 
lacklustre  demand.  According  to  the  2025  EIB 
investment  survey,  the  second  most  important 
obstacle to investment after uncertainty about the 
future  is  the  availability  of  skilled  staff:  43%  of 
businesses  in  France  consider  this  to  be  a  major 
investment,  a  share  significantly 
obstacle  to 
smaller 
reflecting  a 
(52%), 
perception  that  the  labour  market  is  less  tight  in 
France  than  in  the  EU  on  average.  The  lack  of 

the  EU’s 

than 

(173) France,  reply  to  the  European  Commission’s  questionnaire, 

question 11, 12/2025. 

(174) European  Investment  Bank,  EIB  investment  survey  2025, 
France, 9/12/2025, based on interviews carried out between 
April and July 2025. 

(175) Fipeco,  Prélèvements  sur  les  sociétés  non  financières  et 

aides reçues, 18/12/2025. 

(176) BpiFrance/  Rexecode,  BAROMÈTRE  TRIMESTRIEL,  p. 18, 

11/2025. 

57 

 
 
 
 
skilled  staff  is  followed  by  energy  costs  (35%),  a 
share  lower  than  in  the  EU  (41%).  The  next 
obstacle  to  business  investment  is  considered  to 
be  demand  for  products  and  services:  27%  of 
businesses  in  France  consider  this  to  be  a  major 
obstacle to investment. It is a larger share than in 
the  EU  (22%),  reflecting  France’s  lower  growth 
compared with the EU in 2025: 0.9% vs 1.6% (177). 

Access to finance is satisfactory. Only 15% of 
businesses in France find that access to finance is 
a  major  obstacle  to  investment  (181),  which  is 
slightly less than in the EU (16%). According to the 
EIF  access  to  finance  indices  (Table  A5.1),  access 
to  loans  (0.73)  is  significantly  better  than  the  EU 
average (0.43),  while  access  to  equity  (0.20) is in 
line with the EU average (0.19) (Annex 6). 

Regulations  are  a  growing  concern  for 
businesses.  27%  and  26%  respectively  of  firms 
in  France  consider  labour  market  regulations  and 
business  regulations  to  be  a  major  obstacle  to 
investment (vs 27% and 34% in the EU) (178). This 
represents  an  increase  compared  with  the  year 
before,  when  22%  and  20%  respectively  of  firms 
in  France  considered  labour  market  regulations 
and  business  regulations  to  represent  a  major 
obstacle  to  investment  (vs  26%  and  32%  in  the 
EU).  The  procedures  relating  to  cessation  of 
legal 
payment, 
proceedings  are  considered  to  be  the  most 
complex to carry out (179). 

cessation  of  activity  and 

reduce 

life  could  help 

The implementation of the law on simplifying 
economic 
the 
administrative  burden  as  recommended  by 
the  2025  CSR  (3).  The  law  for  simplifying 
economic life (180) was adopted on 15 April 2026. 
It  establishes  a  Council  for  Simplification  for 
Enterprises,  attached  to  the  Prime  Minister,  that 
will  include  representatives  of  businesses.  This 
Council will carry out ‘tests entreprises’, i.e. deliver 
opinions on draft laws, ordinances, regulatory texts 
and  draft  EU  acts  that  have  an  impact  on 
law  generalises 
businesses. 
mediation  with  the  administration  in  case  of 
conflict. It facilitates certain industrial  and energy 
projects  through  derogation  measures,  while  data 
centres  with  an  industrial  dimension  will  be 
eligible,  subject  to  conditions,  for  the  status  of 
projects  of  major  national  interest.  The  law  still 
needs  to  be  promulgated,  and  by-laws  adopted, 
before it can be fully implemented. 

In  addition, 

the 

Late  payments  (182)  are  weighing  on  SMEs’ 
cash  position.  In  2024,  SMEs  had  a  cash  flow 
deficit of EUR 15.3 billion due to payments beyond 
the  legal  deadlines  (183).  According  to  the  Banque 
de  France,  late  payments  increase  the  risk  of 
businesses  default  by  25%  (184).  28%  of  SMEs  in 
France  say  that  they  have  been  experiencing  late 
payments  from  public  entities  (against  15.9%  in 
the  EU)  (Table  A5.1).  In  the  public  works  sector, 
85%  of  companies  report  payment  delays  from 
public  authorities  (185),  with  frequent  cases  of 
serious  delays  (more  than  90  days).  According  to 
their  business  organisation,  payment  delays 
remain  massive  and  structural,  and  the  official 
data published by the administration do not reflect 
reality  experienced  by  companies.  This 
the 
discrepancy  can  be  explained  by  the  existence  of 
‘hidden’ payment delays, which are not reflected in 
the  public  data,  such  as  the  time  taken  by  the 
public  authorities  to  register  an  invoice  on  the 
relevant  platform.  In  addition,  unfair  payment 
practices have been detected such as the absence 
of  payment  of  late-payment  interest.  55%  of 
SMEs  do  not  participate  in  public  procurement 
procedures  out  of  fear  of  not  being  paid  on  time 
(186).  In  addition,  public  entities  in  the  overseas 
territories  are  greatly  exceeding  the  30-day 
regulatory  ceiling  (187).  Public  hospitals  are  paying 
with  long  and  increasing  delays.  On  average, 

(181) European  Investment  Bank,  EIB  investment  survey  2025, 
France, 9/12/2025, based on interviews carried out between 
April and July 2025. 

(182) Part of the barriers highlighted in the Single market strategy 
(‘Terrible  Ten’)  and  the  2026  Annual  Single  Market  and 
Competitiveness Report. 

(183) France,  Rapport  de  l’Observatoire  des  délais  de  paiement 

(177) Source:  Eurostat.  In  seasonally  and  calendar-day  adjusted 

terms. 

2024, 7/2025. 

(184) Sénat, rapport n°376, 11/2/2026. 

(178) European  Investment  Bank,  EIB  investment  survey  2025, 
France, 9/12/2025, based on interviews carried out between 
April and July 2025. 

(185) Fédération  nationale  des 

travaux  publics,  Délais  de 
paiement :  une  réalité  bien  plus  dégradée  que  les  chiffres 
officiels pour les entreprises de travaux publics, 26/1/2026. 

(179) France’s  reply  to  the  European  Commission’s  questionnaire, 

(186) Cabinet ARC, Retards de paiement, 25/6/2025. 

December 2025. 

(187) France’s  reply  to  the  European  Commission’s  questionnaire, 

(180) France, loi de simplification de la vie économique.  

December 2025. 

58 

 
 
 
hospitals  need  more  than  63  days  to  pay  their 
suppliers,  while  the  maximum  payment  term  for 
hospitals  is  50  days,  with  alarming  peaks  in  the 
outermost regions (+121 days (188)). In addition to 
late  payments  from  public  entities,  58%  of  SMEs 
complain  about  receiving  late  payments  from 
private  entities  (against  47.1%  in  the  EU)  (Table 
A5.1).  When  observing  the  payment  behaviour  of 
French companies based on their size, those which 
perform  the  worst  are large  companies,  with  only 
15%  of  payments  made  on  time  (189).  France  is 
implementing several measures to discourage late 
introduction  of  e-
payments:  (i)  the  gradual 
invoicing;  (ii)  the  inclusion  of  this  factor  in  the 
Banque  de  France’s  listing  of  firms;  (iii)  the 
doubling  of  the  ceiling  to  EUR 4 million  for  fines 
for delays; (iv) an increased practice of ‘name and 
shame’; and (v) regarding late payments from the 
public  sector,  the  publication  of  local  authorities’ 
payment deadlines. A bill currently discussed in the 
Parliament  aims  to  reduce  late  payments  from 
private and public entities (190). 

in 

France 
the 
is  performing  strongly 
deployment  and  use  of  digital  connectivity 
infrastructures,  with  clear  progress  towards 
full coverage. Only 10% of businesses in France 
consider  digital  infrastructure  to  be  a  major 
obstacle  to  investment  (191),  which  is  slightly  less 
than the EU average (12%). The country is rolling 
out  fibre  and  5G  networks,  with  100%  coverage 
expected  before  2030.  Fibre-to-the-premises 
(FTTP)  coverage  reached  87.47%  in  2024,  well 
above  the  EU  average  (69.24%).  France’s  roll-out 
pace  also  exceeded  the  EU’s  in  rural  areas 
(FR: 78.12%,  EU: 58.78%).  Concerning  take-up, 
France leads the EU in gigabit-speed subscriptions: 
58.92%  of  fixed  broadband  subscriptions  are 
above  1 Gbps.  On  mobile,  5G  coverage  in  France 
also  shows  solid  progress,  reaching  94.34%  in 
2024  and  aligning  with  the  100%  coverage  in 
national and EU objectives by 2030. 

(188) Sénat, rapport n°376, 11/2/2026. 

(189) European Commission, EU payment observatory 2025. 

(190) Sénat,  Proposition  de  loi  visant  à  réduire  les  retards  de 
paiement afin de lutter contre les défaillances d'entreprises. 

(191) European  Investment  Bank,  EIB  investment  survey  2025, 
France, 9/12/2025, based on interviews carried out between 
April and July 2025. 

Single Market 

SMEs  are  not  fully  exploiting  the  growth 
opportunities  offered  by  the  Single  Market. 
France  has  the  lowest  rate  of  integration  into  EU 
trade  in  the  EU:  intra-EU  import  and  export 
volumes  represented  only  17.1%  of  GDP  in  2025 
(vs  40.7%  on  average  in  the  EU)  (Table  A5.1). 
France’s  integration  rate  is  much  lower  than  the 
EU  average,  both  for  goods  and  services.  For 
goods, France’s integration rate is the lowest of all 
Member States (11.6% vs 18.2% in the EU). It can 
be explained by several factors: French businesses 
have  less  need  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  the  ‘osez 
l’export’ [dare to export] scheme (192) to develop an 
export  culture  in  businesses,  promote  French 
know-how,  and  focus  on  tomorrow’s  sectors  and 
expanding overseas markets (193).  

France’s  performance  on  implementing  and 
complying  with  Single  Market 
law  has 
deteriorated  and  is  below  the  EU  average 
(194).  The  percentage  of  Single  Market  directives 
not  transposed  on  time  increased  from  0.5%  in 
2024 to 1.1% in 2025 (against 1% in 2025 in the 
EU)  (195)  (Table  A5.1).  Meanwhile,  the  percentage 
of directives transposed incorrectly increased from 
1.2%  to  1.5%  (against  1.1%  in  the  EU).  The 
number of pending infringement proceedings  rose 
from 29 to 31 (EU average: 25). The average delay 
in transposing directives increased from 7 to 10.2 
months  (EU  9.7  months).  In  addition,  France  has 
repeatedly infringed its legal obligations under the 
Single  Market  Transparency  Directive,  taking  the 
risk of erecting new unjustified regulatory barriers 

(192) France  Diplomatie,  Lancement  du  Plan 

‘Osez 

l’export’, 

31/8/2023. 

(193) Rapport  sur  le  commerce  extérieur,  2/2025,  partie  III.1- 

politiques de soutien à l’exportation, p. 55-56. 

(194) The  lack  of  Single  Market  ownership  by  Member  States  is 
one  of  the  10  Single  Market  barriers  that  should  be 
addressed  as  a  priority  (European  Commission,  The  Single 
Market:  our  European  home  market  in  an  uncertain  world, 
21.5.2025). 

(195) European 

Commission, 

The 

Single  Market 

and 

Competitiveness Scoreboard, France, December 2025 data. 

59 

 
 
 
to the free movement of goods and services in the 
the  business 
Single  Market  and  making 
environment  less  predictable.  On  a  more  positive 
note, the duration of infringement proceedings has 
decreased,  from  55.1  months  to  37.2  months, 
below the EU average of 44.5 months. The SOLVIT 
indicator  has  also  improved  and  shows  a  better 
performance than the EU average: France resolved 
93.1%  of  the  SOLVIT  cases  in  2025  (against 
84.6%  in  the  EU).  This  reflects  an  outstanding 
performance, given that the French SOLVIT centre 
dealt with more than 27% of the SOLVIT caseload. 
indicators  measuring  the  time 
However,  the 
needed  to  process  these  cases  show  that  France 
does  not  have  enough  staff  to  deal  with  this 
caseload.  

Regulatory and administrative barriers to the 
intra  EU-trade  in  goods  persist.  Businesses 
report  that  packaging  and 
labelling  rules  – 
environmental  labelling,  packaging  and  complex 
administrative 
the 
Extended  Producer  Responsibility  (EPR)  scheme  – 
create  compliance  burdens 
Ineffective 
application of mutual  recognition and fragmented 
product  compliance  rules  also  affect  trade  in 
goods. 

requirements 

related 

(196). 

to 

Sustained investment in standardisation (197) 
is  essential  to  preserve  a  robust  and 
forward-looking  system.  As 
technological 
change  accelerates,  the  effectiveness  of  the 
European  Standardisation  System 
increasingly 
depends on the ability of National Standardisation 
Bodies to mobilise and retain a strong and diverse 
pool of expertise. In France, where AFNOR already 
plays  a  leading  role,  the  priority  is  to  sustain  this 
high-performing system by ensuring the continued 
engagement of a critical mass of stakeholders and 
experts  in  standardisation  activities.  At  the  same 
time,  rapidly  evolving  fields  such  as  artificial 
intelligence and quantum technologies require not 
only  broad  participation  but  also  continuous 

(196) Business  Europe,  report  2025  Examples-of-Single-Market-
barriers-–-Striving-for-greater-harmonisation-of-packaging-
legislation-to-prevent-market-barriers.pdf  and  Single  Market 
Obstacles  Compendium,  European  Round  Table  of  Industry, 
Mau  2025,  Single  Market  -  Compendium  of  obstacles  -  21 
May 2025 

(197) Rigid  and  outdated  standardisation  system  has  been 
identified as one of ten Single Market barriers that should be 
addressed  as  a  priority  (European  Commission,  The  Single 
Market:  our  European  home  market  in  an  uncertain  world, 
21.5.2025). 

60 

upskilling.  Maintaining  France’s  leadership  will 
depend  on  the  ability  to  regularly  strengthen 
experts’  capabilities  so  they  can  keep  pace  with 
the  digital  transition  and  remain  responsive  to 
innovation. 

of 

Although  the  number  of  market  surveillance 
investigations  has  increased,  the  number 
of investigations per inhabitant is lower than 
the  EU median.  Compliance 
products 
circulating  in  the  Single  Market  (198)  is  key  to 
ensuring  a  level-playing  field  for  law-abiding 
companies and the safety of consumers. In France, 
the  number  of  market  surveillance  investigations 
has  increased  compared  with  2019.  In  2025, 
national authorities reported in the EU system for 
total 
market 
of 60.6 investigations  per  one  million  inhabitants, 
which  is  lower  than  the  EU median  of  136.2.  The 
number 
in 
absolute  terms,  which  may  also  be  the  result  of 
insufficient  IT  national  interoperability  to  the 
ICSMS system.  

notifications remains limited 

surveillance 

(ICSMS) 

of 

a 

Regarding trade in services, France is among 
the Member States with the most restrictive 
regulations.  Restrictive  regulations  on  trade  in 
services reduce the opportunities for businesses in 
France to access a wide range of services and may 
harm  their  competitiveness.  The  figure  which 
applies  to  France  in  the  OECD’s  intra-EEA  STRI 
(intra-European  Economic  Area  Services  Trade 
Restrictiveness Index) (199) is the second highest in 
the  EU  (0.065  for  France  in  2025  against  0.068 
for the highest value in the EU  and 0.050 for the 
EU  average  –  Table  A5.1).  France’s  restrictions  to 
intra-EEA  service  trade  are  particularly  high  in  air 
transport,  architecture,  distribution  services,  legal 
services,  accounting,  rail  freight  and  road  freight.  
Barriers  to  cross-border  professional  services 
(shareholding 
limits,  multidisciplinary  practice 
bans,  and  fixed  tariffs  in  regulated  professions) 
restrict  provision  of  services,  especially  in  the 
legal,  health,  transport  and  construction  sectors. 
Additionally,  businesses  report  that  complex  legal 
obligations  make  posting  of  workers  burdensome 

(198) Part  of  the  ten  Single  Market  barriers  that  should  be 
addressed  as  a  priority  (European  Commission,  The  Single 
Market:  our  European  home  market  in  an  uncertain  world, 
21.5.2025). 

(199) European  Commission  staff  calculation  based on  the  OECD, 

intra-EEA STRI database, 11/2/2025. 

 
 
 
and 
costly 
agreement) (200).  

(remuneration,  status, 

collective 

ensure  that  the  tariffs  more  closely  align  with 
costs (205). 

when 

barriers 

the 
to 

Commission 
address 

For  several  professions,  regulatory  barriers 
to  entry  and  competition  remain  higher  in 
France  than  in  comparable  countries.  Some 
253  professions  are  regulated  in  France  (201), 
which 
(200). 
is  more  than  the  EU  median 
According  to  the  OECD  (202),  on  1 January 2023, 
regulatory barriers remained higher in France than 
in  peer  countries  for  accountants,  architects, 
estate  agents  and  lawyers,  and  the  level  of  the 
barriers  to  entry  in  service  sectors  was  the  same 
as in 2018. These barriers mostly take the form of 
shareholding  and  legal  form  requirements.  Since 
adopted 
2021, 
in 
recommendations 
professional  services  (203),  progress  has  remained 
limited.  In  reply  to  a  survey  carried  out  by  the 
Commission  between  December  2025  and 
February  2026,  France  reported  that  it  had  only 
partially  implemented  7  out  of  11  of  the  2021 
Commission  recommendations.  In  2023,  France 
adopted  an  ordinance  to  clarify  and  ensure  the 
consistency of the provisions applicable for setting 
up  professional  companies  (204).  Most  of  the 
provisions  of  this 
into  force  on 
1 September  2024,  following  the  publication  of 
by-laws. While  this ordinance may have improved 
to  prevent  professional 
clarity, 
companies 
professionals) 
only 
established in other Member States from acquiring 
a  majority  share 
in  professional  companies 
established 
in  France.  Although  France  has 
received the recommendation to reduce regulatory 
restrictions  on  firms,  in  particular  in  the  services 
sector (CSR 2025 3(1)), it has not taken any steps 
to  reduce  restrictions  in  regulated  professions 
since  the  adoption  of  the  recommendation.  The 
competition  authority  has  recommended  that 
France  reviews  the  methodology  to  set  the 
regulated  tariffs  of  certain  legal  professions  to 

it  continues 
(owned 

law  came 

by 

(200) Single  Market  Obstacles  Compendium,  European  Round 
Table of Industry, May 2025, Single Market - Compendium of 
obstacles - 21 May 2025 

(201) European Commission, Regulated Profession Database. 

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

France compare?, 2024. 

France  is  keeping  stringent  restrictions  on 
the  operations  and  establishment  of  retail 
shops  (206).  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, 
according  to  the  Commission’s  (207)  and  OECD’s 
(208)  indicators.  France  adopted  the  EGalim 3  Law 
in  March  2023 (209)  and  updated  it  in  November 
2023 (210). These laws have introduced new rules, 
notably  on  commercial  negotiations  between 
retailers  and  suppliers,  with  the  objective  of 
rebalancing  negotiating  power  along  the  food 
supply  chain  and  providing  a  fair  income  to 
farmers.  Retailers  must  comply  with  stricter 
purchasing  conditions  and  additional  formalities. 
The  French  authorities  also  impose  the  EGalim 
laws  and  the  jurisdiction  of  the  French  courts  on 
(211)  established in  other 
economic  operators 
Member  States  that  carry  out  pan-European 
negotiations  and  conclude  contracts  for  the 
benefit  of their  members who  are  retailers  active 
in different Member States, if the products are to 
be  sold  in  France.  Failure  to  comply  with  French 
law entails heavy fines. This may prevent retailers 
freedoms,  and 
from  using  Single  Market 
consumers  from  benefiting  from  competitive 
prices and a broader choice of products. Although 
France  has  received  the  recommendation  to 
reduce 
in 
particular in the services sector (CSR 2025 3(1)), it 
has not reduced the restrictions on the operations 
and establishment of retail shops. 

restrictions  on 

regulatory 

firms, 

(205) Autorité de la concurrence, avis 25-A-09 du 31 juillet 2025. 

(206) (i) Restrictive and diverging national services regulations and 
(ii)  complicated  business  establishment  and  operations  are 
two  of  the  10  Single  Market  barriers  that  should  be 
addressed  as  a  priority  (European  Commission,  The  Single 
Market, 21.5.2025). 

(207) European  Commission,  Retail  restrictiveness  indicator (2022 

update), 2024. 

(208) OECD, Product Market Regulation indicator. 

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

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

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

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

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

relative  à 

l’exercice en société des professions libérales réglementées. 

(211) These  operators  do  not  negotiate  with  farmers  or  small 

companies in the food supply chain. 

61 

 
 
 
The  implementation  of  the  law  simplifying 
economic life  could  improve transparency of 
banking  fees  and  facilitate  the  termination 
of  insurance  contracts.  Pursuant  to  the  law 
simplifying  the  economic  life,  banks  will  have  to 
send a statement of fees to very small enterprises 
and  harmonise  the  presentation  of  their  tariffs. 
SMEs  will  have  the  right  to  terminate  their 
contracts  insurance  companies  anytime  after  the 
first year. 

Regarding  public  procurement  procedures, 
the  competition  level  is  higher  than  the  EU 
average.  The  share  of  direct  awards  is  only 
around 2% (212), which is significantly below the EU 
median  of  6% (Table A5.1).  Also  on  the  positive 
side, the share of single bids is significantly below 
the EU median (19% vs 27%). 

the 

required 

turnover 

to  have 

threshold 

their  data  pre-filled 

SMEs  access  to  public  procurement  is  being 
facilitated.  France  adopted  a  decree  (213),  which 
lowers 
to 
participate  in  public  procurement  procedures.  In 
2026, it launched “Passe marché”, which will allow 
businesses 
in 
application  forms.  Last,  the  law  for  simplifying 
economic life, adopted on 15 April 2026, contains 
provisions to facilitate businesses’ access to public 
procurement.  By  the  end  of  2030,  the  State,  its 
operators, hospitals and social security institutions 
will  publish  their  bids  on  a  single  online  public 
procurement platform (‘Place’). In addition, certain 
contract lots could be reserved to young innovative 
companies. 

and 

stronger 

But  the  e-procurement  landscape  is  still 
fragmented, and data quality issues highlight 
the need for interoperable systems, common 
standards, 
data 
governance. Considering  France’s  decentralised 
e-procurement  service,  with  between  12  and  20 
different  separate  procurement 
in 
operation  (214),  economic  operators  must  still  use 
several  systems  to  access  all  public  procurement 
procedures,  creating complexity  and barriers  to 
participation.  This  fragmentation  underscores  the 
need  for introducing interoperability  and  common 
standards.  The once-only principle is only partially 
implemented  at  national  level  (Annex  7),  and 

services 

(212) European Commission, Public procurement data space. 

(213) Décret n° 2025-1383 du 29 décembre 2025 

buyers  across  the  EU  still  lack  digital  access  to 
relevant  evidence.  France  has  experienced  a 
decline in data quality, and as of 2023, new data 
will  not  be 
the  Public 
Procurement  Data  Publication  Platform.  France 
would benefit from a dedicated service within the 
administration to  collect  and  analyse  public 
procurement  data  and  thus  support  data-driven 
oversight of the procurement lifecycle (215). 

incorporated 

into 

think 

in  practice 

Businesses’  views  on  corruption  risks  in 
public  procurement  are  below  the  EU 
average. Among companies that have experience 
of  and  have  participated  in  a  public  procurement 
procedure,  19% 
that  corruption  has 
prevented them from winning a public tender or a 
(EU 
public  procurement  contract 
average:  25%)  (216).  53%  of  companies  (EU 
average: 51%) consider collusive bidding in public 
procurement  procedures  to  be  a  very  or  fairly 
widespread  practice,  and  48%  (EU  average:  53%) 
consider  conflicts  of  interest  in  the  evaluation  of 
bids  to  be  a  very  or  fairly  widespread  practice. 
58%  of  businesses  perceive  the  independence 
level  of  the  public  procurement  review  body  (the 
regular courts) to be ‘very’ or ‘fairly good’ when it 
is reviewing public procurement cases (217). France 
is  enacting  a  law  on  the  use  of  consulting 
to 
companies  for  public  policies, 
address concerns related to large public contracts, 
while the French Anti-Corruption Agency has been 
tasked with developing an anti-corruption strategy 
for  ports  (218).  Public  procurement  has  been 
identified  as  an  area  at  high  risk  of  corruption 
during  the  public  consultation  for  the  preparation 
of the next national anti-corruption plan (219). 

introduced 

Industry and economic security 

Industry slowed down in 2025 but is showing 
signs  of  resilience.  In  2025,  the  growth  of  the 

(215) European  Court  of  Auditors, Special  report  28/2023:  Public 

procurement in the EU, 2023. 

(216) European Commission, Flash Eurobarometer 557, p. 133. 

(217) European  Commission,  Justice  Scoreboard  (2025),  p. 53; 

Flash Eurobarometer 555, p. 39. 

(218) European Commission, Rule of Law Report- Country Chapter 

France (2025), pp. 9-10. 

(219) European Commission, Rule of Law Report- Country Chapter 

(214) As reported in the e-procurement matrix. 

France (2025), p. 9. 

62 

 
 
 
a 

to 

According 

uncertainty, 

competition 

regulatory 
and 

manufacturing  industry  has  been  hampered  by 
burden, 
political 
international 
geopolitical 
constraints,  including  US  tariffs.  More  factories 
closed  than  opened.  Some  industrial  sectors  have 
than  others:  energy-intensive 
suffered  more 
industries,  the  automotive  industry,  but  also  the 
agro-industry. 
European 
Commission  study  (220),  the  decline  of  France’s 
impact  the 
industry  will  strongly 
automotive 
regions  where  the  automotive  industry  is  located. 
Nevertheless, the industry is showing resilience, as 
evidenced  by  employment  figures.  According  to 
business  organisations,  support  to  industry,  in 
particular  through  France  2030  (221),  a  EUR 54 
billion  investment  plan  launched  in  2021  and 
initially  planned  for  5  years,  continues  to  bear 
fruit,  but  future  payments  may  be  reduced  (222). 
Competitiveness  is  maintained,  partly  because 
wage increases have been lower than inflation, but 
at  an  average  level  only.  Productivity  gains  are 
insufficient  compared  with  other  countries.  Skills 
tensions are decreasing (also due to bankruptcies) 
but are still present, with 40 000 vacancies in the 
manufacturing sector in 2025 (223). 

has 

industries 

Since  2021,  the  production  of  France’s 
energy-intensive 
fallen 
significantly.  While  France’s  manufacturing 
production  has  increased  slightly  (+2%  between 
2021  and  2024),  the  production  of  energy-
intensive  industries  has  declined.  At  the  end  of 
2024, France’s production of steel, glass and basic 
chemicals  were  respectively  24%,  20%  and  15% 
lower  than  in  the  second  quarter  of  2021  (224) 
(Graph A 5.1). This fall can be explained by several 
factors:  the  large  increase  in  energy  prices,  the 
competition from Asia and North America and the 
lack  of  dynamism  in  demand,  notably  from  the 
construction  and  manufacturing  sectors.  Since 
their  peak  in  March  2023,  energy  prices  have 
fallen but remain well above their 2021 level and 
are  considerably  higher  than  in  the  US  or  China. 

(220) European  Commission,  Mapping  the  impact  of  industrial 

decline on European regions, 2025. 

(221) France, Evaluation ex ante de l’impact macroéconomique de 

France 2030, April 2026 

(222) Under the 2026 budgetary law, the payments possible under 

France 2030 in 2026 were reduced by EUR 1.1 billion. 

(223) Meeting  between  European  Commission  staff  and  business 

organisations, 1/2026. 

(224) France’s  reply  to  the  European  Commission’s  questionnaire, 

Compared  with  the  EU  however,  electricity  prices 
for  non-household  consumers  in  France  were 
around 17% below the EU average in 2025 (Table 
A5.1 and Annex 9). 

Graph A5.1: Manufacturing industry production: 
total and selected sector, index (2021=100), 
2015-2024 

Source: Eurostat 

The  net-zero  industry  is  strong  in  certain 
areas  but  modest  overall,  given  the  size  of 
the  country.  French  companies  are  among  the 
largest  European  manufacturers  of  nuclear 
equipment  and  technologies.  In  addition,  France 
manufactures  components  and  end-use  products 
needed  for  (i)  wind  power,  with  a  production 
estimated by a recent study (225) at 6% of total EU 
production; (ii) grids with a production estimated at 
4%  of  EU  production;  (iii)  solar  energy  with  a 
production estimated at 2% of EU production and 
(iv)  heat  pumps.  France  also  manufactures 
batteries,  with  a  capacity  estimated  at  6-7%  of 
total  EU  capacity  in  2024,  while  mega  factory 
projects are expected to produce 115 GWh of cells 
in  the  long  term  to  meet  the  needs  of  the 
automotive  sector (226).  The  production  of  electric 
vehicles is growing but remains modest, given the 
country’s  needs.  France 
imports  much  more 
electric vehicles than it exports (227). Lastly, France 

(225) European  Commission,  The  net-zero  manufacturing  industry 
landscape across the Member States, country fiches, 1/2025. 

(226) France,  Ministère  de 

l’économie,  Théma  de 

la  DGE, 

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

December 2025. 

(227) Bruegel, European clean tech tracker, update: 3/9/2025. 

63 

8590951001051101151201252015201620172018201920202021202220232024ManufacturingManufacture of wood and of products of wood and cork, except furniture;manufacture of articles of straw and plaiting materialsManufacture of paper and paper productsManufacture of chemicals and chemical productsManufacture of rubber and plastic productsManufacture of other non-metallic mineral productsManufacture of basic metals 
 
        
 
represents  only  1-3%  of  EU  capacity  in the value 
chains  of  electrolysis  and  fuel  cells  technologies 
used to produce hydrogen. 

France  supports  decarbonisation  of industry, 
but  financing  will  end  soon,  if  not  replaced. 
France  has  used  the  Recovery  and  Resilience 
Facility’s  (RRF)  funding  for  the  decarbonisation  of 
the 
(investment  C2.I1)  and 
industry 
development  of  technologies  relevant  for  the 
decarbonisation  of  industry  (investment  C4.I1) 
(228).  Under  France  2030,  France  has  allocated 
EUR 4.5 billion to industrial decarbonisation (Annex 
8). 

for 

Public  support  is  also  provided  for  the 
development of  the  net-zero  industry.  France 
provides  direct  financial  support  through  several 
instruments:  (i)  important  projects  of  common 
European  interest  were  set  up  for  batteries  and 
hydrogen;  (ii)  the  RRP  includes  large  investments 
for hydrogen (229); (iii) ‘France 2030’ targets French 
industrial  development  in  key  sectors,  including 
EUR 4.8  billion  for  the  production  of  two  million 
hybrid  and  electric  vehicles  by  2030,  EUR 3.1 
billion  for  decarbonised  hydrogen  and  renewable 
energy  technologies,  and EUR 0.8  billion  for  small 
modular  nuclear  reactors (230).  In  addition,  France 
has set up a tax credit for the green industry (231) 
for  investment  in  batteries,  solar,  wind  and  heat 
pumps.  This  scheme  entered  into  force  in  March 
2024.  By  1 December  2025,  44  applications  had 
been approved, representing EUR 1.2 billion of tax 
credits  granted  (232).  The  2026  budgetary  law 
prolonged the scheme until 2028. 

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

(228) Council  of  the  EU,  ANNEX  to  the  COUNCIL  IMPLEMENTING 
DECISION  amending  the  Implementing  Decision  of  13  July 
2021 on the approval of the RRP for France, 20/11/2025. 

(229) France  has  reviewed  its  hydrogen  strategy,  including  the 
objective  of  having  manufacturing  capacities  on  the  whole 
hydrogen value chain. See Stratégie nationale de l’hydrogène 
décarboné 2025, 4/2025. 

(230) Programmation actualisée du plan France 2030 au 1er avril 
2025 et en millions d’euros. Source : Sénat, Projet de Loi de 
finances pour 2026: investir pour la France de 2030, rapport 
No 139, 24/11/2025. 

(231) Crédit  d’impôt  au  titre  des  investissements  dans  l’industrie 

verte (C3IV). 

(232) France’s  reply  to  the  European  Commission’s  questionnaire, 

(233) 

and 

land 

industry 
the  permitting 
to  speed  up 
procedures for the construction of factories (from 
17  to  9  months);  improve  the  procedures  for 
brownfield 
industrial 
planning 
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 2024 (234) that made it possible to 
conduce  the  permit-granting  process  in  parallel 
with  public  consultations.  Between  October  2024 
and October 2025, 436 applications for permitting 
were  submitted.  321  benefitted  from  the  new 
public 
in  parallel  with  other 
procedures.  At  the  end  of  2025,  115  were  being 
examined  and  five  had  been  authorised,  with  an 
average duration of seven-and-a-half months (235). 

consultation 

is 

Act 

However,  implementation  of  the  Net-Zero 
Industry 
progressing 
(NZIA) 
slowly. France  has  not  yet designated a  single 
point of contact (Article 6(1) NZIA), which is crucial 
for streamlining coordination among stakeholders. 
Regarding 
has 
established a  national  contact  point  to  process 
applications, which will facilitate the advancement 
of net-zero strategic projects, and has applied for 
five  projects  (236).  Regarding  net-zero  acceleration 
valleys,  France  has  not  designated  any  area,  nor 
expressed an interest in designating an area. 

net-zero 

projects, 

France 

critical 

raw  materials, 

While France supports projects to secure the 
supply  of 
its 
dependency  on 
remains  high. 
imports 
Following the 2022 Varin report, France adopted a 
national  strategy  to  secure  the  supply  of  critical 
raw  materials  (237)  and  provides  support  for  the 
extraction, processing and recycling of critical raw 
materials  through  several  instruments:  (i)  the  tax 
credit  for  the  green  industry  covers  processes 
related 
the  extraction,  processing  and 
valorisation  of  critical  raw  materials;  (ii)  under 
France  2030,  France  is  devoting  EUR 425  million 

to 

(233) Légifrance,  Loi n° 2023-973 du 23 octobre 2023 relative à 

l'industrie verte. 

(234) France,  Loi 

industrie  verte: 

récapitulatif  des  décrets 

d’application, 19/7/2024. 

(235) France, Evaluation annuelle de la mise en œuvre des 
mesures prévues par la loi industrie verte, 2/2026. 

(236) European  Commission,  Overview  of  strategic  projects  under 

NZIA, 4 May 2026. 

December 2025. 

(237) European Commission, country report France, 2025, p. 54. 

64 

 
 
 
recognised  by 

for  the  extraction,  processing  and  recycling  of 
critical  metals  in  France;  (iii)  an  investment  fund 
for critical metals was set up in 2024 with a state 
allocation  of  EUR 500 million,  with  a  view  to 
collecting  EUR 2  billion; 
(iv)  France  provides 
guarantees for projects abroad or in France. Under 
the Critical  Raw  Materials  Act,  France  has 
presented  10  projects 
the 
Commission as strategic projects (238). They include 
projects to extract and process lithium, as well as 
projects 
raw 
materials,  such  as  rare  earth  elements  for 
magnets, cobalt, nickel and copper. The benefits of 
this  policy  still  need  to  materialise.  France’s 
material  import  dependency  stands  at  30.8%, 
against  an  EU  average  of  22.4%.  In  particular, 
France depends on imports for many of the critical 
raw materials needed  for developing the net-zero 
industry (239). 

to  process  and 

recycle  other 

(238) European  Commission,  Selected  strategic  projects  under 

CRMA, 3/2025. 

(239) European Commission, country report France, 2025, p. 54. 

65 

 
 
Table A5.1:  Single Market and Industry 

Source: (1) Eurostat, (2) EIB Investment Survey, (3) EIF SME Access to Finance Index, (4) Intrum Payment Report, (5) SAFE survey, 
(6) OECD, (7) data up to 2024: Single Market and Competitiveness Scoreboard, 2025: Commission calculation based on TED data, 
accessible at the Public Procurement Data Space (PPDS) (*) the value represented here under EU average is the median, (8) Single 
Market and Competitiveness Scoreboard, (9) European Commission calculations. 

66 

POLICY AREA20212022202320242025EU-27 average119.3113.9115.5114.0114.5100.012.712.712.712.3-12.64.14.24.24.4-3.9Business environment and simplification21.316.617.619.726.034.00.850.720.750.73-0.430.160.240.210.20-0.1911.316.516.817.417.117.48.722.718.514.313.813.6from private entities in the previous or current quarter---58.158.147.1from public entities in the previous or current quarter---28.728.215.916.519.318.217.317.140.70.0660.0660.0650.0650.0650.0501921222219272222260.60.30.10.51.111.51.41.31.21.51.182.45888685.893.184.63936312931250.08190.11430.18410.13910.12280.146235.936.036.6--32.719.420.322.523.2-25.231.932.429.630.8-22.415.416.716.917.8-12.2FranceINDICATOR NAMEBusiness environment and investmentProductivity and investmentLabour productivity (GDP per hour worked in PPP terms), % of EU271Business investment (share of GDP)1Public investment (share of GDP)1Impact of regulation on long-term investment, % of firms reporting business regulation as a major obstacle2SME liquidityEIF Access to Finance for SMEs index - loans3EIF Access to Finance for SMEs index - equity3Late paymentsPayment gap - corporates B2B, difference in days between offered and actual payment4Payment gap - public sector, difference in days between offered and actual payment4Share of SMEs experiencing late payments, %5Industry and economic securitySingle Market IntegrationEU trade integration, average(intra-EU imports + intra EU exports)/GDP, %1EEA Services Trade Restrictiveness index6Public procurementSingle bids, % of total contractors7*Direct awards, % of negotiated procedures7*ComplianceTransposition deficit, % of all directives not transposed8Conformity deficit, % of all directives transposed incorrectly8SOLVIT, resolution rate per country, %8Number of pending infringement proceedings8Energy-intensive industriesElectricity prices for non-household consumers1Electrification (electricity as a share of total energy consumption in industry)1Share of energy from renewable sources (renewable energy generation as a share of overall energy consumption)1Critical raw materialsMaterial import dependency, %1Circular material use rate1Operational cleantech manufacturing capacity in 20259 - Solar PV (c: cell, w: wafer, M:module), GW0.005 (c ), 1.05 (m) - Electrolyzer, GW- - Heat pump assembly 0.4147 - Battery, GW19.6 
 
     
 
ANNEX 6: SAVINGS, INVESTMENT AND ACCESS TO FINANCE 

Table A6.1:  Savings and Investments Union summary diagnostic 

Source: OECD (pensions), Eurostat (households' financial wealth), FISMA CMU dashboard (VC and PE), national sources (capital 
taxation). End-2024. 

France  is  an  average  Member  State  on  the  key 
progress indicators for the Savings and Investment 
Union  (see  Table  A6.1).  Even  though  the  financial 
sector  in  France  remains  dominated  by  banks, 
non-bank financial intermediaries like insurers and 
the  French  capital  markets  are  also  well 
developed.  Like 
in  most  Member  States, 
households  in  France  invest  relatively  little  in 
financial  assets,  including  equities.  The  French 
savings  and  investment  account  (Plan  d’Epargne 
en  Actions)  is  a  useful  tool  to  foster  equity 
investment that needs to be further improved. The 
banking  sector  appears  relatively  sound  and 
profitable  and  is  therefore  not  constrained  in  its 
role  of  financing  the  economy.  The  French 
insurance sector remains robust, but its investment 
portfolio  is  mostly  composed  of  bond  holdings. 
Asset-backed,  funded  pensions  remain  relatively 
small  and  generate  only  modest  real  returns. 
Encouraging  the  development  of  complementary, 
universal,  funded  pension  schemes  alongside  the 
prevailing  pay-as-you-go  system  would  help 
channel  investment  into  equities,  corporate  bonds 
and  growth  capital  such  as  venture  capital  and 
private  equity.  This  in  turn  would  support  growth 
and innovation. 

Business landscape and company 
funding 

In  comparison  with  the  EU  average,  the 
French  economy,  in  terms  of  structure  and 
size,  relies  more  on  large  companies.  The 
relative  importance  of  micro-sized  businesses  in 
France  is  about  the  same  as  the  EU  average, but 

large  companies  play  a  greater  role 
in  the 
structure  of  the  economy,  at  the  expense  of 
medium-sized  and  small  companies  (see  Annex 5 
for  more  details).  This  has  concrete  implications 
for the corporate sector’s demand for funding. 

Graph A6.1: Composition of NFCs’ funding 

Source: Eurostat. End-2024. 

Firms  in  France  rely  more  on  funding  from 
capital  markets  and  less  on  both  internal 
funding and funding from banks than the EU 
average.  French  businesses  depend 
less  on 
internal  financing  than  their  European  peers. 
According  to  the  2025  EIB  Investment  Survey, 
50%  of  French  firms’  investment  needs  are 
covered by internal funding, compared with an EU 
average of 66%. At the end of 2024 bank finance 
through loans constituted 25% (vs 27% in the EU) 
of  external  funding  for  French  non-financial 
corporations (NFCs), while listed shares and bonds 
accounted for 30% (vs 24% in the EU) of external 
funding.  When  expressed  in  terms  of  GDP,  the 
overall  level  of  NFC  funding  was  higher  in France 

67 

050100150200250300FREU% of GDPLoansTrade credit and advancesBondsListed sharesUnlisted sharesOther equityMain featuresRelative EU positioningAssets at 19.2% of GDP (32.3% in the EU)10-year real return of 1.3% (1.4% in the EU)France has moderate pension fund assets that yield a modest return. Exposure to equity is low. France has no mandatory or auto-enrolment pension schemes.EUR 95 100 per capita (EUR 85 100 in the EU)o/w 5.8% in listed shares and bonds (7.6% in the EU)o/w 6.3% in investment funds (11.1% in the EU)o/w 28.5%  in life insurance (13.4% in the EU)o/w 3.6% in pension claims (13.6% in the EU)A very high share of households' substantial financial assets is invested in life insurance, and relatively little in investment funds and pensions.VC at 0.089% of GDP (0.064% in the EU)PE at 0.855% of GDP (0.487% in the EU)Relatively high venture capital and very high private equity investments.Capital gains tax of 30%, corporate income tax of 25% with interest deductibility, withholding tax of 30% (except regulated deposits), financial transaction tax.Equity is typically more taxed than other assets, but PEA partly corrects that.1-34-1011-1718-2425-27Colours indicate the country's relative ranking based on five groups, ranging from the three best to the three worst performers. The relative ranking as regards an SIU diagnostic topic derives from a consistent cross-country comparison, the starting point of which is the average of the underlying main features.TopicAsset-backed pension schemesHouseholds' financial assetsVenture capital (VC)Private equity (PE)Capital taxation 
 
 
      
 
 
 
     
 
(270% of GDP) than the EU average (226%)  (see 
Graph A6.1). 

Size and structure of the financial 
sector 

Graph A6.2: Capital markets and financial 
intermediaries 

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  (equivalent  to  92%  of  GDP  in 
2024) when compared with the EU average (67% 
of GDP), but much  smaller  than the US (213% of 
GDP). The market breadth of French bond markets 
exceeds the EU average (2.1 vs 1.5)  (240), and the 
bid-ask  spread (241)  on  equity  markets  is  lower 
than  the  EU  average  (1.3  vs  1.6).  Initial  public 
offerings  were  equivalent  to  0.07%  of  GDP  in 
2024, broadly in line with the EU average (0.08% 
of GDP). 

France  has  adopted  –  or  plans  to  adopt  – 
several  measures  to  make 
its  capital 
markets  more  attractive.  These  measures 
should both: (i) improve innovative firms’ access to 
listing 
share 
structures;  and  (ii)  facilitate  the  use  of  capital 
increase  operations.  Other  measures  will  support 
the  digitalisation  of  trade  finance  operations  and 
shareholder meetings. 

introducing  multiple-vote 

by 

Source: ECB, EIOPA, AMECO. End-2024. 

Even  though  the  financial  sector  in  France 
remains  dominated  by  banks,  non-bank 
financial 
intermediaries  are  also  very 
developed.  Banks’  assets  were  equivalent  to 
416% of GDP in December 2024 (vs 251% in the 
EU) (see Graph A6.2). The French banking sector is 
mostly  made  up  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  91%  of 
the  country’s  banking  sector  assets  in  December 
2024.  Most  banks  are  privately  owned,  and  the 
only significant state-controlled bank is La Banque 
Postale,  the  country’s  sixth  largest  bank.  The 
French 
total  assets 
equivalent to almost 99% of GDP at end-2024 (vs 
55%  of  GDP  in  the  EU),  dominates  non-bank 
intermediation.  Its  relatively  large  size  is  due  to 
the  popularity  of  life  insurance  in  France,  which 
offers long-term savings and investment products. 
The  pension  funds  sector  is  much  smaller,  with 
assets  equivalent  to  only  8%  of  GDP  (vs  23%  in 
the EU). The investment funds sector is larger, with 
assets  equivalent  to  a  significant  65%  of  GDP, 
above the EU median. 

insurance  sector,  with 

Half of bonds are issued by the government. 
At end-2024, NFCs accounted for more than 90% 
of  the  market  capitalisation  of  the  public  French 
stock market, which reflects the extent to which it 
is  geared  towards  funding  the  non-financial 
segment  of  the  real  economy.  The  outstanding 
volume of listed debt securities was equivalent to 
190%  of GDP  at  end-2024,  one  of  the  highest in 
the  EU.  Bonds  issued  by  the  French  government 
accounted  for  half  of  the  total.  This  reflects  the 
significant weight of gross public debt in the bond 
market. 

Households’ participation in capital 
markets 

in  most  Member  States,  French 
Like 
households invest relatively little in financial 
assets  and,  more  importantly,  equity.  French 
households’  financial  assets  were  equivalent  to 
221%  of  GDP in  2024,  slightly  more  than  the  EU 
average  (212%),  but  much  less  than  the  US 
(446%).  Moreover,  assets  invested  in  equity  were 

(240) Expressed as the ratio of bonds outstanding to GDP. 

(241) Median of bid-ask spread as a percentage of the mid-price. 

68 

Non-financial corporationsFinancial corporationsNon-financial corporationsMFIsInsurance  and pension fundsOther financialsGovernmentMFIsPension fundsInsurance corporationsInvestment funds050100150200250300350400450   Listed equity               Bonds                        Assets by sector% of GDP 
     
 
estimated to be  equivalent to only 108% of GDP, 
above the EU average (91%) but less than a third 
of the US (291%). Compared with the average EU 
household,  French  households  invest  relatively 
little  in  investment  funds,  while  allocating  a 
significant  portion  to  life  insurance.  However,  the 
assets  held  by  these  traditional  life  insurance 
schemes  are  mostly  bonds,  which  generate  lower 
returns than equity investments. 

Graph A6.3: Composition of HHs’ financial assets 

Source: Eurostat. End-2024. 

The  French  savings  and  investment  account 
(SIA)  is  a  useful  tool,  but  it  could  be 
improved.  The  French  Plan  d’Épargne  en  Actions 
(PEA)  is  a  type  of  SIA  (242)  that  offers  several 
positive  features,  such  as  fee  limits,  a  broad 
investment  universe  and  the  ability  to  open  an 
account  without  financial  advice.  However,  it  has 
some  shortcomings  which  may 
the 
attractiveness  of  the  product:  it  retains  an  age 
limit,  it  restricts  geographic  diversification,  and  it 
does  not  guarantee  universal  access  to  the  most 
favourable  tax  treatment.  In  parallel,  subject  to 
lock-in  period), 
certain  conditions 
employees  of  some companies  can, via  dedicated 
(243),  accumulate 
employee  savings  schemes 
assets  in  a  tax-advantaged  manner  –  including 
employer contributions – by investing in their own 
company or in investment funds. 

(notably  a 

reduce 

The banking sector: resilience and 
financing of the economy 

in 

sector 

the  EU).  Despite 

reports  adequate 
The  banking 
solvency  and  is  therefore  not  constrained  in 
its  ability  to  finance  the  economy.  With 
annualised  return-on-equity  of  6.6%  in  2024  and 
6.8%  in  the  first  three  quarters  of  2025,  (vs  an 
average of 9.6% in the first three quarters in the 
EU),  the  profitability  of  French  banks  is  relatively 
stable but significantly lower than elsewhere in the 
EU.  This  is  due to: (i)  the high  (regulated)  interest 
rate  on  the  ‘Livret  A’  savings  products  offered  to 
retail investors; (ii) the predominance of fixed-rate 
loans on the asset side; and (iii)  the highest cost-
to-income  ratio  in  the  EU  (66.1%  in  Q3-2025  vs 
53.8% 
the  difficult 
macroeconomic environment, the capital adequacy 
ratio of French banks has remained broadly stable 
over  the  years  and  reached  19.7%  in  September 
2025 (vs 20.2% in the EU). The average minimum 
requirement  for  own  funds  and  eligible  liabilities 
(MREL)  level  of  French  banks  stood  at  32.6%  of 
total  risk  exposure  amount  (TREA)  in  Q2-2025, 
slightly down from 33.4% in December 2024 (244). 
Against an average MREL binding target (including 
combined  buffer  requirements)  of  26.6%  TREA  in 
Q2-2025,  no  bank  reported  an  MREL  shortfall.  In 
February  2024,  France  published  information  on 
its  national  bail-in  mechanic  in  line  with  the  EBA 
guidelines  (245).  Credit  quality  remains  relatively 
strong, with the non-performing loan ratio (2.1% in 
Q3-2025  vs  1.9%  in  the  EU)  up  from  its  all-time 
low of 1.8% observed from March 2022 to March 
2023.  This  relatively  good  credit  quality  is  partly 
due  to  the  predominance  of  fixed-rated  loans  on 
the  asset  side.  However,  the  banks’  asset  quality 
outlook is increasingly uncertain due to the current 
conflict  in  the  Middle  East  and  its  impact  on 
energy  prices  and  economic  growth.  The  loan-to-
deposit ratio slightly decreased from 98.8% in Q4-
2024 to 98.0% in Q3-2025 (vs 93.2% in the EU), 
signalling a slight excess of deposits over loans. 

(242) On 30 September 2025, the Commission published a 

Recommendation to increase the availability of SIAs with 
simplified and advantageous tax treatment. 

Credit  growth  in  France  has  slightly  picked 
up after a period of record low credit growth. 
Due  to  the  recent  moderate  decline  in  interest 
rates,  year-on-year  household  credit  growth  in 

(244) See the MREL Dashboard published by the SRB. 

(243) Such as the Plan d’Epargne Entreprise and the Plan 

(245) EBA, Guidelines to resolution authorities on the publication of 

d’Epargne Interentreprise. 

their approach to implementing the bail-in tool. 

69 

0100200300050100FREUFREUper capita (000 EUR) (lhs)% of GDP (rhs)Other equityUnlisted sharesListed sharesBondsInvestment fundsInsurance and pension fundsCurrency and depositsHH Debt (liability) 
     
 
 
France has accelerated, rising from a low of 0.1% 
(vs  0.2%  in  the  euro  area)  in  October  2024  to 
1.3%  in  September  2025  (vs  2.6%  in  the  euro 
area).  The  relatively  weak  growth  was  driven  by 
the very low growth in housing loans (0.5% in the 
12  months  to  September  2025),  while  consumer 
loans fared much better, with year-on-year growth 
in  the  12  months  to  September  2025  of  4.5%. 
Lending to NFCs was more resilient than lending to 
households,  as  year-on-year  growth  in  credit  to 
NFCs  reached  3.2%  in  September  2025  (vs  2.5% 
in  the  euro  area),  up  from  a  low  of  1.6%  in 
January 2024. 

Interest  rates  on  new  loans  to  the  private 
sector  have  receded  from  the  peak  reached 
at the end of 2023. In September 2025, interest 
rates on new loans to French households for house 
purchases  reached  2.99%  (vs  3.25%  in  the  euro 
area),  down  from  a  high  of  3.60%  in  December 
2023.  Interest  rates  on  new  loans  to  NFCs 
followed  a  similar  –  but  even  steeper  –  pattern. 
They  dropped  to  3.45%  (vs  3.68%  in  the  euro 
area)  in  September  2025,  sharply  down  from  the 
peak  of  4.92%  observed  in  November  2023. 
Overall, even if they have somewhat declined from 
their peak, interest rates remain higher than those 
observed over the last decade. 

French  banks  reported  a  slight  tightening  in 
their  credit  standards  for  NFC  loans  and 
some  easing  in  credit  standards  for  housing 
loans  in  Q4-2025.  In  the  January  2026  Bank 
Lending  Survey246,  French  banks  indicated  that 
their  credit  standards  for  NFC  loans  had  slightly 
tightened in Q4-2025 compared with Q3-2025, in 
line  with  the  tightening  reported  in  the  euro  area 
on  average.  French  banks  also 
reported  a 
moderate  easing  in  credit  standards  for  housing 
loans to households in Q4-2025 (vs a small easing 
in the euro area), and expect some further easing 
in  Q1-2026.  However,  they  also  reported  some 
slight  tightening  in  credit  standards  for  consumer 
loans,  and  expect  some  further  substantial 
tightening  in  this  area  in  Q1-2026.  Firms’  net 
demand for corporate loans continued to decrease 
in  Q4-2025  for  the  12th  quarter  (Q3-2024 
excluded) in a row (vs a slight increase in the euro 
area), due to reduced fixed investment. Thanks to 
better  housing  market  prospects,  the  demand  for 
housing  loans  increased  in  Q4-2025  for  the  sixth 

consecutive quarter (vs a moderate increase in the 
euro area), but it is expected to deteriorate in Q1-
2026. 

Role of non-bank financial 
intermediaries 

regulatory 

The  French  insurance  sector  remains  robust. 
The  solvency  ratio  has  declined  but  remains  well 
requirements.  The  average 
above 
solvency  ratio  stood  at  238%  at  end-2024  (vs 
244%  in  the  EU),  down  from  249%  in  2023.  The 
decline  was  sharper  for  ‘bancassurers’  (insurers 
linked  to  banks),  whose  solvency  dropped  by  20 
percentage  points  between  the  end  of  2023  and 
the  end  of  2024,  partly  due  to  large  end-of-year 
from  profit-sharing 
withdrawals 
to 
insurance  contracts  with  a 
life 
remunerate 
guaranteed  interest  rate.  Despite  this  decline,  all 
insurers  exceed  minimum 
regulatory  capital 
requirements, with 75% reporting a solvency ratio 
above  170%,  and  25%  reporting  a  solvency  ratio 
above  291%.  Life  insurers  have  benefited  from 
greater asset returns and the use of profit-sharing 
provisions,  enabling  them  to  offer  attractive 
revaluation  rates  and  achieve  record-high  net 
inflows in 2024. Non-life insurers, meanwhile, saw 
improved  technical  profitability  in  2024  thanks  to 
increased  premiums,  although  this  remains  below 
pre-2022 levels due to the inflation shock. 

reserves 

The  investment  portfolio  of  French  insurers 
is  mostly  composed  of  bond  holdings.  The 
French insurance sector, which is very large by EU 
standards  (assets-to-GDP  of  100%  vs  an  EU 
average of 53% in Q2-2025), invested 42% of its 
assets in bonds in Q4-2024 (on average, insurers 
in the European Economic Area invest 37% of their 
assets  in  bonds)  (247).  Government  bond  holdings 
(of which 58% are domestic) represented 20% of 
the total asset portfolio (vs 19% for insurers in the 
EEA), while corporate bonds accounted for another 
22% of their portfolio (vs 18% for insurers in the 
EEA), equity 14% (vs 16% in the EEA), investment 
funds 32% (vs 36% in the EEA), cash and deposits 
3% (vs  4% in the EEA), and mortgages and loans 
2% (vs 4% in the EEA). 

(246)https://www.ecb.europa.eu/stats/ecb_surveys/bank_lending_s

urvey/html/index.en.html  

(247) Source: EIOPA Insurance Statistics. 

70 

 
 
 
also 

returns 

individual 

supported 

inflows.  Returns  on 

Higher  returns  in  life  insurance  have  led  to 
life 
record 
insurance contracts in France stabilised at 2.6% in 
2024,  aided  by  the  use  of  profit-sharing  reserves 
built  up  during  the  period  of  low  interest  rates. 
These  reserves  declined  from  5.4%  of  technical 
provisions  in  2022  to  4.3%  in  2024.  Higher 
investment 
this 
performance,  despite  unrealised  losses  on  bond 
holdings,  which  remained  stable  at  3%  of 
portfolios.  Equity,  fund,  and  real  estate  holdings 
continued  to  show  unrealised  gains,  keeping  total 
unrealised  gains  stable  at  3%.  The  competitive 
return levels led to historically high gross and net 
inflows  into  life  insurance  in  2024.  During  the 
period  of  low  interest  rates,  insurers  promoted 
unit-linked  contracts  –  where  market  risks  are 
borne  by  savers  –  to  offset  weaker  returns  on 
traditional  contracts  with  guaranteed  capital 
(fonds en euro). From 2019 to 2023, guaranteed-
capital products saw persistent net outflows, while 
unit-linked contracts attracted positive net inflows. 
Higher interest rates for bank-deposit savings and 
rising  mortgage  costs  in  2022–2023  triggered 
trend 
more 
reversed  in  2024,  with  net  inflows  reaching  a 
record  EUR 25 billion,  thanks  to  increased  gross 
inflows  –  especially 
into  capital-guaranteed 
contracts – and fewer redemptions. 

insurance  withdrawals.  This 

life 

The  profitability  of  non-life  insurance  in 
France  has  improved,  in  part  due  to  lower 
inflation,  but  it  remains  under  pressure. 
Profitability  continued  to  recover  modestly  in 
2024,  with  the  combined  ratio  (248)  improving  to 
97%  (vs  96%  in  the  EU)  from  98%  in  2023  and 
100%  in  2022.  However,  profitability  remains 
under  pressure,  especially  outside  the  health 
segment.  Key  challenges  included  the  rising  costs 
for  auto  parts,  home  repairs,  and  reinsurance. 
Although  insurance  premiums  rose  more  slowly 
than  inflation  in  2022–2023,  they  picked  up  in 
2024, particularly in motor insurance. Nonetheless, 
some  lines  like  construction,  general  liability,  and 
disability  coverage  remain  exposed  to  inflation 
over  the  long  term  due  to  less  frequent  price 
revisions. 

Natural  hazards  are  a  major  risk  in  non-life 
insurance.  After  a  surge  in  2023,  catastrophe-

related  claims  in  France  fell  by  45%  in  2024, 
bringing  the  combined  ratio  down  to  126%  from 
193% the year before. Technical results were less 
volatile  due  to  risk-sharing  with  reinsurers.  In 
France, catastrophe reinsurance relies on a unique 
public-private  system  led  by  the  Caisse  Centrale 
de  Réassurance  (CCR),  which  reinsures  almost  all 
insurers under a harmonised framework. After two 
years of increases, the reinsurance balance (i.e. the 
difference  between  the  claims  paid  by  the 
reinsurer and the premiums paid to the reinsurer) 
declined  in  2024  but  remained  positive.  A  higher 
natural-disaster surcharge effective as of January 
2025  will  support  the  sustainability  of  the  CCR 
scheme.  However,  the  growing  frequency  of 
extreme  weather  events  like  storms,  hail,  and 
snow  may  make  reinsurance  more  difficult  to 
obtain  in  private  markets,  potentially  impacting 
insurers’ profitability over time. 

The pension fund industry has an even more 
conservative  investment  profile  than  French 
insurers,  with  an  even  greater  focus  on 
bonds  and  government  bonds  in  particular. 
The  assets  of  French  pension  funds  were 
equivalent  to  8%  of  GDP  in  Q2-2025  (vs  23%  in 
the  euro  area).  At  the  end  of  2024,  bonds 
accounted for 49% of the assets of institutions for 
occupational  retirement  provision  (249)  (bonds  on 
average  account  for  only  35%  of  pension  fund 
assets  in  the  EEA),  with  holdings  in  government 
bonds exceeding those in corporate bonds (27% vs 
22%).  Investment  funds  accounted  for  36%  of 
assets  (vs  38%  in  the  EEA),  (vs  12%  in  the  EEA), 
equity  6%  (vs  20%  in  the  EEA)  and  cash  and 
deposits 3% (vs 3% in the EEA). 

Asset-backed 
(funded)  pension  schemes 
remain small and fail to deliver a significant 
real  return.  France  lacks  well  developed  asset-
backed  pension  systems.  These  systems  are 
critical to secure citizens’ finances, deepen capital 
markets  and  mobilise  investment  for  growth  and 
(250)  were 
innovation.  French  pension  assets 
equivalent  to  only  20.1%  of  GDP  in  2024  (vs 
32.3%  in  the  EU  and  162.0%  in  the  US).  France 
has  some  modest  public  pension  reserve  funds 
(equivalent to 7.3% of GDP), but one of these (the 

(249) https://www.eiopa.europa.eu/tools-and-data/occupational-

pensions-statistics_en. 

(248) The combined ratio is equal to the sum of the incurred losses 
and expenses divided by the earned premiums. It is inversely 
related to profitability. 

(250) Pension assets consist of pension providers’ assets and 
public pension fund reserve assets. See OECD, Pension 
Markets in Focus 2025 for details. 

71 

 
 
 
in 

are 

population 

Fonds  de  Réserve  des  Retraites)  is  in  run-off. 
Unlike some other Member States, contributions to 
occupational  pension  schemes  are  not  mandatory 
in  France.  Such  schemes  exist  only  in  certain 
sectors  and  there  is  no  auto-enrolment,  resulting 
in a relatively low participation rate (27.7% of the 
working-age 
voluntary 
occupational  pension  schemes).  Over  the  past  10 
years the average real return generated by French 
pension assets has been modest (1.3% vs 1.4% in 
the  EU)  largely  because  of  low  equity  exposure 
and  high  levels  of  bond  holdings.  On  personal 
pensions,  the  2019  reform  creating  the  Plan 
d’Épargne Retraite (PER) under the PACTE law was 
a  useful  step  towards  broader  access  to  funded 
pensions  through  tax 
incentives  and  product 
simplification,  although  its  scope  and  take-up 
could be strengthened to achieve its full potential. 
As  Kukies  and  Noyer  (2026)  also  argue  (251), 
encouraging  the  build-up  of  universal,  funded 
pension schemes alongside the prevailing pay-as-
you-go system would help channel investment into 
equities,  support  growth  and 
innovation  and 
diversify retirement income.  

Venture capital ecosystem 

France’s  domestic  venture  and  growth 
capital  market  is  more  developed  than  the 
EU  average.  The  value  of  private  equity  relative 
to  nominal  GDP  hovered  around  0.79%  of  GDP 
between  2017  and  2024,  and  reached  0.88%  in 
2024  (vs  0.46%  in  the  EU).  And  the  value  of 
venture capital relative to nominal GDP fluctuated 
at around 0.07% of GDP between 2017 and 2024, 
and reached 0.07% in 2024 (vs 0.06% in the EU). 
Although  private  equity  activity 
is  relatively 
sizeable in France compared with the EU average, 
venture capital remains smaller than that of global 
competitors  and  European  peers.  It  may  prove 
insufficient  to  meet  the  massive  financing  needs 
of scale-ups (see also Annex 4). 

France  has  put  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  both  implementing  public  policies  aimed  at 
start-ups  and  bringing  together  this  ecosystem 
nationally and internationally. It supports start-ups 
through  various  programmes,  like  ‘France  Tech 
Next40/120’,  ‘Je  choisis  la  French  Tech’,  ‘French 
Tech  2030’,  ‘French  Tech  Tremplin’  and  ‘French 
Tech Rise’. These programmes aim to both support 
companies  that  meet  the  priorities  of  the  French 
government’s  innovation  strategy,  and  to  offer 
them  the  most  comprehensive  range  of  services 
possible. They combine all the levers of the state, 
in France and abroad, to mobilise the French tech 
ecosystem  and  public  and  private  buyers,  and 
carry out promotional activities. Bpifrance is a key 
partner and operator on several of these schemes, 
and  has  its  own  catalogue  of  products  to  offer 
start-ups and scale-ups. 

The  participation  of  domestic  institutional 
investors  in  providing  funding  for  venture 
capital  investors  is  relatively  low.  A  2024 
paper  by  the  think  tank  the  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. 
This  is  substantially  less  than  the  19%  in  the 
Baltic  states  or  the  +20%  in  the  Nordic  Member 
States (252). Given the size of the French insurance 
sector,  there  could  still  be  further  potential  to 
boost  insurers’  investments  in  venture  capital, 
where  France  can  build  on  its  successful  Tibi 
initiative  (see  also  Annex  4).  Since  2019,  the  Tibi 
initiative  has  been  encouraging 
institutional 
investors  to  invest  in  France’s  most  innovative 
technology companies (253). 

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

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

(251) Kukies, J. and Noyer, C., Financing innovative ventures in 
Europe. Recommendations to close the scaleup financing 
gap, deepen the Savings and Investments Union and 
strengthen Europe’s competitiveness, 2026. 

(253) As of March 2025, a total of EUR 12.5 billion had been 

invested by 37 institutional investors 
https://www.tresor.economie.gouv.fr/banque-assurance-
finance/financer-la-iveme-revolution-industrielle.  

72 

 
 
 
Table A6.2:  Statistical Annex 

(1) Annualised data. 
For ECB data on credit growth and pension fund assets, EU data refer to the EA average. 
Private equity and venture capital, % of GDP is calculated as a three-year moving average. 
Source: ECB, ESTAT, OECD, CMU Dashboard, AMECO. 

73 

20182019202020212022202320242025-Q3EUTotal assets of MFIs, % of GDP374.1383.2452.5441.0433.7420.2416.4418.4246.1Common equity Tier 1 ratio14.515.216.016.215.816.216.216.116.8Total capital adequacy ratio18.018.619.519.719.419.619.919.720.2Overall NPL ratio, % of all loans2.72.52.21.91.81.92.02.11.9NPL ratio, loans to NFCs4.43.93.93.53.43.63.73.93.5NPL ratio, loans to HHs3.22.92.62.32.12.12.22.32.1Return on equity ratio16.56.04.17.16.15.96.66.89.6Loans to NFCs, % of GDP43.343.751.849.550.147.847.146.529.3Loans to HHs, % of GDP59.461.067.065.264.661.259.358.343.6NFC credit growth rate, %6.45.613.53.88.22.22.53.22.5HH credit growth rate, %5.66.34.85.65.21.30.31.32.6Stock market capitalisation, % of GDP80.796.8100.1116.396.799.492.093.569.9Initial public offerings, % of GDP0.120.300.050.690.060.010.07-0.06Market funding ratio58.257.856.156.154.253.453.3-49.7Private equity, % of GDP0.6440.6550.6930.8040.9080.9150.855-0.487Venture capital, % of GDP0.0380.0510.0590.0770.0940.0990.089-0.064Financial literacy, composite index-----45.0--45.5Bonds, % of HHs' financial assets0.80.70.60.60.60.80.9-2.8Listed shares, % of HHs' financial assets4.24.84.75.24.85.14.9-4.8Investment funds, % of HHs' financial assets5.25.24.94.85.75.66.3-11.0Insurance/pension funds, % of HHs' financial assets39.939.638.836.433.733.233.7-27.8Total assets of insurers, % of GDP114.0119.4127.7120.9100.498.598.6100.553.9Pension assets, bn EUR---362.0415.9552.2587.9-5813.8Pension assets, % of GDP---14.415.719.520.1-32.310y real return average of pension assets, %-----1.61.3-1.4Pension funds assets, ECB (% of GDP)----7.67.67.77.723.01-34-1011-1718-2425-27Colours indicate performance ranking among the 27 EU Member States.Banking sectorNon-banking sector 
 
     
 
ANNEX 7: EFFECTIVE INSTITUTIONAL FRAMEWORK 

institutional  framework 

An  effective 
is 
essential  for  competitiveness.  This  requires 
public  trust  built  on  integrity,  quality  legislation, 
regulatory  simplification  and  efficient  services  for 
people  and  businesses.  For  France,  the  2025 
recommendations  highlighted 
country-specific 
challenges 
regulatory  and 
in 
administrative  burden,  particularly  in  relation  to 
businesses (See Annex 5). 

reducing 

the 

Public trust 

Graph A7.1: Trust in justice, regional/local 
authorities and in government 

(1) EU-27 since 2019; EU-28 before 
Source: European Commission, Standard Eurobarometer 
surveys 

Public trust in government in France is at an 
all-time low due to political instability in the 
country  and  is  considerably  below  the  EU 
average,  continuing  the  downward  trend 
since  2017.  Trust in  other  public  institutions  has 
also  sharply  decreased  and  has  fallen  below  the 
EU  average.  Businesses  retain  confidence  in  the 
public administration’s ability  to handle their data 
securely  and  responsibly,  while  the  general  public 
is  divided,  reinforcing  perceptions  of  inefficiency 
and poor data governance(254). 

Quality of lawmaking 

impact  assessments 

France’s  rules  for  lawmaking  demonstrate 
alignment  with  many,  but  not  all,  best 
practices in reducing regulatory burdens and 
ensuring  effective  implementation,  showing 
limited  progress  on  implementing  the  2025 
country-specific  recommendations  (255)  (Table 
A7.1).  Ex  ante 
remain 
mandatory for most draft laws and were clarified 
and  strengthened  in  2025(256),  notably  regarding 
environmental and cross-border impacts. However, 
there  is  no  requirement  to  identify  potential 
enforcement mechanisms and assess the level  of 
legislation,  thus 
compliance  when  developing 
reducing  the  government’s  ability  to  monitor 
implementation.  Furthermore,  oversight  of  better 
regulation  tools  is  also  weakened  by  the  absence 
of  an  external  body  responsible  for  reviewing  the 
quality  of  ex  post  evaluation.  There  is  also  a  lack 
of  publicly  available  assessments  of 
the 
effectiveness of regulatory impact assessments in 
amending  regulatory  proposals  and  of  ex  post 
evaluations  in  improving  the  regulatory  stock. 
Transparency  and  early  stakeholder  engagement 
remain insufficient, especially for primary laws, as 
the  government  is  not  required  to  provide  public 
feedback  on  how  consultations  were  reflected  in 
the  legislative  proposal  and  reports  on  regulatory 
impact  assessment  are  not  published  online 
anymore. 

Public service delivery and 
digitalisation 

remain 

Challenges 
regarding  the  user-
friendliness  of  public  services  in  France. 
Satisfaction levels with administrative services are 
slightly  above  the  EU  average  among  people 
(France:  49%;  EU:  45%)  and  businesses  (France: 
47%;  EU:  42%).  While  satisfaction  tends  to  be 
higher  when  considering  specific  services,  the 
for 
discrepancy 

highlights 

potential 

room 

(254) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(255) OECD, 2025, Better Regulation Practices across the European 

Union 2025, https://doi.org/10.1787/6f007516-en.  

(256) Circulaire n° 6502/SG relative à l’évaluation préalable des 
textes normatifs et à la maîtrise du flux réglementaire - 
Légifrance. 

74 

00.10.20.30.40.50.60.70.80.9AutumnSpringAutumnSpringAutumnSpringWinterSummerWinterSpringWinterSummerAutumnSpringAutumnSpringAutumnSpring202520242023202220212020201920182017Justice,  legal system EU-27Justice,  legal system FRRegional or local public authorities EU-27Regional or local public authorities FRGovernment  EU-27Government  FR 
 
      
 
 
 
 
Table A7.1:  France. Selected indicators on better regulation practices for primary legislation 

Source: OECD, 2025, Regulatory Policy Outlook 2025 [https://doi.org/10.1787/56b60e39-en] and Better Regulation across the 
European Union 2025. 

improvement  in  terms  of  connecting  services,  for 
example  through  the  life  event  approach  or 
through  higher  data 
reuse.  Additionally,  a 
significant share of users adopts a neutral position 
(20%),  highlighting  the  need  to  improve  user 
experience and clarity in service delivery. 

Graph A7.2: Most time-consuming aspects of 
service delivery 

Source: European Commission, 2026, Flash Eurobarometer 
surveys 567 and 568 on satisfaction with administrative 
services. 

the 

limited  progress  on 
France  has  made 
reducing 
burden, 
particularly in relation to businesses, though 
efforts are ongoing(257). While perceptions about 
service delivery have not changed since 2023(258), 

administrative 

the share of people who find public administration 
complex  and  burdensome  remains  one  of  the 
highest  in  the  EU  (France:  46%;  EU:  38)(259).  For 
people, identifying the correct service and where to 
request  it  is  the  most  time-consuming  aspect  of 
administrative service delivery (Graph  A7.2), while 
32%  engage  with  the  administration  more  often 
than  they  expected,  highlighting  complexity.  For 
businesses,  collecting  and  preparing  documents 
and  data,  understanding  the  applicable  legislation 
and  obligations,  and  waiting  times  for  responses 
are  the  most  time-consuming  aspects.  55%  of 
facing  challenges  with 
them  also 
administrative services. These challenges, both for 
people and businesses, point to a need for simpler 
processes  and  clearer  guidance  on  the  steps  to 
take.  Furthermore,  the  limited  number  of  digital 
public  services  available  for  businesses  (France’s 
score: 77 vs EU: 86)(260) exacerbates the situation, 
with a crucial need for France to improve its digital 
infrastructure.  However,  there  has  been  some 
progress.  Despite  involving  multiple  stakeholders, 
registering  a  French business  online  usually  takes 
48  to  72  hours,  faster  than  the  EU  average,  with 
prefilled  data  reaching  66%  at  application  stage 
and  99%  during  validation  and  decision-making, 

reported 

(257) Loi de simplification de la vie économique : des mesures 

concrètes pour faciliter l’activité des entreprises | 
economie.gouv.fr 

(259) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(258) European Commission 2023, Flash Eurobarometer FL526: 

(260) European Commission, 2025, Digital Decade: eGovernment 

Understanding Europeans’ views on reform needs. 

Benchmark, link. 

75 

0%10%20%30%40%50%ServiceidentificationDocumentspreparationApplicationformsDocumentspreparationLegislationandobligationsTime forresponsesPeopleBusinessesEUTools for smart legislation: Share of possible impacts assessed for all primary laws when developing legislation 1Regulators are required to identify and quantify the benefits of a new primary law1Regulators are required to identify and assess the impacts of alternative non-regulatory options1Tools for effective implementation: when developing laws, regulators are required to:Assess the level of compliance0Identify and assess potential enforcement mechanisms0Specify the methodology of measuring progress in achieving the law's goals1Oversight of better regulation: There is an external  body responsible for reviewing the quality of RIAs and of ex post evacuations 1There are publicly available assessments of the effectiveness of RIA in modifying regulatory proposals 0There are reports on the level of compliance by government department with the requirements of RIA1There are indicators on the percentage of ex post evaluations that comply with guidelines0The effectiveness of ex post evaluations in improving the regulatory stock has been assessed in the last five years0 
 
   
 
 
 
     
 
Table A7.2:  Digital Decade key performance indicators: availability of digital public services 

(1) Digital Decade target by 2030: 100. (2) Publishing year, data were collected in the previous year 
Source: European Commission, State of the Digital Decade report 2025. 

demonstrating  strong  data 
(See Annex 5).  

interoperability(261). 

involve 

frequently 

Fragmented 
territorial  governance  and 
overlapping competencies create uncertainty 
for  businesses.  France  has  significant  digital 
infrastructure  when  it  comes  to  permitting,  yet  it 
does  not  have  a  single  end-to-end  permitting 
platform  spanning  all  domains.  For  building  and 
environmental permits, platforms such as PLAT’AU 
and  entreprendre.service-public.fr  provide  digital 
form-filing  and  workflow  management,  but 
communes, 
processes 
prefectures  and  specialised  state  services.  This 
means  that  while  submission  is  digital,  decision-
making  remains  multi-layered.  SMEs  and  mid-
caps, in particular, have difficulty identifying which 
authority  to  approach  for  permits,  funding  or 
regulatory approvals, with some projects requiring 
consultations  with  up  to  seven  different  public 
authorities.  Lengthy  decision-making  timelines 
raise 
slow 
investment(262);  the  French  Senate  estimated  in 
2023 that these administrative layers cost around 
EUR 7.5  billion  per  year,  equivalent  to  0.3%  of 
GDP(263). 

administrative 

costs 

and 

The  availability of  digital  public  services  for 
people  and  for  businesses  have  been 
stagnating  for  two  years 
(people:  score 
between  71  and  72;  businesses:  between  77  and 
79)  (Table  A7.2),  and  efforts  to  advance  digital 
data  governance  would  be  beneficial.  Although 
most  people  in  France  find  public  administration 

(261) European Commission, forthcoming, Simplification of key life 

events. 

(262) Lluansi O., 2025, Produire et travailler en France : Mode 
d'emploi - 15 leviers à actionner simultanément pour 
restaurer le socle industriel français. Rapport pour le 
Mouvement des Entreprises de Taille Intermédiaire (METI). 

(263) Rapport Sénat coût du millefeuille administratif. 

services easy to use while abroad in the EU, 55% 
believe their public services should be more easily 
accessible(264). Both people and businesses believe 
it is important for public administration services to 
be fast and accessible through different channels, 
and  for 
information  to  be  transparent  and 
clear(265). France provides poor access to its digital 
services for people and companies from other EU 
countries (people - France: 51; EU: 71, businesses - 
France: 56; EU: 74). 

in 

This 

success 

illustrates 

The  availability  of  electronic  health  records 
the  number  of  e-
(Table  A7.2)  and 
government(266)  and  eID(267)  users  stand 
above  the  EU  average.  For  e-government  - 
France: 91.3, EU:  76.0; for eID  – France: 91.6, EU: 
digital 
55.3. 
authentication  through  FranceConnect  and  France 
Identité,  which provide access to a growing list of 
services,  such  as  healthcare  portals,  tax  systems 
and  administrative  formalities.  58%  of  people 
indicate  that  digital  public  administration  services 
reduce  the  time  and  effort  required  to  access  a 
suggest 
service,  while  more 
improvements  such  as  prompt  assistance,  user-
friendly  design  and  step-by-step  guidance  to 
increase  digital  usage(268).  Efforts  to  ensure 
transparent  data  usage  and  protection  would 

than  50% 

(264) Baromètre de l’Institut Paul Delouvrier, 2025, Based on a 

sample of nine public services. Baromètre 2024 sur l’opinion 
des Français et la satisfaction des usagers de services 
publics. 

(265) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

(266) European Commission, Eurostat 2025 (E-government users 
among individuals who used internet in the last year). 

(267) European Commission, Eurostat, 2026, E-government 
activities of individuals via websites, Use of electronic 
identification (eID). 

(268) European Commission, 2026, Flash Eurobarometer surveys 
567 and 568 on satisfaction with administrative services. 

76 

EU-272023202420252025717271827979778654798483Digital public services for citizens (0 to 100)Digital public services for businesses (0 to 100)Access to electronic health records (0 to 100)France 
 
 
 
   
 
improve  take-up  of  digital  services  and  facilitate 
further development. 

of 

data 

exchange 

France is not making progress in enabling the 
cross-border 
and 
documents  between  authorities  through  the 
EU once-only technical system(269). This means 
that  people  and  companies  from  other  EU 
countries  still  have  to  search  for  their  data, 
download and upload documents manually across 
e-government portals in France. It also means that 
French people and businesses cannot retrieve data 
and  documents  issued  by  the  French  authorities 
across  e-government  portals  in  different  Member 
States. It would be beneficial for France to actively 
engage 
technical  system 
community  and  prioritise  the  development  of 
interoperable digital infrastructure. 

the  once-only 

in 

Civil service 

increase 

in 
including 

France faces challenges related to its ageing 
public  administration  workforce,  posing 
potential  risks  for  mid-term  capacity  and 
quality of public administration. The proportion 
of  civil  servants  older  than  49  has  slightly 
decreased  in  the  past  year,  yet  has  continued  to 
increase  for  those  over  55(270).  There  has  been  a 
the  number  of  public 
steady 
servants(271), 
higher 
education.  However, 
the  proportion  of  civil 
servants having a higher education remains below 
the  EU  average.  Participation  in  adult  learning  in 
France  is  slowly  increasing  and  reached  the  EU 
average(272). Civil servants below 54 years old tend 
to  participate  less  in  adult  learning  compared  to 
the 
the  EU  average,  potentially  hindering 
acquisition of new skills and affecting operational 
efficiency.  It  underscores  the  need  for  a  robust 
framework  to  support  continuous  professional 

those  with 

development.  France  has  taken  steps  to  make 
public administration roles more attractive(273) but 
issues  remain.  Additionally,  gender  disparity  in 
senior  civil  servants’  positions  persists,  with  39% 
of women occupying such roles compared to 48% 
in the EU(274). 

Integrity 

is  a 
Corruption  when  doing  business 
in  France. 
significant  business  concern 
Perceptions 
largely  mirror  the  EU 
in  France 
average:  63%  of  companies  say  corruption  is 
widespread  (EU:  63%).  Although  fewer  companies 
state that overly close links between business and 
politics lead to corruption (France: 70%; EU: 76%), 
a higher-than-average share still report corruption 
as  a  practical  obstacle  to  doing  business  (France: 
42%;  EU:  35%)(275),  indicating  tangible  concerns. 
Sectors  particularly  vulnerable  to  corruption  in 
France  are  public  procurement,  urban  planning, 
construction,  health,  sport,  waste  treatment  and 
defence  procurement(276)  (see  also  Annex  5).  At 
the same time, the number of companies in France 
that report having been asked or expected to offer 
a  gift,  a  favour  or  extra  money  for  permits, 
services  or  procurement  is  in  line  with  the  EU 
average  (France:  13%;  EU:  10%).  In  France,  a 
higher share of companies (France: 44%; EU: 33%) 
think that people and businesses caught bribing a 
senior  official  are  appropriately  punished, 
indicating greater confidence in enforcement than 
the EU average(277). 

France  has  taken  some  steps  to  improve 
prevention  and  detection  of  corruption.  In 
November  2025,  it  adopted  its  second  national 
anti-corruption  plan  (2025-2029)  to  strengthen 
for  preventing,  detecting  and 
mechanisms 

(269) I European Commission, Once-Only Technical System 

Acceleratormeter, Ec.europa.eu. 

(270) European Commission, Eurostat, 2026, European Union 

Labour Force Survey, Employed persons by economic activity 
(NACE Rev. 2) (2008-2026). 

(271) +1.1% more at the end of 2023 than at the end of 2022, 
Chiffres clés de la fonction publique – Édition 2025. 

(272) European Commission, Eurostat, 2026, European Union 

(273) Various Technical Support Instrument projects have 

supported France’s public administration in becoming more 
attractive, see our website for more information. 

(274) European Institute for Gender Equality, 2025, Gender 

Statistics Database. 

(275) European Commission, 2025, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

(276) European Commission, 2025, Rule of Law Report. 

Labour Force Survey, Employees by educational attainment 
level and NACE Rev. 2 activity (2008-2026). 

(277) European Commission, 2025, Flash Eurobarometer survey 
557 on Businesses' attitudes towards corruption in the EU. 

77 

 
 
 
prosecuting  corruption(278).  This  plan  focuses  on 
implementing  strong  preventive  measures  across 
public administrations, emphasising ethics training 
for  senior  officials,  and  introducing  new  ethics 
rules for parliament members and magistrates. 

France has improved its prosecution capacity 
and  asset  recovery  tools.  Efforts  to  prosecute 
corruption stepped up in 2025 – including in high-
level cases – supported by additional staffing and 
new legislative instruments, notably to strengthen 
asset recovery. 

Justice 

the 

The  efficiency  of 
justice  system 
continues to face challenges. The time taken to 
reach  a  decision  in  civil  and  commercial  cases  at 
first instance courts increased between 2023 (354 
days) and 2024 (434 days). The estimated time to 
resolve  administrative  cases  at  first  instance 
courts decreased in 2024 (301 days compared to 
322 days in 2023)(279). 

justice  system 

The  quality  of  the 
is 
considered  to  be  good  overall.  In  line  with  a 
law  adopted  in  2023(280),  additional  posts  in  the 
judiciary  will  be  created  every  year  until  2027  to 
address the low number of staff. 

Some further progress has been made on the 
digitalisation  of  judicial  procedures.  Digital 
tools  were  further  deployed  for  criminal  and  civil 
procedures  and  general  public  online  access  to 
published 
  The  country 
performs  well  on  arrangements  for  producing 
machine-readable  judicial  decisions,  while  more 
could 
electronic 
to 
communication  between  the  courts,  prosecutors 
and other judicial actors(281). 

judgments 

improved. 

improve 

done 

be 

(278) Agence francaise anticorruption, 2025, Plan national 

pluriannuel de lutte contre la corruption. 

(279) Fig. 5 and 7, EU Justice Scoreboard 2026.  

(280) LOI n° 2023-1059 du 20 novembre 2023 d'orientation et de 
programmation du ministère de la justice 2023-2027. 

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

justice system in France, see the upcoming 2026 EU Justice 
Scoreboard and the 2025 Rule of Law Report. 

78 

 
 
 
SUSTAINABILITY 
ANNEX 8: INDUSTRY DECARBONISATION, CIRCULARITY AND CLIMATE MITIGATION 

France faces several challenges, particularly 
on 
industrial  electrification,  on  freight 
transport,  on  water  pollution  and  on  the 
circular  economy.  In  2025,  France  received  a 
country-specific  recommendation  to  support  the 
increase  in  demand  and  supply  of  low-emission 
transport  modes  and  vehicles.  Efforts  are  also 
needed on rail and inland waterways transport for 
freight,  with  levels  in  both  being  below  EU 
average.  Water  pollution  from  industry  is  another 
challenge,  imposing  direct  and  indirect  costs  of 
EUR 72 million a year. Although the country has an 
ambitious 
strategy, 
implementation remains uneven with a slow pace 
of  adoption  of  secondary  materials.  Waste 
generation  is  broadly  unchanged,  underscoring 
persistent  reliance  on  primary  resources.  Despite 
some progress,  France  still  faces  significant  costs 
and health impacts due to air pollution. 

economy 

circular 

Industry decarbonisation 

Greenhouse gas emissions from industry 

The greenhouse gas (GHG) emission intensity 
of French industry is somewhat above the EU 
average but industrial emissions account for 
a relatively low share of total emissions (282). 
In  2025,  industry  generated  16.5%  of  gross  GHG 
in  France (283).  With  about  260 
emissions 
g CO2eq/€ in 2024, the greenhouse gas emissions 
intensity of manufacturing production in France is 
among  the  lower  in  the  EU (284).  51%  of  France’s 

(282) This Annex discusses the transition of France's 

manufacturing industry, specifically its energy-intensive 
industries, to low-carbon and net-zero modes of production, 
which is key to preserving competitiveness on the path 
towards climate neutrality as mandated by the European 
Climate Law. A broader perspective on the current 
competitiveness challenges facing France's manufacturing 
industry is provided in Annex 5. For a more detailed 
description of greenhouse gas emissions from industry, see 
European Commission (2025), 2025 Country Report - France, 
Commission staff working document, SWD (2025) 205 final, 
Brussels, 4.6.2025, Annex A7. Clean industry and climate 
mitigation. 

manufacturing  emissions  (in  2023)  stem  from 
energy  use  rather  than  processes,  which  is  below 
the EU average. This might be partly explained by 
France’s  relatively  decarbonised  energy  mix (285). 
The  share  of  electricity  and  renewables  in  final 
energy  consumption  of  manufacturing  increased 
only  slightly  between  2019  and  2024  from  42% 
to 44% (286). 

Policy 
decarbonisation 

framework 

to  promote 

industry 

a 

has 

comprehensive 

France 
policy 
framework  to  decarbonise  industry,  linking 
ambitious  GHG  emission  reduction  targets 
with  a  legislative  framework  and  support 
measures.  The  revised  draft  3rd  National  Low-
Carbon  Strategy  (SNBC3),  presented  in  December 
2025,  sets  an  objective  for  industry  to  reduce 
emissions by 68% by 2030 compared to 1990 (up 
from  46% in the  earlier  draft  SNBC3  and  35%  in 
SNBC2) and by 97% by 2050 (excluding Bioenergy 
with  Carbon  Capture  and  Storage).  The  revised 
SNBC  positions  technological  transformation  as  a 
driving  force,  most  notably  to  enable  a  strong 
acceleration  in  the  process  to  electrify  industrial 
processes,  hydrogen  electrolysis  and  carbon 
capture,  utilisation  and  storage.  The  2023  Green 
Industry  Law  simplifies  environmental  permitting 
for  industrial  projects,  with  the  objective  to  halve 
the time needed for permit delivery.   

The supply of low-carbon industrial products 
is  eligible  for  budgetary  support  under 
schemes  available  for  multiple  technologies 
and  sizes  of  project.  The  flagship  France  2030 
investment  plan,  supported  by  the  Recovery  and 
Resilience  Facility,  plans  to  spend  EUR 4.5  billion 
on  industrial  decarbonisation  through  a  variety  of 
schemes targeting multiple technologies and sizes 
of  project.  In  February  2026,  seven  large-scale 
industrial  decarbonisation  projects  (Grand  Projets 
Industriels  de  Décarbonisation)  were  selected  for 

value added) with those from the UNFCCC under the 
Common Reporting Format. Also see further indicators on 
industry decarbonisation, as well as the annotation for 
further information, in table A8.1 at the end of this Annex. 

(283) ProjetSee latest estimates from Citepa: CP-

Citepa_Barometre_avril2026.pdf  

(285) See Annex 9.  

(284) Data on the manufacturing sector exclude the NACE division 
C19 – manufacture of coke and refined petroleum products, 
for better match of the sectoral data from Eurostat (gross 

(286) Consommation finale d'énergie par secteur et par énergie | 

Chiffres clés de l'énergie - Édition 2025, SDES, Bilan 
énergétique de la France. 

79 

 
 
 
 
 
 
 
 
funding  with  individual  support  of  over  EUR  20 
million.  They  will  receive  funding  over  15  years, 
including  EUR 1.6  billion  in  2026.  Altogether,  the 
projects should reduce 3.8 mtCO2eq, corresponding 
to  24%  of  the  industrial  GHG  emission  reduction 
target included in the SNBC3. Eligible technologies 
include carbon capture and storage, electrification 
of  processes  and  use  of  alternative  products  to 
substitute  cement.  France  also  has  additional 
schemes  for  smaller-  to  medium-scale  projects 
(from  EUR 100 000  to  EUR 30  million  of  support 
per  individual  project)  and  has  launched  regular 
calls for proposals since 2020. 

France  promotes  industrial  decarbonisation 
by  providing  support  under  an  off-budget 
mechanism  known  as  the  energy  saving 
certificate scheme (CEE). This scheme mobilises 
between EUR 600 million and EUR 1.2 billion every 
year  for  projects  to  reduce  energy  demand  in 
industry  in  the  form  of  an  obligation  for  energy 
providers  to  finance  energy  saving  projects.  The 
scheme  generates  half  of  the  EUR 1.3  billion  in 
investment, 
ArcelorMittal's 
announcement  in  February  2026  to  build  an 
electric  arc  furnace  for  green  steel  production  in 
Dunkirk,  one  of  France’s 
largest  single  GHG 
emitting site. 

following 

Despite  relatively  low  electricity  prices,  the 
high  potential  for  industrial  electrification 
remains untapped. Electricity  generated 36% of 
industrial energy consumption in 2024, against the 
draft SNBC3 target of 47% by 2030 and 57% by 
2050.  In  particular,  there  is  high  potential  to 
transition  industrial  heat  generation,  as  93%  of 
consumption  in  2022  relied  on  fossil  energy. 
Challenges to industrial electrification include high 
capital  expenditure  costs, 
for 
connection  to  the  grid  and  uncertainty  related  to 
electricity  prices.  This  is  despite  the  fact  that 
France  benefits  from  lower  electricity  prices  than 
other  European 
countries.  From  a  global 
perspective,  industrial  consumers  and  competitive 
electricity  prices  have  somewhat  shielded  France 
from  the  2022  and  2023  price  hikes  thanks  to 
lower 
to 
international  competition  and  to  indirect  carbon 
cost compensation.  

the  sectors  exposed 

time  needed 

taxation 

in 

To  tackle  the  weak  demand  signals  for 
industrial  products,  France 
decarbonised 
could  use  complementary  policy  levers.  The 
revised  National  Hydrogen  Strategy,  published  in 
April  2025,  is  now  strongly  aligned  with  SNBC3 

80 

the 

lever 

targets  were 

and  confirms  hydrogen  as  key 
for 
electrification  and  decarbonising  hard-to-abate 
sectors.  However, 
revised 
downwards  (4.5GW  electrolysis  capacity  by  2030, 
down from 6.5 GW in the 2020 strategy) reflecting 
in  demand  and  persistent 
slower  growth 
investment  risks.  Projected  industrial  demand  is 
planned to absorb a limited share of the targeted 
output  (5 TWh,  i.e.  a  third  of  national  capacity). 
Stronger  R&D,  including  in  natural  hydrogen  (for 
example  under  the  REGALOR (287)  project  co-
funded  by  the  Just  Transition  Fund),  and  stronger 
demand-side  measures  for  low-carbon  industrial 
products  could  enable  France  to  tap  the  full 
potential  of  hydrogen  and  accelerate  industrial 
electrification. 

Reduction of effort sharing emissions 

Compliance  with  effort  sharing  limits  with 
domestic measures 

France’s  effort  sharing  emissions  are 
projected  to  exceed  its  2030  target,  but  it 
could  cover  the  gap  with  unused  emission 
allocations  from  earlier  years (288).  In  2024, 
greenhouse  gas  emissions  from  France’s  effort 
sharing sectors are expected  to have been 24.9% 
below  2005  levels.  By  2030,  current  and  planned 
policies  and  measures  are  expected  to  lead  to  a 
46.3% reduction, leaving a gap  of 1.2 percentage 
points to the 2030 target. France could bridge this 
gap with unused annual emission allocations from 
earlier  years.  Swift  and  steady  implementation  of 
the  additional  measures  will  remain  crucial  to 
achieve progress towards climate neutrality. 

(287) REGALOR 2 Project - GeoRessources. 

(288) The national GHG emission reduction target is set out in 

Regulation (EU) 2018/842 (the Effort Sharing Regulation). It 
applies jointly to buildings (heating and cooling), road 
transport, agriculture, waste and small industry (known as 
the effort sharing sectors). The emissions from effort sharing 
sectors for 2024 are based on approximated inventory data. 
The final data will be established in 2027 after a 
comprehensive review. Projections about the impact of 
current policies (‘with existing measures’, WEM) and 
additional policies (‘with additional measures’, WAM) as per 
France’s 2025 reporting under Article 17 of Regulation (EU) 
2018/1999 (the Governance Regulation). Also see European 
Commission (2025), Climate Action Progress Report 2025 – 
Technical Information, Commission staff working document, 
Brussels, Chapter 9 (pp. 111ff.), and in particular Tables 25 
and 26. 

 
 
Sustainable transport  

In  2024,  road  transport  generated  39%  of 
France’s  effort  sharing  emissions,  a  14% 
levels (289).  The  2025 
reduction  from  2005 
country-specific 
for 
France  highlighted  challenges  of  low  demand  for 
and  supply  of  low-emission  transport  modes  and 
vehicles. 

recommendations 

(CSRs) 

Graph A8.1: Greenhouse gas emissions in the 
effort sharing sectors, 2005, 2023, and 2024 

Source: European Environment Agency. 

low, 

The  share  of  low-emission  transport  modes 
remains 
in  particular  for  freight 
transport. The modal shift to transporting freight 
by rail and inland waterways remains a challenge, 
with 86.2% of freight transported by road, against 
the EU average of 75%. Rail and inland waterways 
transport  8.9%  and  1.8%  of  freight  respectively, 
against  EU  averages  of  16.4%  and  4.8%.  The 
share  of  freight  transported  by  inland  waterways 
has  stalled.  There  has  been  a  reduction  in  rail 
freight since 2023, with only limited increases for 
combined and intermodal transport (290). 

the 

2025 

To  shift  to  more  sustainable  transport  in 
France,  further  action  is  needed.  France  is 
addressing 
country-specific 
recommendation  highlighting  the  need  to  remove 
barriers  and  provide  incentives  to  increase  the 
demand  and  supply  of  low-emission  transport 
modes  and  vehicles.  Key  measures 
include 
purchase  subsidies,  newly 
introduced  energy 
savings  certificates  (CEE)  and  a  social  leasing 
programme  that  is  expected  to  continue  until  at 
least 2027. As part of this social  leasing scheme, 
France  added  in  October  2025  a  top-up  subsidy 

for  vehicles  assembled  in  Europe  with  batteries 
manufactured  in  Europe.  There  are  no  specific 
measures  to  stimulate  demand  for  second-hand 
electric  vehicles  or  for  the  installation  of  private 
charging points. 

low-emission 

France  has  made  progress  on  the  demand 
and  supply  of 
transport 
vehicles, but it remains insufficient. The share 
of zero-emission vehicles (ZEVs) in new passenger 
car  registrations  reached  20%  in  2025,  up  from 
16.9%  in  2024.  Progress  was  also  made  in  other 
segments,  with  ZEV  registrations  increasing  for 
light 
(9.6%  of  new 
vehicles 
registrations  in  2025,  up  from  up  7.1%  in  2024) 
and  gradually  rising  for  heavy-duty  vehicles  (710 
electric buses registered in 2025, up 8% year-on-
year  with  electric  trucks  accounting  for  3.7%  of 
new registrations, up from 2.6% in 2024) (291). 

commercial 

supporting 

Strengthening  the  regulatory  and  fiscal 
framework  for  commercial  vehicles  could 
low-emission 
accelerate  the  take-up  of 
technologies 
the 
while 
In 
competitiveness  of  the  automotive  sector. 
March  2025,  France  introduced  a  tax  incentive  to 
help  reach  the  national  target  on  low-emission 
further 
company  vehicles,  but 
disincentivised the purchase of combustion engine 
vehicles. The parameters for the tax framework on 
CO₂ and weight penalties have been strengthened 
in 2026. France does not use the option to exempt 
electric  heavy-duty  vehicles  from  tolls  on  high-
speed  roads.  It  does  not  internalise  the  external 
cost of CO2 emissions of conventional  heavy-duty 
vehicles  in  tolls (292)  nor  does  it  conduct  the 
assessments  mentioned 
in  Article  7ca (4)  of 
Directive 1999/62/EC. 

it  has  not 

is  needed  to 

improve 
Additional  action 
sustainable  alternatives  to  road  transport. 
The quality of rail and inland waterway networks is 
declining.  France  has  yet  to  adopt  its  national 
strategy  for  inland  waterways  to  address  the 
challenges  faced  by  the  sector,  including  the 
uptake  of  technological  innovation.  Although  in 
2023,  60.8%  of  railway  lines  were  reported  as 
electrified (293)  and  a  significant  number  of 

(291) European Alternative Fuels Observatory. 

(292)https://www.ecologie.gouv.fr/sites/default/files/documents/20

(289) See Graph A8.1, and Table A8.1 at the end of this Annex. 

25.03.05%20-%20rapport%20Eurovignette-3.pdf. 

(290) Statistical Pocketbook 2025. 

(293) Statistical Pocketbook, 2025. 

81 

050100150200250300350400450200520232024MtCO2eDomestic transport (excl. aviation)Buildings (under ESR)AgricultureSmall industryWaste 
   
 
 
measures in the national rail freight strategy were 
implemented  in  November  2025,  an  estimated 
EUR  4 billion  in  investment  in  rail  freight  is  still 
needed over the period 2023-2032 (294).  

Decarbonisation of fisheries 

The French fishing fleet is among the higher 
emitting fleets in the EU in terms of total CO2 
equivalents,  amounting  to  an  average  of  913 
thousand 
tonnes  CO₂eq  between  2018  and 
2022 (295),  and  287.4  million  litres  of  marine  fuel 
consumed  in  2023.  In  view  of  climate  change 
mitigation,  both  the  fisheries  and  aquaculture 
sectors  face  the  dual  challenge  of  moving  away 
from  fossil  fuels  and  increasing  energy  efficiency 
to  enhance  sector  resilience.  This  requires  a 
comprehensive  energy  transition  strategy  that 
incorporates 
sources, 
technological  innovation,  adequate  infrastructure 
and  access  to  energy  sources,  and  improved 
energy practices across the sector's operations. 

renewable 

energy 

Sustainable industry 

Circular economy industry 

implementation 

is 
France’s  circular  economy  strategy 
ambitious,  but 
remains 
uneven,  with  a  slow  pace  of  adoption  of 
secondary  materials.  France 
ranks  below 
average  on  recycling  rates.  40.9%  of  municipal 
waste is recycled (against the EU average in 2024 
of 48,1%) and 65% of construction and demolition 
waste is recovered (296) (against the EU average of 
80%,  in  2022).  It  is  well  below  average  on  the 
(approximately 
recycling  of  plastic  packaging 
25,7% 
in  2023,  below  the  EU  average  of 
42,1% (297).  France  is  the  European  leader  on 
patents  related  to  recycling  and  secondary  raw 

(294)https://www.ecologie.gouv.fr/sites/default/files/documents/20
2503%20SNDFF%20Programme%20d%27investisssement
%202023-2030.pdf. 

(295) Study on greenhouse gas emission (GHG) reduction costs, 

scenarios and pathways for EU fisheries to achieve net zero 
by 2050 - Publications Office of the EU. 

(296) Techno-economic and environmental assessment of CDW 

management, JRC, 2024, Link. 

materials.  In  2021,  it  filed  32  patents  out  a  total 
of 324 in the EU (298). 

remains 

generation 

Waste 
broadly 
unchanged,  underscoring  persistent  reliance 
on  primary  resources (299).  Despite  this,  per 
capita  material  consumption  has  decreased  over 
the  past  five  years  by  14.5%  between  2019  and 
2024 (300) and resource productivity has increased 
by 37% over the same period.  

France’s  fiscal  tools  for  circular  practices 
are more ambitious than the EU average but 
there is scope to develop them further.  Total 
environmental  tax  revenue  is  lower  than  the  EU 
average  1.9%  of  GDP  in  2024,  EU  average 
2.1% (301). Taxes on pollution and resources make 
up a very low share of total taxation (respectively 
6.2%  and  1%  of  the  total  environmental  tax 
revenues (302).  Introducing  fiscal  instruments  like 
across 
the 
municipalities  and  regions  or  a  CO2  tax  on 
incineration  could  lead  to  a  reduction  in  the 
volume  of  waste (303)  and  could  also  generate 
additional revenue (304). 

pay-as-you-throw 

system 

(298) Eurostat, Patents related to recycling and secondary raw 

materials, Link. 

(299) Eurostat, circular material use rate, Link. 

(300) Eurostat, Material footprints, Link. 

(301) European Commission: Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU's economic governance framework, 
2025.   

(302) European Commission: Directorate-General for Environment, 
Camboni, M., Markandya, A., Tyrer, D., Goonesekera, S. et 
al., Greening the European Semester – Resource and 
pollution taxes. Annex 6, Country factsheets, Publications 
Office of the European Union, 2026, Link.   

(303) An average 25% reduction in the volume of municipal waste 
can be achieved when PAYT is applied, (Dornbusch, H. J., et 
al., 2020, Vergleichende Analyse von Siedlungsrestabfällen 
aus repräsentativen Regionen in Deutschland zur 
Bestimmung des Anteils an Problemstoffen und 
verwertbaren Materialien - Abschlussbericht, UBA Texte No 
113/2020, Umweltbundesamt, Deassau-Rosslau, 2020, 
Link). 

(304) EEA, Early warning assessment related to the 2025 targets 

(297) Packaging waste statistics - Statistics Explained - Eurostat 

for municipal waste and packaging waste, Link. 

82 

 
 
 
To  reach  the  circular  economy  objectives,  France 
would  require  EUR 4.6  billion (305)  of  additional 
investment annually. 

Bioeconomy industry 

registering 

France's  bioeconomy  sector  value  added 
outpaced  domestic  GDP  growth  over  the 
2018–2023  period  (3.7%  versus  3.1%  on 
average) (306).  Bio-based  textiles  emerged  as  the 
strongest  performer, 
the  highest 
average  value-added  growth  at  7.2%,  reflecting 
both accelerating regulatory tailwinds — including 
upcoming 2025–2026 bans on PFAS chemicals — 
and  rising  market  demand  for  sustainable  and 
circular  fibre  solutions (307).  Employment  trends 
are equally encouraging, with bio-based chemicals 
and  plastics  leading  on  job  creation  at  3.5% 
between 2018 and 2023 (308).  Labour productivity 
reached  84.3%  of  the  national  average,  up  from 
80.5%  in  2018,  indicating  a  steady  narrowing  of 
the  gap  with  the broader economy  and  a  gradual 
shift toward higher-value bio-based activities (309).  

investment 

Research  and  development  (R&D)  business 
expenditure  from  bioeconomy  sub-sectors 
has grown more than three times faster than 
(9.5% 
overall  national  R&D 
compared  with  an  average  growth  of  3.0% 
between 
France's 
bioeconomy  is  anchored  in  its  food  and  beverage 
sector, which is progressively shifting toward high-
value  organic  production  and  agricultural  side-
stream valorisation.  These sectors are embedded 
in France's Bioeconomy Strategy (311). 

2023) (310). 

2018 

and 

Over  the  past  decade,  France  has  made 
in  reducing  key  air  pollutants 
progress 
through  cleaner  energy  production,  tighter  vehicle 
emission standards and improvements in industrial 
technology. This has enabled France to reduce air 
pollutant  emissions  (NOx,  NMVOC,  PM10,  SOx)  by 
34% in kg of emissions per capita in 2023. Despite 
this  progress,  France  continues  to  grapple  with 
impacts  of  air 
significant  costs  and  health 
pollution. Challenges remain, as outlined by  Santé 
Publique  France (312).  In  2022,  it  ranked  among 
Europe’s  worst  performers,  with  multiple  air 
quality zones exceeding the target level for ozone, 
and  annual  damage  costs  estimated  at  EUR  112 
million (313).  This  underscores  the  need  for  further 
action,  particularly  in industrial  regions  and  urban 
transport corridors.  

France  has  not  brought  in  any  new  taxes  on 
major  air  pollutants  such  as  NOx,  SO₂,  or 
particulate  matter  over  the  same  period (314). 
Introducing  a  pollution  tax  system  could  reduce 
these  polluters  by  7-30%,  depending  on  the  tax 
rate,  while  generating  up  to  EUR  63  million  in 
revenue by 2030 (315). 

Water pollution from industry also remains a 
critical  challenge.  France  has  made  some 
progress  on  water  pollution  including  a  30% 
reduction  in  industrial  heavy  metal  releases  (Cd, 
Hg,  Ni,  Pb)  and  a  92%  reduction  in  total  organic 
carbon emissions to water since 2010, as reported 
under the Industrial  Emissions Directive (IED) (316). 
However,  23%  of  France’s  surface  water  bodies 
still  fail  to  achieve  good  chemical  status  due  to 
the  presence  of  ubiquitous,  persistent,  bio-

Zero-pollution industry 

(305) European Commission, Environmental Implementation 

Review (2025), France country report, Link. 

(312) La pollution de l'air extérieur en France – Extrait du Bilan 
environnemental 2024 | Données et études statistiques. 

(306) Joint Research Centre, Developments of Economic Growth 

and Employment in Bioeconomy Sectors across the EU, Link. 

(307) Bioeconomy subsectors: food and beverages; bio-based 

textiles; wood products and furniture; bio-based chemicals 
and plastics. 

(308) Ibid. 

(309) Ibid. 

(310) Joint Research Centre, Business expenditure in Research and 

Development (R&D) in the EU bioeconomy, Link. 

(311) A bioeconomy strategy for France: 2018-2020 Action plan | 
Ministère de l’Agriculture, de l’Agro-alimentaire et de la 
Souveraineté alimentaire. 

(313) European Commission: Directorate-General for Environment, 
EMRC, Logika Group and RPA Europe; Update of the costs of 
not implementing EU environmental law (2025), Link. The 
damage cost is computed as VOLY.  

(314) European Commission, Directorate-General for Environment, 

RPA Europe, Conduct in-depth assessments on 
environmental priorities to support the greening of the 
European Semester and integration of environmental 
priorities into the EU's economic governance framework, 
2025.  Link, page 164 

(315) Ibid. 

(316) EEA, Water pollutant releases changes from 2010 to 2022 

for the EU Member States, 2024, Link. 

83 

 
 
 
accumulative  and  toxic  substances  (uPBTs) (317) 
generated by past industrial activities.  

Water  pollution  by  industry  imposes  direct  and 
indirect costs of EUR 100 million annually, not yet 
sufficiently borne by the polluters (318). 

(317) European Commission, Third River Basin Management Plans 
Second Flood Hazard and Risk Maps and Second Flood Risk 
Management Plans Member State: Germany, 02/2025, Link. 

(318) European Commission: Directorate-General for Environment, 
IEEP, Green taxation and other economic instruments – 
Internalising environmental costs to make the polluter pay 
(p. 35, Table 5), 2021, Link. 

84 

 
 
Table A8.1:  Key clean industry and climate mitigation indicators: France 

Source: Industry decarbonisation: All data are from Eurostat; data following the UNFCCC Common Reporting Format (CRF) are 
from the European Environment Agency (EEA), republished by Eurostat. (1) Sectors covered: all divisions of section C - 
Manufacturing - of the NACE Rev. 2 statistical classification of economic activities, except C19 (manufacture of coke and refined 
petroleum products). (2) GHG emissions as per UNFCCC Common Reporting Framework (CRF) categories 1.A.2 - fuel combustion in 
manufacturing in industries and construction (that broadly correspond to the broadly correspond to the NACE sections C - 
Manufacturing and E - Construction, excluding C-19),  and CRF2 - industrial processes and product use. The figures shows the 
emissions in the 1.A.2 category as a share of the sum of CRF1.A.2. and CRF2 emissions. (3) Sectors covered: CRF 1.A.2 as 
described above. Gross value added (GVA) data in the denominator aligned in sectoral coverage, in 2020 prices. (4) Sectors 
covered: NACE section C excluding C19. (5) Nominator: NACE divisions C17, 20, 23, 24; denominator: NACE section C excluding 
C19 (see above). (6) GVA (denominator) in 2020 prices. Reduction of effort sharing emissions: Data source: European Environment 
Agency, greenhouse gas data viewer; European Commission, Climate Action Progress Report, 2025. For details, see the footnote in 
the "Reduction of effort sharing emissions" section. Sustainable road transport: (7) Source: Eurostat; (8) Source: European 
Alternative Fuels Observatory; (9) Source: Eurostat. For all climate mitigation indicators, the trend arrows compare the latest 
available data (year t) with the data four years earlier (t-4). Sustainable industry: Bioeconomy value added, employment and 
productivity: JRC, Developments of Economic Growth and Employment in Bioeconomy Sectors across the EU. Bioeconomy R&D 
business expenditure: JRC, Business expenditure in Research and Development (R&D) in the EU bioeconomy. Damage cost for 
industrial pollution: EEA, The costs to health and the environment from industrial air pollution in Europe, 2024. Water industrial 
pollutants releases: EEA, Industrial releases of pollutants to water and economic activity in the EU-27, 2024. Water chemical 
status: WISE, Surface water bodies: Chemical status, 2024 and WISE Groundwater bodies: chemical status, 2024. Other indicators: 
Eurostat. For circular economy indicators, the trend arrows compare the latest available data (year t) with the data two years 
earlier (t-2). 

85 

Climate mitigationTrendIndustry decarbonisation201820192020202120222023202420182023GHG emissions intensity of manufacturing production, g/€ (1)345327318320305268259330-Share of energy-related emissions in industrial GHG emissions (2)47.548.549.850.250.551.3-55.557.9Energy-related GHG emissions intensity of manufacturing and construction, g/€ (3)192.9184.1185.8183.2175.6157.7-203.9163.0Share of electricity and renewables in final energy consumption in manufacturing, % (4)42.042.242.641.242.744.144.242.843.9Energy intensity of manufacturing, GWh/€ (4)1.311.251.271.261.221.121.081.271.05Share of energy-intensive industries in manufacturing production, % in GVA (5)15.7715.3415.1914.8716.3014.61---GHG emissions intensity of production in sector [...], g/€ (6)- paper and paper products (NACE C17) 565          523          508                 542            588                   546            -722             619             - chemicals and chemical products (NACE C20) 1,164        1,050        1,060               1,299         1,650                1,403         1,286          --- other non-metallic mineral products (NACE C23) 2,181        2,193        2,297               2,156         2,230                2,011         -2,495           2,352          - basic metals (NACE C24) 4,861        4,364        3,553               6,669         12,073              10,756       -2,842           3,099          Reduction of effort sharing emissions201820192020202120222023202420182023GHG emission reductions relative to base year, % -18.1-21.7-24.9-24.9- domestic road transport-7.7-8.3-22.1-12.4-9.9-13.5-14.4-1.4-5.6- buildings-27.1-29.1-31.5-28.5-38.7-44.9-45.2-20.3-33.520052021202220232024TargetWEMWAMEffort sharing: GHG emissions, Mt; target, gap, %401.1328.4313.9301.1301.4-47.5%-37.0%-46.3%Sustainable road transport2018201920202021202220232024202520182021New zero-emission vehicles, electricity motor, % (7)1.431.936.649.6913.1416.4916.571.038.96Number of publicly accessible AC/DC charging points (8)--05465383317119255155931186717446956n/aShare of electrified railways, % of total (9)58.3658.6459.0459.5160.0060.0160.9855.4756.49Sustainable industryTrendEU-27Circular economy transition20182019202020212022202320242018latest dataMaterial footprint, tonnes per person14.015.013.515.014.513.812.914.813.7Circular material use rate, %19.8          16.2          15.4                 15.4           16.7                  16.9           17.811.612.2Resource productivity, €/kg3.1            2.9            3.0                   3.0             3.3                    3.5             3.92.13.0Employees in circular economy1.9            1.92.0                   2.0             1.8                    1.8             -2.12.0Patents in circular economy42.9457.1          53.5                 32.8           12.312.0Recycling rate            40.7           41.0                  39.3             40.9                    40.1             40.3 40.9            46.4048.1Plastic recyling 27%27%21%23%26%26%-41%42%Construction and demolition waste (CDW) recovery 73-748889Bioeconomy industry 2018201920202021202220232024CAGR 2018-202320182023Value added, million EUR98,62799,42998,685107,432122,346122,682-3.7%642,438863,436Employment, total number of people employed1,667,8051,679,2311,707,5331,714,5791,740,0461,742,597-0.7%17,649,04017,085,642ProductivityValued added per worker, thousand EUR59.159.257.862.770.370.4-2.9%36.450.5Valued added per worker, % of national average80.578.980.583.289.284.3--62.270.7R&D business expenditureTotal bioeconomy (biomass producing and converting sectors)1,9281,9281,9752,8613,3553,3249.5%15,67223,335Total R&D business expenditure34,02335,22034,62536,47838,96540,630-3.0%196,587259,525Zero pollution industry201820192020202120222023202420182021Damage cost for industrial pollution29.224.722.826.7---414.9352.7Water industrial pollutants releases 2021change (2010)2021change (2010)2021change (2010)2021change (2010)9,366        -84%38,225,200      -35%47,136,300       -92%2,336,140    -42% Water chemical statusGood7,745               Good (%)0.7                    Poor2627.0Poor (%)23%EUTOCPhosporusFranceFranceCd, Hg, Ni, Pbnitrogen 
 
   
 
ANNEX 9: AFFORDABLE ENERGY TRANSITION 

This  annex  outlines  the  progress  made  and 
the  ongoing  challenges  faced  in  increasing 
energy  affordability,  while  advancing  the 
transition 
the 
implementation  of  past  energy-related  country-
specific recommendations. 

to  net  zero. 

reflects 

It 

While France’s energy mix remains generally 
more decarbonised than the EU average, with 
55,7%  clean  energy  sources,  challenges 
persist.  France  continues  to  fall  short  of  its 
renewable  targets,  with  instability  in  the  policy 
framework for renewables and delays in long-term 
planning hampering industrial activity, investment, 
employment,  and  progress 
towards  France’s 
climate targets. This has been further exacerbated 
by  stagnating  electricity  demand,  compounded  by 
an  oversupply  of  electricity  and  barriers  to 
electrification  of 
consumption 
patterns. 

final  energy 

Energy prices and costs 

Retail  electricity  prices  decreased  in  France 
in  2025  compared  to  2024,  remaining  below 
the EU average; gas prices for household and 
industrial  consumers  increased,  remaining 
below  the  EU  average 
in  the  case  of 
industrial  prices  but  exceeding  the  EU 
average  in  the  case  of  household  prices. 
During the first half of 2025, household electricity 
prices  in  France  decreased  compared  to  2024, 
at 
the 
remaining 
EUR 0.2664/kWh.  By  contrast,  household  gas 
prices  increased  compared  to  2024  and  were 
again  above  the  EU  average  at  EUR 0.1298/kWh 
(the fourth highest in the EU). 

average 

below 

EU 

Retail energy prices for industrial consumers 
followed  the  same  trend,  with  the  exception 
of  industrial  gas  prices  which  remained  well 
below  the  EU  average.  Nevertheless,  final 
energy  prices  in  France  during  the  first  half  of 
2025  remained  imbalanced.  For  large  businesses, 
electricity was 2.6 times more expensive than gas 
in  the  first  half  of  2025,  with  taxes  and  levies 
(excluding  VAT)  accounting  for  16%  of  electricity 
bills  and  10%  of  gas  bills.  Excluding  taxes  and 
levies, the electricity-to-gas price ratio would have 
decreased  to  2.4,  demonstrating  that  France’s 
fiscal  measures  do  not  have  a  balancing  effect. 
For household consumers, the effect of taxes and 

86 

levies  on  the  electricity-to-gas  price  ratio  is  non-
existent,  with  electricity  averaging  twice  the  price 
of gas (319). 

Graph A9.1: Electricity and gas prices for 
household and non-household consumers, first 
half of 2025 

(i) For household consumers, the consumption band is DC for 
electricity and D2 for gas. 
(ii) For non-household consumers, the consumption band is ID 
for electricity and I4 for gas. VAT and recoverable charges are 
not displayed for non-household consumers as these are 
typically recovered by businesses. This also applies to the ‘% 
of taxes and levies’, which is shown excluding VAT and 
recoverable charges for non-household consumers. 
(iii) ‘Without taxes and levies’ indicates the retail price 
excluding all taxes and levies. It always includes the 
energy/supply and network cost components, which are not 
disaggregated in Eurostat’s six-monthly price dataset. 
Source: Eurostat 

Thanks  to  low-carbon  energy  accounting  for 
a  substantial  share  of  the  electricity  mix 
(94.5%), with nuclear power playing a major 
role,  France  had  the  third  lowest  average 
wholesale  electricity  price  in  the  EU  at 
EUR 65/MWh  in  2025 (320)  (vs  an  EU  average 
of  EUR 85/MWh).  Average  day-ahead  electricity 
prices  in  France  increased  by  9%  in  2025  driven 
by rising natural gas costs. The effect this had on 
electricity  prices  was  mitigated  by  the  growing 
penetration  of  renewables.  Nevertheless,  France 
remains  vulnerable  to  price  spikes  during  peak-
demand  hours.  Low  solar  output  in  the  evening 
and  early  morning,  combined  with  limited  non-
fossil  flexibility  and  greater  demand  requires 
thermal  power  plants  to  ramp  up  generation  to 
balance  supply  and  demand.  As  a  result,  price 

(319) Analysis based on S1 2025 Eurostat data.  

(320) Ember 

 
 
 
 
 
 
spreads (321)  in  France  averaged  EUR  87/MWh  in 
2025, a 13% increase compared to 2024.   

Graph A9.2: Low-carbon electricity generation vs. 
electricity wholesale prices, 2025 

Unavailable data for Cyprus and Malta. Wholesale price is 
given as average of day-ahead electricity prices over 2025. 
EU-27 average is calculated as consumption-weighted. EU 
low-carbon share is calculated out of total EU electricity 
generation. Low-carbon share by country is calculated out of 
total public electricity generation. Low-carbon includes 
renewables and nuclear. 
Source: Eurostat 

Flexibility and electricity grids 

The French network mostly complied with the 
EU  requirement  to  ensure  a  minimum 
availability  of  70%  of  capacity  for  cross-
border  trade (322).  France  is  part  of  the  ‘Core’, 
‘Italy  North’  and  ‘South-West  Europe’  capacity 
calculation 
(CCRs)  which  harmonise 
methods  for  calculating  transmission  capacity  to 
reduce  bottlenecks  and  increase  the  share  of 
cross-zonal  capacity  made  available  for  trade. 
France’s  borders  have  not  been  subject  to  any 
derogations  from  the  70%  minimum  capacity 
margin since 2022 (323). 

regions 

Driven  mainly 
grid 
electricity 
reinforcements, 
interconnection  level  increased  slightly  in 

incremental 

France’s 

by 

(321) Spread refers to the difference between the highest and 
lowest hourly day-ahead electricity prices in a single day.  

(322) Implementation of the minimum threshold of 70% of 

interconnection capacity for electricity exchanges at French 
borders: review of the year 2024 - CRE 

(323) ACER 2024 Market Monitoring report - France experienced 

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

87 

is 

its 

countries (325), 

interconnected  with  six  of 

2025  to  5.44% (324),,  which  more  than  offset 
the  impact  of  the  continued  expansion  in 
solar  capacity.  Although  France’s  electricity 
system 
its 
cross-border 
neighbouring 
electricity  interconnection  level  is  currently  below 
the  15%  target  for  2030.  Nevertheless,  with  new 
interconnectors  and  adjustments  to  generation 
capacity  in  the  pipeline,  progress  towards  this 
target is expected. A number of new cross-border 
electricity  projects  are  underway (326),  although 
some  have  been  delayed (327).  France’s  network 
development  plan  did  not  include  the  Trans-
Pyrenean  electricity  interconnection  projects  in  its 
reference scenario, despite these having the status 
Interest (328).  Greater 
of  Projects  of  Common 
interconnection  capacity  is  crucial  for  achieving 
more integrated renewable energy production and 
improved 
integration 
flexibility  and  market 
(especially  with  the  Iberian  Peninsula,  bearing  in 
mind  that  internal  reinforcements  may  also  be 
necessary in some cases).  

The  lack  of  flexibility  in  France’s  energy 
system  has  led  to  increasing  curtailment  of 
renewable electricity (329) and a greater need 
for  modulation  of  nuclear  generation.  In 
addition  to  a  lack  of  flexibility,  electricity  demand 
in  France  has  stagnated  which,  alongside  the 
increasing  supply  and  availability  of  low-carbon 
electricity  (notably  through  greater  availability  of 
the nuclear fleet and faster solar deployment) has 
contributed to more frequent negative-price hours, 
higher 
curtailment,  and  better 
adaptation  of  nuclear  generation  to  demand. 
Further  progress  in  electrification  across  sectors 
would 
cost-effectively 
help 
decarbonise the economy, create additional outlets 
for 
the 
low-carbon  generation,  and  support 
business  case  for  renewable  deployment  and 
flexibility  solutions,  such  as  shifting  consumption 

renewables 

therefore 

to 

(324) See Electricity interconnection targets. 

(325) Belgium, Germany, Italy, Spain, Switzerland and UK. 

(326) 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).    

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

Biscay Bay: 2028. 

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

automatically incorporated into the NDP. 

(329) RTE 2024 Electricity Review 

 
 
 
 
to  periods  of  surplus  generation.  In  2024,  France 
had 5.7 GW of pumped hydro storage capacity and 
255 MW  of  battery  storage  capacity,  but  only 
9 MW of installed thermal storage capacity (330). In 
the  final  version  of  its  updated  national  energy 
and climate plan, France set itself the objective of 
reaching  25 GW  of  flexible  capacity  by  2030  and 
35 GW  by  2035.  To  reach  this  objective,  it  will 
focus  on  battery  storage,  pumped  hydro  stations, 
demand-side  response  and  interconnections,  and 
introduce a new support scheme for decarbonised 
flexibility 
and 
demand-side 
storage) (331). 

response 

(for 

transmission 

to  France’s 

(RTE),  2.5 TWh  of  electricity 

system 
According 
operator 
from 
renewable sources were curtailed in 2025, up from 
In  2023,  curtailment  of 
1.7 TWh 
in  2024. 
renewable  energy 
cost  EUR 2.2 million  and 
corresponded  to  509 GWh  (i.e.  0.7%  of  electricity 
production) (332). In February 2025, RTE announced 
investments worth EUR 100 billion in the electricity 
grid by 2040. 

Overall, France’s permit-granting process for 
energy 
remains 
infrastructure  projects 
complex, notably due to a fragmented multi-
authority 
various 
improvements  and  new  features  have  been 
introduced,  e.g.  the  streamlining  of  environmental 
permits,  the  roll-out  of  a  digital  platform  and 
reforms to improve public participation.  

process.  Nevertheless, 

France  has  generally  good 
levels  of 
consumer  empowerment  in  the  electricity 
and  gas  markets.  Nevertheless,  household 
consumers with fixed-price contracts (regulated or 
not) still account for almost 80% of the market. In 
2024,  60%  of  household  consumers  had  a 
regulated  fixed-price  contract.  Moreover,  94%  of 
final  household 
smart 
meter (333), compared to the EU average of 80%. 

consumers  had  a 

(330)Thermal storage is likely to boost industry’s competitiveness 
with short payback periods and low electricity prices. 

(331) 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 (including independent aggregators) can 
participate in these markets and services. 

(332)ACER - data on curtailment.   

(333) CRE 

to 

consumers. 

Further  progress  in  electrification  across 
to  cost-effectively 
sectors  would  help 
decarbonise  the  economy  and  bring  the 
benefits  of  affordable  renewable  and  low-
France’s 
carbon  energy 
electrification  rate,  i.e.  the  share  of  final  energy 
consumption  (FEC)  accounted  for  by  electricity, 
was 26.5% in 2024. This is above the EU average 
of  23.4%  but  has  remained  largely  unchanged 
over  the  last  decade  across  different  sectors (334). 
Electricity  accounts  for  35.4%  and  35.7%  of 
household  and 
respectively. 
Furthermore,  in  the  transport  sector,  the  share  of 
FEC  accounted 
remained 
negligible at 2.5%. 

for  by  electricity 

industrial  FEC 

Renewables and long-term contracts 

In  2024,  France’s  energy  mix  was  39.1% 
nuclear,  29.8%  oil,  16.6%  renewables,  12% 
natural  gas  and  2.4%  solid  fossil  fuels. 
France  has  the  third  most  decarbonised  energy 
mix in the EU, with fossil fuels representing 44.3% 
of its energy mix (EU average of 66%) (335). 

in 

energy 
for 

sources 
of 

France 
Renewable 
accounted 
electricity 
27.0% 
generation  in  2025,  a  slight  decrease  of  0.2 
percentage  points  compared  to  the  previous 
year  (27.2%  in  2024).    Installed capacity  for 
renewables in France rose to 83,632 MW in 2025, 
up 9.4% compared to 2024. Installed  capacity for 
wind energy grew to 25.7 GW in 2025 (compared 
to  24.2  GW  in  2024,  +5.8%),  whilst  installed 
capacity  for  solar  grew  significantly  (+22.7% 
compared to 2024), reaching 31.2 GW.  

(334)The  CAGR  (compound  annual  growth  rate)  was  0.04% 
between  2015  and  2024.  The  minimum/maximum  shares 
were 26.3% and 27.5% respectively (Source: Eurostat). 

(335) Eurostat, Gross Inland Consumption. 

88 

 
 
 
Graph A9.3: France’s installed renewable capacity 
vs electricity generation mix 

Electricity mix is given as net electricity generation (gross 
electricity production minus consumption of power stations’ 
auxiliary services). Electricity produced in pumped hydro 
plants is excluded from total net electricity production, as it 
was previously counted as electricity produced from another 
source. 
“Other” includes renewable municipal waste, solid biofuels, 
liquid biofuels, and biogas. 
Source: IRENA, Eurostat 

The  final  version  of  France’s  updated 
national  energy  and  climate  plan  did  not 
include a target for the share of renewables 
in  France’s  gross  FEC by  2030 (336).  Moreover, 
the  adoption  of  France’s  third multiannual  energy 
programming  law  (PPE  3)  was  delayed.  As  a 
consequence,  this  created  major  uncertainty  for 
investors,  developers  and  local  manufacturing 
companies 
in  2025.  The  PPE  3  was  finally 
published in February 2026.  

Renewables  auctions  in  2025  revealed  a 
downward trend in award prices, notably due 
to  an  increase  in  competitive  pressure  since 
2023 (337).  Auction  subscription 
rates  were 
uneven  and  low  in  some  categories,  until  2023, 
but  improved  in  2025,  particularly  thanks  to 
stabilisation  in  costs  and  conditions,  and  better 
rates  of  subscription  in  sectors  such  as  solar 
photovoltaics in building.  

France has continued adopting implementing 
provisions  for  its  2023  Renewable  Energy 
Acceleration  Law  (APER),  however  a  number 
of crucial aspects are yet to be implemented. 

(336) 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.  

(337) CRE 

zones’ 

(ZAER). 

‘solarisation’ 

The APER is intended to speed up the deployment 
of  renewables  through  a  set  of  permitting, 
planning  and 
(solar  adoption) 
measures, 
including  a  bottom-up  mechanism 
allowing  municipalities  to  designate  ‘renewable 
of 
acceleration 
implementation,  French  parliamentary  monitoring 
indicated  a  policy  adoption  rate  of  around  73% 
(36  of  an  expected  51  regulatory  measures 
adopted),  which  is  deemed  unsatisfactory  by  the 
French  Parliament (338).  Besides,  administrative 
bodies responsible  for its implementation such as 
decentralised  State  services,  have  not  scaled 
accordingly (339). 

terms 

In 

According  to  the  French  authorities,  as  of 
January  2026,  16 000  municipalities  had 
identified  ZAERs.  However,  their  identification 
has not yet translated into fully stable, operational 
mapping  of  deployable  potential.  Approval  and 
validation  rates  for  ZAERS  and  their  practical 
effects  vary  considerably  from  one  area  to 
another, 
future 
‘renewables  acceleration  areas’  introduced  by  the 
Renewable  Energy  Directive  III  will  need  to  be 
addressed,  while  the  value-sharing  aspects  of 
ZAERs are still unclear.  

their  consistency  with 

the 

to 

jointly  address 

In terms of offshore wind, the APER enabled 
public  debates 
the 
development  of  offshore  wind  energy  and 
sea  basin  strategy  documents  (documents 
stratégiques  de  façade).  This  came  into  force 
for public debates as of 2023–2024 and resulted 
in  October  2024  in  the  publication  of  a  list  of 
priority  zones  for  offshore  wind  deployment  for 
the next 10 years and for the period up to 2050. 

France does not have a one-stop-shop which 
streamlines  the  permitting  process  for 
renewables.  France’s  Net  Zero  Land  Take  Law 
(ZAN) imposes regional  quotas on battery storage 
and  renewable  projects  but  does  not  do  so  for 
nuclear projects.  

France  stepped  up  its  support  for  power 
purchase agreements (PPAs), in particular by 
including  smaller  contracts  in  its  guarantee 
scheme  in  order  to  support  their  uptake  by 

(338) Rapport relatif au débat sur le contrôle de l’application des 

lois, February 2026.  

(339) French Senate, March 2025 

89 

 
 
 
 
SMEs.  However,  2025  was  marked  by  major 
challenges for the French solar PPA market due to 
low  capture  rates,  frequent  negative-price  events 
(513  hours  of  negative  prices  in  2025,  compared 
in  2024 (340)  and  a  narrowing  of 
to  352 
transactable price ranges.  

Self-consumption  is  expanding  rapidly  in 
France. 66% of photovoltaic installations are 
used  for  individual  self-consumption  (over 
815 500 
343 
collective  self-consumption  schemes  currently 
exist in France, with 14 521 participants, of which 
almost 13 000 are self-consumers. 

installations).  Meanwhile, 

Energy efficiency 

(FEC) 

slight  progress 

towards 
France  made 
improving  energy  efficiency.  In  2024,  final 
increased  slightly 
energy  consumption 
(+0.4%)  on  2023  to  130.7  Mtoe,  only 
just 
reversing  the  downward  trend  observed  since 
2019  (-8.8%).  France’s  FEC  in  2024  was  in  line 
with  the  trajectory  for  meeting  its  expected 
contribution by 2030.  

buildings  play  an  important  role  in  improving 
energy security.  

In  summer  2025,  France’s  national  subsidy 
scheme for deep renovations of individual housing 
“Parcours  Accompagné”)  was 
(MaPrimeRenov’ 
suspended,  resulting  in  a  major  slowdown  in 
renovation  activity  in  the  country.  In  2025,  the 
number  of  energy  renovations  declined  by  10%, 
adding to a decreased of 40% in 2024 compared 
with  2023 (342),  and  only  some  120 000  homes 
had  undergone  deep  renovation,  far  from  the 
250 000  needed  each  year  according  to  France’s 
latest  draft  national  low-carbon  strategy  (SNBC). 
in  the  support  and 
In  this  regard,  stability 
regulatory  framework 
in  giving 
important 
is 
certainty  to  building  owners  and  the  construction 
industry.  In  2026,  the  State  budget  allocated  to 
MaPrimeRenov’  was  scaled  back,  while  the  CEE 
(Certificat  d’Economie  d’Energie)  envelope  was 
simultaneously  increased  to  offset  this.  Overall, 
the  total  spending  for  MPR  should  be  maintained 
at  the  2025  level  (circa  EUR  3.8  bn).  The  French 
Court  of  Auditors 
(Cour  des  comptes)  has 
questioned  the  governance  framework  for  CEEs, 
while their reliability has been undermined by their 
basis  on  theoretical,  rather  than  calculated, 
savings.  

residential 

Since  2019,  FEC  has  decreased  substantially 
in  industry  (-12.8%),  services  (-10.3%)  and 
the 
(-14.9%),  and 
sector 
(-3.3%). 
decreased  slightly 
France prioritised the transition to energy efficient 
heating  and  cooling  by  means  of  the  ‘Fonds 
Chaleur’  public  support  scheme  and  recorded  the 
highest  increase  in  district  heating  in  Europe 
(+9%). 

in  transport 

final 

residential 

Heating and cooling account for 77% (343) of 
France’s 
energy 
consumption, with renewables supplying 31% 
of total energy used for heating and cooling 
across all sectors. Around 550 000 heat pumps 
were  sold  in  2024,  a  decrease  of  24%  compared 
to the previous year, taking France’s total stock of 
heat pumps to around 6.5 million.  

France’s  final  energy  consumption  in  the 
residential  sector  decreased  by  14.9% 
between 2019 and 2024, while its long-term 
renovation strategy set a reduction target of 
22%  by  2030.  This  reduction  was  mostly  driven 
by  energy  savings,  including  through  structural 
measures such as thermal  renovations (341).  Given 
that  buildings  are  responsible  for  39%  of  energy 
use in France, and that in 2023 around 39% of the 
final energy used in residential buildings for space 
and  water  heating  came  from  fossil  fuels, 

(340) RTE 

In 2024, district heating saw major growth in 
France. Between 2023 and 2024, the amount of 
heat  delivered  through  district  heating  networks 
increased by 9.3%. Over the same period, the heat 
generated  from  renewable  sources  increased  by 
8%, from 20.6 TWh to 22.2 TWh. As of 2024, the 
renewables  accounted  for  67%  of  the  district 
heating  energy  mix  in  France,  up  0.5 percentage 
points on 2023. There is still considerable potential 
for  increasing  heat  recovery  from  industry,  data 

(342) See CHIFFRES-CLES_ANAH-2025.pdf and 202501-

chiffresCles2024-WEB.pdf and 28-
Jaune2026_Renovation_Energetique_Batiments.pdf (page 
14). 

(341) https://www.indicators.odyssee-mure.eu/decomposition.html  

(343) Eurostat 

90 

 
 
 
centres  and  wastewater  treatment  plants,  as 
mentioned  in  a  number  of  France’s  strategic 
documents.  

France  reported  55  ecodesign  and  energy 
labelling  checks  in  2025,  fewer  than  in  the 
previous year, and insufficient relative to the 
size of the country and overall levels of non-
compliance in the EU. 

Fossil fuel subsidies 

In  2024,  environmentally  harmful  (344)  fossil  fuel 
subsidies  without  a  planned  phase-out  before 
2030 represented 0.31% (345) of France’s GDP (346). 
Additionally,  France’s  2023  Effective  Carbon 
Rate (347)  averaged  EUR  87.87  per  tonne  of  CO₂, 
above the EU weighted mean of EUR 84.80 (348). 

Security of supply and diversification   

France has traditionally had a diversified gas 
supplier  portfolio  that  includes  Russia.  It  has 
significant LNG import capacity with four terminals 
and  one  floating  storage  and  regasification  unit 
(FSRU).  France 
is  also  directly  connected  to 
Norway’s  gas  fields  and  storage  capacity.  A 
significant but unquantified share of Russian LNG 
received  by  France 
is  re-exported  to  other 
European  countries  rather  than  being  consumed 
domestically. 

France  is  advancing  its  Small  Modular  Reactor 
(SMR)  ecosystem.  To  accelerate  deployment, 
in  streamlining 
is  needed 
further  progress 
SMR/AMR  (Advanced  Modular  Reactors)  designs, 
securing the fuel cycle for advanced technologies, 
and  supporting 
first-of-a-kind  demonstration 
projects. Key strategic priorities include simplifying 
intra-EU  export  controls  and  bridging  the  gap 
between R&D and commercialization. Furthermore, 
sustaining  a  highly  qualified  workforce  remains 
essential,  requiring  synergy  between  national 
initiatives  and  EU  programs  like  the  European 
Nuclear Skills Academy. 

In  response  to  the  regional  crisis  in  the 
Middle  East,  France  has  introduced  a  €330 
million  support  package,  including  a  €50 
"fuel  allowance"  for  2.9  million  low-income 
workers,  €0.20/litre  diesel  subsidies  for 
SMEs,  and  €0.15-€0.35/litre  subsidies  for 
agriculture  and  fisheries.  France 
is  also 
participating in the IEA's oil stock release and has 
announced  an  electrification  plan  with  22 
measures  to  accelerate  the  transition  across 
sectors.  

91 

(344) Explicit fossil fuel subsidies (e.g. direct transfers) and implicit 
fossil fuel subsidies (i.e. tax expenditures linked to forgone 
tax revenues that have an identifiable fiscal impact for the 
central budget) that support fossil fuel energy production, 
transmission and/or consumption.  

(345) European Commission calculation based on underlying data 
from the Study on energy subsidies and other government 
interventions in the EU – 2025 edition, Enerdata. 

(346) 2024 Gross Domestic Product at market prices, Eurostat. 

(347) 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. 

(348) OECD (2024), Pricing Greenhouse Gas Emissions 2024. 

 
 
 
ANNEX 10: CLIMATE ADAPTATION, PREPAREDNESS AND ENVIRONMENT 

reforms 

important 

France’s  high  exposure  to  climate  risks  and 
increasing pressure on natural resources call 
for  accelerating 
it  has 
the 
undertaken.  A  comprehensive  policy  framework 
for climate adaptation is in place but ensuring it is 
fully  integrated  at  all  government  levels  remains 
an 
significant 
challenge 
investments are needed. Water scarcity and water 
pollution are particularly worrying threats, not only 
to  the  environment  and  public  health  but  also,  in 
the 
to  economic  ecosystems. 
Balancing  the  demand  and  supply  of  forest 
biomass  and  better  targeting  forest  renewal 
subsidies remain key to enhancing the resilience of 
the carbon sink. 

longer 

term, 

and 

Climate adaptation and preparedness  

in 

(as 

shown 

France  is  highly  exposed  to  climate  change 
impacts  that  require  significant  investment 
and  policy action  across  sectors.  In  particular, 
is  exposed  to  more  frequent  heatwaves, 
it 
droughts,  floods  and  forest  fires,  as  well  as  to 
coastal  erosion 
the  2025 
analysis) (349). This has systemic consequences for 
several  sectors  (including  energy).  Floods  are  the 
most  widespread  climate  risk,  accounting  for  two 
thirds  of  registered  climate-related  events  since 
1900 (350). France had the third largest flood event 
frequency in the EU and this had significant socio-
in  1870-2020 (351).  Direct 
economic 
economic 
impacts 
social 
from coastal flooding  in  France  are  projected  to 
rise  sharply  this  century (352).  France’s  outermost 
regions  are  one  of  the  three  types  of  region 
identified as hotspots for climate risks as a result 
of  their  remote  location,  weaker  infrastructure, 
and  low  and  limited  economic  diversification (353). 
They  also  face  specific  climate  risks  such  as 
cyclones and hurricanes and their low-lying coastal 
communities  are  particularly  vulnerable  to  severe 

damage 

impacts 

and 

(349)European  Commission,  2025,  Commission  Staff  Working 
Document  2025  Country  report  –  France,  COM(2025) 210 
final, Link. 

(350)Chiffres  clés  des  risques  naturels,  Ministère  de  la  Transition 

Écologique et de la Cohésion des territoires, 2023, Link.  

(351)EEA, 2024, European Climate Risk Assessment, Link. 

(352)Nature, 2020, Economic motivation for raising coastal flood 

defenses in Europe, Link. 

(353)EEA, 2024, European Climate Risk Assessment, Link. 

92 

coastal  flooding (354).  In  2024,  France  had  the 
seventh highest number of heat-related deaths in 
the  EU  in  absolute  terms,  but  the  heat-related 
mortality  rate  remained  well  below  the  EU 
average (355). 

Significant  investments  are  needed  to adapt 
the country to the effects of climate change. 
A  recent  study  commissioned  by  DG CLIMA (356) 
indicates that France will need to invest more than 
EUR 10.6 billion  per  year  in  climate  adaptation 
measures up to 2050 (0.3% of annual GDP, below 
the  EU  average  of  0.5%)  in  infrastructure  (more 
the  food  sector 
than  54%  of 
(approximately 
ecosystems 
20%) 
(approximately 16%) (357). 

total), 

and 

the 

A  comprehensive  policy  framework  for 
adaptation is in place. One major step was the 
adoption of France’s third national plan for climate 
adaptation  (PNACC3)  in  spring  2025.  This  was 
followed  by  the  adoption  in  January  2026  of  a 
decree integrating  into  national  law the  reference 
warming 
climate  adaptation 
for 
(TRACC) (358).  Its  implementation  by  ministries, 
which 
is  centrally  coordinated  and  regularly 
monitored,  seems  on  track.  Risk  evaluation  linked 
to  climate  change  has  been  complemented  since 
September  2025  by  climate  projections  for 
overseas territories, in line with the new reference 

trajectory 

(354)Nature,  2026,  Coastal  flood  impacts  and  lost  ecosystem 
services  along  Europe’s  outermost  regions  and  overseas 
countries and territories, Link.  

(355)Janoš,  et  al.,  2025,  Heat-related  mortality  in  Europe  during 
reduce 

forecasting 

to 

2024  and  health  emergency 
preventable deaths, Link. 

(356)European  Commission,  2026,  Assessment  of  EU  and 
Member States adaptation investment needs, Table 25, Link. 
The  study  provides  detailed  estimates  of  adaptation 
investment  needs  at  the  level  of  the  EU  and  individual 
Member  States  for  each  type  of  measure.  It  relies  on  a 
common  methodology  that  makes  estimates  comparable 
across  the  EU.  Four  accompanying  methodological  reports 
provide  a  detailed  description  of  how  the  results  were 
estimated to ensure full transparency. 

(357)Typical  investments  in  ecosystems  include  soil  restoration, 
wildfire  prevention,  biodiversity  protection  and  coastal 
ecosystems  restorations.  Typical  investments  in  health  are 
linked  to  occupational  health  and  safety,  wastewater 
treatment facilities upgrade and wildfire disaster response. 

(358)TRACC stands for “Trajectoire de réchauffement de référence 
pour l’adaptation au changement climatique”: it assumes a 
temperature increase of +2°C by 2030, +2.7°C by 2050 and 
+4°C by 2100 in mainland France compared with pre-
industrial level. 

 
 
 
 
 
from 

resulting 

warming trajectory for climate adaptation (359). An 
update  of  the  map  of  exposure  to  the  risk  of 
damage 
the  expansion  and 
retraction  of  clay-rich  soils  (an  important  and 
rapidly growing climate-related risk) was published 
in  January  2026.  A  new  platform  on  projected 
climate  impacts  and  vulnerabilities  in  the  various 
territories is planned for 2026.  

identifies 

levels.  Central  government 

Effective  multi-level  governance  remains  a 
key challenge and will have a critical impact 
on  the  implementation  of  the  PNACC3’s 
territorial 
measures.  The  PNACC3 
differentiation  as  a  core  principle,  but 
its 
operationalisation  will  depend  on  effective 
integration  of  adaptation  planning  by  all 
is 
government 
supporting the sub-national level in this endeavour 
through a variety of levers. Most notably, regional 
conferences of parties (COPs) (inspired by UNFCCC 
COPs, they bring together all levels of government 
involved 
in  a  specific  territory)  focused  on 
adaptation  in  2025.  They  provided  sub-national 
actors  with  dedicated  analytical 
tools  and 
encouraged  them  to  prioritise  adaptation  issues 
  Associations  of 
and  define  priority  actions. 
municipalities  above  20 000 
inhabitants  are 
required  by  law  to  develop  and  implement  their 
own  territorial  climate-air-energy  plans,  which 
must  include  an  adaptation  dimension.  By  March 
2025, 74% of the cities targeted by the obligation 
Embedding 
had 
adaptation actions within existing governance and 
planning 
(e.g. the  Schéma  de 
cohérence  territoriale  (SCoT))  can  be  decisive  in 
the 
leveraging  existing  responsibilities 
distribution  of  competences  at  different  levels  of 
government).  The  share  of  France’s  population 
covered by the EU Covenant of Mayors signatories 
was stable at 31% (EU-27 average: 34%) in 2024. 
Only  29%  of  signatories  have  submitted  a 
sustainable  energy  and  action  plan  (SECAP)  on 
time 
initial 
commitment to the EU Covenant)  and only 8% of 
signatories have submitted at least one monitoring 
report within the recommended timeframe. 

two  years  of 

frameworks 

plans (360). 

(i.e. within 

adopted 

(given 

their 

their 

Climate  risks  have  a  direct  and  significant 
effect  on  France’s  economy,  but  insurance 

(359)Météofrance,  2025,  Quel  climat  futur  pour  les  outre-mer ?, 
Link. 

(360)Groupe  de  Travail  Structuration des  plans  climat-air-énergie 
territoriaux (PCAET), 2025, Introduction, Link . 

93 

coverage  is  satisfactory.  Between  1980  and 
2024, France recorded EUR 138 billion in economic 
losses and ranked eighth in the EU-27 in terms of 
loss  per  capita  caused  by  weather  and  climate-
related  extreme  events (361).  Natural  catastrophe 
damage was between 0.05% and 0.1% of GDP in 
2000-2023 (362).  The  latest  studies  show  that 
extreme  weather  events  are  likely  to  have  a 
prolonged  and  intensifying  impact  on  economic 
activity  in  France (363).  France’s  35%  rate  of 
insurance coverage against natural catastrophes is 
the  fifth  highest  in  the  EU (364).  France  has  a 
(the  CatNat 
national  public-private  scheme 
scheme)  to  supplement  private  insurance  cover 
against  natural  catastrophes.  This  covers  a  wide 
range  of  catastrophes (365)  and  is  covered  by  an 
unlimited state guarantee. The growing number of 
natural  catastrophes  and  their  growing  unitary 
cost 
financial 
the 
solvencyHalf of its financial buffer disappeared in 
2016-2022 (366). The large increase (from 12% to 
20%) in the levy on insurance premiums to finance 
the  CatNat (367)  is  starting  to  reconstitute  this 
buffer.  The  cost  of  climate-related  claims  could 
reach 
double  between  2020  and  2050 
EUR 143 billion (368). 

scheme’s 

straining 

to 

is 

For 

the 

Climate-proofing  of  energy  and  transport 
infrastructure is starting, encouraged by the 
PNACC3. 
sector,  higher 
temperatures  and  changing  rainfall  patterns, 
droughts, lower river flows and rising sea level can 
impact  nuclear  production 
to  6 GW  of 
production  loss  –  10%  of  the  installed  capacity 
during  the  summer  2019  drought (369))  and  hydro 

energy 

(up 

(361)EEA,  2024,  Economic  losses  from  weather-  and  climate- 
related extremes in Europe, Link. 

(362)ECB  and  EIOPA,  2024,  Towards  a  European  system  for 
natural  catastrophe  risk  management,  Link.  Chart 2.  This  figure 
includes earthquakes which happened in the period 2020-2023. 

(363)Usman,  Parker  &  Vallat,  2025,  Dry-roasted  NUTS:  early 
estimates of the regional impact of 2025 extreme weather, Link. 

(364)EEA,  2024,  Economic  losses  from  weather-  and  climate-
related extremes in Europe, Link. 

(365)ECB  and  EIOPA,  2024,  Towards  a  European  system  for 
natural catastrophe risk management, Link. 

(366)Assemblée  Nationale,  2023,  Rapport  d’Information  sur 
l’évaluation  de  la  prise  en  compte  du  retrait-gonflement  des 
argiles, Link. 

(367)CCR, 2025, Résultats du 1er semestre 2025, Link. 

(368)France  Assureurs,  2021,  Changement  climatique,  quel 
impact sur l’assurance à l’horizon 2050 ?, Link. 

(369) RTE, 2022, Climat et Système électrique, Link. 

 
 
 
to 

Electricity 

transmission 

trajectory  by  2040.  France’s 

production (370). 
and 
distribution  networks  are  affected  by  increasing 
temperatures,  flooding  and  storms.  They  are  also 
put  under  pressure  by  climate-change-induced 
changes  in  production  and  consumption  patterns. 
The  PNACC3  provides  for  the  deployment  of 
vulnerability studies for the 20 largest companies 
and  energy  network  managers.  In  September 
2025,  RTE 
(the  French  transmission  system 
operator)  published  its  draft  10-year  network 
development  plan,  which  aims 
invest 
EUR 24 billion in adapting 80% of its network to a 
transport 
4°C 
infrastructure  was  particularly  exposed  to  storms 
and  floods  in  the past, but  extreme  temperatures 
are  likely  to  also  play  an  important  role  in  the 
future.  An  estimated  total  of  EUR  7.4  billion  will 
need  to  be  invested  until  mid-century  in  TEN-T, 
mostly in  maritime ports (EUR 2.9 billion (371))  and 
railways 
transport 
vulnerability index of the TEN-T network to climate 
change 
in  France  has  been  assessed  as 
moderate (372).  The  PNACC3  provides  for  all 
responsible  authorities  and  operators  to  establish 
evidence-based  adaptation  plans  that  are  aligned 
with  the  national  climate  trajectory.  Significant 
efforts  are  also  being  made  to  update  technical 
standards  and  engage  stakeholders.  The  PNACC3 
estimates  that  EUR 25.8 million  are  needed  to 
support  organising  authorities 
in  completing 
vulnerability studies in all regions. 

(EUR 2.6 billion). 

The 

to 
Additional  efforts  are  being  made 
accelerate  and  scale  up  the  use  of  nature-
based  solutions  (NbS).  The  PNACC3  recognises 
that nature-based solutions and prevention play a 
key role in increasing resilience. So far, they have 
been  mostly  developed  on  a  project  basis  rather 
than  systemic  basis  (through  flagship  and  pilot 
projects in a limited number of sectors). However, 
the PNACC3 includes measures to mainstream and 
accelerate 
through 
uptake, 
production  of  national  references,  tools  and 
guidelines;  structuring  of  regional  and  national 
and 
support 
of 
awareness-raising 

training 
actions;  mobilisation 

dedicated 

networks; 

notably 

their 

(370)Hydroelectric  production  varies  between  50  and  75 TWh 
from one year to the next because of climate-related events 
(RTE, 2022, Climat et Système électrique, Link. 

(371)Ibid. 

(372)Support  study  on  the  climate  adaptation  and  cross-border 
investment needs to realise the TEN-T network, Publications 
Office of the European Union, 2024, Link. 

94 

research  and 
innovation  programmes;  and 
expansion  of  NbS  across  a  broader  range  of 
sectors. 

Water resilience 

The rise in water scarcity may affect sectors 
of  France’s  economy.  Energy  cooling,  public 
water supply and agriculture are among the most 
water-dependent  sectors (373).  The  national  water 
exploitation  index  plus  (WEI+) (374),  a  measure  of 
how much water is being used compared with the 
total renewable freshwater resources available for 
a  given  territory  and  period,  indicates  low  overall 
pressure  due  to  abundant  renewable  freshwater 
resources.  However, 
large  regional  disparities 
persist  in  the  EU  (as  evidenced  by  the  JRC 
European  Drought  Risk  Atlas (375)).  The  WEI+ 
decreased  from  4.7%  in  2022  to  3.2%  in  2023 
(with  a  peak  at  11.9%  in  Q3 2023)  but  was  still 
below the 20% threshold for water scarcity. Lower 
river flows are increasing the risk of curtailment of 
nuclear  electricity  production  (especially  during 
heatwaves  and  droughts)  and  jeopardising  the 
nuclear  deployment  strategic  agenda  (376).  The 
2023  Plan  Eau  is  progressively  delivering  on  its 
targets (377).  All  the  planned  measures  have  been 
initiated and 77% have been implemented (378). In 
the  water 
particular, 
to  50  major 
efficiency  objectives  assigned 
industrial  sites  is  achieving  as  much  as  30%  in 
water  efficiency  savings  in  some  industrial  sites. 
The  implementation  report  draws  attention  to 
water’s  possible  impact  on  industrial  production 
and industrial competitiveness (379). According to a 
recent ECB study (380), the share of national gross 

implementation  of 

the 

(373) EEA, 2025, Water abstraction by economic sector, 2000-

2023, Link.  

(374) Eurostat, Water Exploitation Index, plus, Link. 

(375)Rossi,  et  al.  (JRC),  2023,  European  Drought  Risk  Atlas, 

Publications Office of the European Union, Link. 

(376)ASNR,  19 March 2024,  Rapport  de  l’ASN  sur  l’état  de  la 
sûreté nucléaire et de la radioprotection en France en 2022. 

(377)Plan eau : 3 enjeux, 53 mesures | Ministères Aménagement 

du territoire Transition écologique. 

(378) Plan eau : 3 ans après, 100% des mesures initiées dont 77% 
mises en oeuvre | Ministères Aménagement du territoire 
Transition écologique 

(379)31322d0401c9a078030ea805939ae7ec50999c6e.pdf. 

 
 
 
economic  output  at  risk  from  surface-water 
scarcity amounts to 24-26%. Water productivity in 
France  was  nevertheless  EUR 94  per  m³  of 
abstracted  water  in  2022  (a  1.6%  increase  on 
2018) (381). 

deputy of the National Assembly (388)assessed the 
insufficient tackling of such pollution challenges in 
some  areas  and  called  for  legal  provisions  to  be 
strengthened at the national level. 

of 

and 

Implementation  Review 

Parts  of  France’s  surface  and  groundwater 
bodies  are  subject  to  water  stress  due  to 
intensive  agriculture,  hydro-morphological 
pressure 
contamination, 
chemical 
affecting the resilience of agriculture. This is 
underlined  by  the  Commission  report (382)  on  the 
third river basin management plan (RBMP) and the 
Environmental 
(EIR) 
report (383).  The  ecological  status/potential  of 
France’s 
slightly 
surface  waterbodies  has 
deteriorated  since  the  second  RBMP.  43.6%  have 
good  or  high  ecological  status/potential 
(EU 
average: 39.3%) (384).  Diffuse  pollution  affects 
56% 
(EU 
average: 39.2%) (385).  41%  of  these  relate  to 
pesticides  and  nutrient  diffuse  pollution  from 
agriculture.  10.5%  of  groundwater  bodies  have 
poor  quantitative  status  (EU  average:  9.2%) (386). 
For  at  least  10.6%,  this  is  due  to  abstraction 
exceeding the available groundwater resource. The 
situation has slightly deteriorated since the second 
RBMPs, partly because of improved monitoring and 
consideration 
groundwater-dependent 
ecosystems.  A  government  report  highlighted  the 
risks associated with pesticides and metabolites in 
drinking  water  (for  example,  a  high  concentration 
of  chloridazon-desphenyl 
in  northern  France, 
where there is intensive beetroot farming) (387). On 
12 February 2025,  a  report  commissioned  by  a 

surface 

bodies 

water 

of 

(380)Nature  at  risk:  Implications  for  the  euro  area  economy  and 

financial stability. 

(381)EEA,  Water  abstraction  by  economic  sector,  2000-2023, 

(2025). Link 

(382)Commission staff working document on reporting RBMP and 
FRMP  to  the  Council  and  the  European  Parliament,  ENV  – 
Bibliothèque. 

(383)Register of Commission Documents – SWD(2025)309. 

(384)Surface  water  bodies:  Ecological  status  or  potential  (group) 
[table]  |  Water  Framework  Directive  experts  dashboards  | 
WISE Freshwater. 

(385)Pressures  and  impacts  |  Water  Framework  Directive  |  WISE 

Freshwater. 

(386)Groundwater quantitative status | Water Framework Directive 

| WISE Freshwater. 

(387)Prévenir et maîtriser les risques liés à la présence de 

pesticides et de leurs métabolites dans l'eau destinée à la 
consommation humaine | Igas 

95 

all 

On a positive note, France is taking measures 
to  reduce 
individual-substance  pressures 
resulting  from  industrial  and  wastewater 
in  a 
discharges.  France  has  also  engaged 
national-level 
relevant 
dialogue  with 
stakeholders  to  address  water  resource  scarcity 
challenges  by  2050 (389)  as  well  as  in  territorial 
dialogues  at  the  level  of  each  river  basin (390).  At 
EU  level,  a  structured  dialogue  is  being  held  with 
the Commission to accelerate the achievement of 
the  environmental  objectives  of  the  EU  water 
legislation (391).  France’s  compliance  rate  with  the 
Waste  Water  Treatment  Directive  (WWTD)  was 
91% in 2020. 498 agglomerations (generating the 
urban 
of 
water 
6 337 540 people)  were  not  compliant.  The 
Commission  has  calculated  the  annual  water 
investment gap to achieve compliance by 2027 at 
EUR 3.9 billion  – primarily relating to waste  water 
infrastructure  (EUR 2.6 billion)  and  drinking  water 
infrastructure (EUR 1.1 billion).  

equivalent 

waste 

Nature restoration 

France’s  economy  is  structurally  exposed  to 
nature loss because it has one of the highest 
direct dependencies on ecosystem services in 
the EU (47% vs an EU average of 44%). The 
European  Central  Bank  has  assessed 
the 
dependency of non-financial corporations financed 
by euro area banks on nature and has studied the 
magnitude  and  likelihood  of  shocks  caused  by 
nature depletion. It concluded that France is at risk 
–  like  all  Member  States(392)..  On  2nd  April  2026, 
the  Ministry  of  Ecological  Transition  presented  a 

(388)assemblee-

nationale.fr/dyn/opendata/RAPPANR5L17B0928.html 

(389)Enjeux_Eau_2025_sgpe_20250722_vf.pdf. 

(390)Lancement  officiel  des  conférences:  L'eau  dans  nos 
|  Ministères 

territoires  par  Agnès  Pannier-Runacher 
Aménagement du territoire Transition écologique. 

(391)Dialogues 

to  begin  on  ensuring  sustainable  water 

management – Environment. 

(392)Living in a world of disappearing nature: physical risk and the 

implications for financial stability. 

 
 
 
report  to  the  Comité  National  de  la  Biodiversité 
(CNB)(393)  on  the  implementation  of  the  2023 
national biodiversity strategy. It noted that 80% of 
the planned measures had been initiated. The CNB 
nevertheless made a number of recommendations 
related  to  the  governance  of  the  implementation 
of  the  strategy  in  order  to  reduce  pressures  on 
biodiversity,  strengthen  restoration  measures  and 
grant  the  necessary  funding.  This  report  showed 
in 
the  challenges  faced  by 
delivering  on  the  initial  ambitions.  It  particularly 
called for confirmation of the ‘Zero Artificialisation 
Nette’  objectives  and  for  clarification  of  the  legal 
framework  applicable  to  the  use  of  pesticides  in 
Natura  2000  sites  and  in  drinking  water  capture 
sites. 

the  authorities 

also 

France 

The  Environment 
Implementation  Review 
(EIR) indicates that France hosts 130 habitat 
types  and  291 species  covered  under  the 
hosts 
Habitats  Directive. 
populations  of  145 bird  taxa  listed  in  Annex I  to 
the Birds Directive. In 2023, 13% of France’s land 
area was covered by Natura 2000 sites (EU18.627 
average: 18.6%).  Special  protection  areas  (SPAs) 
classified under the Birds Directive covered 8% of 
the  territory  (EU-27  average:  12.8%).  There  was 
insufficient  provision  for  migratory  birds  and  in 
marine  coastal  areas.  Sites  of  importance  under 
the  Habitats  Directive  covered  only  8.9%  (EU 
average: 14.3%) and the gaps are currently being 
assessed. France therefore still has to complete its 
Natura  2000  network  (particularly  its  marine 
network). An EU pilot dialogue on assessing gaps is 
ongoing with France. France legally protects 28.1% 
of  its  terrestrial  areas  and  45.3%  of  its  marine 
areas  (above  the  EU-27  averages  of  26.1%  and 
12.3%). This includes Natura 2000 sites and other 
nationally  designated  protected  areas.  The  EIR 
invited France to: i) complete the Natura 2000 site 
designation 
the 
establishment 
conservation 
objectives and measures for all Natura 2000 sites 
(including  by  adopting  their  management  plans) 
and  ensure  their  effective  implementation.  In 
economic  terms,  loss  of  biodiversity  particularly 
impacts  pollination  (impacting  70%  of  France’s 
agriculture  production  to  a  total  amount  of 
between 
EUR 5.3 billion 
annually (394)).  More  positively,  the  EIR  report 

and 
site-specific 

process; 
of 

EUR 2.3 billion 

ii) finalise 

and 

(393) Accueil - Biodiversité.gouv.fr 

(394)Pollinisateurs : Des services évalués entre 2,3 et 5,3 milliards 
d’euros en France. 

96 

welcomed  France’s  measures  against  invasive 
alien  species.  Protected  areas  represented  28.3% 
of total territory in 2023 (EU average: 26.4%) and 
maritime  protected  areas  represented  45.3%  (EU 
average: 13.7%).  However,  highly  protected  areas 
represented only 4.2%. 

Sustainable agriculture and land use 

France’s carbon removals are in line with the 
level  of  ambition  needed  to  meet  its  2030 
target  for  land  use,  land-use  change  and 
forestry  (LULUCF).  To  meet  the  2030  LULUCF 
target,  additional  carbon  removals  of  6.7  million 
tonnes of CO2 equivalent (CO2-eq) are needed. The 
latest  available  projections  show  a 
target 
overshoot  of  7.3 MtCO2-eq  for  2030  –  in  stark 
contrast  with  last  year’s  data,  which  showed  a 
large  shortfall.  This  development  is  due  to  the 
inclusion of a new carbon pool (forest dead wood) 
in 2025 reporting data and is not entirely certain. 
In  France,  net  carbon  removals  in  the  LULUCF 
sector  were  declining  at  a  worrying  rate  until 
2017,  but  there  have  been  significant  annual 
variations 
in  recent  years.  The  carbon  sink 
decrease  is  linked  to  climate  change  effects 
(droughts,  fires  and  pest  attacks)  which  increase 
forest  mortality  and  slow  forest  growth.  Further 
investment  in  healthy  forests  and  soils  is  key  to 
building  resilient  biobased  product  value  chains 
competitive  EU 
and  enabling  a  growing, 
bioeconomy.  Continued 
the 
system  for  monitoring  net  removal  data  and 
projections  would  greatly  support  timely  and 
effective action in the sector. 

improvements 

in 

Balancing  the  demand  and  supply  of  forest 
biomass and better targeting forest renewal 
subsidies are key to enhancing the resilience 
of the carbon sink. The third multiannual energy 
programme (PPE-3) acknowledges that there is an 
issue of adequation between (i) the availability of 
national  biomass 
forest 
supply 
biomass)  affected  by  the  impacts  of  climate 
(ii) increasing  demand.  This  can 
change;  and 
directly affect the carbon sink. The PPE-3 includes 
a merit order for the uses of biomass on the most 
relevant uses, which is also presented in the draft 
low  carbon  strategy  (SNBC-3). 
third  National 
However, public subsidy schemes still remain to be 
fully  aligned  with  the  necessary  moderation  of 
biomass uses. Systemic enforcement of this merit 

(especially 

 
 
order  on  the  ground  by  private  and  public  actors 
remains  a  key  challenge.  Support  measures  for 
forest  renewal  are  in  place,  but  they  allow 
subsidies to be granted for reforestation after the 
clearcutting of forest stands that were not at risk 
of  dying.  Better  targeting  that  limits  support  to 
forest  stands  vulnerable to  climate  change  would 
enhance  the  long-term  resilience  of  the  carbon 
sink (395). 

Under  the  EU  Nitrates  Directive,  France’s 
groundwater monitoring stations recorded an 
average  of  50.2%  of  nitrate  concentrations 
exceeding  25 mg/l  and  12.7%  exceeding  the 
maximum  allowable  concentration  50 mg/l 
(slightly  below  the  EU  average  of  14.1%) 
(396).  A  14%  reduction  in  agricultural  ammonia 
emissions  between  2018  and  2023  underscored 
improvements 
the 
persistence  of  nitrate  pollution  indicates  gaps  in 
These 
nutrient  management 
concentrations  reflect  some  systemic  agricultural 
pressures. 
density 
(0.72 livestock  units  per hectare  in  2023)  is close 
to the EU average of 0.75 (397). 

in  emission  control,  but 

strategies. 

livestock 

France’s 

thresholds 

for  pesticide 

Pesticide  contamination  remains  a  critical 
issue.  42%  of  surface  water  bodies  exceeded 
regulatory 
residues 
between  2018  and  2023  (well  above  the  EU 
average  of  23%) (398).  For  groundwater  bodies, 
France’s  33%  excess  was  also  above  the  EU 
average  of  12.3%.  Pesticides  not  only  threaten 
aquatic ecosystems  but  also  pose  long-term  risks 
to  human  health  through  contaminated  drinking 
water and food chains. Contamination particularly 
impacts  citizens  and  neighbouring  vineyards  (as 
shown  by  a  recent  study  by  Santé  Publique 
France) (399). 

(395)Cour  des  comptes  (2024),  La  gestion  durable  de  la  forêt 
métropolitaine, quelle adaptation au changement climatique ? 

(396) Nitrate in groundwater in Europe | Indicators | European 

Environment Agency (EEA) 

(397)[tai09] Livestock density index. 

(398)Pesticides  in  rivers,  lakes  and  groundwater  in  Europe  | 
Indicators | European Environment Agency (EEA). 

(399)PestiRiv:  résultats  de  l'étude  nationale  sur  l'exposition  aux 
pesticides des riverains de zones viticoles. 

97 

 
 
Table A10.1:Key Adaptation Indicators 

(1) EFFIS (European Forest Fire Information System). Link. 
(2) The climate protection gap refers to the share of non-insured economic losses caused by climate-related disasters, based on modelling of the 
risk from floods, wildfires and windstorms and on the insurance penetration rate. Scale: 0 (no protection gap) – 4 (very high gap). EIOPA, 2025, 
Dashboard on insurance protection gap for natural catastrophes. 
(3) This 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 to or greater than 40% indicate severe water 
scarcity. 
(4) European Commission, 2024, Seventh 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). 
(5) Indicator refers to concentrations of nitrate (NO3) in groundwater, measured as milligrams per litre (mgNO3/L). Nitrate 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 is limited to 50 mgNO3/L to avoid threats to human health. 
(6) Net removals are expressed in negative figures, net emissions in positive figures. Reported data are from the 2025 greenhouse gas inventory 
submission. 2030 value of net greenhouse gas removals as in Regulation (EU) 2023/839 – Annex IIa. 
Source: Eurostat, EEA and JRC 

98 

Climate adaptation and preparedness:EU-27201920202021202220232024latest dataDrought impact on ecosystems9.677.660.3144.21.91-2.76[area impacted by drought as % of total]Forest fires burned area (1)43,602     14,547     30,652     66,337     22,350     12,268     354,510     [burned area in ha. per year]Economic losses from extreme events5,807       4,848       6,203       8,915       3,258       1,942        40,452        [EUR million at constant 2022 prices]Insurance protection gap (2)---1              1              1               -[composite score between 0 and 4]Sub-national climate adaptation action14            15            20            31            31            31            34               [% of population covered by the EU Covenant of Mayors for Climate & Energy]Water resilience:EU-27201920202021202220232024latest dataWater Exploitation Index Plus, WEI+ (3)3.22         3.54         2.53         4.67         3.19         -4.53            [total water consumption as % of renewable freshwater resources]Water productivity86            84            91            94            --151[EUR per m3]Water abstractionWater abstraction by source (% from surface water)78.15%76.15%78.34%75.84%--Water abstraction by sectorAgricultureElectricity coolingManufactu-ringPublic water supplyMining and QuarryingConstru- ction 11.47%60.54%5.39%22.29%0.32%0.00%Status of water bodies (4)[% of water bodies in a good status]Surface water bodies (ecological)-----44%38%Groundwater bodies (quantitative)-----88%93%Nature restoration:EU-27201920202021202220232024latest dataEcosystem dependency---47%--44%[% of direct dependency]Protected area26.827.7282828.326.4[% of terrestrial protected areas]Invasive alien species (IAS)-----6029.2[number of IAS of Union concern]Damage cost of IAS----9.481.69[EUR billion]Eutrophication 237237295[AAE of area at risk of euthrophication]Sustainable agriculture and land use:EU-272012-20182018-2021latest dataYearly net land taken by Member State630          538          670            [ppm of total urban surface per Member State]Land conversion in functional urban area [% of total land taken from 2018-2021]Arable land50%Complex and mixed cultivation0%Forests9%Herbaceous vegetation associations3%Open spaces with little or no vegetation0%Pastures34%Permanent crops3%Water1%Wetlands0%201920202021202220232024latest dataNitrates in groundwater (5)17.317.317.417.417.5[mgNO₃/l]Livestock density0.750.720.75(number of livestock units per hectare of utilised agricultural area)Ammonia emissions 97%97%97%96%96%-94%[% of total utilised agricultural area]Pesticide contamination on rivers and lakes water bodiesrivers42%27%[% of monitoring sites with pesticides exceeding thresholds, 2018-2023]lakes13%18%Pesticide contamination in soil 69%57%[% of samples with a concentration over 0.5 mg/Kg⁻¹]Net greenhouse gas removals from LULUCF (6)-35023.9-37742.7-34959.4-33970.4-37380.6--198,421 [ktCO₂-eq] 
 
       
 
FAIRNESS 
ANNEX 11: LABOUR MARKET 

France’s  labour  market  has  continued  to 
strengthen  in  recent  years,  yet  significant 
structural challenges still hinder productivity 
and  competitiveness.  Economic growth  remains 
limited,  amid  persistently  high  unemployment, 
sluggish  productivity  gains,  pronounced  regional 
disparities, and the persistently lower employment 
rate of certain groups (particularly young and older 
people,  those  with  low  qualifications  and  those 
born outside the EU). As France moves towards its 
2030 employment rate target, unlocking untapped 
labour  potential,  reducing  skills  mismatches  and 
improving  the  quality  of  jobs  are  essential  to 
building  a  more  resilient  and  inclusive  labour 
market and supporting a dynamic economy.  

and 

pronounced 

Despite  significant  improvements,  France’s 
labour  market  continues  to  face  structural 
regional 
weaknesses 
disparities.  The  employment  rate  increased  to  a 
record  high  of  75.5%  in  2025  but  remains  below 
the  EU  average  (76.1%)  and  the  2030  national 
employment  target  (78%).  Similarly,  the  activity 
rate  rose  to  75.2%.  Unemployment,  however, 
remains  a  key  structural  challenge  in  France:  at 
7.7%  in  2025,  it  is  significantly  above  the  EU 
average  of  6%  and  is  projected  to  increase  to 
8.3%  in  2026 (400).  Although  on  par  with  the  EU 
average (1.9%), the long-term unemployment rate 
has shown no improvement (1.7%). Labour market 
slack (401)  increased  to  14.8%,  exceeding  the  EU 
average  (11.7%)  and  affecting  around  4.9  million 
people with an unmet supply of employment.  

lower 

regions,  and  employment 
in 

There  are  major  disparities  between 
mainland 
is 
systematically 
the  outermost 
regions (402).  The  employment  rate  ranges  from 
50% in French Guiana to 78.3% in Bretagne, a gap 
of  28.3  pps.  Bretagne  also  has  the 
lowest 
unemployment  rate (5.6%),  while  Guyane  has  the 
highest  (16.9%),  far  above  the  highest  mainland 
rate  (Ile-de-France,  8.8%).  In  mainland  France, 
sectoral 
these 

disparities  mainly 

reflect 

(400) European Commission, Spring Forecast, 2026. 

(401) The labour market slack is the underuse of labour resources, 
those 

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

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

and 

levels 

varying 

specialisation 
of 
urbanisation (403).  Challenges  in  the  outermost 
regions  are 
longstanding 
compounded  by 
structural  weaknesses.  These  are  due  to  these 
regions’  insularity,  infrastructure  gaps  (in  higher 
education, essential services, access to water, etc.) 
and  limited  industrial  development (404),  which 
opens up few job opportunities (see Annex 18).  

Graph A11.1: Key labour market indicators 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, lfsi_neet_a, 
une_ltu_a, lfsi_emp_a] 

support. 

Youth  labour  market  outcomes  remain  weak 
despite  extensive  policy 
The 
unemployment  rate  for  young  people  (15-24) 
reached  19.7%  in  2025,  well  above  the  EU 
average of 15.2%. The share of young people (15-
29)  neither  in  employment  nor  in  education  and 
training  (NEETs)  remains  higher  than  the  EU 
average  of  11%,  and  slightly  increasing  (12.7%). 
The  NEET  unemployment  rate  is  of  particular 
concern  for  persons  with  disabilities  (30%  in 
2023) and those in the outermost regions (31.9% 
in  Guyane  in  2025). Youth  employment  outcomes 
educational 
are 
is 
attainment,  while  educational  performance 
directly 
linked  to  socio-economic  background. 
Weaknesses in skills development emerge from an 

correlated  with 

strongly 

(403) See 2025 country report. 

(404) Cour des comptes, ‘Les financements de l’État en 

Outre-mer’, 2022. 

99 

6668707274767880828401234567892019202020212022202320242025%%Activity rate 20-64 (rhs)Employment rate 20-64 (rhs)Unemployment rate 15-74 (lhs)Long-term unemployment rate 15-74 (lhs) 
 
 
 
        
 
 
 
face 

they 

early age for disadvantaged pupils (see Annex 13). 
In  addition,  young  people  are  more  likely  to  be 
employed on temporary contracts (38.9% of those 
aged  15-29  in  employment  in  2025  vs  13.6% 
among  the  20-64  age  group),  highlighting  the 
in  accessing  quality 
difficulties 
employment.  These  structural  challenges  persist 
despite the implementation of numerous initiatives 
aimed at supporting young people, such as the ‘1 
‘Contrat 
young 
d’engagement  jeune’  and  apprenticeship  support 
measures  (see  2025  country  report,  Annex  10). 
Evaluations  also  point  to  the  need  to  tackle 
additional  barriers,  such  as  housing  and transport 
(see Annex 16) (405). 

person,  1 

solution’, 

the 

Graph A11.2: Labour market outcomes of young 
people 

training  that  leads  to  formal  qualifications  (see 
Annex 13).  

Non-EU-born  people  and  people  with  a 
migrant  background  face  multiple  obstacles 
entering  the  labour  market.  Obstacles  include 
language  barriers,  lower  educational  attainment, 
difficulties  getting  qualifications  recognised,  and 
discrimination.  The  employment  gap  for  people 
born  outside  the  EU  is  slowly  improving,  reaching 
11.7 pps in 2025, but remains higher than the EU 
average  of  7.4  pps,  particularly  for  non-EU-born 
women  (17.9  pps  vs  11.8  pps  in  the  EU).  Despite 
efforts  to  improve  societal  integration,  France’s 
overall 
integration  outcomes  appear  to  have 
remained  broadly  unchanged  since  2019  and  are 
only slightly above the EU average (406). There are 
limited  active  labour  market  measures  targeting 
the  specific  obstacles  faced  by  people  with  a 
migrant  background.  These 
labour  market 
outcomes  are  also  to  be  monitored  in  light  of 
increasing  at-risk-of-poverty 
these 
groups (see Annex 12). 

rates 

for 

Increasing  the  employability  of  older  people 
remains  a  priority  amid  a  rapid  ageing  of  the 
population. The employment rate of older workers 
(55-64)  has  improved  slightly,  particularly  in  the 
wake of the 2023 pension reform, which has been 
temporarily  suspended (407).  However,  it  remained 
far  below  the  EU  average  in  2024  (61.8%  vs 
66.4%  in  the  EU).  Moreover,  the  employment gap 
for  older  workers,  at  13.7  pps,  still  exceeded  the 
EU  average  of  9.7  pps  in  2025. Social  partners 
agreements  on  older  workers’  working  conditions 
and  access  to  training  were  enacted  into  law  in 
October  2025,  but  the  impact  of  these  measures 
on the employability of older workers is still to be 
assessed. These measures are essential to keeping 
older  workers  in  employment  and  limit  their 
unemployment,  particularly  amid  a  shrinking 
workforce  driven  by  declining  birth  rates  and 

(406) MIPEX score of 56 vs 54 in the EU in 2024. MIPEX is a tool 
that measures policies to integrate migrants. The MIPEX 
score is based on a set of indicators covering eight policy 
areas (labour market mobility, family reunification, education, 
political participation, permanent residence, access to 
nationality, anti-discrimination and health). Indicators are 
scored on a scale from 0 to 100 for each key area and 
overall score. 

Source: Eurostat, LFS [lfsi_emp_a, une_rt_a, lfsi_neet_a, 
lfsi_pt_a] 

Limited  labour  market  participation  among 
low-skilled  people  hampers  competitiveness. 
People with low qualifications face disadvantages 
in  the  labour  market  and  lack  access  to  lifelong 
learning  opportunities.  In  2024,  the  employment 
gap for people with low-level qualifications (ISCED 
0-2) increased to 21.9 pps, above the EU average 
of  17.9  pps.  Moreover,  low-skilled  adults  are  less 
likely to participate in adult learning or to enrol in 

(405) Cour des Comptes, Rapport annuel 2025 sur les politiques 

publiques en faveur des jeunes’, 2025.  

(407) INSEE, ‘L'emploi des jeunes se replie, celui des seniors 

continue d'augmenter’, 2025. 

100 

20.721.518.917.317.218.719.712.413.412.81212.312.512.730.128.932.234.935.234.634.738.239.338.438.38.905101520253035404505101520252019202020212022202320242025%%FRUnemployment rateNEET rateEmployment rateTemporary employment 
        
 
 
accelerated  population  ageing,  with  large  cohorts 
of older people approaching retirement (408). 

for  France 

to  achieve 

Better  integration  of  vulnerable  groups  and 
unlocking untapped labour potential remains 
its  2030 
key 
employment  target.  France  carried  out  a 
significant  reform  of  the  public  employment 
service in 2023, overhauling France Travail, with a 
clear goal to mobilise untapped potential. Although 
the direction is promising, early effects are mixed, 
and  recent  budget  cuts  reducing  the  number  of 
guidance counsellors risk undermining the reform’s 
effectiveness. Targeted activation measures, more 
inclusive  recruitment  practices,  tailored  support 
services and improved access to childcare services 
(see  Annex  12)  could  help  advance  progress  on 
making  the  labour  market  more  resilient  and 
inclusive, 
the  country’s  2030 
objectives.  Those  in  the  social  and  solidarity 
economy play a major role in France in supporting 
labour  market 
for 
disadvantaged  groups  and 
in  regions  facing 
structural  employment  challenges.  The  European 
Social  Fund  Plus  (ESF+)  also  supports  access  to 
employment 
ESF+ 
programme and through the regional programmes 
vocational 
promoting 
training for unemployed people.  

integration,  particularly 

entrepreneurship 

line  with 

national 

through 

and 

the 

in 

France has a well-established framework for 
its 
social  dialogue,  but  concerns  over 
effectiveness remain. The institutional set-up is 
well-regulated  and  characterised  by  a  multi-level 
system.  While  the  coverage  rate  of  collective 
bargaining is high (98% in 2024) (409), trade union 
density is one of the lowest in the EU (10.1%) (410). 
Employer organisation density stood at 74.4%, but 
this  figure  dates  from  2017 (411).  Social  partners 
have  repeatedly  expressed  their  dissatisfaction 
over  their  insufficient  involvement  in  significant 
reforms. 
concerns  about 
established  procedures  not  being  respected  and 

There  are  also 

(408) Sbaihi M. (2025), ‘Des écoles au marché du travail : la marée 

descendante de la dénatalité’, Haut-commissariat à la 
Stratégie et au Plan, La Collection du Plan, October 2025. 

(409) OECD, Collective bargaining coverage. 

(410) OECD data on employer organisation and trade union density 
(2019). Employer density rate calculated as a share of 
employees working in establishments that are affiliated to 
an employer’s organisation. Union density rate is calculated 
as a share of employees that are trade union members. 

(411) OECD/AIAS ICTWSS v2.0. 

in 

times  of  political 
timeliness,  particularly 
forum 
instability.  A  new,  open  discussion 
Travail  Emploi  Retraites)  was 
(Conférence 
launched 
in  December  2025  to  discuss  key 
employment and pension issues in the spirit of co-
construction. 

Wage growth is relatively low, but the recent 
rebound  in  real  wages  has  somewhat  offset 
earlier losses. Wage growth has slowed, reaching 
2.2%  in  2025,  and  is  expected  to  fall  to  2.3%  in 
2026.  After  marked  drops  in  2022  and  2023  (by 
0.3% and 1.3% respectively), real wages increased 
by 0.3% in 2024 and 0.7% in 2025 and are set to 
increase  by  0.6%  in  2026.  The  recovery  in  real 
wages  mainly  reflects  easing 
inflation,  amid 
modest  nominal  wage  growth  and  limited  labour 
productivity.  Statutory  minimum  wages  increased 
by  13.7%  between  January  2022  and  January 
2026,  which  is  a  cumulative  increase  of  0.5%  in 
terms.  While  frequent  minimum  wage 
real 
adjustments  support  growth  at  the  lower  end  of 
the  distribution,  their  high  level  contributes  to 
wage  compression.  In  France,  the  minimum  wage 
accounts for 62% of the median wage, one of the 
highest ratios among OECD countries (412).  

some 

limited.  An 

Risks  of  low-wage  traps  persist,  reflecting 
limited  wage  progression  and  rising  in-work 
poverty.  While  the  minimum  wage  is  one  of  the 
highest  in  the  EU,  relative  to  median  gross 
earnings, both real and nominal wage growth have 
remained 
increasing  number  of 
employees remain clustered at, or just above, the 
minimum  wage,  highlighting  limited  labour  and 
social  mobility  and  the  risk  of  continued  low  pay 
for 
categories  of  workers.  Despite 
historically  high  employment  and  activity  rates, 
the 
increased, 
underscoring that certain employment positions do 
not 
escape 
sufficient  means 
poverty (413).  The  growing  share  of  low-wage 
earners  in  recent  years  (from  6.1%  of  total 
employment  in  2010  to  9.7%  in  2022)  is  also 
worrying  amid  rising  in-work  poverty  (8.7%  in 
2025), exceeding the EU average of 8.3%. Against 
this  backdrop,  the  system  of  exemptions  for 
employer  social  contributions  (aiming  to  support 
employment) may amplify risks of low-wage traps, 
especially  through  threshold  effects  at  specific 

risk-of-poverty 

provide 

rate 

has 

to 

(412) OECD, Employment Outlook 2025 : France. 

(413) CNLE, ‘Panorama de l’évolution de la pauvreté et l’exclusion 

sociale’, 2025.  

101 

 
 
 
levels.  As  part  of  the  French  medium-term  fiscal-
structural  plan,  a  reform  of  general  reductions  in 
social contributions relative to the minimum wage 
was adopted in September 2025. The reform aims 
to  streamline  the  existing  schemes  to  incentivise 
wage  mobility (414);  but  its  impact  is  still  to  be 
assessed. 

Labour  shortages  are  linked  to  the  shortage 
of skills. In Q4-2025, the job vacancy rate stood 
at 2.3% (EU: 2.1%). Skills mismatches increased to 
23.3%  in  2025  (from  22.9%  in  2024)  and 
continue  to  exceed  the  EU  average  (19.2%  in 
2025).  Despite  some  easing  of 
recruitment 
difficulties  since  2023 (415),  skills  shortages  have 
continued  to  hamper  labour  market  performance. 
Recruitment  difficulties  are  reported  by  43.8%  of 
employers (416), with the lack of adequately skilled 
workers  one  of  the  main  barriers.  Recruitment 
difficulties  persist 
in  construction  (47%)  and 
healthcare  and  social  services  (45%),  which  are 
sectors  facing  a  persisting  challenge  of  staff 
shortages  (see  Annex  15),  as  well  as  in  industry 
(45%)  and  automotive  trade  and  repair  (42%). 
These  difficulties  are  widespread  across  regions: 
35.6%  of  companies  report  difficulties  in  Île-de-
France, 49.8% in Nouvelle-Aquitaine and 56.8% in 
Mayotte  (see  Annex  18).  Most  sectors  face  skills 
shortages,  with  certain  occupations  experiencing 
significant difficulties (e.g. roofers, skilled machine 
operators,  doctors,  sheet  metal  workers,  car 
mechanics).  Additionally,  more  than  10%  of 
in  2025  are 
occupations  reporting  shortages 
relevant to the green transition. These include civil 
and  electrical  engineering  technicians,  roofers, 
electrical  mechanics  and  fitters,  which  all  have 
been  in  shortage  since  2022.  If  left  unaddressed, 
this  challenge  is  likely  to  increase  as  the  green 
transition  progresses.  France  also  slightly  lags 
behind  in  the  share  of  ICT  specialists  (4.9%  of 
total  employment  vs  5%  in  the  EU),  amid  strong 
recruitment  needs  and  skills  shortages  in  science, 
technology, 
and  mathematics. 
Recruitment  difficulties  are  expected  to  remain 

engineering 

for 

scope 

very high for most economic sectors (417). There is 
skills 
further 
still 
development,  particularly  for  those  most  in  need, 
and 
improving  the  alignment  between  skills 
provision  and  labour  market  needs  to  support 
competitiveness (see Annex 13).  

promoting 

Recruitment  difficulties  are  partly  due  to 
demands  for  improved  working  conditions, 
including  more  reasonable  working  hours, 
higher  salaries  and  less  hardship.  39%  of 
companies attribute recruitment difficulties to  the 
unattractiveness  of  the  working  conditions (418). 
Regarding  quality  jobs,  France  ranks  among  the 
worst performers in the EU on long working hours 
and  fatal  accidents  at  work.  9.4%  of  employees 
work  more  than  49  hours  a  week,  compared  with 
6.2%  in  the  EU.  Labour  market  segmentation 
remains  pronounced.  The  share  of  temporary 
contracts  among  employees 
(20-64)  reached 
13.6%  in  2025,  surpassing  the  EU  average  of 
11.5%,  and  is  significantly  higher  for  young 
people.  Involuntary  part-time  employment  is  also 
high (3.9% vs 3.3% at EU level). The transition rate 
is 
from 
improving but still lags behind the EU average. The 
number of short and very short contracts has also 
increased, with recent study showing that 80% of 
recruitments in 2024 relied on short or very short 
term  contracts  (419),  which  contributes  to  job 
insecurity and poverty. With in-work poverty rising, 
the most vulnerable groups are disproportionately 
affected, primarily due to inadequate wages, non-
standard  forms  of  work  and  temporary  schemes 
(see Annex 12). Amid demographic change, labour 
market  dynamics  are  changing,  underscoring  the 
need  for  companies  to  adapt  more  effectively  to 
employees’  expectations  on  how  to  recruit  and 
retain staff (420).  

to  permanent  contracts 

temporary 

(414) The ‘Décret n° 2025-887 du 4 septembre 2025 relatif aux 

modalités d’applications de différents dispositifs de 
réduction et d’exonération de cotisations patronales de 
sécurité sociale’ introduced a more progressive withdrawal 
rate of the exemptions on social security contributions until a 
shortened exit point of 3 SMIC. 

(417) Foucher A. (2025), ‘Décrochage démographique : cinq 

revolutions du marché du travail’, Haute-Commissariat à la 
stratégie et au plan, La Collection du Plan, October 2025. 

(418) France Travail, ‘Enquête Besoins en Main-d’Œuvre 2026’, 

2026. 

(415) Dares, ‘Les emplois vacants’, 2026. 

(419) Unedic, ‘Contrats temporaires ou atypiques : focus sur 7 pays 

(416) France Travail, ‘Enquête Besoins en Main-d’Œuvre 2026’, 

2026. 

européens’, 2026  

(420) Foucher A. (2025). 

102 

 
 
 
ANNEX 12: SOCIAL POLICIES 

for 

the 

(ECEC) 

that  hinder  parents’ 

Amid growing inequalities, poverty and social 
exclusion  risks  remain  a  pressing  issue  in 
France,  particularly  impacting  children.  For 
France, 
country-specific 
2025 
recommendations highlighted the need to prevent 
and  reduce  child  poverty,  notably  by  removing 
barriers 
labour  market 
participation and access to quality early childhood 
the  most 
education  and  care 
disadvantaged  households.  France  is  significantly 
behind  on  its  2030 poverty  reduction  target, both 
for the overall population and for children, despite 
decreasing unemployment. Income inequalities are 
widening,  and  existing  social  benefits  are  less 
effective  in  reducing  the  risk  of  poverty.  Amid 
to  quality 
persistent 
of 
employment, 
education 
intergenerational  transmission  of  poverty  and 
social  exclusion  remains  high,  limiting  the  future 
opportunities  of  disadvantaged  children.  Child 
poverty  remains  a  significant  challenge  in  France, 
with  the  majority  of  those  affected  concentrated 
in  urban  areas  and  strong  disparities  between 
mainland  France  and 
its  outermost  regions. 
Poverty  or  social  exclusion  risks  are  strongly 
correlated  with  employment  status,  while  in-work 
poverty  has  increased.  Despite  recent  efforts, 
there  remains  significant  scope  for  further  policy 
measures  aimed  at  preventing  and  alleviating 
poverty and social exclusion. 

inequalities 
and 

in  access 

risk 

the 

as 

in  mainland  France 

Contrary to  the downward trend  at  EU  level, 
the  number  of  people  facing  poverty  or 
social exclusion risks has been rising steadily 
in  France  since  2019.  In  2025,  the  number  of 
people at  risk  of  poverty  or  social  exclusion 
(AROPE) 
rose  by  0.19 
million compared  to  2024,  resulting  in  a  total 
increase of 1.43 million since 2019. This contrasts 
with the overall EU trend where a reduction of 3.5 
million has been observed. This marks a continued 
deterioration, 
rate 
remained persistently high at 20.8% in 2025, only 
slightly below the EU average of 20.9%. Moreover, 
the 2030 national target does not include France’s 
outermost  regions (1),  which  would  add  720 000 
people  to  the  AROPE  count  in  2025,  including 
176 000  children.  In  this  context,  efforts would 
need  to  be  accelerated  for  France  to  reach  its 
2030  national  target  of  reducing  the  number  of 
people at risk of poverty or social exclusion by 1.1 
million.  A  comprehensive  approach,  as  set  out  in 
the  EU  anti-poverty  strategy,  could  help  address 
the  multiple  dimensions  of  poverty  and  achieve 
the national anti-poverty target. 

AROPE 

the 

Income  inequalities  are  rising  in  France.  In 
contrast  to  the  downward  EU  trend,  the  income 
quintile  share  ratio  (S80/S20)  has  been  steadily 
increasing since 2018, reaching its highest level in 
the  last  decade  (4.7  vs  4.6  in  the  EU).  Although 
higher than the EU  average of 33.2%, the impact 
of  social  benefits  (excluding  pensions)  on  poverty 
reduction has declined since 2024, dropping to its 
lowest  recorded  level  in  the  last  decade  in  2025 
(38.5%),  mainly  due  to  changes  in  housing  and 
family  benefits  (421).  Moreover,  at  15.4%,  the 
persistent  at-risk-of-poverty  (AROP)  rate  (422)  is 
significantly  above  the  EU  average  of  11.3%. 
Despite  high  coverage  (the  highest  in  the  EU), 
further  initiatives  have  been  introduced  to  reduce 
non-take-up  of  social  benefits  (423).  However,  in  a 
context  of  budgetary  constraints,  their  impact  on 
poverty  alleviation 
to  be  evaluated. 
is  still 
Moreover,  a  proposal  for  an  ‘allocation  sociale 
unique’ 
(single  social  allowance)  could  be 
discussed  in  2026  (to  be  implemented  by  2030), 
against  a  backdrop  of  high  political  uncertainty. 
Although  this  reform  aims  to  achieve  further 
administrative  simplification  and  digitalisation,  its 
concrete  impact  on  the  most  vulnerable  groups 
will have to be evaluated if adopted. 

Children in France are particularly vulnerable 
and  exposed  to  poverty  or  social  exclusion. 
The  AROPE  rate  for  children  remained  high  in 
2025 (27.5%), significantly above the EU average 
(24.3%).  From  2019  to  2025,  the  number  of 
children  at  risk  of  poverty  or  social  exclusion 
increased  by  0.37  million  (0.14  since  2024), 
reaching  3.6  million  (424)  and  moving  away  from 
France’s  2030  child  poverty  reduction  sub-target. 
Children  and  young  people  (18-24)  are  the  two 
age  groups  most  vulnerable  to  poverty  risks  in 
France  (AROPE  for  18-24  years  old  at  27.6%  vs 
26.3%  in  the  EU).  The  implementation  of  the 
European  Child  Guarantee  is  progressing  in  terms 
of  access  to,  for  example,  school-based  activities 

(421) OFCE, Lutte contre la pauvreté, le décrochage français, 2025. 

(422) Indicator defined as the share of persons with an equivalised 
disposable income below the at-risk-of-poverty threshold in 
the current year and in at least two of the preceding three 
years. 

(423) Maisons France Services launched in 2020, the project 
Territoires zéro non-recours launched in 2023 and the 
second stage of the reform Solidarité à la source 
implemented in 2025. 

(424) To be noted that the methodology regarding the 2030 

national targets does not include the data for the outermost 
regions. 

103 

 
 
 
 
 
and  healthcare.  However,  there  are  gaps 
in 
ensuring that children in need  have access to key 
services  such  as  ECEC  (below  the  age  of  3)  and 
adequate  housing,  in  a  context  of  high  levels  of 
homelessness  among  children.  The  number  of 
children  living  on  the  streets  or  in  public  spaces 
due  to  the  lack  of  a  housing  solution  has  more 
than  doubled  in  five  years  (from  927  in  2020  to 
2 159  in  2025  (425))  (see  Annex  16).  France 
introduced the 2023-2027 solidarity pact to tackle 
child  poverty  through  diverse  initiatives,  as  child 
poverty  is  a  driver  of  further  socio-economic 
disadvantages.  However,  evaluations  highlight the 
lack  of  a  comprehensive  strategy,  and  limited 
success  in  achieving  significant  poverty  reduction 
(426).  

the 

gap 

less 

likely 

children 

Inequalities  emerge  from  an  early  age,  with 
disadvantaged 
to 
participate  in  quality  education  and  care.  In 
2025,  more  than  half  of  children  under  three 
participated  in  ECEC  (59.7%  vs  40.5%  in  the  EU). 
However, 
between 
participation 
advantaged  and  disadvantaged  children  is  one  of 
the  largest  in  the  EU  (36  pps  vs  20  pps).  Early 
inequalities  significantly  impact  the  educational 
outcomes  and  employment  prospects  of  children 
from  disadvantaged  families  (427).  Concerns  also 
persist  regarding  the  quality  of  ECEC  provision 
(428),  and  its  coverage  is  significantly  lower  in  the 
outermost 
reform 
establishing  an  ‘early  childhood  public  service’ 
aims  to  strengthen  municipalities’  responsibilities 
in  organising  ECEC.  This 
includes  assessing 
childcare  needs  for  children  under  three  and 
families  about  available  childcare 
informing 
options. The government is, however, not on track 
to  reach  its  aim  of  creating  200 000  new  ECEC 
places  by  2030,  and  labour  shortages  in  this 
in 
sector  persist.  The  reform’s  effectiveness 
increasing  ECEC  participation  by  overcoming 
financial  and  regional  barriers  to  access  remains 
to be evaluated. 

regions (429). 

The  2025 

(425) UNICEF-FAS, Baromètre Enfants à la rue, 2025. 

(426) Cour des Comptes, Le pilotage par l’État de la politique de 

lutte contre la pauvreté, 2025. 

(427) OECD, The economic costs of childhood socio-economic 

disadvantage, 2022. 

(428) Cour des Comptes, La politique d’accueil du jeune enfant, 

2024. 

increasing  women’s 

Poverty or social exclusion risks are strongly 
correlated  with  the  composition  and  work 
intensity  of  the  household.  Single-parent 
families  are  the  most  vulnerable  to  poverty  or 
social exclusion (48.6% vs 44.3% in the EU). Their 
AROPE  rate  has  risen  since  2023  (at  46.3%)  and 
they  account  for  a  growing  proportion  of 
households in France. There is significant potential 
for initiatives aimed at promoting better work-life 
balance, 
labour  market 
participation  and 
improving  accessibility  of 
childcare services. Parental educational attainment 
is  also  a  strong  predictor  of  child  poverty  in 
France.  While  the  AROP  rate  for  children  with 
highly skilled parents is 9.9% (EU: 8.5%), this rate 
jumps  to  58.8%  for  children  with  low-skilled 
parents (EU: 52.7%), and has increased by 5.3 pps 
since  2023.  Work  intensity  plays  a  pivotal  role:  in 
2025, 81.7% of children in very low work intensity 
households  were  at  risk  of  poverty  (EU:  73.8%), 
compared  to  6.1%  of  those  in  very  high  work 
intensity  households  (EU:  5.6%).  Moreover,  the 
percentage of children living in jobless households 
increased to 10.3% in 2025 (EU: 7.8%). 

individuals, 

Certain  groups,  specifically  non-EU-born  and 
low-skilled 
remain  more 
vulnerable  to  poverty  or  social  exclusion.  In 
2025, the AROPE rate for native-born people was 
below the EU average (16.3% vs 17.6%). This rate 
reached 39.3% for the non-EU-born, above the EU 
average  of  38.9%,  marking  it  one  of  the  highest 
gaps  in  the  EU.  Moreover,  46.5%  of  children  with 
at  least  one  parent  born  outside  the  EU  were  at 
risk of poverty or social exclusion (EU: 38.8%). This 
disparity  can  be  attributed  to  structural  factors, 
such  as  these  populations  often  being  younger, 
less qualified  and employed in temporary or non-
standard work (430). The AROPE rate decreases with 
higher  educational  attainment  levels  (from  31% 
for  individuals  with  less  than  lower  secondary 
education to 9.6% for those with high educational 
attainment).  In  this  context,  the  European  Social 
Fund Plus provides substantial support to improve 
the social inclusion of the most vulnerable groups, 
covering both mainland France and the outermost 
regions  (see  2025  country  report).  The  support 
also  aims  to  prevent  and  alleviate  poverty, 
including for children. 

(429) CNAF-ONAPE, L'accueil des jeunes enfants - Édition 2025, 

(430) INSEE, Revenus et patrimoine des ménages – Insee 

2025. 

Références – Édition 2024, 2024. 

104 

 
 
 
(8.7%  vs  43.3%), 

The  in-work  poverty  rate  has  increased  in 
France,  in  a  context  of  rising  employment. 
The  rise  in  in-work  poverty  (up  1.3 pps  between 
2019  and  2025)  has  been  driven  partly  by  the 
strong  increase  in  the  risk  of  poverty  among  the 
self-employed  (+4.9 pps)  (431).  Although  employed 
individuals face lower risks of poverty compared to 
unemployed  people 
the 
worsening  in-work  poverty  trend  highlights  the 
vulnerability of some groups within the workforce. 
Among  the  main  factors  are  slow  wage  growth, 
precarious  contracts,  atypical  forms  of  work  and 
involuntary part-time work (see Annex 11). In-work 
poverty disproportionately affected the low skilled, 
part-time  workers,  temporary  workers  and  single 
parents (432). The AROP rate of unemployed people 
has  increased  since  2019  (by  6.9 pps),  notably  in 
the  context  of  the  unemployment  benefit  reform 
(433).  In  addition,  to  better  target  those  furthest 
away  from  the  labour  market,  a  comprehensive 
reform of France Travail was initiated in 2023; its 
impact  will  be  evaluated  as  risks  of  adverse 
effects remain. 

Graph A12.1: In-work poverty (% of employed) 

Poverty  risks  are  most  prevalent  in  urban 
areas,  while  strong  regional  disparities 
persist  throughout  France.  Poverty  rates  are 
higher in cities (24% vs 21.3% in the EU), notably 
in  priority  urban  districts,  known  as  quartiers 
prioritaires de la politique de la politique de la ville 
(434).  The  rate varies  significantly  across  mainland 
regions,  with  a  9.7  pp  gap  between  the  regions 
with the lowest and highest  rates (from 14.8% in 
Bretagne  to  24.5%  in  Hauts-de-France).  However, 
the  strongest  disparities  occur  between  mainland 
France and its outermost regions. The AROPE rate 
is  significantly  higher  in  the  outermost  regions, 
reaching  an  average  of  41.3%  (ranging  from 
31.3% in Martinique to 54.8% in Guyane), marking 
a  striking  40 pp.  gap  between  the  lowest  rate  on 
in  the 
the  mainland  and  the  highest  rate 
outermost  regions.  The  poverty  rate  remains 
particularly high in Mayotte, reaching 77% in 2018 
(vs  15.3%  in  mainland  France  (435).  In  addition, 
access to clean water remains a challenge in this 
region  (see  also  Annex  19).  Similar  trends  can  be 
observed in the rate of people living in households 
with  very  low  work  intensity  and  facing  severe 
material and social deprivation, with these regions 
also  experiencing  the  most  significant  challenges 
in  the  labour  market  (see  Annex  11).  Moreover, 
inequalities  are  exacerbated  in  the  outermost 
regions  (436),  as  the  cost  of  living  is  significantly 
higher than in the rest of the country. France has 
introduced 
its 
outermost  regions  in  the  context  of  the  solidarity 
pact,  although  it  remains  difficult  to  implement 
those measures. 

specific  measures 

targeting 

Source: Eurostat, EU-SIL [ilc_iw01] 

(431) CESE, « Lutter contre la précarité professionnelle par une 

économie plus inclusive ». February 2026. 

(432) CNLE, Panorama de l’évolution de la pauvreté et l’exclusion 

(434) Category identified based on per capita income with the aim 
of reducing development gaps (mainland and outermost 
regions). 

sociale, 2025.   

(435) INSEE, L’essentiel sur Mayotte, 2025. 

(433) DARES, Rapport du comité d’évaluation de la réforme de 

(436) CESE, Dix préconisations pour le pouvoir d’achat en Outre-

l’assurance chômage initiée en 2019, 2025. 

mer, 2025 

105 

6.577.588.599.5102016201720182019202020212022202320242025FREU 
      
 
 
Graph A12.2: Population at risk of poverty and 
social exclusion (%) 

Charentes,  Auvergne  and  Corse  are  particularly 
poorly  served  by  public  transport (441)(442).  The 
outermost  regions  are  also  highly  concerned  by 
issues  of  transport  poverty (443)  (see  also  Annex 
19).  France  also  faces  further  challenges  related 
transport  and  cross-border 
to  urban  public 
commuting (see Annex 19). 

Source: Eurostat, EU-SILC [ilc_pecs01] 

poverty 

remains 

affecting 

high, 
Energy 
the  most 
disproportionately 
vulnerable  groups.  Despite  a  slight  decrease 
since  2023,  11.5%  of  the  population  was  unable 
to keep their home adequately warm in 2025 (EU: 
8.8%),  with  people  at  risk  of  poverty  being 
particularly impacted (23.5% vs 19.6% in the EU). 
This  challenge  is  especially  severe  in  regions (437) 
where  the  AROPE  rate  is  higher  (12.6%  in  Hauts-
de-France  vs  10.2%  in  Île-de-France).  In  2023, 
21.1% of households faced issues like leaks, damp 
or rot, above the EU average of 15.6%. According 
to  the  national  energy  poverty  observatory,  35% 
of  the  population  reported  suffering  from  cold 
during the 2024-2025 winter (marking an increase 
of  5 pps  since  the  previous  year),  with  37%  of 
cases  attributed  to  financial  constraints  and  32% 
to inadequate insulation (438) (see Annex 16).   

Transport  poverty  is  also  a  challenge  in 
France.  France  has  the  highest  rate  of  people 
reporting they do not use public transport regularly 
because it is not available (26.6% vs 10.8% in the 
EU) (439). 
In  mainland  France (440),  the  former 
administrative  regions  of  Bourgogne,  Franche-
Comté,  Basse  Normandie,  Limousin,  Poitou-

(437) Only regions in mainland France, as data do not include the 

French outermost regions. 

(438) ONPE, Tableau de bord de la précarité énergétique - Édition 

novembre 2025, 2025. 

(439) 2024 EU-SILC ad hoc module on access to services; including 
Guadeloupe, Martinique, French Guiana and Réunion but 
excluding Mayotte. 

(440) Note that the methodology regarding transport poverty relies 
on the administrative regions in France as they were before 
2016. For reasons of clarity this classification is used here, 
although it is not aligned with the current French 
administrative regions. 

(441) Data from Commission’s Transport Poverty Hub. 

(442) In those regions, it takes at least half of the population more 
than 45 minutes to reach the nearest healthcare facility by 
public transport (Transport Poverty Hub). 

(443) The Transport Poverty Hub does not yet include data on the 

outermost regions. 

106 

18.519.19.520.20.521.21.522.201920202021202220232024EU27France, including outermost regions (OR)Metropolitan France 
      
 
 
ANNEX 13: EDUCATION AND SKILLS 

in 

initial 

training, 

Improving the resilience and competitiveness 
of  the  French  economy  requires  further 
policy action on education and skills. Declining 
basic  skills  proficiency  of  young  people  across 
socio-economic  groups  limits  their  opportunities 
for successful upskilling and reskilling later in life, 
with a negative impact on competitiveness. Fewer 
disadvantaged  students  achieve  the  basic  skill 
in  today’s 
level  needed  to  fully  participate 
technology-driven  and  fast  changing  economy. 
Recent  education  and  training  reforms  have 
inconsistently  addressed 
labour  market  and 
schools’  needs  and  have  often  fallen  short  in 
adequately  engaging  teachers.  Teachers  face 
challenges 
professional 
development  and  artificial  intelligence  (AI)  use. 
Upskilling is insufficiently targeted towards sectors 
with  acute 
labour  shortages  and  sectors  of 
strategic importance, including sectors relevant to 
the  green  and  digital  transitions.  Furthermore, 
existing  schemes  do  not  sufficiently  reach  the 
broader  working-age  population.  Enhancing  the 
labour-market  relevance  of 
inclusiveness  and 
education  and 
to 
overcoming skills gaps. The 2025 country-specific 
recommendations 
highlighted 
challenges,  still  relevant  in  2026,  in  improving 
educational  outcomes,  reducing  inequalities  in 
education,  strengthening  the  teaching  profession, 
addressing  skills  shortages  through 
increased 
access  to  training,  and  facilitating  access  to 
quality early childhood education and care (444) for 
the  most  disadvantaged  households  (see  also 
Annex 12).  

training  would  contribute 

France 

for 

The  drop  in  basic  skills  proficiency  is  a 
barrier  to  further  skills  acquisition  and 
human  capital  development,  and  ultimately 
to productivity growth. Between 24% and 29% 
reach  a  minimum 
of  15-year-olds  do  not 
proficiency  in  reading,  mathematics  and  science, 
and  close  to  half  of  disadvantaged  students  lack 
these basic skills, far from the 15% EU-target (445). 
Educational  equity  has  decreased  over  the  last 
decade,  with  only  14.4%  of  disadvantaged 
students  achieving  good  performance  in  basic 
skills  (EU  average:  16.3%),  down  from  20.8%  in 

(444) From the age of 3, every child is subject to compulsory 
education (Articles L131-1 to L131-13 of the Education 
Code).  

2015  (EU  average:  21.1%) (446).  Top  performance 
has also deteriorated markedly, with the share  of 
top performers in mathematics falling from 11.4% 
in 2018 to 7.4% in 2022. The decline in basic skills 
is  broad-based  and  affects  students  across  all 
socio-economic groups to varying degrees (447).  

France  has  adopted  revised  curricula  to 
improve  basic  skills,  but  their  effectiveness 
will require reinforced teacher preparation. A 
new curriculum will apply to pre-primary education 
(age  3-6)  as  of  the  2025/2026  school  year.  It 
defines  age-appropriate  learning  objectives  for 
early  literacy  and  numeracy.  While  pre-primary 
school is mandatory, access to education and care 
for  the  youngest  children  (age  0-3)  strongly 
depends  on  their  socio-economic background (see 
Annex 12). As of 2025/2026, revised, competence-
based curricula were also introduced for all grades 
of  primary  school  and  the  first  grade  of  lower 
secondary  school  (448).  Ensuring  that  teachers  are 
sufficiently  prepared  to 
implement  the  new 
curricula is essential. However, only primary school 
teachers  are  entitled  to  mandatory  collaborative 
training  (18  hours  per  year).  In  the  OECD’s  TALIS 
survey,  half  of  French  lower  secondary  teachers 
(49%) indicated having to implement changes and 
reforms  without  the  necessary  resources  (OECD 
average: 31%) (449). 

the 

The  insufficient  use  of  student  assessment 
lack  of  well-developed 
data  and 
strategies  for  differentiated  teaching  at 
school  level  undermine  the  effectiveness  of 
basic  skills  support  schemes.  Evidence  shows 
that  differentiation  in  teaching  is  crucial  for 
improving  basic  skills.  In  the  2024/2025  school 
year,  ability  grouping  was  introduced  in  the  first 
two  grades  of  lower  secondary  schools.  However, 
an  evaluation  found  that  this  measure  did  not 
achieve 
reducing 
underperformance.  This 
two  main 
factors: (i) students rarely moved between groups 
throughout  the  school  year;  and  (ii)  pedagogical 
methods  were  not  effectively  adapted  due  to 

its  main 

objective 

reflected 

of 

(446) Achieving level 4 or above in one of the PISA domains 
(Commission calculations based on OECD 2022 PISA). 

(447) HCSP, 2025, Le niveau scolaire: Faut-il s’inquiéter?, Note 

n°155. 

(448) MENJS, 2024, Bulletin officiel de l’Éducation nationale, de la 

Jeunesse et des Sports n° 41 du 31 octobre 2024. 

(445) OECD, 2022 PISA. 

(449) OECD, 2025, TALIS.  

107 

 
 
 
 
 
 
insufficient  continuous  professional  development. 
The  evaluation  recommended  a  more  tailored, 
school-level  approach, while making better use of 
national  student  evaluation  outcomes  (450).  Ability 
grouping  remains  in  place,  but  the  Ministry  of 
Education has since placed a greater emphasis on 
its 
flexibility  and  pedagogical  autonomy 
(451). 
implementation 
regional 
committees  for  basic  skills  improvement  were 
established  in  2023  (452).  A  further  evaluation  is 
planned  to  investigate  if  flexible  ability  grouping 
contributes to reducing underachievement (453). 

addition, 

In 

in 

in 

in 

(454) 

limited  success 

The  main  scheme  supporting  disadvantaged 
students  faces  challenges 
improving 
academic  performance.  Schools  in  designated 
receive  extra 
‘priority  education’  areas 
support. However, the map of these areas, defined 
in  2015,  needs  to  be  revamped  and  the  scheme 
has  had 
lifting  academic 
performance.  The  French  Court  of  Auditors  has 
recommended  reforming  it,  noting  that  its  rigid 
design  leads  to  incomplete  coverage,  with  an 
estimated 70% of disadvantaged learners left out. 
In  addition,  teachers  in  these  schools  are  less 
experienced than on average. The Court suggested 
more:  (i)  flexible  resource  allocation  to  better 
address 
teaching 
methods;  and  (iii)  collaboration  among  schools  in 
the priority network (455).  

local  needs; 

(ii)  adapted 

Demographic  decline  presents  opportunities 
for  efficient  and  effective  investment  in 
primary  education,  with  reduced  class  sizes. 
In  recent  years,  a  major  policy  to  reduce 
underachievement has consisted in lowering class 
sizes in first and second grades at disadvantaged 
primary  schools  in  ‘priority  education’  areas.  A 

(450) IGÉSR (2025). Mise en place des groupes de besoins en 
français et mathématiques au collège. N° 24-25 007. 

(451) Décret n° 2025-315 du 4 avril 2025 relatif à l’organisation 
de la formation au collège. Journal officiel de la République 
française. 

(452) Bulletin officiel n° 2 du 12 janvier 2023. Conseils 

académiques des savoirs fondamentaux. 

(453) Results expected by summer 2026. 

(454) ‘Priority education’ areas are defined based on an index 

taking into account the number of students from 
disadvantaged backgrounds, those with learning delays, and 
those residing in disadvantaged urban areas, among other 
things. 

(455) Cour des Comptes. (2025). L’éducation prioritaire, une 

politique publique à repenser.  

study  has  showed  that  this  investment  has  a 
positive  cost-benefit  ratio  as  smaller  class  sizes 
translated  into  better  academic  outcomes,  while 
an  improvement  of  one  standard  deviation  in 
academic performance leads to 10% higher future 
earnings. This suggests that  class splitting  can be 
self-financing  in  the  long  run  (456).  Despite  recent 
efforts,  the  average  pupil-to-teacher  ratio 
in 
primary  education  was  high  at  18.1  in  2023, 
above the  EU  average  (13.4).  The  projected  steep 
demographic  decline  in  the  population  of  primary 
school  pupils,  with  exceptions  (e.g.  Mayotte  and 
to 
French  Guiana),  presents  an  opportunity 
continue investing in reduced class sizes across all 
grades and beyond ‘priority education’ areas.  

Teachers are central to developing the skills 
of  the  future  workforce,  yet  they  face 
challenges  in  initial  training,  professional 
development and AI use. Only 50.7% of French 
initial  teacher 
the  quality  of 
teachers  rate 
education (ITE) highly, one of the lowest shares in 
the  EU  (EU  average:  71.5%)  (457).  In  2025,  the 
government  reformed  ITE  to  attract  more  people 
into  the  profession  and  strengthen  practical 
experience during studies. There is scope to further 
focus  the  reform’s  objectives  on  content  and 
quality of ITE. In addition, only 35.3% of teachers 
report that the continuous training they followed in 
the  previous  year  had  a  positive  impact  on  their 
teaching  (EU  average:  56%),  and  only  13.5%  of 
teachers used AI in the previous year (EU average: 
31.6%).  The  adoption  in  2025  of  a  national 
framework  on  the  use  of  AI,  together  with 
effective  training,  should  help  raise  teachers’ 
in  this  area.  A  2022  reform  of 
proficiency 
continuous  professional  development  established 
around  30  training  centres  (écoles  académiques 
de 
la  formation  continue).  According  to  the 
Education  Inspectorate,  the  reform  has  not  yet 
achieved  its  full  potential  in  terms  of  visibility, 
reach,  needs  identification  and  monitoring  of  the 
(458).  Working 
efficacy  of 
training  offer 
its 
the  profession’s 
conditions  also  weigh  on 
attractiveness:  only  26.6%  of  lower  secondary 

(456) Conseil d’Analyse Economique, 2025, L’effet des 

compétences scolaires sur les salaires futurs. Focus n°112 & 
Economic Efficiency of Reducing Class Size, Focus n°113. 

(457) OECD (2025), Results from TALIS 2024: The State of 
Teaching, also for other data in this paragraph unless 
otherwise indicated. 

(458) IGÉSR, 2024, La mise en place des EAFC : quels effets en 
faveur du développement professionnel des enseignants?. 

108 

 
 
 
teachers  were  satisfied  with  their  earnings  (EU 
average:  37.3%),  which  corresponded  to  82%  of 
the  salary  of  a  tertiary-educated  worker  (EU 
average:  85%)  (459).  Rules  on  the  country-wide 
mobility  of  secondary  teachers  are  seen  as 
stringent  and  may  discourage  entry  into  the 
profession or lateral recruitment (460). 

Graph A13.1: Enrolment in medium-level 
vocational education 

is  further  scope  to 

There 
increase  the 
attractiveness  and  labour-market  relevance 
of  vocational  education  and  training  (VET). 
The  share  of  learners  enrolled  in  medium-level 
vocational education (ISCED  3-4)  has increased in 
recent  years,  reaching  41.4%  in  2024,  although 
remaining below the EU average of 52.9%. Socio-
economic  and  territorial  inequalities  persist,  as 
29%  of  students  in  ‘priority  education’  areas  opt 
for  VET,  compared  to  18.5%  outside  these  zones 
(461).  The  number  of  new  apprenticeship  contracts 
declined for the first time in 2025 (-5% compared 
to 2024) (462), partly reflecting adjustments to the 
hiring  subsidy  scheme,  initially  supported  by  the 
Recovery and Resilience Facility. Most VET learners 
(82.4%)  participated  in  work-based  learning  in 
2024  (EU  average:  65.2%).  However,  only  73.0% 
of people who had recently completed VET were in 
employment  (EU  average:  80.0%),  underlining  the 
need 
labour-market 
improve 
relevance  of  VET  programmes  and  strengthen 
incentives for work-based learning, particularly for 
those 
(see 
Annex 11).  The  European  Social  Fund  Plus  (ESF+) 
supports  VET  programmes  at  regional 
level, 
developing an offer adapted to territorial needs.  

to  employment 

facing  barriers 

to  further 

the 

(459) OECD, 2025, Education at a Glance. 

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

Challenge of Attractiveness. 

(461) Bannier, Raux (2025), «Mission flash sur les impacts des 

réformes successives du baccalauréat professionnel, juillet 
2025.  

Source: Eurostat [educ_uoe_enra16, edat_lfse_24, 
educ_uoe_enrt10] 

in 

Enrolment in science, technology, engineering 
and mathematics (STEM) is currently too low 
to  meet  growing  demand.  In  2025,  overall 
tertiary  attainment  was  higher  than  in  the  EU  on 
average  (56.0%  vs  44.8%),  but  the  share  of 
students  enrolled  in  STEM  fields  remains  below 
the  EU  average  and  fell  from  25.3%  in  2015  to 
23.7%  in  2023  (EU  average:  26.8%  in  2023).  In 
2023,  a  minority  of  34.7%  of  tertiary  STEM 
students  were  women  (although  above  the  EU 
average:  32.2%).  Among  STEM  students,  only 
13.4%  were  enrolled 
information  and 
communications  technology  (ICT)  (EU  average: 
20.3%).  At  medium-level  vocational  education, 
enrolment  in  STEM  is  in  line  with  the  EU  average 
(36.9%  in  France  vs  an  EU  average  of  36.6%  in 
2024),  but  the  share  of  women  in  STEM  is  below 
the  EU  average  (12.5%  vs  15.9%).  Following  a 
decrease  between  2021  and  2023,  the  shares  of 
adults  with  at  least  basic  digital  skills  (65.7%  in 
2025)  and  those  with  above-basic  digital  skills 
(35%)  have  both  improved  However,  more  than 
2 in 5  eighth  graders  lack  basic  digital  skills  (463). 
Meanwhile,  labour  demand  is  expected  to  rise 
strongly  in  STEM-related  occupations,  with  the 
number  of  ICT  engineers  and  industrial  engineers 
projected  to  increase  by  26%  and  24%  by  2030 
compared  to  2019,  respectively  (464).  Graduates 
entering  the  labour  market  are  anticipated  to  fill 
only  three  quarters  of  these  recruitment  needs in 
2030,  implying  that  close  to  1  in  4  jobs  could 
remain  vacant  due  to  STEM  skills  shortages.  A 
strategy adopted in 2025 aims to close the gender 
gap  (in  favour  of  boys)  in  maths  in  primary  and 
secondary  education.  It  does  not  cover  other 

(463) IEA, 2023, ICILS. 

(462) DARES, 2026. 

(464) DARES/France Stratégie, 2022, Métiers 2030. 

109 

0.010.020.030.040.050.060.070.080.090.0Enrollment in VETEmployment rate ofVET graduatesEnrolment in STEMShare of women inSTEMFREU 
 
   
 
education  levels  or  general  uptake  of  STEM  and 
does not have a dedicated budget. STEM skills are 
an important driver of competitiveness. 

the 

implementation  of 

Despite  sustained  efforts,  skills  shortages 
continue  to  hinder  France’s  labour  market 
performance,  undermining  competitiveness 
across  many  sectors.  Labour  and  skills 
shortages  remain  elevated,  particularly  in  the 
construction,  healthcare  and  social  services, 
industry,  and  automotive trade  and  repair  sectors 
(see  Annex 11).  Moreover,  half  of 
industrial 
companies  indicate  that  the  lack  of  skilled  labour 
is  a  major  determinant  of  investment  decisions 
across the territory (465). This highlights the need to 
enhance  the 
labour-market  relevance  of  the 
training  offer.  To  tackle  skills  shortages,  France 
has  made  substantial  investments  over  the  past 
years.  The 
individual 
learning account (Compte personnel de formation) 
has progressed steadily since 2019 (466), although 
access  for  the  most  vulnerable  groups  could  be 
further  supported  through  better  guidance,  and 
incentives could be introduced for training aligned 
Plan 
with 
d’investissement  dans  les  compétences  (PIC)  has 
allocated  EUR 14 billion  between  2018  and  2022 
to foster skills development. While the number of 
training  doubled 
jobseekers  participating 
between  2021  and  2022,  only  20%  of  training 
courses targeted jobs for which recruiters reported 
the 
hiring  difficulties 
implementation  of  the  PIC  highlight  a  lack  of 
outreach  measures,  limited  participation  of  low-
qualified  people  (468)  and  insufficient  schemes  to 
(469).  Although 
address  employment  barriers 
renewed for the period 2024-2027, its budget has 
been  significantly  scaled  down.  While  progress 
was made in increasing participation in training, no 
other measures were taken to improve the labour-
market relevance of the training system.  

(467).  Evaluations  of 

labour  market 

needs. 

The 

in 

tackle  skills  mismatches.  In  2024, 
labour 
shortages  were  reported  in  several  occupations 
requiring  green  skills, 
including  forestry  and 
related  workers,  civil  engineering  technicians  and 
roofers (470).  Although 
the  share  of  workers 
employed in green sectors (471) increased between 
2014 and 2022 (from 2.1% to 2.6%), recruitment 
difficulties  persist,  driven  notably  by  a  lack  of 
candidates  and  skills  mismatches  (472).  Only  46% 
of  the  population  believe  that  their  current  skills 
can  support  the  green  transition  (EU  average: 
54%). By 2030, 3 million new jobs are expected to 
be  created in the green economy  (473); however, a 
comprehensive policy targeting sectors of strategic 
importance  has  not  been  introduced.  At  the  same 
time,  workers’  participation 
in  education  and 
training  in  energy  intensive  industries  decreased 
from  20.3% 
in  2023, 
nevertheless  remaining  above  the  EU  average  of 
10.9%. The Just Transition Fund provides upskilling 
and  reskilling  opportunities  for  workers  and 
jobseekers  in  industrial  regions  most  affected  by 
the 
low-carbon  economy. 
Evaluations point to a fragmented governance and 
intelligence  system,  dispersed  between 
skills 
multiple 
bodies, 
national 
regional 
institutions,  calling  for  a 
observatories  and 
comprehensive 
skills 
anticipation  and  strong  coordination  among 
stakeholders (474),  to  align  education  and  training 
systems  with  changing  skills  needs  and  boost 
competitiveness (475). 

strategy,  better 

to  15.6% 

in  2015 

transition 

to  a 

skills 

and 

while 

in  adult 

stagnant, 

learning  remains 
Participation 
largely 
educational 
attainment,  employment  status  and  age 
remain  strong  predictors  of  participation 
rates.  According  to  the  adult  education  survey, 
49.2%  of  adults  took  part  in  education  and 
training  in  2022  (EU  average:  39.5%).  Progress 

Initiatives to promote the skills needed for a 
competitive  industry  and  the  green  and 
insufficient  to 
digital  transitions  remain 

(465) BPI France, ”Comment gagner la bataille de la 

réindustrialisation?”, 2024. 

(466) INSEE, Formation et Emploi, 2025. 

(467) INSEE, Formation et Emploi, 2025. 

(468) INSEE, Formation et Emploi, 2025. 

(470) European Labour Authority, EURES Report on labour 

shortages and surpluses 2024, 2025. 

(471) Green sectors as defined by the environmental goods and 
services sector (ECSS) accounts, i.e. economic sectors that 
generate environmental products. 

(472) Onemev, Des difficultés de recrutement persistent en 2022 

dans le secteur de l’économie verte, 2023. 

(473) Haut-Commissariat à la Stratégie et au Plan, Mettre en 

œuvre la planification écologique, 2025. 

(474) CEDEFOP, Next generation skills intelligence for more 

learning and better matching, 2023. 

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

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

les compétences (PIC), 2025. 

les compétences (PIC), 2025. 

110 

 
 
 
towards  the  2030  target  of  65%  thus  remains 
modest,  despite  a  slight  increase  since  2016 
(0.8 pps;  EU  average:  2.1 pps).  Participation  is 
higher  among  employed  and  highly  qualified 
adults. Low-qualified  adults are also less likely to 
enrol in training leading to qualifications (476), even 
though such programmes tend to deliver stronger 
labour  market  outcomes.  Participation  decreases 
with age. More recent data, from the labour force 
survey,  suggest  a  possible  slight  increase  in 
participation rates between 2022 and 2024. At the 
same time, proficiency in basic skills declines with 
age,  while  the  employment  rate  of  older  workers 
remains below the EU average (60.4%  vs 65.2%). 
Although  slightly  above  the  OECD  average,  the 
share  of  low-performing  adults  in  literacy  has 
regarding 
increased,  and 
numeracy  (since  2011)  (477).  Moreover,  these 
challenges are particularly pronounced in France’s 
outermost  regions  and  in  priority  urban  districts 
la 
(quartiers  prioritaires  de 
ville (478)), where participation in lifelong learning is 
lower. The ESF+ supports access to education and 
training  by:  (i)  preventing  early  school  leaving; 
(ii) improving  academic  and  career  guidance 
services; 
(iii)  promoting  apprenticeships  and 
(iv) facilitating upskilling for unemployed people.  

it  has  stagnated 

la  politique  de 

(476) 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. 

(477) Programme for the International Assessment of Adult 

Competencies (PIAAC), 2023. 

(478) Category identified based on per capita income with the aim 
of reducing development gaps (mainland and outermost 
regions). 

111 

 
 
 
ANNEX 14: SOCIAL SCOREBOARD 

Table A14.1:Social Scoreboard for France 

Update of 4 May 2026. 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 2026 for details on the methodology 
(https://employment-social-affairs.ec.europa.eu/joint-employment-report-2026_en). 
Source: Eurostat 

112 

49.27.065.712.75.64.7475.57.71.7113.520.827.538.521.66.459.73.7Critical situationTo watchWeak but improvingGood but to monitorOn averageDynamic 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, 2025)Impact of social transfers (other than pensions) on poverty reduction(% reduction of AROP, 2025)Children aged less than 3 years in formal childcare (% of the under 3-years-old population, 2025)Self-reported unmet need for medical care (% of the population aged 16+, 2025)Disability employment gap (percentage points, population aged 20-64, 2025)Housing cost overburden (% of the total population, 2025)Adult 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 marketBest performersBetter than averageEarly leavers from education and training(% of  the population aged 18-24, 2025)Young people not in employment, education or training(% of the population aged 15-29, 2025)Gender employment gap(percentage points, population aged 20-64, 2025)Income quintile ratio (S80/S20, 2025)At risk of poverty or social exclusion (AROPE) rate (% of the total population, 2025)Employment rate(% of the population aged 20-64, 2025)Unemployment rate(% of the active population aged 15-74, 2025)Long term unemployment(% of the active population aged 15-74, 2025)Gross disposable household income (GDHI) per capita growth(index, 2008=100, 2024)At risk of poverty or social exclusion (AROPE) rate for children(% of the population aged 0-17, 2025) 
 
 
 
   
 
 
ANNEX 15: HEALTH AND HEALTH SYSTEMS 

faces 

health 

system 

France’s 
some 
challenges,  which  negatively  affect  the 
health  of  its  population,  social  fairness,  and 
productivity.  Access to healthcare is affected by 
staff  shortages,  uneven  distribution  of  health 
professionals, 
by 
measures  to  promote  deployment  in  underserved 
areas  and  compounded  by  fragmented  service 
delivery.    Sustaining  and  improving  the  health 
system  will 
the 
backdrop of growing financial constraints.  

investment  against 

insufficiently 

addressed 

require 

Graph A15.1: Life expectancy at birth, in years 

Source: Eurostat (indicator: demo_mlexpec) 

Life expectancy at birth in France was one of 
the highest in the EU in 2024. Disparities exist 
by  gender  and  socio-economic  status.  The  gender 
gap  in  life  expectancy  (5.7  years  in  favour  of 
women)  is above the EU average. At age 35 men 
with tertiary education can expect to live 8.0 years 
longer  than  those  without  a  secondary  education 
diploma.  This  gap  is  5.4  years  among  women. 
Treatable mortality is one of the lowest in the EU, 
suggesting  that  the  health  system  is  effective. 
Preventable mortality is also below the EU average 
and attributed mainly to behavioural risk factors.  

investment  amid 

Meeting  health  system  needs  may  require 
extra 
rising  financial 
pressures.  In  2023,  health  spending  in  France 
accounted  for  11.5%  of  GDP,  among  the  highest 
shares  in  the  EU.  Per  capita  health  spending 
reached EUR 4 359, placing France in the top third 
of  EU  countries.  In  2023,  spending  on  prevention 
accounted  for  2.3%  of  total  spending  on  health, 
lower  than  the  EU  average  of  3.6%.  Since  1996, 
statutory health insurance (SHI) spending has been 
regulated  through  annual  national  targets.  The 
national public health spending objective (ONDAM) 
increased by an average of 4.8% per year between 
2019  and  2025, 
to  COVID-19 
pandemic-related  measures,  compared  with  2.4% 

largely  due 

is 

the 

and 

system 

challenge 

in  2015-2019  (479).  However,  modernising  the 
addressing  workforce 
health 
shortages  will  require  significant  new  funding, 
even as fiscal pressures intensify. The healthcare-
related  social  security  deficit  is  projected  to  rise 
from  EUR  11.8 billion  in  2024  to  EUR  17.9  billion 
by 2028, driven largely by population ageing (480). 
To  contain  costs,  the  National  Court  of  Auditors 
highlights  savings  from  lower  drug  prices  and 
greater  use  of  generics  and  biosimilars,  curbing 
wage  and  tariff  growth,  reducing  unnecessary 
(481). 
care,  and  strengthening  fraud  controls 
consumption  of 
Another 
antibiotics,  which  in  2024  was  above  the  EU 
average, despite the recommended national target 
to  reduce  total  consumption  by  24.5%  between 
2019  and  2030  (482).  France  earmarked  EUR  4.5 
billion of its Recovery and Resilience Plan (RRP) to 
improve 
and  medico-social 
establishment  infrastructure  and  digital  health 
services, as well as to support biomedical research. 
France  also  allocated  EUR  428  million  from  the 
European  Cohesion  Funds,  to  develop  health 
infrastructure  and  digital  health  services. 
In 
addition,  under  EU4Health  France  participates  in 
joint  actions  and  benefits  from  direct  grants, 
primarily  dedicated 
crisis  preparedness, 
to 
European  Health  Data  Space,  digitalisation  and 
cancer initiatives. 

hospital 

the 

Addressing  persistent  challenges,  including 
high  smoking,  obesity  and  suicide  rates  may 
improve health outcomes. Nearly 25% of adults 
continue  to  smoke  daily,  one  of  the  highest 
proportions in the EU. Vaping is on the rise among 
young  people:  19%  of  15-year-olds  reported 
having  used  e-cigarette  in  the  last  month  in 
2022(483).  The  2023-2027  National  Tobacco 
Control  Programme  aims  at  price 
increases 
indexed  to  inflation,  plans  for  plain  packaging  for 
tobacco  and  vaping  products,  and  a  ban  on 
disposable vapes since 2025. Other actions include 
substitutes, 
coverage  of  nicotine 
improved 

(479) OECD/European Observatory on Health Systems and Policies 
(2025), Country Health Profile 2025: France. State of Health 
in the EU. 

(480) LOI n° 2025-1403 du 30 décembre 2025 de financement de 

la sécurité sociale pour 2026. 

(481) Cour des Comptes, Note de synthèse, ONDAM (2025). 

(482) Council Recommendation on stepping up EU actions to 

combat antimicrobial resistance in a One Health approach, 
2023/C 220/01. 

(483) Country Health Profile 2025: France - see earlier footnote. 

113 

82.382.482.383.083.0808080.681.481.520202021202220232024FranceEU 
 
        
 
 
Free 

reduced, 

of-charge 

cessation support tools, and an expanded smoking 
ban in public spaces from July 2025. While alcohol 
consumption  among  adults  has 
it 
remains above the EU average. Obesity rates have 
risen  and  are  close  to  the  EU  average.  France 
introduced also a preventive check-up programme 
in  2024  to  reduce  risk  factors  and  preventable 
diseases. 
comprehensive 
preventive  health  consultations  help  assess 
lifestyle  factors,  identify  health  risks,  and  create 
personalised  prevention  plans.  The  suicide  rate  is 
higher than the EU average but slightly decreasing. 
Mental  healthcare  provision  remains  hospital-
centred  with  limited  availability  in  community 
settings  and  shortages  of  staff.  Recent  reforms 
aim  to  improve  the  coordination  of  services  and 
to  psychologists.  A  suicide 
increase  access 
prevention  telephone  line  was  set  up  under  the 
RRP.  

health 

professionals’. 

of financial incentives for better care coordination 
and  prevention;  and  (iv)  expansion  of the  roles  of 
‘allied 
However, 
multidisciplinary  teamwork  remains  limited  and 
services 
providers 
fragmented,  with  most 
continuing  to  operate  independently  and  with 
limited  collaboration  between  hospital,  primary 
and social care, showing little evidence of progress 
to  date.  There  is  room  for  reducing  avoidable 
hospital  use  and  emergency  department  visits.  A 
key  challenge 
is  the  uneven  availability  of 
healthcare,  marked  by  the  growing  phenomenon 
of  medical  deserts,  with  access  to  primary  care 
varying  widely  across  regions.  Other  challenges 
include weak coordination and prevention, aligning 
financing  and 
organisational  models  with 
population health needs and territorial governance 
in  access  to  healthcare  (484).  A  more  systemic 
evaluation of health system performance to guide 
future improvements is not available.  

Graph A15.2: Treatable mortality 

Age-standardised death rate - mortality that could be avoided 
through optimal quality healthcare. 
Source: Eurostat (indicator : hlth_cd_apr) 

in  access  to  healthcare  are 
Challenges 
increasing  alongside 
the  expansion  of 
medical  deserts.  In  2025,  unmet  medical  needs 
among  people  reporting  needs  stood  above  EU 
average  with  long  travel  distances  being  a  key 
contributing  factor  and  high  for  people  at  risk  of 
poverty.  Unmet  dental  care  needs  stood  even 
higher.  France  has  comparatively  high  unmet 
needs  reported  in  rural  areas  (see  Annex  18). 
Healthcare  coverage  plays  an  important  role  in 
reducing  poverty  rates  and  income  inequality. 
According to Cruces et al (485), income inequality as 
measured  via  the  Gini  coefficient,  would  increase 
in  France  by  26%  in  the  absence  of  public 
coverage for healthcare. 

Healthcare delivery remains fragmented and 
hospital-focused,  despite  recent  initiatives 
aimed  at  strengthening  primary  care  and 
care  coordination.  In  France,  inpatient  care 
accounts for the largest share of health spending, 
well  above  the  EU  average,  while  the  share  of 
spending on outpatient care is comparatively lower 
than the EU average. This, together with a number 
of  hospital  beds  above  the  EU  average  (465  per 
100  000  population  in  2023),  illustrates  France’s 
reliance  on  hospital  care.  Two 
considerable 
reforms adopted in 2021 and part of the RRP aim 
to 
law 
reforming  hospital  governance;  and  (ii)  a  law  on 
social  debt  and  autonomy.  To  strengthen  primary 
care, 
(i) 
multidisciplinary  practices;  (ii)  decentralisation  of 
decisions  on  healthcare provision;  (iii)  introduction 

improve  access  to  healthcare 

encouraged 

reforms 

recent 

(i)  a 

Establishing  a  coherent  long-term  policy  to 
address  staff  shortages  and  distribution 
in  most  EU 
remains  a  challenge.  Unlike 
countries,  where  doctor  density  has  risen,  the 
number  of  doctors  per  capita  in  France  has 
decade. 
remained 

stable 

past 

over 

the 

(484) Rapport public annuel 2023, Mieux coordonner et 

hiérarchiser les interventions des collectivités territoriales 
dans l’accès aux soins de premier recours. 

(485) European Commission: Directorate-General for Health and 

Food Safety, Cruces et al., The role of healthcare in reducing 
inequalities and poverty in the EU, 2025. As regards health 
coverage, poverty and income refer in the present analysis to 
a different measure than the usually reported one that is 
defined for instance in the Annex on Social Policies. Here it 
also estimates the impact of benefits in kind, while the 
standard measure only accounts for cash transfers. 

114 

62.960.359.058.859.458.894.889.291.793.389.786.8201420192020202120222023per 100 000 populationFranceEU 
        
 
Table A15.1: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 2023 data (or latest available). 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 Portugal (licensed to practice) and Slovakia (professionally active). Latest data 
update on nurses for Belgium and Sweden: 2022; for France: 2021; for Luxembourg: 2017. 
** latest available 10-year trend: ratio 2023/2014 or 2024/2013; a factor of 2.00 means that it has doubled in 10 
years.***‘Available hospital beds’ covers somatic care, not psychiatric care. 
Source: Eurostat 

Employment  in  healthcare  dropped  in  2025  Q2 
relative to the 2020 Q1 (compared with an overall 
EU  increase  of  9.9%).  In  2023,  France  had  3.9 
doctors  per  1  000  population,  below  the  EU 
average  (see  Graph  A15.1),  contributing  to  the 
persistence  of  medical  deserts  in  rural  and  peri-
urban  areas.  Nurse  density  has  increased  slightly 
over  the  same  period,  reaching  8.8  per  1  000 
population  in  2023,  above  the  EU  average.  Care 
needs are projected to rise by 50% by 2050, while 
nurse density is projected to increase by only 37%, 
leading to a shortfall of about 80 000 nurses (486). 
High  student  dropout  rates  and  low  hospital 
retention  exacerbate  the  gap,  prompting  recent 
reforms  to  expand  nursing  roles  and  introduce 
mandatory nurse-to-patient ratios from 2027.  

A shortage of general practitioners (GPs) is a 
key  driver  in  the  emergence  of  medical 
deserts.  9.3%  of  the  population  live  in  areas 
classified  as  “medical  deserts”  and  75%  of  the 
population  live  in  areas  considered  “underserved”. 
According 
for  GPs, 
to  national  estimates 
underserved areas cover 87% of the territory and 
75%  of  the  population  (487).  Combined  with 
population growth, GP density fell by 5% between 
2013  and  2023  across  most  regions,  particularly 

(486) Direction de la recherche, des études, de l’évaluation et des 

statistiques ; Health workforce projection 2050. 

(487) Direction de la recherche, des études, de l’évaluation et des 
statistiques ; Déserts médicaux : comment les définir ? 
Comment les mesurer ? 

in  rural  areas  and  the  outskirts  of  Paris.  By 
contrast, the density of specialists has increased in 
most  regions.  An  ageing  GP  workforce  and 
insufficient  replacement  rates  exacerbate  access 
problems. In the last 15 years, measures to tackle 
medical deserts included stipends for students and 
interns,  start-up  grants,  tax  incentives,  support  to 
coordinated  and  multidisciplinary  care  centres. 
increasing 
France  expanded  training  capacity, 
medical student numbers by 20% since 2021, with 
40%  of  postgraduate  internships  allocated  to 
general  practice  and  an  additional  ambulatory 
required  from  2023,  strongly 
training  year 
encouraged  in  underserved  areas.  The  Parliament 
proposed  in  May  2025  a  bill  to  restrict  new  GPs’ 
establishment 
in  well-served  areas,  and  the 
government has also proposed obliging doctors to 
spend 
in  underserved  areas  - 
measures 
reflect  ongoing  debate  over 
incentives  versus  regulation.  These  measures 
opposed  by  doctors,  still  need  to  be  approved  by 
the  Senate.  A  key  strategy  has  also  been  the 
development  of  multidisciplinary  health  centres 
bringing  together  GPs  and  other  primary  care 
professionals, with nearly 3 000 centres operating 
by 2022. Communities of health professionals that 
coordinate  outpatient  care  at  the  territorial  level 
grew from 60 in 2020 to 567 in 2024. The Social 
Security Financing Act for 2026 defines conditions 
to establish the network of primary care structures 
labelled  France  Santé.  5  000  France  Santé 
facilities  are  expected  to  be  designated  by  2027 
through 
Coordinated 
practices  and 
territorial  professional  health 
communities will be part of France Santé and will 

limited  time 
that 

deployment. 

gradual 

115 

2020202120222023202410-year change**EU average* (latest year) Cancer mortality per 100 000 population226.6222.6222.4218.6n.a.0.89233.1 (2023)Mortality due to circulatory diseases per 100 000 population 167.7 169.9 171.6 163.3n.a.0.81313.0 (2023)Current expenditure on health, purchasing power standards, per capita3 8214 1034 2074 3604 5571.323834.9 (2023)Public share of health expenditure, % of current health expenditure 84.3 84.6 84.5 84.4 84.41.1180.6 (2023)Spending on prevention, % of current health expenditure 3.35.43.92.3n.a.1.053.7 (2023)Available hospital beds per 100 000 population*** 491 482 471 465n.a.0.89440 (2023)Doctors per 1 000 population*3.73.83.83.9n.a.1.284.3 (2023)*Nurses per 1 000 population* 8.9 8.8 8.8 8.8n.a.1.077.6 (2023)*Mortality at working age (20-64 years), % of total mortality14.314.614.114.314.00.8414.3 (2023)Consumption of antibiotics in the community and hospital sectors,      defined daily doses per 1 000 inhabitants 20.3 21.5 24.3 24.1 26.51.0420.3 (2024) 
 
 
 
   
 
contribute  to  the  territorial  coordination  of  health 
professionals.  

and 

lifestyle 

considering 

Effective  solutions  to  problems  of  medical 
deserts  still  need  to  be  further  developed. 
Measures  proposed  over  last  15  years  were  not 
evaluated  before  new  ones  were 
introduced. 
Multidisciplinary group practices have shown more 
potential  than  financial  incentives  to  attract  and 
retain doctors in ‘medical deserts’ (see Annex 18). 
Public  incentive  schemes  including  financial  or 
professional  support  to  attract  self-employed 
large  share  of  the  French 
doctors  cover  a 
population  (72%)  with  30%  of  residents  living  in 
priority  intervention  zones  and  a  further  42%  in 
complementary  action  zones.  However,  financial 
incentives play a limited role in GPs choices, which 
are  driven  mainly  by  personal  and  geographic 
background 
considerations. 
Inadequately  calibrated  incentives,  notably  tax- 
based  measures,  produced  unintended  effects, 
including  the  concentration  of  doctors  in  certain 
areas without improving access to care. The Court 
of  Auditors  recommended  targeting  incentives 
according  to  the  actual  healthcare  needs  of 
territories, 
a 
designated GP, excessive emergency care use. The 
2026  Social  Security  Financing  Act  aimed  to 
streamline  the  multiple  incentives  for  doctors’ 
installation 
The  Act 
reintroduces  two  issues  into  medical  convention 
negotiations:  (i)  adjustable  lump-sum  payments 
in 
the  share  of  patients 
linked 
underserved  areas;  and  (ii)  the  conditions  under 
which  billing  for  certain  acts  or  services  may  be 
in  specialised 
limited 
unscheduled care structures. It also allows regional 
health agencies to conclude territorial  ambulatory 
medicine  practitioner  contracts  with  conventioned 
GPs who are not yet established or who have been 
practising  for  less  than  one  year  in  priority  areas. 
In  addition,  general  practice  students  undertaking 
placements in their supervisor’s practice will have 
to  apply  conventional  tariffs,  without  extra  billing 
and  payment  of  fourth-year  general  practice 
students by affiliated university hospitals. The Act 
also creates structures for immediate unscheduled 
the 
care.  The  scope  of  unscheduled  care, 
specifications, and the conditions for accreditation 
will be defined in a decree of the Council of State. 

those  performed 

patients  without 

in  medical 

deserts. 

living 

to 

to 

However,  despite  around  3  000  advance  practice 
nurses  graduating  by  2024,  many  still  face 
challenges  finding  positions  in  advanced  roles.  A 
new medical assistant role was introduced in 2019 
and  by  2024,  around  7  000  assistants  were  in 
place, 57% in underserved areas. The government 
aims to reach 15 000 medical assistants by 2028 
(488).  The  roles  of  other  health  professionals  have 
also expanded to improve access to primary care.    

France  has  made  progress  in  the  digital 
transformation of its health system. In 2024, 
the  share  of  people  accessing  their  personal 
health  records  online  was  slightly  below  the  EU 
average  (25.5%  vs  27.7%).  The ongoing 2023-
2027 digital health  roadmap  intends  to  further 
expand  functionalities  and  usage  of  Mon  Espace 
Santé,  including for prevention  and  the continuous 
follow-up  of  care  pathways.  Telemedicine  cabins 
in  pharmacies  have  expanded,  with  over  3  200 
pharmacies  equipped  by  2023.  These  cabins 
enable reimbursed remote consultations and self-
employed doctors may deliver up to 20% of their 
activity  remotely.  The Ministry  of  Health launched 
to 
in  November  2025  a  strategy  aiming 
involve health  practitioners 
in  deploying  AI 
solutions,  scale-up  high  value  solutions, develop 
robust  clinical  and  economic  assessment  tools, 
facilitate  market  access  and  step  up  digital 
training.  For  hospitals,  digital  twins  make 
it 
possible  to  model  complex  processes,  optimising 
care. 
resource  management 
Investment  in  health  IT  has  risen  since  2020, 
including  significant  investments  under  the  RRP 
and the EU cohesion policy.  

patient 

and 

The  French  health  system  has  the  potential 
to  drive  innovation  and  foster  industrial 
development. The country excels in research and 
innovation,  reflected  by  a  substantial  number  of 
clinical  trials  and  patents,  with  a  clinical  trials’ 
count of 454 in absolute terms in 2025, making it 
one  of  the  EU’s  leading  contributors  in  this  area. 
While  extra-EU  exports  have  shown  a  steady 
performance,  reaching  6.6%  in  2025,  the  growth 
trajectory is stable. 

Task-shifting  has  been  broadened.  In  2025, 
the 
role  of  advanced  practice  nurses  was 
expanded,  including  direct  access  for  patients  in 
salaried  settings  and  broader  prescribing  rights. 

(488) Country Health Profile 2025: France - see earlier footnote. 

116 

 
 
ANNEX 16: HOUSING 

France 
faces  acute  supply  constraints 
important  housing  affordability 
creating 
challenges,  especially  in  high-demand  urban 
and  metropolitan  areas.  A  sharp  slowdown  in 
new  construction  has  further  limited  supply  in 
recent  years.  This  evolution  has  been  driven  by 
higher  financing  costs,  rising  construction  prices, 
land scarcity and complex planning and permitting 
procedures.  France  being  a  key  world  tourist 
destination;  the  expansion  of  short-term  rentals 
has  further  constrained  the  effective  housing 
supply  available  to  residents  in  high-demand 
urban and tourist areas. 

housing 

segments 

Structural  pressures  on  the  social  and 
affordable 
are 
intensifying.  Demand  for  social  housing  remains 
high, leading to long waiting times. In parallel, the 
energy  renovation  of  the  housing  stock  poses 
significant challenges: stricter energy-performance 
requirements,  high  upfront  renovation  costs  and 
reduced  incentives  weigh  on  investment  capacity, 
particularly  for  small  landlords  and  low-income 
homeowners.  

The 

The  housing  crisis  is  increasingly  affecting 
the  most  vulnerable.  Housing  (un)affordability 
has become an increasing challenge for part of the 
population,  particularly  in  a  context  of  rising 
poverty  and  social  exclusion  for  families  with 
children. 
country-specific 
2025 
recommendation  highlighted  the  need  to  prevent 
and reduce child poverty by removing barriers that 
hinder  parents’  labour  market  integration.  Strong 
regional  disparities,  including  in  the  outermost 
regions, have further intensified pressures on low-
income households (see Annex 19). Homelessness 
is  rising,  with  a  particularly  sharp  increase  in  the 
number  of  children  and  single-parent  households 
living on the streets.  

Housing market developments 

In 2025, the housing market showed signs of 
stabilisation,  following  a  marked  correction 
in  prices  that  brought  them  back  down  to 
their  longer-term  level  relative  to  incomes. 
France  has  experienced  house  price  growth 
broadly in line with incomes over the last 20 years, 
on  average.  In  line  with  many  countries,  a  strong 
acceleration  in  price  growth  –  both  nominal  and 
compared  with  incomes  –  took  place  around  and 

just  after  the  pandemic, but  this  was  followed  by 
two years of falling house price until 2024 (-0.4% 
in  2023  and  -3.7%  in  2024).  Overall  housing 
prices  rebounded  slightly  in  2025  (+0.7%).  At  the 
end  of  December  2025,  the  annual  number  of 
transactions  over  the  last  12  months  rose  by 
12.5% to 951 000 (489). This number has increased 
continuously  since  October  2024,  following  a 
decline that started in April 2022 (-13.3% in 2024, 
after  -23.0%  in  2023).  The  price-to-income  ratio 
declined to 12.9 years of income in 2025, after a 
peak of 15.5 in 2022.  

Regional  differences  in  prices  and  price 
changes  are  substantial.  The  price  of  100 m² 
exceeds 20 years of average household income in 
some metropolitan and tourist areas, whereas it is 
below  5  years  in  some  rural  areas.  In  2025-Q3, 
prices  of  second-hand  dwellings  increased  the 
most  in  Paris  (+2.0%),  although  they  remain 
10.9%  below  their  peak  of  2020-Q4.  Prices  rose 
by 0.8% over a year ago in the provinces but they 
remain  4.0%  below  their  peak  reached  in  2023-
Q1.  

Housing  demand  has  rebounded,  fuelled  by 
the decrease in interest rates. The increase in 
interest  rates  in  2022-2023  reduced  borrowing 
capacity  and  therefore  the  housing  purchasing 
power  of  households,  leading  to  a  drop  in  credit 
flows  (Graph  A16.1).  In  2024,  the  mortgage 
required to buy a 100 m² apartment was higher in 
France  than  in  most  other  EU  countries (490). 
Interest rates fell from 3.6% in December 2023 to 
3%  in  February  2025  (GraphA16.2).  In  2025,  the 
(excluding 
housing 
value 
renegotiations)  increased  by  36%  compared  with 
2024.  The  stock  of  loans  for  house  purchases 
stabilised  (+0.0%  in  2025-Q3  compared  with 
2024-Q3).  

loans 

new 

of 

(489) In Q4 2025, prices of second-hand dwellings went up 

(+0.5%), Insee, 26 February 2026, Informations rapides n°47. 

(490) COUSIN G., FRAYNE C., MARTINS V. and VAŠÍČEK B., ‘Housing 
in the European Union: Market Developments, Underlying 
Drivers, and Policies’, Discussion Paper 228, European 
Commission, 2025. 

117 

 
 
 
 
 
Graph A16.1: House prices and housing loans in FR 
since 2008 

Graph A16.2: Borrowing cost for house purchase in 
FR and the EA since 2013 

Source: ECB and Eurostat 

Source: ECB 

increases 

Rent 
remained  more 
have 
moderate than in the past.  The rent regulation 
mechanism constrains annual rent increases to not 
be  greater  than  the  annual  inflation  and  capped 
them  to  3.5%  during  the  energy  crisis,  between 
2022-Q3 and 2024-Q1. Between 2015 and 2025, 
rents  increased  by  around  10%  (vs  +20%  in  the 
EU  and  +19%  in  the  Euro  Area),  while  household 
income  increased  by  41%.  However,  the  share  of 
people  living  in  households  with  arrears  on  their 
mortgage,  rent  or  utility  bills  (10.6%)  is  higher 
than  in  the  EU  (9.2%)  and  has  increased  by 
2.2 percentage points (pps) since 2019. 

Graph A16.3: House supply indicators in FR since 
2005 

signs 

showed 

Housing  supply,  including  supply  of  social 
of  moderate 
housing 
stabilisation  in  2025,  after  having  fallen 
sharply  in  2023  and  2024.  Construction  costs 
slightly  declined  in  2025  (-4.4%  in  the  first  three 
quarters of 2025 compared with the same period 
a  year  earlier),  after  several  years  of  sharp  rises: 
residential  building  producer  prices  increased  by 
24% between 2019 and 2024. Building permits in 
m²  per  thousand  persons  fell  by  15.3%  in  2024, 
after -26.7% in 2023. They rebounded by 14% in 
2025.  

by 

the 

calculations  made 

There is a housing construction gap. According 
to 
European 
Commission’s  Joint  Research  Centre (491),  there  is 
an  estimated  housing  supply  gap  of  around 
20 000 new dwellings per year in areas where the 
need  for  new  homes  is  not  met  by  ongoing 
construction,  and  a  residual  need  for  around 
64 000  dwellings  per  year  to  make  up  for  the 
shortfalls from the past. This is despite estimates 
of  3  million  vacant  units  (7.7%  of  existing 
dwellings).   

(491) Balouktsi et al. (2026) Housing investment needs in the EU. 

JRC Technical Report 144419. 

(1) 4-quarter moving sums (for permits and investment) and 
4-quarter moving average prices 
Source: Eurostat 

Labour  shortages  persist  in  the  construction 
sector.  Although 
labour  shortages  decreased 
slightly  in  France  in  2025,  they  remain  high  in 

118 

-10-5051015080910111213141516171819202122232425Rate of change y-o-y (%)MFI loans for house purchase (y-o-y growth rate)House Price Index (y-o-y growth rate)01234513141516171819202122232425%FREuro Area0123456784060801001201401601800507091113151719212325% of GDPIndex (2005 = 100)Residential building permits in m2, indexResidential buildings producer prices, indexInvestment in dwellings (right-hand side axis) 
     
 
      
     
certain  sectors,  including  construction  (see  Annex 
11).  In  France,  construction  continues  to  be  the 
sector  with  the  highest  rate  of  hiring  difficulties 
reported  by  companies  (65%,  12 pps  above  the 
second  highest  rate  in  social  services (492)).  There 
are labour shortages for most construction-related 
occupations, 
construction 
managers  and  supervisors (493).  Persistent  skills 
mismatches and work-related risks are among the 
main reasons for such labour shortages.  

roofers 

from 

to 

Structural policies 

legislative 

France’s housing policy is characterised by a 
dense  and  highly  regulated  legal  framework 
embedded  within  a  multi-level  governance 
structure.  Numerous 
instruments, 
financial schemes and public actors interact across 
national and local levels (494), shaping both supply 
and demand. The state establishes the overarching 
regulatory  framework  at  national  level,  ensuring 
coherence  and  uniform  standards  across  the 
territory.  At  the  same  time,  decentralisation  has 
strengthened the role of regions, departments and 
municipalities,  notably  in  urban  planning,  social 
housing  delivery  and  land-use  regulation.  While 
this  architecture  allows  for  territorial  adaptation 
within  a  unified  legal  system,  the  interaction  of 
multiple  regulatory  layers  and  policy  instruments 
contributes to structural complexity. Differentiated 
local  contexts  therefore  result  in varied  outcomes 
across  the  country  (see  Annex  19),  and  regional 
disparities  remain  a  key  challenge,  particularly  in 
terms  of  housing  affordability,  supply  constraints 
in  metropolitan  areas,  uneven  access  to  social 
housing  and  pronounced  differences  in  the  share 
of unoccupied dwellings (51.4% in Hautes Alpes vs 
7.4 % in Seine-Saint-Denis (495)).  

In  2026,  vacancy  taxes  have  been  simplified,  the 
national  level  (TLV)  being  repealed,  in  favour  of 
the local-level vacant property tax (THLV). The new 

(492) France Travail, ‘Enquête Besoins en Main-d’Œuvre 2025’, 

2025. 

(493) ELA, ‘EURES report on Labour Shortages and Surpluses 

2024’, 2025. 

TVLH (taxe sur la vacance des locaux d’habitation) 
allows  local  municipalities  greater  freedom  to  set 
tax  rates  at  the  level  they  deem  appropriate 
according to local housing conditions.  

The regulatory environment for buildings and 
dwellings  is  characterised  by  a  high  degree 
of  complexity.  Beyond  substantive  standards 
(environmental, energy and construction standards 
(e.g. réglementation environnementale (RE) 2020), 
housing  projects’  timelines  and  costs  are  also 
shaped  by 
rules  are 
the  way  planning 
implemented:  overlapping  rules,  spanning  from 
heritage  rules  to  non-binding  local  charters (496). 
Building  permits  are  subject  to  multiple  layers  of 
review,  public  consultation  and  potential  legal 
litigation  risks  often  delaying 
challenge,  with 
projects  for  years.  Since  2021,  the  number  of 
building permits has declined, with sharp drops in 
Q3  2024  (-41.6%  in  floor  area  and  -35.4%  in 
dwellings),  followed  by  an  improvement  in  2025 
as  declines  eased 
to  -28.4%  and  -19.5%, 
respectively (497).  Enacted  in  November  2025,  the 
Huwart  Law  aims  to  expedite  housing  and  urban 
development  projects  by  streamlining  planning 
procedures,  enhancing  permit  certainty  and 
reducing  litigation-related  delays.  Furthermore,  a 
simplification bill is expected to focus on planning, 
permitting,  public  procurement  and  digital 
procedures 
in  the  housing  and  development 
sectors.  

Land-use  policies  play  a  central  role  in 
shaping  housing  supply.  Recent  reforms  have 
strengthened  sustainability 
requirements  and 
tightened  constraints  on  urban  expansion,  with 
potential  effects  on  housing  availability.  The 
intermediate  target  provided  for  a  50%  reduction 
in land consumption in 2021-2031 compared with 
land consumption between 2011 and 2021 under 
the  Zéro  Artificialisation  Nette 
(ZAN)  policy, 
introduced in 2021.  

Regulatory  measures  and  the  expansion  of 
short-term  rentals  influence  the  functioning 
and  supply of  the  private rental  market.  The 
2018  ELAN  Law  on  construction  and  housing 
increase 
supply  environment 
controls  in  housing-stressed  areas.  Experimental 

introduced 

rent 

(494) ESPON, ‘France – European Compendium of housing policies’, 

p.150-152. 

(496) Cour des comptes, ‘La délivrance des permis de construire – 
Un parcours complexe dans un cadre instable’, 2024.  

(495)Eurostat, ‘Conventional dwellings by occupancy status, type 

(497) Eurostat, ‘Building permits – quartely data – number of 

of building and NUTS 3 region’, 2021. 

dwellings’, 2025 

119 

 
 
 
rent 
level  capping,  covering  72  cities,  was 
introduced  in  2019  and  is  due  to  expire  in 
November  2026,  with  the  government  set  to 
submit  a  comprehensive  assessment  of  the 
experiment  to  Parliament  in  spring  2026.  A  study 
indicated that this experimental scheme helped to 
limit  rent  increases  to  around  5%  in  the  five 
studied  cities (498).  At  the  same  time,  rent  control 
may  come  with  adverse  effects  on  housing 
supply (499). 
In  December  2025,  the  National 
Assembly  adopted  a  bill  to  make  rent  control 
permanent,  which  still  needs  to  be  confirmed  by 
the  Senate.  While  the  ALUR  Law  to  facilitate 
access  to  housing  and  promote  renewed  urban 
planning  (2014)  strengthened  tenant  protection, 
the Kasbarian-Bergé Law to protect  housing from 
squatting,  which  entered  into  force  in  July  2023, 
has  accelerated  eviction  procedures.  The  rapid 
expansion  of  short-term  rental  platforms  has 
placed  additional  pressure  on  rental  markets  in 
major  cities  and  tourist  areas.  Despite  the  ALUR 
Law  (2014),  which  classified  the  conversion  of 
residential  properties  into  short-term  rentals  as  a 
regulated 
prior 
authorisation,  or  secondary  homes,  and  limits 
primary  residences  to  120  days  of  short-term 
rental per year without permission, the number of 
nights  booked  via  collaborative  platforms  surged 
between  2018  and  2024,    increasing  by  77%  in 
Paris, 159% in Annecy and 272% in Rouen (500). In 
response,  the  French  Parliament  adopted  the  Le 
Meur Law in 2024, strengthening local authorities’ 
powers  to  regulate  short-term  rentals  through 
tighter 
requirements  and 
enhanced enforcement, with the aim of preserving 
residential housing stock.  

registration 

of  use, 

requires 

change 

limits, 

rental  housing 

Public financing to social housing providers is 
combined with targeted subsidies supporting 
is  primarily 
demand.  Social 
financed through long-term loans from the Caisse 
des  Dépôts,  with  annual  financing  volumes 
exceeding  EUR 10 billion.  Additional  supply-side 
support  is  channelled  through  Action  Logement, 
to 
which  uses  employer-based  contributions 

support 

housing, 

intermediate 

finance  the  construction  and  renovation  of  social 
urban 
and 
regeneration projects and provide subsidised long-
term loans and grants to housing providers. On the 
demand  side,  first-time  buyers  benefit  from 
government-backed loans (Prêt à Taux Zéro), while 
housing  allowances  reduce  costs  for  low-income 
rent 
households.  Since  2018, 
the  solidarity 
reduction  mechanism  reduces  rents  for 
low-
income  tenants  in  social  housing,  by  lowering 
housing  allowances  and  requiring  social  housing 
providers to reduce rents by the same amount. In 
2025  and  2026,  this  financial  burden  was 
reduced,  to  restore  financial  stability  to providers, 
enabling  them  to  invest  in  construction  and 
renovation  projects.  Housing  support,  which  also 
includes  operating  and  investment  subsidies  and 
interest-rate 
to 
EUR 43.1 billion  in  2024  (around  1.5%  of  GDP). 
After a sharp increase in 2023, it declined slightly 
due to lower social benefits – particularly energy-
related  support  –  and  reduced  spending  on 
MaPrimeRénov national 
renovation 
support scheme(501).  

advantages, 

amounted 

housing 

Social  housing  provision  in  France,  managed 
by  social  housing  providers 
(“bailleurs 
sociaux”),  is  complemented  by  affordable 
housing  schemes.  France  has  the  EU’s  largest 
social  housing  stock,  totalling  5.4 million  units  in 
2024  (+0.9%  y-o-y) (502).  Social  housing  accounts 
for  about  17%  of  France’s  housing  stock, 
managed  by  HLM  (Habitations  à  Loyer  Modéré) 
organisations.  The  Court  of  auditors  pointed  out 
inefficiencies and shortcomings in the governance 
and  functioning  of  the  social  housing  system(503). 
Among  the  28  million  households  residing  in 
mainland France, 70% are theoretically eligible for 
social  housing.  The  SRU  Law  on  solidarity  and 
urban  renewal  requires  municipalities  to  allocate 
usually  20%  or  25%  of  their  housing  stock  to 
social  units,  with  penalties  for  non-compliance, 
applying to municipalities above certain population 
thresholds  and  integrated  within  larger  urban 
areas  where  housing  supply  obligations  are 

(498) APUR, ‘Impact de l’encadrement des loyers à Paris:  

(501)Commissariat général au développement durable, ‘Rapport 

actualisation de l’évaluation et extension à 5 autres villes 
régulées’, 2025  

(499) Kholodilin, ‘Rent control effects through the lens of empirical 
research: An almost complete review of the literature’, 2024. 

du compte du logement 2024’, 2025. 

(502) Commissariat général au développement durable, ‘5,4 
millions de logements locatifs sociaux en France au 1er 
janvier 2024’, 2024. 

(500) Eurostat, ‘Short-stay accommodation offered via 

(503) Rapport public annuel 2026 sur la cohésion territoriale et 

collaborative economy platforms by residence of the guest 
and cities - experimental statistics’. 

attractivité des territoires, Cour des comptes (vie-
publique.fr/files/rapport/pdf/302553.pdf ) 

120 

 
 
 
defined  at the  territorial  level.  Since  2014,  a  new 
category  of  affordable  housing  has  been 
introduced:  ’intermediary  housing‘.  This  type  of 
housing serves as a bridge between social housing 
and market-rate housing, offering rents in practice 
in 
10  to  20 %  below  private  market  rates, 
exchange  for  beneficial  tax  incentives.  In  parallel, 
targeted schemes seek to improve the provision of 
affordable housing. One such mechanism, the bail 
land  and  building 
réel  solidaire  separates 
ownership,  allowing  individuals  to  buy  homes 
affordably by leasing land from a non-profit, with 
a  focus  on  long-term  accessibility  for  lower-
income  buyers  and  resale  conditions  that  ensure 
continued 
eligible 
purchasers.  The  social  rental  agencies  (Agences 
Immobilières  à  Vocation  Sociale  et  Agences 
Immobilières  Sociales)  are  also  important  part  of 
the affordable housing system.  

affordability 

future 

for 

In  early  2026,  the  French  government 
unveiled  a  housing  recovery  plan  (Relance 
Logement),  which  aims  to  counter  the  sharp 
decline in  new  housing construction.  The  plan 
sets  a  target  of  2 million  new  homes  by  2030. 
From 2026 onwards, it will provide funds to social 
landlords  to  deliver  125 000  social  housing  units 
annually.  It  aims  to  deliver  50 000  private  rental 
fiscal 
dwellings  per  year  via  demand-side 
incentives for households to divert savings toward 
buying  housing  and  becoming  landlords,  without 
geographic zoning restrictions, in exchange for rent 
caps  (“relance  logement”  scheme).  This  has  been 
adopted in  the  Budget  Bill (504)).  The  subsidies  for 
landlords  aim  to  increase  the  supply  of  rental 
housing  and  ease  rental  cost  pressure,  but  are 
likely to increase house prices.  

around 

demands 

housing 
2024, 

emergency 
In 

of 
remain 
unmet (505). 
2.7 million 
households  were  on  social  housing  waiting  lists, 
compared  with  only  384  000  effective  yearly 
allocations (506).  This  decline  in  social  housing 
allocations is coupled with a decrease in the social 
housing turnover, reflecting the lack of affordable 
housing  alternatives.  Overall,  4.2 million  people 
face  material  difficulties  with  regard  to  housing. 
Despite  some  positive  results  in  increasing  the 
share  of  social  housing,  disparities  in  compliance 
with the SRU  law on solidarity and urban renewal 
across  municipalities  persist (507).  The  2026 
proposal  to  revise  this  law   (508)  by  including 
‘intermediary  housing’ 
reflects  ongoing  and 
recurrent debates about this legislative framework. 
In  this  context,  housing  insecurity  has  intensified. 
The number of housing evictions rose significantly, 
from 19 000 in 2023 to 24 500 in 2024, notably 
in  the  context  of  rising  housing  prices  and 
following  the  adoption  of  the  Kasbarian-Bergé 
Law (509). 

increased  sharply 

Homelessness  has 
in 
France  over  the  last  decade,  increasingly 
affecting young people and children. In 2025, 
an estimated 350 000 people were homeless (510) 
(vs  143 000  in  2012).  The  number  of  children 
living  on  the  streets  has  increased  particularly 
rapidly  in  recent  years.  In  2025,  2 159  children, 
including  503  children  under  the  age  of  3  years, 
were  living  on  the  streets  or  in  public  spaces, 
representing  a  120%  increase  since  2020 (511). 
These  children  are  often  part  of  a  single-parent 
household, 
heightened 
vulnerability  of  this  group.  Homelessness  among 
regional 
children 

highlighting 

significant 

displays 

also 

the 

Vulnerable groups 

Social  and  affordable  housing  supplies 
remain  insufficient  in  the  face  of  rapidly 
growing demand. Demand for social housing has 
increased  sharply,  by  49%  since  2021  –  while 
supply  has been  growing  in  a  very moderate  way 
(between 0.5 and 1.1% over the same period). As 
a result of this widening supply-demand gap, 61% 

(504) Notably presented as a replacement of the Pinel tax 

exemption scheme for rental property investment, which was  
phased out in 2024. 

(505) IGF, IGAS, AGA, ’Revue de dépenses sur le budget de 

l’hébergement d’urgence‘, 2025. 

(506) Union Sociale pour l’Habitat, ‘La demande et les attributions 

de logement social à fin 2024’, 2025. 

(507) Chapelle, Gobillon and Vignolles, ‘Building Without Income 
Mixing: Public Housing Quotas in France’, 2025 and Sénat, 
’Évaluation de la loi n° 2000-1208 du 3 décembre 2000 
relative à la solidarité et au renouvellement urbains’, 2021. 

(508) Loi Solidarité et renouvellement urbain (SRU), this law 

requires certain municipalities to have a minimum number of 
social housing units. 

(509) IGF, IGAS, AGA, ’Revue de dépenses sur le budget de 

l’hébergement d’urgence‘ 2025. 

(510) Fondation pour le Logement, ’31ème rapport sur le mal-

logement en France en 2026”’ 2026. 

(511) UNICEF-FAS, ‘Baromètre Enfants à la rue’, 2025. 

121 

 
 
 
disparities,  with  the  highest  numbers  recorded  in 
Ile-de-France,  Auvergne-Rhône-Alpes,  Occitanie 
and  Hauts-de-France.  The  situation  is  even  more 
pressing in the outermost regions, where the  cost 
of  living  is  significantly  higher  than  in  mainland 
France (see also Annex 12). In La Réunion, around 
1 000 children lacked access to adequate housing 
in 2024, including 330 under the age of 3 (512). In 
Mayotte,  a  third  of  the  population 
in 
precarious  housing,  as  the  territory  continues  to 
deal with the consequences of cyclone Chido. 

lives 

in  employment  nor 

Access  to  affordable  housing  remains  a 
significant challenge for students and young 
people,  in  a  context  of  increasing  young 
people  neither 
in 
education  and  training  (NEET)  and  youth 
unemployment rates (see Annex 11). In 2022, 
only  8%  of  all  students  in  France  had  access  to 
student  housing,  with  strong  regional  disparities 
(see  Annex  19)  reflecting  the  absence  of  a 
coherent  and  binding  framework  for  student 
housing (513). In this context, 70% of students must 
rely  on  the  already  constrained  private  rental 
market and are therefore exposed to high housing 
costs (514).  Rental  expenditure  represents  a  high 
share  of  students’  total  spending  (evaluated  at 
60%  in  2023 (515)).  More  broadly,  young  people 
(aged  15-29)  face  high poverty  risks  -    19.3%  of 
them in 2024. Improving access to affordable and 
adequate housing for young people, especially the 
most  vulnerable,  could  improve  their  educational 
outcomes  and 
integration,  as 
labour  market 
housing  insecurity  remains  a  key  barrier  to  job 
searching,  mobility  and  participation  in  the  labour 
market.  

Housing  quality  remains  a  concern.  In  2023, 
21.1%  (EU:  15.6%)  of  the  population  in  France 
experienced  housing  deprivation  –  defined  as 
dwellings with a leaking roof, damp walls, floors or 
foundations,  or  rot  in  window  frames  or  floors  – 
while 4.6% experienced severe housing deprivation 
(EU:  4%).  Energy  poverty  further  exacerbates 
housing  vulnerability.  The  share  of  people  at  risk 

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

logement à la Réunion’, 2025. 

(513) Cour des Comptes, ’Le soutien public au logement des 

étudiants’, 2025. 

(514) Sénat, ‘Programmer, adapter, innover: 25 clés pour le 

logement des jeunes’, 2025. 

(515)UNEF, ’Enquête sur le coût de la vie étudiante en 2023’, 
2023. 

of  poverty  experiencing  energy  poverty  is  above 
the EU average (22.4% vs 19.7%). In 2024, 11.5% 
of  the  population  reported  being  unable  to  heat 
their  homes  for  financial  reasons,  an  increase  of 
130%  since  2018(516)(See  Annex  12).  Finally,  the 
in  access  to 
rate  of  reported  discrimination 
housing  is  among  the  highest  in  the  EU  (8.3%  vs 
5.8%).  

The  measures  implemented  to  tackle  these 
challenges  are  limited  in  the  context  of  a 
deepening  housing  crisis  for  vulnerable 
groups  in  France.  Housing  First  (Logement 
d’abord), a strategic framework implemented since 
2018,  aims  to  reduce  homelessness,  including 
among  children,  and  support  financing  to  access 
social  housing.  The  second  phase  of  this  plan, 
launched in 2023, seeks to facilitate the transition 
from emergency accommodation to stable housing 
for  the  most  vulnerable  people.  Moreover,  the 
Solidarity  Pact  (Pacte  des  Solidarités)  includes  an 
emergency  plan  to  protect  children  experiencing 
homelessness.  At  EU  level,  the  European  Social 
Fund  Plus  allocated  around  EUR 15 million  to 
to  housing, 
improve  access 
initiatives 
facilitating  the  transition  from  temporary  to 
permanent  housing,  and  supported  the  population 
in Mayotte in the aftermath of the cyclone, notably 
through the RESTORE priorities (517). 

to 

(516) ONPE, ‘Tableau de bord de la précarité énergétique - Édition 

novembre 2025’, 2025.  

(517) Regional Emergency Support to Reconstruction.  

122 

 
 
 
Graph A16.4: Housing affordability selected indicators 

Source: Eurostat and European Commission calculations.  The overburden rate should be read together with the tenure structure 
(homeowner, tenants), that may differ across country and regions. 

123 

 
 
HORIZONTAL 
ANNEX 17: 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  SDGs 8  and  9.  On  SDG 4 

Graph A17.1: Progress towards the SDGs in France 

(quality education), the percentage of young adults 
with tertiary education increased significantly, but 
adult  participation  in  learning  decreased  from 
19.5%  in  2019  to  15.52%  in  2025  –  although 
remaining  above  the  EU  average.  On  SDG 8 
(Decent  work  and  economic  growth),  France 
decreased its investment rate to 22.1% of GDP in 
in  2019,  while 
to  22.4% 
2024  compared 
remaining above the EU average of 21.7% and its 
2019 level (22.3%). In addition, the percentage of 
young  people  not  in  education,  employment  or 
training  increased  slightly  between  2019  and 
2025  (from  12.4%  of  the  population  aged  15-29 
to 12.7%), 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 2023 to 3.60 accidents per 100 000 
workers, well above the EU average of 1.63. 

While  close  to  the  EU  average,  the  SDG 9-related 
indicators are somewhat stagnating. These include 
gross  domestic  expenditure  on  R&D  and  R&D 
personnel  (2.2%  of  GDP  in  2019  vs  2.18%  in 

For a detailed progress assessment towards the various SDGs, see the annual Eurostat report ‘Sustainable development in the 
European Union’; for extensive data on the short-term SDG progress of EU countries, see Key findings – Sustainable development 
indicators; for an interactive visualization of SDG progress of EU countries, see SDG country overview. 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 or six 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 29 April 2026. Data refer mainly to the period 2019-2024 or 2019-2025. Data on SDGs may 
vary across the report and its annexes due to different cut-off dates. 

124 

 
 
 
 
 
 
2024, and 1.57% of the active population in 2019 
vs  1.70%  in  2024).  A  notable  exception  is  the 
significant  improvement  in  the  percentage  of 
households  with  high-speed  internet  connection 
(43.8% of households in 2019 to 87.5% in 2024) 
above  the  EU  average.  The  French  recovery  and 
resilience  plan  (RRP)  includes  several  measures 
supporting R&D investments in digital technologies 
and 
and 
transition, 
infrastructure 
innovative 
projects 
strengthening  R&D 
businesses,  and  preserving  R&D  employment. 
However,  barriers  to  improve  productivity  growth 
in France remain. 

green 
of 

France  is  improving  on  six  SDGs  (SDGs 2,  7, 
9, 12, 13, 15) related to sustainability, but is 
moving away from the targets on three other 
SDGs (SDGs 6, 11, 14) and needs to catch up 
with the EU average on five SDGs (SDGs 2, 7, 
9,  11,  14).  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 5.8 tonnes of CO2 equivalent per 
capita  in  2019  to  4.7 tonnes  in  2024),  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  137.9 g CO2/km  in  2019  to  94.1 g  in  2024, 
well  below  the  EU  average  (107.9 g CO2/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. 

on 

cities 

France  is  moving  away  from  the  targets  for 
SDG 11 
and 
Sustainable 
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).  It  is  also  moving  away  from  the 
targets  for  SDG 6  on  Clean  water  and  sanitation 
and  SDG 14  on  Life  below  water,  with  the  latter 
being  below  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 4,  5,  7,  8,  10)  but  is 
moving  away  from  the  goals  on  SDG 1  (No 
poverty)  and  SDG 3  (Good  health  and  well-

being).  In addition,  France  needs to  catch  up 
with  the  EU  average  on  SDGs 1,  3,  7,  8  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 
7.0% in 2025) and the higher tertiary educational 
attainment  (from  48.2%  of  the  population  aged 
25-34 in 2019 to 56.0% in 2025). 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  percentage  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)  and  SDG 3  (Good  health 
and  well-being).  The  percentage  of 
the 
population  at  risk  of  poverty  or  social  exclusion 
has risen from 18.8% of the population in 2019 to 
20.5%  in  2024)  while  the  percentage  of  the 
population living in households with very low work 
intensity has risen from 7.1% in 2019 to 8.7% in 
2024.  France  is  the  EU  Member  State  that 
deviates the most from its 2030 poverty reduction 
target  (see  Annex 12).  It  also  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  8.2  percentage  point 
difference in the percentage of population in 2024 
(EU  average  in  2024:  0.0 pp.  difference).  France’s 
performance  on  SDG 3  (Good  health  and  well-
being)  worsened  slightly  overall,  and  it  needs  to 
catch up with the EU average. 

related 

growth) 

economic 

France  is  improving  on  SDG  8  (Decent  work 
and 
to 
macroeconomic stability  but is moving away 
from the goals on SDG 16 (Peace, justice and 
strong institutions) and SDG 17 (Partnerships 
for  the  goals)  and  still  needs  to  catch  up 
with  the  EU  average  on  SDGs 8,  16  and  17. 
Indicators  relating  to  SDG 16  and  SDG  17 
worsened,  with  both  remaining  below  the  EU 
average. Victims of human trafficking increased to 
3.1 per 100 000 in 2024, above the EU average of 
2.2.  In  2025,  51%  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, 

125 

 
to  developing 

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  decreased  its 
financing 
(EUR 22 
115 billion in 2019 vs EUR 15 005billion in 2024) 
but increased its percentage of imports from these 
countries (2.16% in 2019 vs 2.31% in 2025). The 
general  government  gross  debt 
increased  to 
115.6%  of  GDP  in  2025,  which  is  significantly 
higher than the EU average of 81.7%. 

countries 

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

126 

 
ANNEX 18: COMPETITIVE REGIONS 

Regional development trends 

include 

Over the past two decades, France’s GDP per 
head  (in  PPS)  has  fallen  relative  to  the  EU 
average,  with  the  decline  being  particularly 
marked in certain territories. The capital region 
of Île-de-France has seen its GDP per head relative 
to the EU average fall from 173 in 2004 to 160 in 
2024. Outside Île-de-France, only six departments 
recorded  a  GDP  per  head  at  or  above  the  EU 
(i)  Bouches-du-Rhône 
average.  These 
(department of Marseille), where GDP per head in 
PPS  dropped  from  110%  of  the  EU  average  in 
2004  to  106%  in  2024;  (ii)  Rhône  (Lyon),  from 
143%  to  133%;  (iii)  Haute-Garonne  (Toulouse), 
from  117%  to  113%;  (iv)  Alpes-Maritimes  (Nice) 
from  119%  to  106%;  (v)  the  alpine  region  of 
Savoie,  from  118%  to  109%;  and  (vi)  Marne  in 
Champagne-Ardenne,  from  122%  to  103%.  In 
2004,  only 
two  metropolitan  departments 
registered a GDP per head is less than 75% of the 
EU average. By 2024, however, four NUTS 2 units 
(i)  Franche-Comté;  (ii)  Picardie;  (iii)  Lorraine;  and 
(iv)  Limousin,  and  36  departments  had  fallen 
below this threshold in metropolitan France. In the 
outermost regions, GDP per head ranges from just 
30%  of  the  EU  average  in  Mayotte,  the  poorest 
region  in  the  EU,  to  69%  in  Martinique,  with  no 
clear signs of convergence over time. 

Territories  outside  of  dynamic  core  areas 
face  challenges 
in  stagnating  growth, 
compounded  by  low  productivity  gains.    Real 
GDP  growth  in  2014-2024  was  below  the  EU 
average  in  81  departments.  Growth  was  largely 
driven  by  employment  expansion  rather  than 
labour productivity gains. This dynamic contributes 
to  the  declining  relative  position  of  French 
transition  regions  in  terms  of  GDP  per  head  and 
points  to  the  critical  role  of  productivity-boosting 
employment. 

including 

dynamics, 

Since employment underpins regional growth 
and  is  closely  linked  to  demographic  trends, 
population 
youth 
mobility,  are  some  of  the  main  drivers  of 
territorial  economic  and  social  challenges. 
Natural population growth is slowing across France 
and between 2015-2024 turned negative in most 
French  departments,  with  positive  balances 
confined to a handful of large metropolitan areas 

and  outermost  regions,  except  Martinique  (518). 
Territorial  divergences  are  emerging.  Some  areas, 
mainly  rural  and  remote,  experience  population 
losses, while others benefit from migration-driven 
gains  that  go  hand 
in  hand  with  economic 
dynamism (see Map A18.2). 

Map A18.1:  GDP per head compared to the EU 
average 

2021-2023 average GDP per head in purchasing power 
standard compared with the EU average. 
Source: Commission calculations based on Eurostat 16 July 
2025 data 

The  North–East–Centre  axis  is  characterised 
by  demographic  decline  and  weak  economic 
growth.  Between  2015-2024,  the  population 
declined in Bourgogne, Franche-Comté, Nord–Pas-
de-Calais,  Picardie,  Champagne-Ardenne,  Lorraine, 
and Limousin. However, it remained stable or grew 
below  the  national  average  in  Haute-Normandie, 
Basse  Normandie,  Centre–Val  de  Loire  and 
Auvergne  (see  Table  A18.2).  In  these  regions, 
population loss affects both rural areas and many 
territories  under  industrial  transition,  undermining 
their  economic  potential  (see  Table  A18.2,  Map 
A18.2). 

(518) In 2023, Île-de-France, Rhône-Alpes, Nord–Pas-de-Calais, 
and the departments of Strasbourg, Rennes, Nantes, 
Bordeaux, Toulouse, Marseille, and Grenoble recorded 
positive natural growth, alongside Haute Savoie, two 
departments benefiting from metropolitan spillover (Ain, 
Oise), two mid-sized city departments (Maine-et-
Loire/Angers, Loiret/Orléans), and the outermost regions 
except Martinique. 

127 

 
 
 
 
 
 
 
 
Table A18.1:Main development trends, challenges and the concentration of resources 

Source: Commission analysis based on Eurostat data; categories of regions based on Map A18.1 

in 

industrial 

territories 

the 
Traditional 
northern  and  eastern  regions  are  still 
undergoing industrial transition showing only 
modest  economic  growth,  while  experiencing 
a significant outflow of young workers. In the 
north-east,  net migration among 15–39-year olds 
is  negative  across  all  departments,  driving  overall 
population  decline  even  in  areas  with  positive 
natural  population  growth,  such  as  Nord-Pas-de-
Calais.  In  the  north-east,  the  net  inflow  of  young 
people  has  only  grown  in  the  departments  of 
Haut-Rhin and Bas-Rhin (Strasbourg) and Moselle, 
which borders Luxembourg (see Map A18.2). 

include 

the  North–East–Centre  axis, 
areas 
extending through parts of Auvergne-Rhône Alpes, 
Limousin,  Occitanie  across  the  Massif  Central,  as 
well  as  some  other  rural  areas  in  the  south, 
struggle  to  secure  the  right  to  stay  for  their 
inhabitants.  These  areas  face  growing  challenges 
in service provision, driven by demographic decline, 
while  the  outmigration  of young  and  working  age 
population  is  partly  driven  by  a  lack  of  economic 
opportunities.  

Fragile  rural  areas  struggle  to  secure  the 
‘right  to  stay’  for  their  inhabitants.  These 

128 

Main development trendsLess developed regions (population 8.4 million)In 2004, only two metropolitan departments registered a GDP per head below 75% of the EU average. By 2024, however, four NUTS 2 units – Franche-Comté, Picardie, Lorraine, and Limousin – and 36 departments (NUTS 3) had fallen below this threshold in metropolitan France. In particular, the North–East–Centre axis is marked by sluggish economic growth and challenging demographic trends, notably the outmigration of young people, which erodes the region’s economic potential. France’s outermost regions are all classified as less developed. Transition regions (population 48 million)In France, the bulk of NUTS 2 areas qualify as transition regions (threshold: 100% of EU average GDP). The relative stagnation of French regions is mainly due to limited productivity growth. Between 2014 and 2023, labour productivity in France increased by a mere 0.1% per year on average, lagging well behind the EU average of 0.6%. Almost all French regions experienced productivity growth below the EU benchmark. While real GDP expanded, this did not lead to strong gains in GDP per head, since growth was predominantly fuelled by employment expansion rather than improvements in labour productivity – a trend observed across most French regions and departments, even in its more dynamic metropolitan areas.More developed regions (population 12.4 million)Île-de-France accounts for 18% of France’s population and 30% of French GDP. The region is a major economic and cultural hub in Europe. Despite this, and in a pattern mirrored across other French regions, Île-de-France has slipped relative to the EU average in GDP per head, declining from 172 in 2004 to 159 in 2024. Overall, the region continues to experience population growth, particularly among younger cohorts, even as Paris faces resident outflows driven by high house prices and quality-of-life concerns. Specific territoriesOutermost regions: In terms of GDP per head, Mayotte (27%), Guyane (41%) and La Réunion (62%) rank among the 20% poorest regions in the EU. Guyane and Mayotte are characterised by strong population growth, driven by high birth rates and immigration, whereas Guadeloupe (66% of EU average GDP per head) and Martinique (67%) face population decline and high youth outmigration. Poverty rates remain high, particularly in Guyane and Mayotte, while employment rates – including among young people – are well below the national average. People not in employment, education or training (NEET) rates exceed 30%, and rise to over 34% in Guyane and Mayotte, highlighting severe labour market and social inclusion challenges. Outermost regions experience structural vulnerabilities linked to insularity, such as higher transport costs, dependence on few economic sectors and heightened exposure to climate risks, which require appropriate measures to ensure their development.Just transition regions: Industrial transitions (notably of greenhouse gas emission-intensive sectors), as well as the gradual phase out of coal-based energy production and coking/refining, trigger localised socio-economic challenges and investment needs. Territories most affected by these processes were identified in France’s territorial just transition plans. 
 
   
 
Table A18.2:Key regional indicators (at NUTS 2 level) for France 

Source: Eurostat data 

Conversely, 

Guadeloupe 

trends  and  challenges 

The  outermost  regions  show  contrasting 
demographic 
in 
accessing  services.  Guyane  and  Mayotte 
experience  strong  population  growth  driven  by 
high  birth  rates  and,  in  Mayotte's  case,  also 
immigration. 
and 
Martinique  face  population  decline  and  high  net 
youth  migration  (15-39-year  olds),  -2.47%  and  -
2.33%  respectively  per  year  in  2014-23).  At  the 
same 
face  challenging 
conditions,  with  at-risk-of-poverty  rates  around 
40%  in  Guadeloupe  and La  Réunion,  around  30% 
in  Martinique,  and  above  50%  in  Guyane  (see 
Annex  12).  Employment  rates  remain  well  below 
the national average of 75.5%, ranging from 67% 
in  Martinique  to  40%  in  Mayotte,  while  youth 
employment  rates  are  particularly  low,  from  24% 
in  La  Réunion  to  6%  in  Mayotte  (519)  (national 
in 
average  equal 

to  35%).  Those  neither 

regions 

these 

time, 

(519) Eurostat data from 2020 – note that due to data scarcity 
related to Mayotte, more recent data is unavailable. 

employment,  education  or  training  (NEET)  rates 
exceed 30%, and stand above 34% in Guyane and 
Mayotte.  Infrastructure  deficits  further  compound 
in 
constraints, 
competitiveness 
transport connectivity, water distribution networks, 
and electricity systems.  

particularly 

Coastal  areas,  along  the  Mediterranean, 
including Corse and the entire Atlantic coast 
north  of  Bordeaux  to  Bretagne,  are  gaining 
population  and  attracting  younger  people. 
This  trend  affects  both  high-  and  low-GDP  per 
head areas, as illustrated by Landes, a department 
on  the  Atlantic  coast  of  Aquitaine.  Despite  a 
relatively  low-GDP  per  head  (70%  of  the  EU 
average),  Landes  attracted  young  people  (aged 
15–39) at a notable average annual rate of 1.27% 
in  2014–2023.  Overall,  these  territories  benefit 
from their proximity to dynamic urban centres and 
natural  amenities  and  attract  commuters  with 
more  affordable  housing.  They  also  draw  older 
people  seeking  a 
thus 
increasing  demand  for  healthcare  and  accessible 

favourable  climate, 

129 

GDP per head (PPS, index)Population growthGrowth in natural populationNet migration of population aged 15-39Real GDP growthReal productivity growth (per hour worked)At-risk-of-poverty or social exclusion rate (AROPE)Employment rate 20-64Population aged 25-34 with high educational attainmentNEET 15-29: Neither in employment nor in education or trainingR&D expenditure in business enterprise sector (BERD)Employment in high-technology sectorsEU27=100Average annual change per 1000 residentsAverage annual change per 1000 residentsAverage annual change per 1000 residents aged 15-39Average annual % changeAverage annual % change% of population% of population aged 20-64% of population aged 25-34% of population aged 15-29% of GDP% of total employment20242015-20242015-20242014-20232014-20242014-2024202520252025202520232025EU1001.8-1.77.11.60.721.076.144.811.01.515.1France983.61.72.71.20.120.875.556.012.71.445.0Ile de France1603.87.37.31.20.120.976.572.712.41.959.1Centre — Val de Loire820.4-0.8-2.40.80.315.177.951.611.61.024.4Bourgogne83-1.2-3.0-3.60.60.320.475.543.811.60.542.7Franche-Comté74-0.4-0.2-3.20.50.019.473.744.216.02.405.5Basse-Normandie800.4-2.4-4.40.7-0.216.976.450.812.50.732.4Haute-Normandie830.30.9-3.20.4-0.217.775.447.614.10.982.6Nord-Pas de Calais77-0.31.9-4.30.80.026.971.853.613.70.422.9Picardie73-1.20.9-5.20.80.419.174.338.315.71.192.8Alsace893.31.23.40.90.117.078.451.28.80.893.8Champagne-Ardenne87-3.2-0.7-5.40.90.822.973.141.015.00.411.5Lorraine72-1.3-1.2-2.00.50.220.873.148.615.90.552.1Pays de la Loire875.90.94.21.40.015.777.554.913.60.903.5Bretagne845.8-1.42.81.60.314.878.348.910.71.055.0Aquitaine877.6-1.29.51.50.019.677.453.311.51.254.2Limousin74-1.2-4.90.00.5-0.122.076.851.09.60.802.6Poitou-Charentes812.4-3.20.41.00.217.677.246.712.70.451.2Languedoc-Roussillon767.8-0.95.91.5-0.325.372.148.515.10.653.7Midi-Pyrénées896.7-0.410.11.40.023.377.356.49.32.977.1Auvergne790.4-3.01.31.10.422.477.046.99.41.563.8Rhône-Alpes1005.82.96.11.60.118.077.160.110.22.225.6Provence-Alpes-Côte d’Azur965.40.44.71.4-0.120.774.452.313.31.304.4Corse8610.2-1.713.02.20.528.672.928.711.20.154.7Guadeloupe67-4.72.6-24.70.6-1.238.461.240.622.20.002.3Martinique69-5.8-0.2-23.30.0-1.031.367.437.824.20.012.6Guyane4113.523.4-6.40.2-3.254.850.018.931.90.05La Réunion636.19.2-13.91.6-0.442.359.431.625.20.091.3Mayotte3034.932.03.06.13.339.60.00  
 
 
   
 
local public and commercial services. At the same 
time, they rely heavily on young seasonal workers 
in the tourism sector, who often face housing and 
cost-of-living pressures. Social conditions are more 
strained  in  Mediterranean  regions,  where  poverty 
and  unemployment  rates  are  higher,  whereas 
Atlantic  departments 
show  more 
favourable  social  and  labour  market  outcomes. 
Youth  unemployment  (15-24  years  old)  in  Corse 
stands  at  46%  in  2025,  more  than  double  the 
national  average  (19.7%).  This  rate  is  also  higher 
than  those  recorded  in  all  outermost  regions, 
except Mayotte, where it reached 55.4%. 

tend 

to 

Map A18.2:  Net youth migration in France, ages 
15-39, 2014-2023 (NUTS 3) 

Source: DG REGIO calculations based on JRC ARDECO data 

have 

Cross-border 
seen 
territories 
population  growth  due  to  their  functional 
integration  with  neighbouring  countries 
through  labour  markets,  particularly  with 
Switzerland  and  Luxembourg.  Population 
growth is driven in part by workers seeking to live 
near  cross-border  employment  centres.  Net 
migration,  especially  among  younger  people,  is 
strong, notably in the departments of Ain (+0.19% 
of annual net migration for people aged 15–39 in 
2014–2023)  and  Haute  Savoie  (+0.16%),  which 
border 
labour  district.  However, 
housing  markets  are  increasingly  under  pressure 
from cross-border workers and commuting strains 
road networks during peak hours. 

the  Geneva 

Key challenges for regional 
competitiveness 

Outside  of  core  urban  centres,  territorial 
innovation  ecosystems  struggle  to  convert 
research 
into  technological  transfer  and 
value  creation  for  businesses,  especially  in 
mid-sized  cities  and  in  the  industrial  north 
and  north-east.  Smart  specialisation  strategies 
(520)  are  an  effective  way  to  increase  regional 
innovation  capacities  while  taking  into  account 
regional  specificities.  However,  current  strategies 
lack  sufficient  territorial  tailoring.  The  Court  of 
Auditors  (Cour  des  Comptes)  (521)  highlights  weak 
links between universities and firms, and business 
leaders,  as  well  as  pointing  to  poor  coordination 
between  research  centres,  company  innovation 
needs, labour demand and training systems. 

still 

their 

completing 

landscape.  Heavy 

In north and north-eastern France, territories 
are 
industrial 
transitions,  which  is  impacting  the  physical 
and  economic 
industry 
continues  to  play  a  key  role  in  the  regional  GDP 
and  employment  and  makes  the  region  an 
important  centre  for  foreign  direct  investment 
(FDI),  with  Hauts-de-France  attracting  10%  of 
national  FDI  projects  and  Grand  Est  9%,  only 
exceeded  by  Île-de-France  (25%)  and  Auvergne-
Rhône-Alpes  (14%)  (522).    In  the  Hauts-de-France 
region,  an  area  known  as  the  “Battery  Valley”  is 
emerging  as  a  major  hub  for  electric‑vehicle 
battery  production,  with  gigafactories  supported 
industrialisation 
research  and 
by 
initiatives under the France 2030 plan (See Annex 
5).  On  the  other  hand,  north  and  north-eastern 
France’s industrial heritage has left unused former 

national 

(520) Smart specialisation strategies are strategic, territorially 

based frameworks to innovation and industrial policy that 
help Member States and regions identify and leverage their 
unique comparative advantages to address structural 
challenges, foster economic transformation and enhance 
competitiveness. 

(521) Cour des comptes, 2023), ‘Universités et territoires: Rapport 

public thématique (Rapport no. 63210)’, 
https://www.ccomptes.fr/sites/default/files/2023-
10/20230131-synthese-universites-et-territoires.pdf. 

(522) EY, 2025, ‘Baromètre de l’attractivité de la France 2025’, 

https://www.ey.com/content/dam/ey-unified-site/ey-com/fr-
fr/campaigns/foreign-direct-investment-
surveys/documents/ey-barometre-ey-attractivite-france-
2025.pdf. 

130 

 
 
 
 
 
for 

with 

industrial 

In  addition 

opportunities 

sites, 
economic 
diversification  to  be  pursued  through  remediation 
and targeted territorial reconversion strategies for 
post-industrial  brownfields. 
to 
infrastructure  bottlenecks, 
transition 
territories  also  struggle  with  skills  mismatches. 
Territorial  disparities  are  driven  by  youth 
outmigration  and  recruitment  difficulties  in  rural 
and  North-East-Central  axis,  uneven  education 
levels  (reflecting  uneven  territorial  access  to 
education),  and  insufficient  territorial  coordination 
for  matching  workforce  competencies  and  skills 
training  to  evolving  labour  market  demands  in 
industrial transition regions (see Annex 13). 

The share of young people (15-29 years old) 
classed  as  NEETs  is  a  main  challenge  for 
social  cohesion  and  sustainable  economic 
growth  in  the  outermost  regions,  Corse  and 
the  North.  France  has  a  national  NEET  rate  of 
12.7%,  with  substantial  territorial  disparities.  The 
most  severe  youth  exclusion  occurs 
in  the 
outermost  regions  of  Guyane  (32%),  La  Réunion 
and  Martinique 
(both  around  25%),  and 
Guadeloupe  (22%).  Within  metropolitan  France, 
elevated NEET  rates  are  above  the  EU  average  in 
most regions and concentrated  in Franche-Comté, 
Lorraine,  Champagne-Ardenne  and 
Picardie, 
Haute-Normandie (all around 15-16%), as well as 
Languedoc-Roussillon.  Urban  peripheries  can  also 
show  inequalities,  as  evidenced  in  the  Île-de-
France region, where Seine-Saint-Denis show NEET 
rates  substantially  above  the  regional  average. 
High  NEET  rates  are  strongly  associated  with  low 
employment  rates  and  modest  GDP  growth 
potential (See Annex 11). 

Fragile  rural  areas  face  challenges  with 
access  to  essential  local  services  and  public 
services  such  as  healthcare,  mobility,  and 
housing,  which  are  vital  for  ensuring  the 
right  to  stay.  Since  1980,  the  share  of  rural 
municipalities  with  at  least  one  nearby  shop  has 
sharply dropped from around 75% to 41%, leaving 
nearly  6  out  of  10  rural  municipalities  without 
adequate  access  to  essential  local  services  (523). 
Employment  opportunities  are  structurally  limited, 
with  only  64  local  jobs  per  100  residents,  forcing 
about half of rural workers to commute more than 

(523) Ministère de l’Économie, 2025, Commerce : un programme 

de reconquête en zones rurales. 

time.  Total  daily 

13 km  daily.  The  scale  of  commuting  has 
round-trip 
intensified  over 
distances increased from about 200 million km in 
1999  to  320  million  km  in  2019,  reinforcing 
(524), 
private  car  dependency  (86%  of  trips) 
reflecting  the  insufficient  public  transport  and 
limited  mobility  options  available  in  these  areas. 
On  broadband 
coverage,  around  3 million 
premises,  predominantly  in  rural  or  lower  density 
areas  (79%  of  the  unconnected  total),  remain 
without  a  broadband  connection  (525).  Healthcare 
access  has  deteriorated  unevenly (See  Annex  15). 
Access to general practitioners’ (GPs), measured by 
the  number  of  consultations  accessed  per 
inhabitant  per  year,  decreases  the  more  rural  a 
person lives, and is particularly low in Centre-Val-
de-Loire,  Bourgogne,  and  Normandy  (Eure,  Orne) 
(526).  It  is  also  a  significant  problem  in  the  peri-
urban ring of Île-de-France, driven by demographic 
pressure  outpacing  supply.  The  density  of 
specialists also decreases the more rural a person 
lives;  at  regional  level,  Île-de-France  has  241 
specialists per 100 000 inhabitants against 135 in 
Centre-Val-de-Loire, 
in 
the 
metropolitan  France.  The  density  stands  below 
150 
and 
(527).  Housing  pressures 
Champagne-Ardenne 
compound  these  trends,  as  energy  vulnerability 
affects  over  20%  of  households  in  several  rural 
regions  due  to  older  housing  stock  and  high-
related costs. 

Haute-Normandie, 

Picardie, 

lowest 

level 

in 

In  the  outermost  regions,  weak  youth 
employment 
insufficient 
opportunities, 
access to services and housing shortages are 
the  main  drivers  behind  sustained  youth 
outward  migration,  undermining  the  right  to 
stay.  Business  competitiveness  in  the  outermost 

(524) INSEE, 2023, Le trajet médian domicile-travail augmente de 

moitié en vingt ans pour les habitants du rural.  

(525) FTTH Council Europe, 2025, European FTTH/B Market 

Panorama 2025 [Report].  

 Arcep, 2025, ‘CarteFibre – données ouvertes sur le déploiement 

de la fibre optique. Autorité de régulation des 
communications électroniques et des postes’, 
https://www.cartefibre.arcep.fr/. Arcep reports FTTH coverage 
as % of any individual buildings or units where a fibre 
connection could technically be installed. 

(526) Drees (Statistique publique de la santé et des solidarités), 

2020, https://data.drees.solidarites-
sante.gouv.fr/explore/dataset/530_l-accessibilite-potentielle-
localisee-apl/information/.  

Sénat, 2022, Rapport d’information n° 577 : Soutenir le 
commerce de proximité dans les communes rurales. 

(527) INSEE, 2025, ‘Professionnels de santé en France : données 
par territoire’, https://www.insee.fr/fr/statistiques/2012677. 

131 

 
 
 
existing 

such  as 

sustainable 

specialists).  By 

regions  is  limited  by  small  market  size,  without 
economic 
selective,  place-based 
sufficiently 
for  entrepreneurship  support.  For 
strategies 
example, 
territorial 
on 
focusing 
specialisations  to  unlock  untapped  potentials  in 
tourism  and 
sectors 
biodiversity.  In  terms  of  access  to  local  services, 
healthcare  accessibility  is  mixed.  Mayotte  records 
only  39  GPs  and  37  specialists  per  100  000 
inhabitants, far below national averages (146 and 
200),  and  Guyane  is  also  underserved  (111  GPs; 
150 
contrast,  Guadeloupe, 
Martinique  and  La  Réunion  display  medical 
densities  at  or  above  national  averages,  in  some 
cases exceeding those of fragile rural departments 
in  metropolitan  France  (528).  Mobility  remains 
highly  car-dependent,  with  nearly  90%  of  trips 
made by private vehicles, but efforts are underway 
to  reinforce  dedicated  bus  lanes  and  high-service 
bus  corridors  (Bus  à  Haut  Niveau  de  Service)  to 
reliance. 
improve 
Broadband  coverage  in  Mayotte  is  very  low,  with 
fibre deployment only recently beginning, and it is 
(529).  Housing 
moderate 
shortages  are  structural,  with  an  estimated  need 
for 110 000 social housing units, and around 80% 
of the population eligible for social housing based 
on income ceilings (530). 

reliability  and 

in  Martinique 

reduce  car 

(66%) 

In  the  French  outermost  regions,  a  lack  of 
robust 
limited 
land-use  planning  and 
administrative capacity are major challenges 
to implementing policies and effective public 
investment.  A  quarter  of  the  population  in  the 
outermost  regions  lives  in  priority  city  districts 
(Quartiers  prioritaires  de  la  ville)  (531),  compared 

(528) INSEE, 2025, ‘Professionnels de santé en France : données 
par territoire’, https://www.insee.fr/fr/statistiques/2012677. 

(529) FTTH Council Europe, 2025, ‘European FTTH/B Market 

Panorama 2025’, https://www.ftthcouncil.eu/resources/all-
publications-and-assets/2358/european-ftth-b-market-
panorama-2025. 

 Arcep, 2025, ‘CarteFibre – données ouvertes sur le déploiement 
de la fibre optique [Database]. Autorité de régulation des 
communications électroniques et des postes’, 
https://www.cartefibre.arcep.fr/ Arcep reports FTTH coverage 
as % of any individual buildings or units where a fibre 
connection could technically be installed. 

(530) Union Sociale pour l’Habitat (USH), 2025, ‘Le logement social 

dans les Outre-mer : état des lieux et besoins’. 

(531) Priority neighbourhoods of urban policy are legally defined 

areas of intervention by the State and local authorities, with 
the common goal of reducing development gaps between 
disadvantaged neighbourhoods and their urban units. 

with  8%  nationally.  However,  there  are  sharp 
contrasts across territories (around half in Guyane 
and  the  entirety  of  Mayotte,  but  only  7%  in 
Martinique).  Informal  housing  and  the  associated 
lack  of  drinking  water  access/networks  are  major 
structural challenges, especially in Mayotte, where 
roughly  one  third  of  housing  is  informal,  and  in 
Guyane,  where  rapid  urban  growth  exacerbates 
land  scarcity  and  poverty.  The  vulnerability  of 
these  settlements  was  tragically  illustrated  by 
Cyclone  Chido  in  December  2024,  which  severely 
damaged  informal  neighbourhoods  in  Mayotte. 
Land-use  planning  does  not  adequately  reflect 
demographic  growth, 
informal  housing,  and 
climate  risks,  especially  in  Mayotte  and  Guyane, 
which  acts  as  a  barrier  to  sustainable,  impactful 
investments  in  housing,  water,  and  transport.  At 
the same time, weak administrative and technical 
capacities  in  the  use  of  EU  and  national  public 
funds,  especially 
in  Mayotte,  Saint  Martin, 
Martinique and Guyane (but  also in Corse) impact 
project delivery and outcomes. 

Urban  areas  face  challenges  related  to 
education  and labour markets in  their  social 
peripheries,  alongside  housing  affordability 
pressures.  Mainland  France’s  1  362  priority  city 
districts (quartiers prioritaires de la ville), home to 
5.3  million  residents,  concentrate  severe  socio-
economic disadvantage. In these areas, at-risk-of-
poverty  rates  reach  44  %  (vs  15.9  %  nationally) 
and unemployment 27.5 % (vs 12.3 % nationally). 
Educational  outcomes  are  markedly  poorer.  74% 
of  students  complete  lower-secondary  education 
on  time  compared  with  87%  elsewhere,  and  only 
in 
28% 
standardised  assessments,  versus  59  %  in  non-
priority  schools  (532)  (See  Annex  13).  France’s 
urban  housing  crisis  reflects  a  severe  supply–
are 
demand 
designated  urban  areas  where  housing  demand 
significantly  exceeds  supply.  By  2024,  2.6  million 
households were awaiting social housing, many of 
(533). 
whom 
Students  and  part-time  workers  are  also  affected 
by  housing  shortage  in  metropolitan  and  tourist 

(750  000)  are 

above-average 

Île-de-France 

imbalance. 

tendues” 

achieve 

results 

“Zones 

in 

(532) Direction de l'évaluation, de la prospective et de la 
performance (DEPP), 2025, ‘Éducation prioritaire - 
Statistiques septembre 2025’; INSEE, 2024, ‘Portrait des 
nouveaux quartiers prioritaires’; ANCT, 2024, ‘Quartiers 
prioritaires’. 

(533) Union Sociale pour l'Habitat (USH), 2024, ‘Les Hlm en 

chiffres - Édition 2024’. 

132 

 
 
 
cities.  Student  housing  covers  only  12%  of 
demand,  with  a  projected  shortfall  of  640  000 
beds by 2030 (534).  

and 

Luxembourg 

Commuting  between 
the  border  with 
faces 
Switzerland 
persistent challenges due to a lack of cross-
border  coordination.  In  these  border  regions, 
approximately 465 000 French residents commute 
daily  to  neighbouring  countries  for  work,  with 
approximately  224  000  travelling  to  Switzerland 
and  105  000  to  Luxembourg  (535).  Most  cross-
border  workers  rely  heavily  on  private  vehicles, 
contributing  to  persistent  congestion,  especially 
along  major  routes  such  as  the  A31  corridor 
towards  Luxembourg.  People  who  commute  by 
train  on  cross-border  routes  also  report  frequent 
delays  and  cancellations.  Luxembourg  and  France 
plan 
transport 
connections between Lorraine and Luxembourg by 
2035, alongside expanded TER (Transport Express 
Régional) services, to address these pressures. 

cross-border 

reinforce 

to 

in 

Climate  change  and 
land-use  pressures 
create  territorial  challenges  that  are  not 
sufficiently  accounted  for 
local  risk 
prevention  and  sector-specific  action,  as 
illustrated  by  rising  pressures  on  water 
resources.  French  territories  are 
increasingly 
exposed to drought with severe environmental and 
social  impacts.  In  the  Paris  metropolitan  area, 
where  agriculture  covers  about  50%  of  the  land, 
water demand has more than doubled since 2012, 
with a projected 45% increase by 2050. The area’s 
drought  risk  is  compounded  by  urban  expansion 
reducing aquifier recharge and periodic water use 
restrictions on rivers and groundwater (536). Across 
much  of  France,  rainfall  has  been  substantially 
below  normal  and  groundwater  levels  remain 
depleted, leading to widespread drought alerts and 
water  shortages  in  multiple  departments  (537). 
Southern  regions 
(Provence-Alpes-Côte  d’Azur, 
Occitanie) face drought and competition for water 

(534) Ministère de l'Enseignement Supérieur et de la Recherche 
(MESRI), 2023, ‘L'état de l'enseignement supérieur et de la 
recherche en France’. 

(535) INSEE, 2023, Un travailleur frontalier sur cinq parcourt plus 

de 50 km pour aller travailler (Insee Première No. 8292201).  

(536) OECD, 2025, Adapting the Paris Metropolitan Area to a 

water‑scarce future. Organisation for Economic Co‑operation 
and Development.  

(537) 
Bulletin (11 April & 13 June 2025). 

OIEau, 2025, French National Hydrological Situation 

chronic 

(538).  Overseas 
experience 

has  intensified  due  to  population  growth  and 
tourism,  while  agricultural  basins  (Centre-Val  de 
Loire,  Nouvelle  Aquitaine)  struggle  with  seasonal 
territories,  notably 
shortages 
Mayotte, 
scarcity,  with 
significant  sections  of  the  population  lacking 
reliable  access  to  running  water  (539).  Even  in 
Atlantic  regions  such  as  Bretagne  and  Pays  de  la 
Loire, seasonal shortages and limited groundwater 
recharge require periodic restrictions on water use, 
including  for  irrigation.  The  above  cases  show 
issues  in  regional-level  resource  planning  and 
unaddressed  infrastructure  shortcomings  leading 
to inefficient water management. 

Renewable deployment varies by region, with 
a significant amount of untapped potential in 
the  outermost  regions.  Onshore  and  offshore 
wind  have  the  highest  potential  in  the  Channel-
Atlantic  arc 
to  Nouvelle-
(Hauts-de-France 
Aquitaine), solar capacity concentrates in southern 
regions (Occitanie, PACA, Corse), while hydropower, 
mainly in Auvergne-Rhône-Alpes and the Pyrénées, 
contributes substantially to the national electricity 
mix (14%). Outermost  regions  face isolated  grids, 
import  dependence,  and  climate  risks,  requiring 
decentralised  renewables  and  storage.  Despite 
small markets and high costs, they pilot innovative 
solutions  like  autonomous  microgrids  and  high-
renewable  systems  (540).  Regional  authorities  play 
a  central  role  in  planning  and  implementing 
renewable  energy  projects,  translating  national 
targets  (from  the  recently  published  PPE  3  –  See 
Annex  9)  into  regional  action,  and  supporting 
projects  implementation  through  regional  energy 
committees. 

France  faces  high  tourism  pressure  and  the 
tourism share in national Gross Value Added 
(GVA) was concentrated in a small number of 
territories. In 12 NUTS 3 regions, tourism density 
(nights/km2)  is  higher  than  the  EU  average.  The 
number of nights per km2 is almost 10 times more 
than  the  EU  average in  Ile  de  France,  and  almost 
2.5  time  more  than  the  EU  average  in  Provence-
Alpes-Côte-d’Azur.  In  terms  of  tourism  intensity, 
Corse, 
Provence-Alpes-
Côte-d’Azur  and  Aquitaine  have  respectively  4.6, 

Languedoc-Roussillon, 

(538) European Commission, 2024, Regional fiche – Mayotte. 

(539) European Commission, 2024, Regional fiche – Mayotte. 

(540) Service des données et études statistiques, Ministère de la 

Transition écologique (SDES), 2024, Chiffres clés de l’énergie 
et des énergies renouvelables.  

133 

 
 
 
1.9,  1.6  and  1.5  times  more  nights  per  resident 
than the EU average (541). 

in 

vessels, 

(resulting 

landing  sites 

The  blue  economy  faces  several  regional 
challenges. The fisheries sector in the outermost 
is  underdeveloped.  Main  challenges 
regions 
include  old  or  obsolete 
sectoral 
fragmentation  with  few  or  no  local  organisations, 
(in  particular 
poorly  equipped 
regarding  cold  chain)  and  limited  access  to  the 
market 
sales  prices). 
Aquaculture  in  the  outermost  regions  is  almost 
potential. 
non-existent 
Organisation  and  occupation  of  the  coastal  areas 
is  a  challenge  in  many  French  regions,  to  ensure 
various 
coexistence 
sectors/activities 
environmental  protection, 
(residential  areas, 
tourism,  energy  production…).  The  installation  of 
offshore  windmill  parks  in  Brittany  or  Normandy 
has  for  example  raised  tensions  with  fishers 
fishing those waters. 

despite 

lower 

high 

its 

of 

(541) European Commission, ‘EU Tourism Dashboard’, 

https://tourism-dashboard.ec.europa.eu/.  

134 

 
 
ANNEX 19: TRANSPORT 

This  Transport  Annex  presents  the  state  of  play, 
and 
the 
the  challenges  France  faces  with 
implementation  of  the  trans-European  transport 
network  (TEN-T),  the  European  railway  traffic 
management  system  (ERTMS),  the  roll-out  of 
sustainable aviation fuels (SAF) and road safety. 

is  crossed  by 

three  European 
France 
transport  corridors  (Atlantic,  Mediterranean 
and  North  Sea  – Rhine  Mediterranean).  The 
TEN-T  in  France  comprises  17 560 km  of  rail 
(8 760 km of which are on the core network) and 
14  515 km  of  road  (5 554  of  which  on  the  core 
network).  France  has  27  airports  (eight  core),  49 
maritime ports (17 core) and 42 urban nodes (542).  

France  has  a  dense  railway  network  with  a 
significant  number  of  regional,  national 
connections  as  well  as  a  robust  high-speed 
network,  but  significant  investments  are 
required  to  modernise  and  maintain  it  (543)). 
Overall,  the  railway  system  is  well-integrated, 
meeting  key  technical  TEN-T  parameters  such  as 
electrification,  track  gauge  and  axle  load,  but 
France  is  lacking  in  implementation  of  the  key 
cross-border  investments.  In  this  context,  it  is 
important  that  existing  cross‑border  operational 
agreements  on  border  stations  are  complete  and 
clearly 
and 
ensuring 
transparent conditions for railway undertakings.  

predictable 

defined, 

of 

key 

cross-border 

The  selected  national  priority  sections  are 
extensions 
CEF 
investments  allowing  for  fully  functional 
transport corridors. The Bordeaux-Toulouse line 
brings the latter closer to the Spanish border and 
significantly  improves  travel  time  on  the  central 
axis towards Paris. The new Provence - Côte d’Azur 
line  (LNPCA)  would  fill  the  missing  link  between 
two CEF cross-border investments linking Occitania 
with 
the 
complementarity  of  funding  would  allow  for  the 
whole  Mediterranean  coastline  railway  line  in 
France to be modernised. Additionally, investments 
are  required  around  Lyon  to  complement  the 
ongoing  cross-border  investment  between  Lyon 
and Turin.  

Achieving 

border. 

Italian 

the 

The  ERTMS  is  essential  to  digitalising  the 
railways and to modernising and harmonising 
railway  operations  across  Europe.  The  ERTMS 
ensures the safety of rail networks by providing a 
unified signalling system that significantly reduces 
the 
It  also  provides 
interoperability  between  national  rail  systems, 
improving  cross-border  train  movements.  Finally, 
the  ERTMS  enhances  network  capacity  and 
operational 
the 
competitiveness of the rail sector. 

risk  of  accidents. 

efficiency, 

increasing 

ERTMS  was  operational  on  only  6.1%  of 
France’s  TEN-T  rail  network  by  the  end  of 
2024 (544). To meet its national plan’s ERTMS roll-
out target by 2035, France aims to deploy ERTMS 
on  an  additional  length  of  2 057 km.  Significant 
gaps remain on the cross-border sections, e.g. the 
high-speed  Brussels-Paris  line,  which  create  a 
barrier  to  cross-border  rail  services.  A  plan  to 
decommission its legacy signalling systems is also 
lacking.  

Large  infrastructure  projects  in  France  tend 
to  suffer  from  a 
lack  of  multiannual 
financial  programming,  as  well  as  from 
complex  and  lengthy  permitting  procedures, 
which  hamper  their  timely  implementation. 
Finalising  the  ongoing  legislative  process  on  the 
framework law on transport development and then 
adopt  a  multiannual  financial  programming  law 
investments  remains 
for  major 
essential. 
to  consider 
streamlining  planning  and  permitting  procedures 
to  speed  up 
implementation. 
infrastructure 
Harmonising  technical  and  operational  rules  with 
the minimisation of national  rules in line with the 
EU  directives  on  rail  interoperability  and  safety 
remains critical to ensuring seamless cross-border 
rail transport. 

infrastructure 
is  also 
It 

important 

Railway  capacity  is  lacking  on  both  sides  of 
the border in Italy and France, so synchronising 
the  planning  and  construction  of  the  access  lines 
to the Lyon-Turin Base Tunnel is critical to making 
full  and  efficient  use  of 
the  cross-border 
infrastructure’s potential. 

(542) TENtec Information System, according to Reg. 2024/1679. 

(543) Rapport Ambition France Transports – Financer l’avenir des 

(544) Based on ERTMS – Third work plan of the European 

mobilités (July 2025). 

coordinator Matthias Ruete.  

135 

 
 
 
 
 
 
Table A19.1:ERTMS deployment in France. 

Source: Based on ERTMS – Third work plan of the European Coordinator Matthias Ruete. 

France  has  a  strong  industrial  base  for 
production  of  sustainable  aviation  fuels 
(SAF).  Achieving  ReFuelEU  Aviation  objectives  in 
France  requires  scaling  up  SAF  production,  in 
particular  fuels  produced  from  hydrogen  (eSAF). 
France  committed  EUR 200  million  in  2023  to 
support  SAF  production,  with  an  additional 
EUR 100 million  to  support  initiatives  through  the 
FEED  phase,  which  is  essential  for  demonstrating 
project  viability.  Alongside  conventional  SAF 
production,  many  advanced  SAF  pathway  projects 
are  expected  to  start  production  in  2030,  with 
outputs per facility ranging from 25 kt to 81kt per 

year  of  various types  of  eSAF  and  advanced  SAF. 
However,  many  projects  lack  a  Final  Investment 
Decision and some were cancelled in the past year. 
Making  use  of  existing  proceeds  of  EU  ETS  or 
penalty  revenue  under  ReFuelEU  Aviation  to 
support investments and ramp-up of production is 
important,  specifically  in  the  context  of  France’s 
participation 
in  the  EU’s  eSAF  Early  Movers 
Coalition. 

Map A19.1:  TEN-T Cross-Border & National Priority Sections in France. 

136 

yearlength % of total TEN-Tend 20241 076 km6.10%by 20353 133 km17.84%EUR 493 millionTEN-T rail networkERTMS (trackside) in operation17 560 kmMin. estimated cost of additional deployment until 2035  
 
 
   
 
 
 
 
 
Road  crashes  impose  an  enormous  social, 
economic  and  health  burden  on  the  EU 
economy.  The  external  socio-economic  costs  of 
fatal,  serious  and  minor  injuries  have  remained 
persistently  high  despite  the  progress  made  in 
reducing  crash  frequency  and  severity.  These 
resources 
innovation, 
education,  healthcare  and  other  crucial  public 
investments(545).  

could  otherwise 

fuel 

In 2024, road fatalities in France were above 
the  EU  average.  There  were  48  road  fatalities 
per  million  inhabitants  in  France  in  2024,  against 
an  EU  average  of  45.  Compared  with  the  EU 
average,  the  distribution  of  fatalities  in  France 
shows  a  relatively  high  proportion  of  fatalities  on 
rider 
rural 
fatalities.  

roads  and  powered 

two-wheeler 

Graph A19.2: Road fatalities and the 2030 target 

Source: Report at the Mid-Point, SWD(2026) 42 final. 

Action  is  needed  as  the  pace  of  reduction  is 
not  sufficient  to  meet  the  2030  targets. 
Based  on  the  data,  a  decrease  of  2%  in  road 
fatalities  was  recorded  between  2019  and  2024. 
The  number  of  serious  injuries  only  decreased  by 
2%  between  2019  and  2023.  Therefore,  France 
currently  does  not  appear  to  be  on  track  to  meet 
the  2030  targets  of  halving  the  numbers  of  road 
fatalities  and  serious  injuries  (see  also  Graph 
A19.2  below).  Accordingly,  France  appears  to 
require actions on multiple fronts in order to reach 
the 2030 targets(546).  

Graph A19.1: France's road fatalities per million, 
2024 

Source: Report at the Mid-Point, SWD(2026) 42 final. 

(545) Report on the implementation of the EU Road Safety Policy 

framework at the Mid-Point, COM(2026) 77 final.  

(546) More details in Report on the implementation of the EU Road 
Safety Policy framework at the Mid-Point, SWD(2026) 42 
final. 

137