France’s recovery and resilience plan

Following an unprecedented crisis due to the pandemic, France’s recovery and resilience plan responds to the urgent need of fostering a strong recoveryand making France future-ready. The reforms and investments in the plan will help France become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 20 reforms and 71 investments. They will be supported by €39.4 billion in grants. 46% of the plan will support climate objectives and 21% will foster the digital transition.

The transformative impact of France’s plan is the result of a strong combination of reforms and investments which address the specific challenges of France. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to accelerate the transition towards more sustainable, low-carbon and climate-resilient economy, to support the digital transformation of all economic actors including public authorities, and to make the French economy more resilient thanks to investments in the health sector and skills, from higher education and lifelong learning. All reforms and investments have to be implemented within a tight time frame, as the Regulation on the Recovery and Resilience Facility foresees they have to be completed by August 2026.

The economic impact of NextGenerationEU in France could lead to an increase of GDP of between 0.6 % and 1.0 % by 2024. After 20 years, the GDP could be 0.2 % higher. In addition, France will benefit from the Recovery and Resilience Plans of other Member States, for instance through exports. These spill-over effects account for 0.4 percentage points of the 1 % gross domestic product impact by 2024, when almost all investments of the French plan will be committed. The plan would also translate into up to 157 000 additional jobs in France. These estimates do not include the possible positive impact of structural reforms, which can be substantial.

+ 0.6-1%

Impact of NextGenerationEU on France's gross domestic product by 2024.

+ 157,000

Jobs by 2026

0.4%

Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2024

When designing the Recovery and Resilience plan, French authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 28 April 2021. On 23 June 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen symbolically transmitted the Commission’s assessment to President Emmanuel Macron during a visit in Brussels. The Plan was in turn adopted by the Council on 13 July opening the door to its implementation and financing.

Green transition

In the area of climate and environmental policies, France needs to accelerate its ecological transition in order to meet its 2030 targets, in particular in view of the increased ambition of the “Fit for 55” package. The transport and buildings sectors are the bigger emitters of greenhouse gas emissions and massive investments are necessary in the thermal renovation of building and in the transport sector in order to green the vehicle fleet and to support the modal shift towards rail transport. In the field of energy production, the production of green hydrogen will also support the decarbonisation of industry.

Key measures for the green transition

France’s plan puts a strong focus on the green transition, as €18billion will be dedicated to green investments, including in building renovation (€5.8 billion), sustainable transport (€4.4 billion in the modernisation of railway network) and the decarbonisation of industrial processes (€0.3 billion). It also features significant investments in R&D and innovation in the field of green technologies such as hydrogen (€1.9 billion to low carbon hydrogen). In addition, the “Climate and Resilience Law” is an overarching reform that will tackle the ways of consuming, producing & working, moving, living and therefore contribute to the current 40% national target in terms of reduction of greenhouse gas emissions.

Example project: Ma Prime Renov’

The plan will finance the scheme called “MaPrimeRenov’” with€1.4 billion, allocated to owners in order to contribute to financing insulation, heating, ventilation or energy audit works for single-family house or apartments in collective housing. Such investment will finance the thermal renovation of 400 000 households, helping France to renovate the existing building stock. In order to guarantee quality standards of the works supported, the renovation works are carried out by companies with the RGE label (“recognised as guarantor of the environment”).

Digital transition

France ranked 15th in the Digital Economy and Society Index (DESI) in 2021. Challenges remain in the areas of connectivity and coverage of fast broadband networks, and in the appropriation of digital technologies by the private sector (especially SMEs). France is still far behind the front runners in terms of digital skills.

Key measures for the digital transition

€8.4 billion, or 21.3% of the French plan, will be devoted to the digital transition. France will invest €1.8 billion in developing and deploying key digital technologies, such as cybersecurity, quantum and cloud. Other key investments concern the support to businesses by helping them make the most of digital technologies (€385 million), the digitalisation of primary and secondary schools through digital equipment (€131 million) and the further digitalization of public services. €240 million will be invested in high speed broadband across the territory aiming to provide access to very high speed networks for all households (100% fibre-to-home) by 2025.

Example project: Digitalisation of the education and training systems

In order to improve the use of digital technologies in education, 45,000 classrooms should be equipped with new digital solutions and 1.4 million students in higher education should have access to hybrid learning by the end of 2022.

Economic and social resilience

Key macro-economic challenges for France include inefficiencies in the research and innovation ecosystem, inequalities in educational outcomes, high unemployment including for youth, and skills mismatches, that weighon competitiveness and productivity growth. The pandemic has highlighted inefficiencies and strong regional disparities in the French health system and the level of public debt remains very high.

Key measures in reinforcing economic and social resilience

The plan reinforces economic and social resilience with measures to foster jobs and training for young people (€ 4.6 billion) and a more inclusive education system. The plan will support apprenticeships, hiring subsidies, or places in boarding schools, and reinforce the resources of the public employment services.
Improving the governance of hospitals, investing in e-health and renovating medical centres and residential care homes for elderly people will improve access to a higher quality care (€2.5 billion).
The reform of the governance of public finances is expected to improve the quality and efficiency of public spending, allowing to prioritise growth and environmental friendly expenditure.

Example project: Jobs and training for young people

By the end of 2022, the plan will have subsidised 65 000 contracts with increased access to training and personal guidance for young people, personalised training for 10 500 early school leavers aged 16-18, “personalised guidance towards employment and autonomy” (PACEA) for 130 000 young NEET. It will also finance 337 000 youth targeted hiring subsidies, more than 330 000 apprenticeship contracts, and state guaranteed loans for 100 000 students.
The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)