France Relance recovery plan: building the France of 2030

Share

In order to address the economic consequences of COVID-19, on 3 September 2020 the French government set out its “France Relance” recovery plan.

This is a massive €100 billion investment plan representing the equivalent of one third of the annual state budget, with €40 billion provided by the European Union in order to support businesses, rethink production models, transform infrastructure and invest in training. France was the leading European country in terms of foreign direct investment attractiveness in 2019 and this plan will further bolster its competitiveness and help support its openness to foreign investors.

“Turning risk and crisis into opportunity, by mainly investing in the most promising fields, which will drive the economy and create the jobs of the future. That is our choice, a choice for the future, a planned choice. With the France Relance recovery plan, we want to build the France of 2030 today.”

Emmanuel Macron, President of the French Republic

The plan has three main themes: ecology, competitiveness and cohesion.

Ecology

France has an ambitious objective: to become Europe’s first major decarbonized economy by achieving carbon neutrality by 2050. To reduce the impact of France’s economic activity on the environment, the recovery plan will significantly speed up the ecological transition and provide it with €30 billion.

France will support the thermal renovation of buildings, the decarbonization of industry, green hydrogen, cleaner transport and transformation of the agricultural sector.

  • Developing green hydrogen:
    To be at the cutting-edge of renewable hydrogen production and low-carbon technologies, France will support projects led by companies across the country in order to encourage the emergence of French hydrogen solutions. It will set up a mechanism to support hydrogen produced by water electrolysis and will create an Important Project of Common European Interest (IPCEI) to support industrialization in France and develop demonstrators.
  • Improving everyday mobility:
    The recovery plan will mobilize €1.2 billion to develop the use of bicycles and public transport by improving existing services.
  • Support for the rail sector:
    Improving the quality of the rail network will help increase the supply of trains for different purposes.

The goal is to increase the supply in the less densely populated areas and better link them to urban areas, to speed up the work to improve the experience at railway stations, especially for reduced-mobility persons, and to develop the transport of goods in order to closely serve companies, logistics platforms and ports under good economic conditions.

  • Biodiversity, fighting against land take and agricultural transition:
    France will increase its food sovereignty to meet the increased demand for local produce by shifting its agricultural model towards more resilient systems. This transformation will help restore biodiversity to territories and help fight against land take.

Competitiveness

France has chosen to upgrade its production facilities, invest heavily in future technologies (including green technologies), reduce production taxes and increase support for research, training and development of skills and existing national expertise.

These choices should enable France to regain its economic sovereignty, not as a nationalistic withdrawal but as a regained capacity for independence to serve France and Europe. The France Relance plan has allocated €34 billion to this.

  • Reshoring industrial production:
    To ensure its economic and technological independence, France is targeting five strategic sectors for its investments:
    • health,
    • inputs (items entering production processes) essential to industry,
    • electronics,
    • the agrifood industry,
    • industrial 5G applications.

Certain production activities will be relocated to France, significantly reducing our companies’ carbon footprint.

  • Investing in future technologies:
    With the Investments for the Future Programme (PIA), the State will support innovation and particularly investment in future technologies, including digital technologies, medical and health-industry research, carbon-free energies, responsible agriculture and food sovereignty, sustainable transport and mobility, and cultural and creative industries.

The goal is to make France the best country in Europe for research and entrepreneurship.

  • Lower production taxes:

Production taxes inhibit the competitiveness of French companies. In France, they accounted for 3.2% of GDP in 2018, compared to an average of 1.6% across the European Union.

To make France more attractive and encourage industrial firms to set up, these taxes will be reduced by €10 billion per year from 1 January 2021.

Cohesion

In 2030, France will need a well-trained workforce.
France Relance is thus investing heavily (€36 billion) in France’s greatest asset: its people.

To avoid widening inequalities, the recovery plan is designed in such a way as to provide better support to young and vulnerable people seeking employment across the country.

  • Strengthening skills and transforming vocational training:
    To respond to new activities linked to the ecological transition, the circular economy and digital technology, the recovery plan will increase workforce training availability by about 400,000 people and transform vocational training systems to make France a leader in the area of digital technology and educational innovation.
  • Training young people in strategic, high-growth sectors:
    To deal with the expected increase in young jobseekers, €1.6 billion has been allocated to increase the number of certificate-based training courses for all young people arriving on the labour market from September 2020.

A historic European recovery plan

The European Union should finance 40% of the French recovery plan. These direct subsidies will be paid to France on the basis of an investment and reform strategy which the government will present in early 2021 to its European partners and the European Commission.

European financing will be provided to support investments and reforms which have a sustainable effect on productivity, which support and speed up the ecological and digital transition and which facilitate the convergence of European economies.

“This recovery plan will be carried out with Europe, which has risen to the challenge. The European agreement on joint debt and the investment plan for the continent’s economic recovery is a historic turning point. It is the fruit of tireless work, initiated by France, which we have been carrying out for three years.”

Emmanuel Macron, President of the French Republic

For more information on France’s recovery plan