#FranceRelance should allow the country to “transform the crisis into an opportunity, by prioritizing investment in the most promising areas that will form the economy and jobs of the future.”
Emmanuel Macron, President of France.
To complete the emergency economic measures implemented at the start of the crisis, last March, then the support plans for the hardest hit sectors applied from this summer, the recovery plan outlined today in a Cabinet meeting, amounting to €100 billion over two years, constitutes the third phase of the French response to the crisis.
The European Union will finance €40 billion of the stimulus plan following the historic agreement reached by the heads of state and government at the end of July. This recovery package will be implemented in 2021-2022 and included as part of the 2021 French Government Budget Bill, which will be presented at a Cabinet meeting at the end of September.
The recovery plan aims to support businesses, employment and public services in the short-term and to pave the way for the French economy of 2030, which will be greener, more competitive, more resilient and more inclusive. It should enable France to return to its 2019 level of GDP by 2022. In addition to its cyclical role to bolster the French economy, the recovery plan will also play a structural role by supporting the ecological and digital transitions, by being part of the government’s reform agenda to improve competitiveness, attractiveness and productivity, and by aiming to strengthen France’s industrial leadership and resilience. To this end, it is structured around three pillars:
- €30 billion will be earmarked to speed up the green transformation of the economy, with investments in energy performance renovations in buildings, in green infrastructure and mobility, to reduce the dependence on carbon in manufacturing processes, and in the development of new green technologies (hydrogen, biofuels, recycling).
- €34 billion will be allocated to boost France’s competitiveness and economic resilience, including substantial reductions in production taxes, support for equity capital funding for businesses, investment in industrial innovation and support for exports. It will also be used to strengthen French industrial resilience and independence through measures to secure critical supplies and support for productive investment in France.
- €36 billion will be used to support skills as well as social and territorial cohesion. Investment in skills aims to safeguard employment (prolonged short-term working scheme), to help the most vulnerable, especially young people, to become more employable through apprenticeships, vocational training and recruitment incentives, as well as to boost productivity (investment in skills for the future) and health resilience (investment plan for hospitals and establishments for dependent elderly people – nursing homes). In addition, the recovery plan will strengthen both social cohesion (support for the purchasing power of the poorest households) and territorial cohesion (digital inclusion, stimulus plan of the Banque des Territoires and revitalizing shops in urban centers).