#FranceRelance: already €72 billion incurred at the end of 2021
While covid-19 severely weakened economies, France rebounded with a record growth of +7.0% on average for 2021. This record growth puts France at the forefront of the European economic recovery! It underlines the positive effects of its massive France Relance recovery plan… So much so that Paul Krugman, Nobel Prize in Economics, now considers that “the star performer of the pandemic era, arguably, is France.” At the end of 2021, 72 of the €100 billion of France Relance have been incurred. It includes €20.3 billion to strengthen competitiveness and €25.4 billion to accelerate the ecological transition.
“France is doing pretty well” through the covid-19 crisis
Announced in the summer of 2020, France Relance is the €100 billion recovery plan to offset the effects of the covid-19 crisis and launch new projects in strategic areas: competitiveness, ecology, and cohesion, to build the “France of tomorrow.”
More than two years after the first announcements, Paul Krugman, Nobel Prize in Economics 2008, wrote in the columns of The New York Times that « other countries [than the United States] have also done well [in limiting the economic damage from covid-19], in some cases and by some measures better. In fact, among major advanced economies, the star performer of the pandemic era, arguably, is… France. ». He concluded by saying that « […] It’s worth knowing that the economy of France is doing pretty well. »
France 2030: economic results are present!
The economic results show the effectiveness of these measures. French growth reaches +7,0% on average for the year 2021 (source: INSEE), which is a record for fifty decades and places France at the head of the economic recovery. In addition, the French economy is more and more attractive! France is the leading destination for international investment in Europe for the second year running, ahead of the UK and Germany. France ranks 1st in Europe for R&D investments across all OECD countries.
The French economy is also the leading destination for industrial setting up through an incentive-based industrial policy. For example, Ikea (€650 million over three years), Ericsson (300 jobs by 2023), AstraZeneca (€500 million investment and 120 positions created), Norske Skog (€260 million investment and 50 positions), or Tetra Pak (€100 million investment and 40 positions) will continue to invest in France in 2022.
Read more: France Attractiveness Scoreboard 2021
French growth and employment maintained (or even increased!)
The implementation in March 2020 of emergency measures and the deployment of France Relance in the summer of 2020 have made it possible to achieve the short-term macroeconomic objectives set at the launch of France Relance on September 3, 2020. As a result, GDP growth will reach a record by 2021. Then, the aim of returning to the pre-crisis activity level by mid-2022 was achieved at the end of the third quarter of 2021.
Regarding skills and employment, particularly for young people, 580,000 employees on partial work contracts have entered a training program to strengthen or diversify their skills. In addition, nearly 4 million young people have benefited directly from the “1 young person, 1 solution” (#1jeune1solution) plan to receive training or support in finding employment, mainly through massive support for apprenticeships.
These measures are consistent with the efforts made to improve the qualification of employees since 2017, recognized by the confederation of Swedish enterprise in its report about “French Flexicurity.” Inspired by the Swedish social model and Danish flexicurity, the aim is to simplify economic life. The reform makes the labor law more transparent, accessible to everyone, and efficient to improve productivity, competitiveness, and sustainability.
The French strategy towards more sovereignty and sustainability in Europe
France’s strategy towards more sovereignty and sustainability is paying off! In 2020, France is ranked first in Europe for receiving international investments. These results, highlighted by the independent evaluation committee of France Relance, the IMF, and the OECD, place France among the European countries with the most robust rebound. Structural measures carried out since 2017 also allow these excellent results to be displayed.
In 2021, 733,000 companies benefited from a reduction in production taxes of €10 billion per year. Moreover, France Relance invests more than €14 billion of productive investments for reindustrialization. A total of 10,400 industrial companies, or one-third of them, have received support to relocate or develop activities in France, modernize, digitalize or decarbonize their production. 84% of the winning companies are tiny businesses and SMEs. France Relance supports nearly 700 industrial relocation projects!
France Relance finances research, innovation, and investments!
Regarding the decarbonization of industry, more specifically, at the end of 2021, France Relance selected 141 projects to reduce annual emissions from industry by 2.8 million tons of CO2eq (CO2 equivalent). It represented nearly 4% of annual emissions from industry in 2019 and 10% of the emissions reduction to be achieved by 2030. France Relance finances research, innovation, and investments in developing the technologies needed for the ecological transition to reach this goal.
For example, fundings concern green aircraft, decarbonized hydrogen, transportation, or strengthening the skills of the nuclear industry. In particular, France Relance invests €2 billion in green hydrogen. This investment is in addition to the France 2030 plan, which sets the main critical priorities for 2030. €7 billion in total is entirely earmarked for the strategic development of a low-carbon economy through hydrogen.
Read more: #France2030: €7 billion for hydrogen