On 13 July 2021, the European Council approved France’s national recovery and resilience plan (“NRRP”) which outlines the recovery investments for which France is seeking European funding. This NRRP was formally submitted in late April 2021 to the EU Commission which had adopted a positive assessment. As a result, among the €672.5 billion that were allocated by the Member States for the European Recovery and Resilience Facility (“RRF”) which aims to support them in their recovery efforts, €39.4 billion will be allocated to France in grants. France will be the Member State to receive the third largest funds, after Spain and Italy.
The funds allocated under France’s NRRP will be part of the wider national France Relance plan of €100 billion as presented by the French Prime Minister in September 2020 (the “French Recovery Plan”). The RRF will therefore provide nearly 40% of the funding for the French Recovery Plan.
Both plans provide for a progressive distribution of funds. As for the NRRP, funds will be disbursed between 2021 and 2023 and a first payment of €5.1 billion has already been issued on 19 August 2021. France will be able to request further disbursement up to twice a year if it meets the agreed milestones and targets. As for the wider French Recovery Plan, about 40% of the funds have already been released in June 2021, while the French government aims at delivering 70% of the funds by the end of 2021 and 100% by the end of 2022.
Outline of the French recovery plan
The French Recovery Plan aims to support the implementation by 2026 of crucial investment and reform measures put forward by France to emerge stronger from the COVID-19 pandemic.
The French NRRP focuses on three key priorities (that are also pillars of the RRF and French Recovery Plan) which can be broken down into nine main components:
i. Environment (approx. €20 billion):
- Energy retrofitting;
- Environment and biodiversity;
- Green infrastructure and mobility;
- Green energy and technologies;
ii. Competitiveness (approx. €5 billion):
- Financing for companies;
- Technological sovereignty and resilience;
- Digital upgrading for the central government, the regions and companies;
iii. Social and territorial cohesion (approx. €15 billion):
- Job preservation, young people, persons with disabilities, vocational training;
- Research, healthcare system, territorial cohesion.
With its NRRP, France states its commitment to reform and transform its economy in favour of greener, more inclusive and more competitive growth, since 46% of the funds will be devoted to the energy transition and 21% to the digitalization of the economy. This goes beyond the eligibility criteria of the RRF set by the Commission which require each national plan to include a minimum of 37% of expenditure for climate transition and 20% for digital transition.
In addition, the French NRRP meets the social ambition of the RRF by taking decisive measures to strengthen vocational training, modernize the health system and fight against the digital divide in France.
The French Recovery Plan was adopted in December 2020 by the French Parliament under the 2021 Budget law which was largely devoted to the recovery of the economy. It was also implemented through the Social Security Financing law for 2021 and various regulatory and legislative simplification measures.
3.1 Tools for the distribution of the funds
The funds from the French Recovery Plan will be allocated in two manners: each pillar of the plan will benefit from both investments and reforms. More practically, companies will benefit from the funds mostly through the following recovery measures:
- Financial support: such as loans and access to dedicated funds;
- Tax measures: such as tax relief and tax credit;
- Contracts: through call for tenders, projects meeting the French Recovery Plan objectives (and in particular that of the energy transition) will be partially or fully funded through this method.
The 2021 Budget law which implements the French Recovery Plan also refers several times to the necessity to comply with the EU State aid rules. Consequently, France is expected to notify to the EU Commission the measures that constitute an aid, unless they are covered by one of the rules set out in the State aid block-exemption regulation.
3.2 How to access the funds?
In theory, no company is excluded from receiving funds from the French Recovery Plan, provided that it meets certain criteria that differ according to each recovery measure envisaged by the French government.
Among such criteria, the most common one is the size of the company, as some measures are indeed only available to VSEs, SMEs or SMIs. Other measures are restricted to companies operating in a particular field such as agriculture, energy or culture. Some criteria are even more specific, such as the type of project in which a company is engaged, like the development of technological solutions for the agro-ecological transition.
As the number of measures is very important (there are currently more than 100) and each recovery measure having specific criteria to be met, a web page has been set up by the government for companies to be able to gather information on the funds they can access. It lists every measure that are available and which criteria must be met to benefit from them.
For more information, a summary of the French NRRP is available here (in English), the full NRRP can be downloaded here (in French) and a website dedicated to the French Recovery Plan can be consulted here (in French).