The French Recovery Strategy

In response to the Covid crisis and the unprecedented economic crisis that has ensued, the French government launched a Recovery Plan and an Emergency Plan that intended to absorb the income shock from the crisis felt by economic agents, even if it increases the public deficit. In this regard the French government draw on the lessons learned from the 2008 and 2011–12 crises. Nevertheless, the strategy of supporting the economic agents hardest hit by the initial effects of the crisis to encourage a rapid rebound is not taken far enough. On the other hand, the French Recovery Plan was presented as forward-looking and focused on the long term. Some of the amounts committed are in fact intended to support investments that could alter the structure of the French economy in the medium or long term. So, the French government is taking advantage of the easing of fiscal criteria to finance a significant cut in production taxes and to fully commit to its environmental transition policies. Funding for the environmental transition and competitiveness thus accounts for nearly 40 per cent of the amounts committed in the Recovery Plan. But it is difficult to assess at this stage whether the Recovery Plan is used to finance measures that have already been decided on or whether it helps to accelerate the environmental transition.