10.6092/issn.1561-8048/15699
France’s Recovery and Resilience Plan was submitted to the European Commission on 28 April 2021, in accordance with Art. 18 of Regulation (EU) 2021/241 establishing the Recovery and Resilience Facility. Being a part of a broader national recovery plan named ‘France Relance’, it consists of 20 reforms and 71 investments in three main areas: green transition, digital transition, and social and territorial cohesion. With particular regard to social issues, the French plan puts a strong focus on youth labour market integration and health care, while being relatively poor in measures relevant to labour law and social protection. Overall, although the plan demonstrates a certain openness towards social growth, it also contains some austerity-driven reforms, especially in the fields of unemployment insurance and retirement pensions, thereby confirming the (still) strong link between social policies and financial sustainability.
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    National Recovery and Resilience Plan:                                         Italian Labour Law e-Journal
    France                                                                        Special Issue 1, Vol. 15 (2022)
    Konstantina Chatzilaou                        The NextGeneration EU in Action: Impact on Social and Labour
    konstantina.chatzilaou@cyu.fr                                                                        Policies
                                                                                                ISSN 1561-8048
                                                                 https://doi.org/10.6092/issn.1561-8048/15699




           National Recovery and Resilience Plan: France
                                      Konstantina Chatzilaou

                                                  Abstract

     France’s Recovery and Resilience Plan was submitted to the European Commission on 28 April
     2021, in accordance with Art. 18 of Regulation (EU) 2021/241 establishing the Recovery and
     Resilience Facility. Being a part of a broader national recovery plan named ‘France Relance’, it
     consists of 20 reforms and 71 investments in three main areas: green transition, digital transition,
     and social and territorial cohesion. With particular regard to social issues, the French plan puts
     a strong focus on youth labour market integration and health care, while being relatively poor in
     measures relevant to labour law and social protection. Overall, although the plan demonstrates
     a certain openness towards social growth, it also contains some austerity-driven reforms,
     especially in the fields of unemployment insurance and retirement pensions, thereby confirming
     the (still) strong link between social policies and financial sustainability.

     Keywords: French Recovery and Resilience Plan, Social dimension, Vocational training for
     young people, Healthcare, Unemployment insurance, Retirement pensions.



1. General framework.

   Since the very beginning of the Covid-19 crisis, France has played a key role in the design
of a European plan aimed at coping with the economic and social shock caused by the
pandemic. It should indeed be recalled that, by a joint initiative of 18 May 2020,1 France and
Germany managed to unblock the conflicting positions within the European Council and to
pave the way for the creation of a common European recovery fund. At the time, the two
Member States proposed in particular to create a European fund endowed with 500 billion




 Associate Professor at CY Cergy Paris Université.
1For more information on this initiative, see:
https://www.elysee.fr/emmanuel-macron/2020/05/18/initiative-franco-allemande-pour-la-relance-
europeenne-face-a-la-crise-du-
coronavirus#:~:text=Il%20renforcera%20la%20r%C3%A9silience%2C%20la,la%20recherche%20et%20l'in
novation.
    Konstantina Chatzilaou                                                            Italian Labour Law e-Journal
                                                                                     Special Issue 1, Vol. 15 (2022)
                                                                       The NextGeneration EU in Action: Impact on
                                                                                         Social and Labour Policies




euros (€) in order to provide the countries most affected by the pandemic with grants, rather
than loans.
   At the European Council’s extraordinary meeting of 17–21 July 2020 – the longest in the
history of the institution – France was thus one of the Member States fiercely opposed to
the so-called “Frugal Four”, namely Austria, Denmark, Sweden and the Netherlands, to
some extent supported by Finland. Indeed, while France, Italy, Portugal, Spain and other
highly indebted states stressed the need to depart from the ‘classic’ Euro-crisis approach by
creating a common recovery fund based on fiscal solidarity, the Frugal Four were hostile to
EU-level bonds and debt mutualisation. As we know, on 21 July 2020, the European Council
finally reached a difficult compromise by agreeing, among other things, on a Recovery and
Resilience Facility2 (€723.8 billion at current prices) providing Member States with both
grants (€338 billion) and loans (€385.8 billion).3 The European Council meeting of July 2020
was closed, in a quite symbolic way, by a joint statement of Emmanuel Macron and Angela
Merkel, who underlined the ‘historic’ character of the agreement.4
   At the European Council meeting of 10–11 December 2020, which focused mainly on
the very delicate question of the rule-of-law conditionality, France took a somewhat more
discrete stance. Indeed, while firmly supporting the adoption of the rule-of-law conditionality
Regulation,5 the French Prime Minister also actively endorsed the controversial political
compromise reached at this Council meeting,6 involving the suspension of the application of
said Regulation until the CJEU handed down its ruling.7 At that time, it seems that Emmanuel
Macron’s absolute priority was the immediate implementation of the Recovery and Resilience
Facility and commencing payment of grants and loans to the Member States (including
France) most affected by the pandemic.


2. An overview of France’s Recovery and Resilience Plan.

2.1. Overall priorities: green and digital transition.

  The French Recovery and Resilience Plan (RRP) was submitted to the European
Commission on 28 April 2021,8 in accordance with Art. 18 of Regulation (EU) 2021/241

2 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing
the Recovery and Resilience Facility.
3 European Council, Special meeting of the European Council (17, 18, 19, 20 and 21 July 2020) – Conclusions, Brussels,

21 July 2020, https://www.consilium.europa.eu/media/45109/210720-euco-final-conclusions-en.pdf.
4 See https://www.elysee.fr/emmanuel-macron/2020/07/21/jour-historique-pour-leurope.
5 Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020

on a general regime of conditionality for the protection of the Union budget.
6 European Council, European Council meeting (10 and 11 December 2020) – Conclusions, Brussels, 11 December

2020, https://www.consilium.europa.eu/media/47296/1011-12-20-euco-conclusions-en.pdf.
7 As a reminder, on 11 March 2021, Poland and Hungary challenged the rule-of-law conditionality Regulation

in the CJEU. On 16 February 2022, the Court dismissed both appeals (see CJEU, 16 February 2022, Hungary v
Parliament and Council and Poland v Parliament and Council, cases C-156/21 and C-157/21).
8 The full text of the French RRP is available at:

https://www.economie.gouv.fr/files/files/directions_services/plan-de-relance/PNRR%20Francais.pdf.

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     Konstantina Chatzilaou                                                              Italian Labour Law e-Journal
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                                                                          The NextGeneration EU in Action: Impact on
                                                                                            Social and Labour Policies




establishing the Recovery and Resilience Facility. It is worth noting that the RRP is part of a
broader national recovery plan called “France Relance”, adopted by the French Parliament
under the 2021 budget bill.9 The estimated cost of the RRP amounted to €40.9 billion,
representing about 40 per cent of the €100 billion planed under “France Relance”. Because this
cost was higher than the maximum financial contribution available for France under Art. 11
of Regulation (EU) 2021/241, however, the country was finally allocated a grant of
approximately €39.4 billion.10 No loans were requested.
   Generally speaking, France’s RRP focuses on three key issues: green transition, digital
transition, and social and territorial cohesion.11 More specifically, the plan is structured in
terms of nine components, which are aimed at tackling the economic and social challenges
facing the country, exacerbated by the Covid-19 crisis. These nine components are presented
as follows: 1: renovation of buildings; 2: biodiversity, circular economy, agriculture and
forestry; 3: green infrastructures and mobility; 4: green energy and technologies; 5: business
support; 6: technological sovereignty; 7: digitalisation of the state, territories, businesses and
support to the cultural sector; 8: employment, young people, disability, professional training;
and finally 9: research and development, health, territories.
   Overall, the majority of the national reforms and investments are directed towards green
transition, as €18 billion will be dedicated to green investments such as building renovation
(€5.8 billion), a sustainable railway network (€4.4 billion) or decarbonisation of industrial
processes (€300 million). The French RRP also puts a strong focus on digital transition, as
€8.4 billion will be devoted to measures related to this area, including developing key digital
technologies such as cybersecurity, quantum and cloud computing (€1.8 billion) and
providing primary and secondary schools with digital equipment (€131 million). Finally,
approximately €10 billion will be dedicated to various ‘social’ reforms and investments
discussed in the following subsection, such as measures fostering jobs and training for young
people (€4.6 billion).




9 For more information on this plan, see: https://www.economie.gouv.fr/plan-de-relance.
10 See Council of the European Union, Council implementing decision on the approval of the assessment of the recovery and
resilience plan for France, Brussels, 6 July 2021, art. 2.
11 For a general analysis of France’s RRP, also in comparison with other national plans, see: Corti F., Núñez

Ferrer J., Ruiz de la Ossa T., Regazzoni P., Comparing and assessing recovery and resilience plans. Italy, Germany, Spain,
France, Portugal and Slovakia, in CEPS, September 2021.

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                                                                                             Social and Labour Policies




      Nine components of the French RRP and associated costs12

        Component                                                                Costs   (EUR
                                                                               million)
    1: Renovation of buildings                                                   5 825
    2: Biodiversity, circular economy, agriculture and forestry                  2 086
    3: Green infrastructures and mobility                                        7 030
    4: Green energy and technologies                                             5 295
    5: Business support                                                          250
    6: Technological sovereignty                                                 3 215
    7: Digitalisation of the state, territories, businesses and support to the   2 101
 cultural sector
    8: Employment, youth, disability, professional training                      7 478
    9: R&D, health, territories                                                  7 671
    Total                                                                         40 950


2.2. Social priorities: vocational training and health care.

    The majority of the “social” reforms and investments planned by the French government
can be found in components 8 (employment, youth, disability and professional training) and
9 (research and development, health and territories) of the RRP. Generally speaking,
component 8 is rather poor in measures related to labour law and social protection, while
putting a very strong focus on vocational training, especially for young people. Furthermore,
some of the measures announced in component 9 of the plan touch upon broader welfare
matters, with a particular focus on health care.
    First of all, it is indeed worth noting that the French RRP contains no major reform plans
on labour law and employment relations. This can be explained by the fact that the French
legislator has already recently embarked (under the influence of “classic” EU Economic
Governance mechanisms, such as the Excessive Deficit Procedure or the Excessive
Imbalance Procedure) on a series of large-scale reforms profoundly transforming these
fields.13 Thus, the RRP only announces some rather minor reforms on occupational health
and safety in order to better support certain groups, in particular the most vulnerable, and to


12 European Commission, Commission staff working document: Analysis of the recovery and resilience plan of France
accompanying the document Proposal for a Council implementing decision on the approval of the assessment of the recovery and
resilience plan for France, SWD/2021/173 final, Brussels, 23 June 2021, 23-24.
13 On this matter, see Syrovatka F., Labour market policy under the new European economic governance: France in the focus

of the new European labour market policy, in Capital & Class, 2021, 283; Chatzilaou K., EU economic governance and
French social legislation, in European Labour Law Journal, 2022, 170.

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                                                               The NextGeneration EU in Action: Impact on
                                                                                 Social and Labour Policies




improve the quality of working life.14 In addition, the plan mentions some measures taken to
reinforce the so-called “partial activity” mechanism, namely the mechanism widely used
during the Covid-19 pandemic to compensate earning losses experienced by workers because
of the reduction of their working time, while helping companies confronted by economic
difficulties.15
    Second, the French RRP puts some emphasis on two quite controversial reforms in the
field of social protection, namely reforms of unemployment insurance and retirement
pensions. The first reform, according to the government, pursues two main goals: supporting
job growth and combating precariousness, by strengthening work incentives and limiting the
excessive use of short-term contracts. In this respect, the plan mentions the recent opening
(under strict conditions) of unemployment insurance rights to self-employed workers and
workers who have resigned from their jobs, but also the significant tightening of the eligibility
conditions for employees, the revision of the rules to calculate and cumulate benefits, as well
as the reduction of benefits for high-salary employees.16 As far as the reform of retirement
pensions is concerned (which was planned for 2020 but was put on hold due to major trade
union reactions and the outbreak of the Covid-19 pandemic), the government declares itself
“determined to carry out an ambitious reform of the retirement pension system aimed at
improving its fairness and sustainability”,17 but does not go into further details. It is just
stated that this reform would create a more equitable universal system by eliminating the
differences between the various existing retirement pension schemes.
    The “social” area on which the French RRP puts the most focus is with no doubt
vocational training, especially for young people, as approximately €4.6 billion will be
dedicated to measures fostering jobs and training for this particular group. In this regard, the
RRP mentions a series of recent initiatives, such as the so-called “1 young person, 1 solution”
(“1 jeune, 1 solution”) scheme, aimed at supporting apprenticeships and subsidies for hiring
young people under 26 years of age. More specifically, the government announced that by
the end of 2022 the plan will have subsidised 65,000 contracts with increased access to
training and personal guidance for young people, personalised training for 10,500 early
school leavers aged 16 to 18, and personalised guidance towards employment for 130,000
young NEETs (“not in employment, education or training”).18 The plan also promises to
finance 337,000 youth-targeted hiring subsidies and more than 330,000 apprenticeship
contracts.19
    Finally, the French RRP contains some measures touching upon broader welfare issues,
with a particular focus on health care. More specifically, €2.5 billion will be dedicated to the
modernisation of the health system by allowing for the renovation of buildings, ensuring the
availability of proper equipment and supporting the integration of hospital and outpatient


14 See France’s Recovery and Resilience Plan, 2021, 608–614.
15 Ibid., 600–603.
16 Ibid., 595–598.
17 Ibid., 26.
18 Ibid., 532, 549 and 554.
19 Ibid., 507 and 515.



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care, and €1.5 billion will be invested in the renovation of medical centres and residential
care homes for elderly people.20 These investments are accompanied by a number of
legislative reforms, such as those aimed at improving the health system or creating a new
“autonomy” branch of social security for people, especially the elderly, whose independence
has been compromised by physical, sensory or mental illnesses and disabilities.21


3. The social and labour dimensions of France’s plan.

3.1 General assessment of the plan.

   According to Regulation (EU) 2021/241, Member States’ RRPs are first carefully
examined by the Commission (Art. 19),22 whose assessment is then approved by an
implementing decision of the Council (Art. 20). More specifically, the Commission assesses
the relevance, effectiveness, efficiency and coherence of the RRPs, considering 11 criteria set
out in Art. 19 (3) of the Regulation. Regarding the relevance of the plan, these criteria require
in particular an assessment of whether the national reforms and investments: (i) represent a
comprehensive and adequately balanced response to the economic and social situation; (ii)
effectively tackle the challenges identified in the relevant country-specific recommendations
(CSRs) addressed to the Member State concerned; (iii) strengthen the growth potential, job
creation, and economic, social and institutional resilience of the Member State and contribute
to the implementation of the European Pillar of Social Rights (EPSR); (iv) ensure that no
measure does significant harm to environmental objectives; (v) and (vi) support the green
and digital transitions.
   Considering all the above mentioned criteria, the Commission adopted a (very) positive
assessment of France’s RRP on 23 June 2021.23 The Commission’s assessment was then
officially approved by the Council through an implementing decision of 6 July 2021.24 This
was an important step, as it allowed for a first disbursement of €5.1 billion in pre-financing,
representing 13 per cent of the total amount allocated to France.25 Regarding in particular
the “social” aspects of the RRP, they were found to be in line with the CSRs addressed to
France in 2019 and 2020, as well as with the principles set out in the EPSR.




20 Ibid., 641.
21 Ibid., 695 and 700.
22 Regarding the role of the Commission in the functioning of the RRF, see Corti F., Núñez Ferrer J., Steering

and monitoring the recovery and resilience plans. Reading between the lines, in CEPS, April 2021.
23 See European Commission, nt. (12).
24 See Council of the European Union, nt. (10).
25 See https://ec.europa.eu/commission/presscorner/detail/en/ip_21_4225 .



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3.2 Compliance with the 2019 and 2020 Country-Specific Recommendations.26

    The 2019 CSRs addressed to France contained two series of recommendations in the
social field: on one hand, “reform the pension system to progressively unify the rules of the
different pension regimes, with a view to enhancing their fairness and sustainability”, and,
on the other hand, “foster labour market integration for all job seekers, ensure equal
opportunities with a particular focus on vulnerable groups, including people with a migrant
background, and address skills shortages and mismatches”.27 As for the 2020 CSRs – which
were prepared by the European Commission in May 2020 just after the outbreak of the
Covid-19 pandemic – they also contained two “social” recommendations, focused mainly on
alleviating the repercussions of the health crisis: “strengthen the resilience of the health
system by ensuring adequate supplies of critical medical products and a balanced distribution
of health workers, and by investing in e-Health”, and “mitigate the employment and social
impact of the crisis, including by promoting skills and active support for all jobseekers”.28
    Overall, the drafters of the French RRP put a lot of effort into demonstrating the
consistency of the plan with the 2019 and 2020 CSRs. Indeed, after the technical description
of each and every national measure, the plan expressly mentions the relevant 2019 or 2020
CSRs and sometimes goes into detail as to how the measures envisaged will contribute to the
effective implementation of the European recommendations. With particular regard to
“social” reforms and investments, the RRP addresses all four 2019 and 2020 CSRs
mentioned above. For instance, the measures regarding unemployment insurance and
training for young people are meant to address the 2019 and 2020 CSRs on market
integration for all jobseekers, equal opportunities for vulnerable groups, and promotion of
skills. Likewise, the measures related to the transformation of the governance of hospitals
and the renovation of medical centres and residential care homes for elderly people are
expected to contribute to the resilience of the national health-care and long-term care
systems.
    In its extensive assessment of the French RRP of 23 June 2021, the European
Commission clearly acknowledges the general consistency of the plan with the 2019 and 2020
CSRs. It therefore considers that the RRP “constitutes a comprehensive package of reforms
and investments” expected to effectively address “all or a significant subset of challenges
identified in the country-specific recommendations” and concludes that “this would warrant
a rating of A under the assessment criterion 2.2 in Annex V to the Recovery and Resilience
Facility Regulation”.29 In the same vein, in its decision on the approval of the French RRP
of July 2021, the Council considers that the plan includes “an extensive set of mutually

26 On the link between the European Semester and the RRF, see Vanhercke B., Verdun A., Atanasova A.,
Spasova S., and Thomson M., From the European Semester to the Recovery and Resilience Facility. Some social actors are
(not) resurfacing, ETUI Working Paper, 13, 2021.
27 Council Recommendation of 9 July 2019 on the 2019 National Reform Programme of France and delivering

a Council opinion on the 2019 Stability Programme of France, OJEU, C 301, 5.9.2019, rec. 1 and 2.
28 Council Recommendation of 20 July 2020 on the 2020 National Reform Programme of France and delivering

a Council opinion on the 2020 Stability Programme of France, OJEU, C 282, 26.8.2020, rec. 1 and 2.
29 European Commission, nt. (12), 47-48.



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                                                                 The NextGeneration EU in Action: Impact on
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reinforcing reforms and investments that contribute to effectively addressing all or a
significant subset of the economic and social challenges outlined in the country-specific
recommendations”, in particular with regard to labour market policies and the resilience of
the health-care system.30 The Council also makes special mention of the measures dedicated
to the fight against unemployment, such as those focusing on training for young people and
unemployment benefits.31
    That said, in its assessment of the French RRP, the European Commission identifies two
‘social’ areas that are not sufficiently covered by the plan: retirement pensions and labour
market measures for vulnerable groups other than young people. Regarding retirement
pensions, the Commission notes that although “the French authorities explain that they plan
on resuming the suspended parliamentary discussions on the pension reform”, the RRP is
not accompanied by milestones and targets for the implementation of said reform. It
therefore underlines that, given its key importance for labour mobility and productivity, the
planned retirement pensions reform will be closely monitored, including its implications in
terms of fiscal sustainability.32 As far as labour market measures for vulnerable groups are
concerned, the Commission observes that while the plan includes a strong targeting on young
people, “further measures may be required to address the labour market challenges faced by
vulnerable groups other than young people”. This mainly concerns persons with disabilities
and elderly people, which are particularly exposed to unemployment and poverty, especially
in the context of the Covid-19 pandemic.33


3.3 Compliance with the European Pillar of Social Rights.

    Unlike the 2019 and 2020 CSRs, the European Pillar of Social Rights (EPSR) is the subject
of much more scattered references in the French RRP. This text is in fact mentioned mainly
in the introductory part of the plan, as well as in the last part dealing with the general impact
of the measures announced. In this last part, the RRP drafters refer to the three chapters of
the EPSR (equal opportunities and access to the labour market, fair working conditions, and
social protection and inclusion) and summarise the national measures aimed at implementing
the various rights and principles set out in each chapter.34 It is worth noting, however, that
the RRP makes no mention of the social scoreboard indicators monitoring the Member
State’s performance in relation to the EPSR.
    Overall, the majority of the “social” reforms and investments contained in the French
RRP are meant to implement the principles set out in the first chapter of the EPSR on equal
opportunities and labour market access. A case in point are the various national measures on
vocational training (in particular for employees in partial activity and young people) and

30 See Council of the European Union, nt. (10), expl. par. 15.
31 Ibid., expl. par. 18.
32 European Commission, nt. (12), 40-41.
33 Ibid., 47.
34 See France’s Recovery and Resilience Plan, 2021, 738–739.



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                                                             The NextGeneration EU in Action: Impact on
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unemployment insurance, which are aimed at implementing the EPSR principles related to
education, training and lifelong learning (Art. 1), equal opportunities (Art. 3) and active
support to employment (Art. 4). Some other smaller scale reforms are expected to help
promote the principles of the EPSR’s second chapter, on fair working conditions. For
example, the occupational health and safety reform is aimed at implementing Art. 10 (a) of
the EPSR, according to which “workers have the right to a high level of protection of their
health and safety at work”. Finally, an important part of the national measures on the
healthcare and social security systems are naturally meant to implement some of the
principles contained in the last chapter of the EPSR, such as those related to social protection
(Art. 12), health care (Art. 16) or long-term care (Art. 18).
    In its extensive assessment of the French RRP, the European Commission seems
generally satisfied by the various different national measures it contains. Indeed, taking into
consideration all reforms and investments envisaged by France, the Commission considers
that the plan is expected to have a “high impact” on EPSR implementation and that this
“would warrant a rating of A under the assessment criterion 2.3 in Annex V to the Recovery
and Resilience Facility Regulation”.35 Likewise, in its decision on the approval of France’s
RRP, the Council concluded that the RRP is expected to have a “high impact (Rating A) on
[…] contributing to the implementation of the European Pillar of Social Rights, including
through the promotion of policies for children and youth”.36
    In its assessment of the French RRP, however, the European Commission identifies once
again a number of shortcomings related to the first and third chapters of the EPSR, namely
labour market access and social protection and inclusion. Regarding labour market access, it
is observed that although the French plan includes significant investments to address the
challenge of labour market integration of young people, it “has a more limited targeting of
other vulnerable groups or deprived areas”.37 In addition, the Commission notes that the
national vocational training measures envisaged are less accessible to atypical workers,
particularly affected by the crisis, as well as to the low qualified, who tend to have lower
access to training provisions.38 As for social protection and inclusion, it is observed that “the
exposure to social risks of some vulnerable groups is not directly addressed in the plan, nor
is its potential impact on child poverty”.39 This mainly concerns the low-skilled, people with
a migrant background (particularly women), single-parent households, workers on temporary
contracts and atypical workers. Finally, the same general observation is made regarding access
to affordable housing, which is also not directly addressed in the French RRP.40




35 European Commission, nt. (12), 55.
36 Council of the European Union, nt. (10), expl. par. 20.
37 European Commission, nt. (12), 56.
38 Ibid., 57.
39 Ibid.
40 Ibid.



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4. Lessons from the previous crisis

4.1 A difficult past: austerity policies in labour law and unemployment insurance.

   Unlike other EU Member States (particularly Greece, Portugal, Cyprus and Ireland),
France has never been the subject of strict financial and budgetary surveillance under the
infamous Memorandums of Understanding (MoU). Nevertheless, from the very beginning
of the 2010 Euro-crisis and for nearly a decade, the country was under intense scrutiny by
the European institutions, mainly within the framework of the Excessive Deficit Procedure
(EDP) and the Excessive Imbalance Procedure (EIP).41 It was not until 2018 that France was
finally able to exit the EDP and be classified among Member States with ‘reduced risk’ of
macroeconomic imbalances. According to the European institutions, these positive
developments were due mainly to the reduction of the deficit below the 3 per cent of GDP
Treaty reference value,42 as well as to “enhanced policy action [having] contributed to a
gradual correction of existing challenges”.43
   From the very first European semester cycle in 2011 and until about 2016, France was
systematically asked to implement various social austerity measures, including loosening
employment protection legislation and facilitating derogations from sectoral collective
agreements by company-level agreements.44 Since 2016–2017 and the so-called
“socialisation” of the European Semester,45 growing importance has been attached to issues
of labour market segmentation and social exclusion, without, however, calling into question
the “austerity dogma”. For instance, although since 2017 the CSRs have been insisting in
revising “the system of vocational education and training”46 and ensuring “equal
opportunities [for] vulnerable groups, including people with a migrant background”,47 the
government has also been requested to “consolidate the measures reducing the cost of labour

41 The EDP is initiated when the deficit and the public debt of a Member State exceed certain thresholds,
namely, 3 per cent of GDP for the deficit and 60 per cent of GDP for public debt. The state concerned is then
placed under enhanced surveillance, which may result in annual financial penalties ranging from 0.2 to 0.5 per
cent of GDP. As for the EIP, it is initiated when a state is facing excessive macroeconomic imbalances. The
state concerned must then draw up an action plan, presenting specific measures intended to correct the
imbalances detected. It must be noted that the insufficiency of the plan or the non-application of the measures
announced can give rise to annual financial sanctions of 0.1 per cent of GDP.
42 Council Decision (EU) 2018/924 of 22 June 2018 abrogating Decision 2009/414/EC on the existence of an

excessive deficit in France, OJEU, L 164, 29.6.2018.
43 Communication from the Commission to the European Parliament, the Council, the European Central Bank

and the Eurogroup, 2018 European Semester: assessment of progress on structural reforms, prevention and correction of
macroeconomic imbalances, and results of in-depth reviews under Regulation (EU) No 1176/2011, 7.3.2018, COM (2018)
120 final, 6.
44 See, for example, Council Recommendation of 14 July 2015 on the 2015 National Reform Programme of

France and delivering a Council opinion on the 2015 Stability Programme of France, OJEU, C 272, 18.8.2015.
45 See, among others, Zeitlin J., Vanhercke B., Socializing the European Semester: EU social and economic policy co-

ordination in crisis and beyond, in Journal of European Public Policy, 2017, 149; Bekker S., Flexicurity in the European
Semester: still a relevant policy concept?, in Journal of European Public Policy, 2017, 175.
46 See, for example, Council Recommendation of 13 July 2018 on the 2018 National Reform Programme of

France and delivering a Council opinion on the 2018 Stability Programme of France, OJEU, C 320, 10.9.2018.
47 See, for example, Council Recommendation of 9 July 2019 on the 2019 National Reform Programme of

France and delivering a Council opinion on the 2019 Stability Programme of France, OJEU, C 301, 5.9.2019.

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     Konstantina Chatzilaou                                                      Italian Labour Law e-Journal
                                                                                Special Issue 1, Vol. 15 (2022)
                                                                  The NextGeneration EU in Action: Impact on
                                                                                    Social and Labour Policies




[in order] to maximise their efficiency in a budget-neutral manner”.48 In addition, with
particular regard to social protection issues, France has been repeatedly asked to reform the
retirement pension system and the unemployment insurance system, in order to improve
their financial sustainability.49
    Over the years, these various European recommendations have had a significant impact
on national law.50 First, between 2016 and 2018, the French legislator embarked on a series
of far-reaching reforms that ultimately led to a profound transformation of French labour
law and the employment relations system. These reforms resulted, among other things, in a
reduction of the sanctions attached to unjustified dismissals, as well as the decentralisation
of the collective bargaining system. Second, between 2019 and 2021, the legislator also
embarked on an important reform of the unemployment insurance system, as mentioned in
the French RRP. While this reform extended (under strict conditions) unemployment
insurance to self-employed workers and workers who have resigned, it also considerably
limited the eligibility conditions for employees and tightened the rules to calculate and
accumulate unemployment benefits. Last but not least, since 2019, the French government
has been trying persistently to introduce a retirement pension reform that may result in a rise
in the retirement age. All in all, the only significant ‘non-austerity’ reform of recent years was
a 2018 reform of vocational training.



4.2 A not so bright future: retirement pension reform.

    Even though France managed to exit the EDP and the EIP in 2018, its financial and
budgetary situation remains very fragile. Indeed, after the outbreak of the Covid-19
pandemic, the Commission found that the country still faces macroeconomic imbalances
and a significant public debt, both of which need to be addressed by various legislative
measures. More specifically, in the Commission’s in-depth review issued in May 2022, it was
found that France was experiencing macroeconomic imbalances because of “high public
debt, as well as competitiveness challenges related to low productivity growth”.51 Likewise,
it was noted that the deficit and debt criteria set by the Treaty were not fulfilled, as the general
government deficit exceeded 3 per cent of GDP, while the debt exceeded 60 per cent of
GDP and did not respect the debt reduction benchmark.52 Although the Commission
decided for the moment not to open any new excessive deficit procedures, it announced that


48 See: Council Recommendation of 11 July 2017 on the 2017 National Reform Programme of France and
delivering a Council opinion on the 2017 Stability Programme of France, OJEU, C 261, 9.8.2017.
49 See, for example, Council Recommendation of 12 July 2016 on the 2016 National Reform Programme of

France and delivering a Council opinion on the 2016 Stability Programme of France, OJEU, C 299, 18.8.2016;
Council Recommendation of 9 July 2019 on the 2019 National Reform Programme of France and delivering a
Council opinion on the 2019 Stability Programme of France, OJEU, C 301, 5.9.2019.
50 For a recent account of these reforms, see Chatzilaou K., nt. (13).
51 European Commission, Commission staff working document: 2022 Country report – France, Brussels, 23.5.2022,

SWD (2022) 612 final, 58.
52 Ibid., 63.



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     Konstantina Chatzilaou                                                         Italian Labour Law e-Journal
                                                                                   Special Issue 1, Vol. 15 (2022)
                                                                     The NextGeneration EU in Action: Impact on
                                                                                       Social and Labour Policies




it would reassess them in autumn 2022,53 and it is clear that France is one of the EU Member
States at “high risk” of being put under this procedure.
    This negative financial and budgetary situation is clearly reflected in both the 2020 and
2022 CSRs. To remedy this situation, the recommendations focus mainly on further investing
in health care, vocational training and education,54 but they also contain some purely
‘austerity’ incentives, especially in the field of social protection. For instance, in explanatory
paragraph No. 17 of the 2020 CSRs, it is noted that the unemployment rate in France is set
to rise, and the government is thus requested to complete the reform of the unemployment
insurance system in order to improve its financial sustainability. More specifically, France is
asked to reform the indemnification rules related to unemployment benefits, which have
been characterised in previous European Semester cycles as quite “generous”.55 In the same
vein, in explanatory paragraph No. 20 of the 2022 CSRs, it is noted that French public
pension expenditure is the third highest in the EU because of “a relatively high replacement
ratio (i.e. pension compared to final annual wages), life expectancy, a relatively early effective
retirement age (around 62 years) and an elevated number of pension beneficiaries out of the
total population”. According to the Commission, this “contributes to the accumulation of
public debt despite a heavy tax burden, leading France to face high fiscal sustainability risks
over the medium term”. The government is thus explicitly requested, in the very first
recommendation of the 2022 CSRs, to “reform the pension system [in order] to progressively
unify the rules of the different pension regimes [and] to enhance its fairness while
underpinning its sustainability”.
    These austerity-driven recommendations find a clear echo in current French legislative
plans in the social field. Indeed, in addition to the unemployment insurance reform which
was fully implemented in December 2021, the newly re-elected President Emmanuel Macron
has already expressed his intention to pursue the suspended reform of the retirement pension
system. More specifically, according to Macron’s recent declarations, the retirement age could
be increased, “gradually and in stages”, from 62 to 65. Considered essential for the financial
balancing of the pension system, the reform could be initiated as early as in autumn 2022.




53 Communication from the Commission to the Council, Fiscal policy guidance 2023, Brussels, 2.3.2022, COM
(2022) 85 final, 8.
54 Indeed, according to the 2020 CSRs, France is requested to “strengthen the resilience of the health system”,

as well as to “mitigate the employment and social impact of the crisis, including by promoting skills and active
support for all jobseekers” (see Council Recommendation of 20 July 2020, nt. (28)). As for the 2022 CSRs, they
recommend to “address the shortage of skills by raising the level of basic skills, providing additional work-
based learning options and improving the learning outcomes of all students, notably by adapting resources and
methods to the needs of disadvantaged students and schools and by improving the working conditions and
continuous training of teachers” (see Recommendation for a Council recommendation on the 2022 National
reform programme of France, Brussels, 23.5.2022, COM (2022) 612 final).
55 European Commission, France – Review of progress on policy measures relevant on the correction of macroeconomic

imbalances, Brussels, December 2016, 20.

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     Konstantina Chatzilaou                                                Italian Labour Law e-Journal
                                                                          Special Issue 1, Vol. 15 (2022)
                                                            The NextGeneration EU in Action: Impact on
                                                                              Social and Labour Policies




5. Conclusions

    Reading the French RRP (along with the assessment documents of the Commission and
the Council) leads to the following general observation: overall, France’s plan seems to put
a strong focus on social and broader welfare issues, as the reforms and investments
announced in these areas occupy the third most important place after the various measures
aimed at accelerating the green and digital transitions. In particular, the reforms and
investments in favour of jobs and vocational training for young people are, in comparison
with other national plans, quite significant, as they represent approximately 10 per cent of
total grants requested. As underlined by the drafters of the RRP, France makes a conscious
effort “to invest massively in favour of young people, given their particularly vulnerable
employment situation and their difficulty in integrating in the labour market in times of
crisis”.56
    Apart from the ambitious national plans to strengthen youth labour market integration
and renovate the health-care system, however, France’s RRP contains no other major reform
in the social field. This is particularly true regarding issues relevant to labour law and
employment relations, as the plan contains no measures to improve wages and other working
conditions, particularly affected by the recent austerity-driven legislative reforms and the
current Covid-19 crisis. In addition, the plan is also rather lacking in measures aimed at
improving social protection and labour market integration for vulnerable groups other than
young people, such as people (particularly women) with a migrant background and atypical
workers.
    What is more, the RRP announces some new austerity-driven legislative plans, especially
in the area of retirement pensions. Indeed, as seen in the previous subsection, the next
retirement pension reform may well result in a further rise in the retirement age, perceived
by some as the only way to guarantee the system’s financial sustainability. In this regard, it is
worth noting that while the plan itself does not go into detail, the Commission directly
addresses the retirement pensions issue from a public finances perspective,57 thereby
confirming the (still) very strong link established between national social policies and fiscal
sustainability.




Copyright © 2022 Konstantina Chatzilaou. This article is released under a Creative
Commons Attribution 4.0 International License




56   See France’s Recovery and Resilience Plan, 2021, 28.
57   European Commission, nt. (12), 40-41.

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