France’s recovery plan, dubbed ‘France Relance’, is challenging to implement due to being over-complicated, difficult to monitor, and involving too many actors that are not immediately identifiable, according to Pierre Moscovici, the French court of auditors president. EURACTIV France reports.
The French government launched the plan in September 2020 to stimulate economic recovery after the COVID-19 pandemic. It provides €100 billion, equivalent to a third of the state budget, including €40 billion in European funds, to support businesses and infrastructure in terms of ecology, competitiveness and cohesion.
Although it is an emergency plan, France Relance is in line with the economic projects launched by President Emmanuel Macron.
But the plan’s effectiveness has been questioned by a report from the court of auditors and Moscovici, who addressed senators on Wednesday (9 March).
The report states that “The porosity of the recovery plan with other programs in progress leads to a weakening of the readability of France Relance and its measures,” adding that “measures were subject to rapid decision-making processes with the counterpart of the risk of a lower quality of the projects selected and priority given to projects already ready at the expense of those which required design time.”
The report published the same day as Moscovici’s senate address states that the recovery plan includes “essential” measures and some whose effectiveness “remains to be established”. Another obstacle is the impossibility of identifying the beneficiaries of each measure.
The functioning of the steering committees set up to implement the recovery plan “has proved uneven, especially at the local level”, according to consultations carried out by the court of auditors.
‘Cumbersome administrative machinery’
Moscovici added that the “rather cumbersome administrative machinery” may have undermined the goal of speedy implementation.
While addressing senators, Moscovici said, “such a massive intervention [must] be punctual” and recommended that the recovery plan be limited in time, not beyond 2022, for example. According to him, full information on the plan’s progress requires “a system for monitoring the credits of the recovery plan”, particularly for the sums to be disbursed after 2022.
The president also expressed concern over the war in Ukraine as supply shortfalls in energy and some raw materials could slow down the recovery plan’s implementation and thus delay the benefits.
Auditors also noted a so-called ‘grey zone’ “between the disbursement […] and the moment when the final beneficiaries actually receive the public money”. To “limit bottlenecks”, the court recommends being more selective by removing measures that do not reach their targets.
Moscovici also stressed the exceptional nature of such expenditure, which weighs heavily on public finances. These “must return to a trajectory compatible with debt sustainability,” he said, adding that measures that would be extended due to their effectiveness must “be compensated by savings”.
The president of the court of auditors also shared the merit of several measures.
Conditional EU funding
However, EU funds from the Next Generation EU plan that France would receive as part of its recovery plan are conditional on achieving specific objectives, Moscovici also warned. One of these objectives includes reforming unemployment insurance, he added.
With a total of about €40 billion to be disbursed by the EU, respect for objectives will have to be stepped up and acknowledged, particularly by those less familiar with this type of conditionality. It is impossible to compromise on the repayment of the debt contracted by EU institutions, Moscovici warned.
Established in a hurry, France Relance has nevertheless allowed the French economy to rebound more quickly than expected but has placed heavy constraints on the health of national public finances.
[Edited by Alice Taylor]