Economic Sustainability
#11Key Findings
France falls into the sample’s upper-middle ranks (rank 11) in the category of economic sustainability.
In 2015, the state set the goal of transitioning to a circular economy, but progress is slow, with little monitoring. Decarbonization of the energy sector is a key target for the green transition strategy. However, the composition of the energy mix has not changed much in the last decade.
The labor market has traditionally been seen as rigid. Macron has introduced reforms intended to increase flexibility and mobility. Employment rates have risen, and unemployment rates have fallen but remain high by international standards. Unemployment benefits are generous.
Tax rates for individuals and businesses are high. The system is highly redistributive. The state has run budget deficits since 1973, generally above 3%. Macron has tried to limit deficits, but no recent government has credibly sought budget balance. Attempts to impose carbon taxes have faced strong public opposition, as seen with the “yellow vest” movement.
In 2015, the state set the goal of transitioning to a circular economy, but progress is slow, with little monitoring. Decarbonization of the energy sector is a key target for the green transition strategy. However, the composition of the energy mix has not changed much in the last decade.
The labor market has traditionally been seen as rigid. Macron has introduced reforms intended to increase flexibility and mobility. Employment rates have risen, and unemployment rates have fallen but remain high by international standards. Unemployment benefits are generous.
Tax rates for individuals and businesses are high. The system is highly redistributive. The state has run budget deficits since 1973, generally above 3%. Macron has tried to limit deficits, but no recent government has credibly sought budget balance. Attempts to impose carbon taxes have faced strong public opposition, as seen with the “yellow vest” movement.
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How committed is the government to driving the transition toward a circular economy?
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The government is clearly committed to transitioning to a circular economy.
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7
6
The government is largely committed to transitioning to a circular economy.
5
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3
4
3
The government is somewhat committed to transitioning to a circular economy.
2
1
1
The government is not at all committed to transitioning to a circular economy.
France adopted a Roadmap for the Circular Economy in 2018, which includes 50 measures designed to move the country toward a 100% circular economy (Ministry for an Ecological and Solidary Transition 2018). Transitioning toward a circular economy has been clearly set as a target since the 2015 passage of a law dealing with the energy transition and green growth. This law set a target in which 65% of domestic waste was to be recycled by 2025. The law especially focuses on households. Mandatory recycling for businesses and the third sector is also in place. In this case, recycling aligns with the principle that emitters are to pay directly for the price of their waste. The construction and the food processing sectors are also subject to specific regulations. These regulations support the development of specific industries for recycling construction materials (concrete, wood, glass, etc.). The general outlook of these policies is coherent and in line with the general objectives. Yet, specific sectors such as returnable recipients have successfully resisted regulation.
The 2015 law also officially forbids the use of built-in obsolescence for products. However, this has had only limited success.
In international comparison, France is ranked in the best group for circular material use rate, whereas it is placed in the middle rank with regard to its overall recycling rate.
The transition toward a circular economy is driven by the Ministry of Ecological Transition and its different agencies. However, coordination has not been effective, with other ministries having paid little attention to the issue, or acting to slow down the process to protect the interests of their sectors.
Monitoring of the transition is limited. The last publication of key indicators dates back to 2017, for instance (MEE 2017).
Citations:
MEE-SOeS. 2017. “10 indicateurs clés pour le suivi de l’économie circulaire.” https://www.statistiques.developpement-durable.gouv.fr/10-indicateurs-cles-pour-le-suivi-de-leconomie-circulaire-edition-2017
Ministry for an Ecological and Solidary Transition. 2018. “Roadmap for the Circular Economy.” https://www.ecologie.gouv.fr/sites/default/files/FREC%20anglais.pdf
The 2015 law also officially forbids the use of built-in obsolescence for products. However, this has had only limited success.
In international comparison, France is ranked in the best group for circular material use rate, whereas it is placed in the middle rank with regard to its overall recycling rate.
The transition toward a circular economy is driven by the Ministry of Ecological Transition and its different agencies. However, coordination has not been effective, with other ministries having paid little attention to the issue, or acting to slow down the process to protect the interests of their sectors.
Monitoring of the transition is limited. The last publication of key indicators dates back to 2017, for instance (MEE 2017).
Citations:
MEE-SOeS. 2017. “10 indicateurs clés pour le suivi de l’économie circulaire.” https://www.statistiques.developpement-durable.gouv.fr/10-indicateurs-cles-pour-le-suivi-de-leconomie-circulaire-edition-2017
Ministry for an Ecological and Solidary Transition. 2018. “Roadmap for the Circular Economy.” https://www.ecologie.gouv.fr/sites/default/files/FREC%20anglais.pdf
Graph View
How committed is the government to updating and protecting critical infrastructure?
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The government is clearly committed to updating basic technical infrastructure.
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The government is largely committed to updating basic technical infrastructure.
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3
The government is somewhat committed to updating basic technical infrastructure.
2
1
1
The government is not at all committed to updating basic technical infrastructure.
There is no comprehensive public plan for the protection and development of the critical infrastructures that are vital within many domains in France. That being said, plans exist within most individual sectors. In the transport sector, for instance, a planning committee (Conseil d’orientation des infrastructures, COI) was created in 2021, which includes political actors as well as experts. It provides the government with medium- and long-term strategic investment advice concerning the transport infrastructure. In 2023, the COI presented an infrastructure development strategy linked to the objective of fighting climate change. Drawing on this blueprint, the government announced an investment plan entailing expenditure of €100 billion by 2040 to develop transport infrastructures and reduce greenhouse gas emissions within the transport sector. Furthermore, alongside the train company SNCF, local authorities and the EU, the government will implement a New Rail Deal in the field of regional train services.
The presence of critical nuclear plants and nuclear weapons systems makes it vitally important to plan and implement protection strategies. Yet, given the degree of state secrecy in these areas, no public communications specifically address these issues. More specific domain protection has been developed for both the public and private sectors. The Agency for the Security of Information Systems (ANSI) monitors and coordinates strategies dealing with digital technologies. It publishes recommendations in this sector (ANSI 2020).
As most of this sector’s actions are not published in the public domain, it is very difficult to precisely assess plans. However, issues dealing with national security have often led to strong and effective responses. Whether the issue has been terrorist threats or natural or technological disasters, service continuity has generally been assured. However, public services (especially hospitals) are regularly subject to hacking attacks, indicating that room for significant improvement still exists. However, France is still ranked in the top 10 of countries worldwide in this domain by the Global Cybersecurity Index (2020).
Citations:
Global Cybersecurity Index. 2020. “Measuring Commitment to Cybersecurity.” https://www.itu.int/dms_pub/itu-d/opb/str/D-STR-GCI.01-2021-PDF-E
France announces EUR 100 billion investment in rail. 2024. “Railway pro, 28 February.” https://www.railwaypro.com/wp/france-announces-eur-100-billion-investment-in-rail/
The presence of critical nuclear plants and nuclear weapons systems makes it vitally important to plan and implement protection strategies. Yet, given the degree of state secrecy in these areas, no public communications specifically address these issues. More specific domain protection has been developed for both the public and private sectors. The Agency for the Security of Information Systems (ANSI) monitors and coordinates strategies dealing with digital technologies. It publishes recommendations in this sector (ANSI 2020).
As most of this sector’s actions are not published in the public domain, it is very difficult to precisely assess plans. However, issues dealing with national security have often led to strong and effective responses. Whether the issue has been terrorist threats or natural or technological disasters, service continuity has generally been assured. However, public services (especially hospitals) are regularly subject to hacking attacks, indicating that room for significant improvement still exists. However, France is still ranked in the top 10 of countries worldwide in this domain by the Global Cybersecurity Index (2020).
Citations:
Global Cybersecurity Index. 2020. “Measuring Commitment to Cybersecurity.” https://www.itu.int/dms_pub/itu-d/opb/str/D-STR-GCI.01-2021-PDF-E
France announces EUR 100 billion investment in rail. 2024. “Railway pro, 28 February.” https://www.railwaypro.com/wp/france-announces-eur-100-billion-investment-in-rail/
Graph View
How committed is the government to fully decarbonizing the energy system by 2050?
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The government is clearly committed to transitioning to a decarbonized energy system.
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7
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The government is largely committed to transitioning to a decarbonized energy system.
5
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3
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3
The government is somewhat committed to transitioning to a decarbonized energy system.
2
1
1
The government is not at all committed to transitioning to a decarbonized energy system.
Decarbonization of the energy production sector has been identified as one of the main targets for France’s green transition. The Paris Climate Agreement’s targets are viewed as the government’s primary commitments in this regard. France still figures among the developed countries with comparatively low levels of carbon emissions per capita. Yet the composition of the energy mix has not changed much in the last decade. The share of fossil fuels is still 47% (2021), which means France is dependent on imported fossil fuels. Progress with regard to developing renewable sources is slow – rising from an 8% share of the overall mix in 2011 to 13% in 2021 (European Commission 2023).
A number of sectors have developed plans both to reduce energy needs and to produce emissions-free energy. In the construction sector, renovations that improve structures’ insulation receive significant subsidies. In transport, a large-scale plan for long-term investment in the train infrastructure launched in 2023. This links the modernization and development of the infrastructure with the aim of decarbonizing transport. According to one plan, only electric and hydrogen cars will be sold by 2025. Emitting industries have their own plans to build carbon-capture systems and to electrify processes. The centerpiece of the French strategy is the development of nuclear plants able to produce electricity without carbon emissions. Shale oil extraction has been banned within the national territory, but imports are still allowed. Renewable energy is promoted, but with far less priority than nuclear energy. Nonetheless, the French electricity system is almost carbon-free.
The overall strategy for the reduction of carbon emissions is largely shared across the government, with the Ministry for the Economy being as active in this domain as the Ministry of Ecological Transition. These policies are seen as highly political measures, with direct and regular interventions by the prime minister and the president himself.
Progress toward decarbonization is closely and regularly monitored at the governmental level, and the results are publicized (MEE 2023).
Citations:
MEE. 2023. “Mise à jour des indicateurs de suivi de la PPE.” https://www.ecologie.gouv.fr/sites/default/files/Publication%20Indicateurs%20PPE%20pour%202021_Janvier%202023.pdf
European Commission. 2023. “State of the Energy Union 2023 France.” Retrieved 28 January 2024 from
https://energy.ec.europa.eu/document/download/1ce7abfa-4ac8-49b2-a0c8-05667db92f81_en?filename=FR_SoEUr%20Fiche%202023_New.pdf
A number of sectors have developed plans both to reduce energy needs and to produce emissions-free energy. In the construction sector, renovations that improve structures’ insulation receive significant subsidies. In transport, a large-scale plan for long-term investment in the train infrastructure launched in 2023. This links the modernization and development of the infrastructure with the aim of decarbonizing transport. According to one plan, only electric and hydrogen cars will be sold by 2025. Emitting industries have their own plans to build carbon-capture systems and to electrify processes. The centerpiece of the French strategy is the development of nuclear plants able to produce electricity without carbon emissions. Shale oil extraction has been banned within the national territory, but imports are still allowed. Renewable energy is promoted, but with far less priority than nuclear energy. Nonetheless, the French electricity system is almost carbon-free.
The overall strategy for the reduction of carbon emissions is largely shared across the government, with the Ministry for the Economy being as active in this domain as the Ministry of Ecological Transition. These policies are seen as highly political measures, with direct and regular interventions by the prime minister and the president himself.
Progress toward decarbonization is closely and regularly monitored at the governmental level, and the results are publicized (MEE 2023).
Citations:
MEE. 2023. “Mise à jour des indicateurs de suivi de la PPE.” https://www.ecologie.gouv.fr/sites/default/files/Publication%20Indicateurs%20PPE%20pour%202021_Janvier%202023.pdf
European Commission. 2023. “State of the Energy Union 2023 France.” Retrieved 28 January 2024 from
https://energy.ec.europa.eu/document/download/1ce7abfa-4ac8-49b2-a0c8-05667db92f81_en?filename=FR_SoEUr%20Fiche%202023_New.pdf
Graph View
To what extent do existing labor market institutions support or hinder the transition to an adaptive labor market?
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Labor market institutions are fully aligned with the goal of an adaptable labor market.
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Labor market institutions are largely aligned with the goal of an adaptable labor market.
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3
Labor market institutions are only somewhat aligned with the goal of an adaptable labor market.
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1
1
Labor market institutions are not at all aligned with the goal of an adaptable labor market.
France has been characterized as a rigid labor market (Fougère and Kramarz 1997). Since 2017, the Macron administration has developed various policies aimed at making regulations more flexible, increasing professional mobility and creating a more fluid labor market. In this perspective, plans for professional training, both at the point of labor market entry and across a professional career, have focused on the development of professional skills. Adaptation plans have been made mandatory in case of major layoffs. A reform of the employment agency, renamed France Emploi in January 2024, is designed to place unemployed people in work more efficiently. Public benefit programs for unemployed recipients have been partially reduced to incentivize a return to work. However, the lack of resources has undermined the implementation of individual-level support. Focus is often placed on maintaining strict oversight of unemployed individuals rather than on making reintegration possible.
After the outbreak of the COVID-19 crisis, the danger of an economic breakdown and massive rise in unemployment led the government to substantially expand the existing – and modest – short-time work schemes. Together with massive and rapid support for businesses (tax cuts, financial aid, etc.), the measures successfully contributed to containing the development of mass unemployment. At the peak of the crisis, up to 8.4 million people working in 1.2 million companies participated in these short-time work schemes (UNEDIC 2022).
These policies have shown ambiguous overall results over time. The overall situation today is better than in 2016, before the Macron era. The employment rate has increased, the unemployment rate fell from 10.4% to 7.4% (2022), the youth unemployment rate fell from 24.5% to 17.3%, and the rate of involuntary part-time work has decreased. Nonetheless, France is still ranked in the lowest group of countries with regard to performance in this area (e.g., 26th out of 30 countries with regard to the unemployment rate).
Citations:
UNEDIC. 2022. “Activité partielle 2020-2021. Etat des lieux et perspectives.” Retrieved 5 February from
https://www.unedic.org/storage/uploads/2023/07/24/ActivitC3A920partielle20C3A9tat20des20lieux20et20perspectives_uid_64be79b2c0012.pdf
Fougère, D., and F. Kramartz. 1997. “Le marché du travail en France.” Economie et statistiques 301-302: 51-60.
After the outbreak of the COVID-19 crisis, the danger of an economic breakdown and massive rise in unemployment led the government to substantially expand the existing – and modest – short-time work schemes. Together with massive and rapid support for businesses (tax cuts, financial aid, etc.), the measures successfully contributed to containing the development of mass unemployment. At the peak of the crisis, up to 8.4 million people working in 1.2 million companies participated in these short-time work schemes (UNEDIC 2022).
These policies have shown ambiguous overall results over time. The overall situation today is better than in 2016, before the Macron era. The employment rate has increased, the unemployment rate fell from 10.4% to 7.4% (2022), the youth unemployment rate fell from 24.5% to 17.3%, and the rate of involuntary part-time work has decreased. Nonetheless, France is still ranked in the lowest group of countries with regard to performance in this area (e.g., 26th out of 30 countries with regard to the unemployment rate).
Citations:
UNEDIC. 2022. “Activité partielle 2020-2021. Etat des lieux et perspectives.” Retrieved 5 February from
https://www.unedic.org/storage/uploads/2023/07/24/ActivitC3A920partielle20C3A9tat20des20lieux20et20perspectives_uid_64be79b2c0012.pdf
Fougère, D., and F. Kramartz. 1997. “Le marché du travail en France.” Economie et statistiques 301-302: 51-60.
To what extent do existing labor market institutions support or hinder the transition to an inclusive labor market?
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9
Labor market institutions are fully aligned with the goal of an inclusive labor market.
8
7
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7
6
Labor market institutions are largely aligned with the goal of an inclusive labor market.
5
4
3
4
3
Labor market institutions are only somewhat aligned with the goal of an inclusive labor market.
2
1
1
Labor market institutions are not at all aligned with the goal of an inclusive labor market.
Unemployment benefit policies have generally been seen as relatively generous. This issue has often been drawn into the political sphere, with people accusing institutions of providing assistance rather than insurance. Various programs have been set up to facilitate job transitions. President Macron has sought to simplify rules in order to increase flexibility and mobility in the labor market.
On the one hand, the government has enhanced regulations at the company level and given small and medium-sized firms more flexibility in adjusting their workforces. On the other hand, measures have removed barriers to employment, for instance by creating enhanced and strengthened job training schemes, lowering benefit levels for unemployed people, and instituting stricter conditions for out-of-work benefits to encourage quicker returns to employment. These efforts align with reforms to the French Employment Agency (renamed France Travail as of January 2024), which aim to enhance employment placement by improving coordination between various local, state and private actors. Various regulations aim to incentivize employment and increase the number of hours worked. This approach is exemplified by the “employment bonus,” which targets individuals with low salaries and is received as a complement to income. Working hours beyond contracted hours are also de-fiscalized, and firms have the option to distribute specific yearly bonuses subject to low tax rates (Leite 2020).
Two groups face disproportunate barriers to employment. Among younger people (Berthet et al. 2021), barriers to employment for school leavers are particularly high because of the deep mismatch between the public general schooling and vocational training systems. This is a key contributor to the high unemployment rate among young people. For this reason, the Macron administration has invested substantially in the generalization of vocational training at all levels of education. The number of apprenticeship contracts has risen significantly in recent years, to more than 1 million (October 2023). Yet this policy has mostly benefited individuals with relatively high education levels – for instance, who hold upper secondary qualifications. For young students and workers with lower-level qualifications, apprenticeships are much more difficult to access. The unemployment rate among young people aged 15 to 24 has dropped from more than 25% (2016) to 17.3% (2022), but this is still one of the highest such unemployment rates within the OECD. Specific policies also seek to reduce school dropout rates, with limited success.
Another group experiencing barriers to saving and to getting back to work is elderly people. Even though the share of people aged 55 to 64 in employment has risen steadily in recent years (56.9% in 2022), it is still below the EU average (62.4%). In November 2023, President Macron set the objective of reaching 65% by 2030. Most of the problems are linked to working conditions and workforce policies within companies. The government has invited labor unions and employers’ associations to discuss and agree on measures in line with this objective. He has promised that the agreement struck via this process could be transformed into law. Negotiations were expected to begin in 2024.
The COVID-19 pandemic also presented an opportunity to significantly change the work-life balance for white-collar workers. While the 35-hour workweek institutionalized such change for blue-collar workers, COVID-19 has generalized remote work for many professionals. However, debates are ongoing as to whether this can continue in various firms, as deserted workplaces seem to trigger various issues with regard to labor organization.
Citations:
Berthet, T., Longo, M. E., Bidart, C., Alfonsi, J., and Noël, M. 2021. “Les rapports au travail des jeunes en situation de vulnérabilité.” Rapport de l’INJEP. https://injep.fr/wp-content/uploads/2021/03/rapport-2021-04-Travail_Jeunes_vulnerables.pdf
Cour des comptes. 2021. “L’insertion des jeunes sur le marché du travail. Les enjeux structurels pour la France.” https://www.ccomptes.fr/fr/documents/58116
DGAS. 2022. “L’insertion par l’activité économique.”
état des lieux et perspectives. Décembre 2022. Retrieved from https://www.igas.gouv.fr/IMG/pdf/2022-048r_iae.pdf
Leite, MD. 2020. “Les réformes récentes du code du travail au Brésil et en France : une analyse comparée.” Sciences humaines et sociales 18.
On the one hand, the government has enhanced regulations at the company level and given small and medium-sized firms more flexibility in adjusting their workforces. On the other hand, measures have removed barriers to employment, for instance by creating enhanced and strengthened job training schemes, lowering benefit levels for unemployed people, and instituting stricter conditions for out-of-work benefits to encourage quicker returns to employment. These efforts align with reforms to the French Employment Agency (renamed France Travail as of January 2024), which aim to enhance employment placement by improving coordination between various local, state and private actors. Various regulations aim to incentivize employment and increase the number of hours worked. This approach is exemplified by the “employment bonus,” which targets individuals with low salaries and is received as a complement to income. Working hours beyond contracted hours are also de-fiscalized, and firms have the option to distribute specific yearly bonuses subject to low tax rates (Leite 2020).
Two groups face disproportunate barriers to employment. Among younger people (Berthet et al. 2021), barriers to employment for school leavers are particularly high because of the deep mismatch between the public general schooling and vocational training systems. This is a key contributor to the high unemployment rate among young people. For this reason, the Macron administration has invested substantially in the generalization of vocational training at all levels of education. The number of apprenticeship contracts has risen significantly in recent years, to more than 1 million (October 2023). Yet this policy has mostly benefited individuals with relatively high education levels – for instance, who hold upper secondary qualifications. For young students and workers with lower-level qualifications, apprenticeships are much more difficult to access. The unemployment rate among young people aged 15 to 24 has dropped from more than 25% (2016) to 17.3% (2022), but this is still one of the highest such unemployment rates within the OECD. Specific policies also seek to reduce school dropout rates, with limited success.
Another group experiencing barriers to saving and to getting back to work is elderly people. Even though the share of people aged 55 to 64 in employment has risen steadily in recent years (56.9% in 2022), it is still below the EU average (62.4%). In November 2023, President Macron set the objective of reaching 65% by 2030. Most of the problems are linked to working conditions and workforce policies within companies. The government has invited labor unions and employers’ associations to discuss and agree on measures in line with this objective. He has promised that the agreement struck via this process could be transformed into law. Negotiations were expected to begin in 2024.
The COVID-19 pandemic also presented an opportunity to significantly change the work-life balance for white-collar workers. While the 35-hour workweek institutionalized such change for blue-collar workers, COVID-19 has generalized remote work for many professionals. However, debates are ongoing as to whether this can continue in various firms, as deserted workplaces seem to trigger various issues with regard to labor organization.
Citations:
Berthet, T., Longo, M. E., Bidart, C., Alfonsi, J., and Noël, M. 2021. “Les rapports au travail des jeunes en situation de vulnérabilité.” Rapport de l’INJEP. https://injep.fr/wp-content/uploads/2021/03/rapport-2021-04-Travail_Jeunes_vulnerables.pdf
Cour des comptes. 2021. “L’insertion des jeunes sur le marché du travail. Les enjeux structurels pour la France.” https://www.ccomptes.fr/fr/documents/58116
DGAS. 2022. “L’insertion par l’activité économique.”
état des lieux et perspectives. Décembre 2022. Retrieved from https://www.igas.gouv.fr/IMG/pdf/2022-048r_iae.pdf
Leite, MD. 2020. “Les réformes récentes du code du travail au Brésil et en France : une analyse comparée.” Sciences humaines et sociales 18.
To what extent do existing labor market institutions support or hinder the mitigation of labor market risks?
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9
9
Labor market institutions are fully aligned with the goal of protecting individuals against labor market risks.
8
7
6
7
6
Labor market institutions are largely aligned with the goal of protecting individuals against labor market risks.
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3
Labor market institutions are only somewhat aligned with the goal of protecting individuals against labor market risks.
2
1
1
Labor market institutions are not at all aligned with the goal of protecting individuals against labor market risks.
Social protection has previously been provided for all workers. New forms of work – especially new independent status for small enterprises (auto-entrepreneurs) – limit such rights (Marzo 2021).
Trade unions have been in decline for decades. Effective representation, however, is regulatorily ensured for all big firms. Smaller firms, especially those with fewer than 50 employees, are not subject to most of these obligations.
Most social rights are portable, especially if workers changing jobs stay in the same sector. The latest development in this area has been the portability of the rights to training. Pension reforms have also served to align rights across the various sectors.
Financial disincentives to return to work have not significantly changed in recent years – they remain relatively high,and above the OECD average.
Citations:
Marzo, C. 2021. “Comparaison britannique des tentatives de protection sociale des travailleurs de plateformes au prisme de la pandémie: vers un nouvel équilibre entre acteurs publics et privés?” Revue de droit comparé du travail et de la sécurité sociale 3: 142-163.
Trade unions have been in decline for decades. Effective representation, however, is regulatorily ensured for all big firms. Smaller firms, especially those with fewer than 50 employees, are not subject to most of these obligations.
Most social rights are portable, especially if workers changing jobs stay in the same sector. The latest development in this area has been the portability of the rights to training. Pension reforms have also served to align rights across the various sectors.
Financial disincentives to return to work have not significantly changed in recent years – they remain relatively high,and above the OECD average.
Citations:
Marzo, C. 2021. “Comparaison britannique des tentatives de protection sociale des travailleurs de plateformes au prisme de la pandémie: vers un nouvel équilibre entre acteurs publics et privés?” Revue de droit comparé du travail et de la sécurité sociale 3: 142-163.
Graph View
To what extent do existing tax institutions and procedures support or hinder adequate tax revenue flows?
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9
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The tax system is fully aligned with the goals of ensuring adequate tax revenues.
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6
7
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The tax system is largely aligned with the goals of ensuring adequate tax revenues.
5
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3
4
3
The tax system is only somewhat aligned with the goals of ensuring adequate tax revenues.
2
1
1
The tax system is not at all aligned with the goals of ensuring adequate tax revenues.
Tax rates are high for individuals and businesses in France, although this has not prevented the existence of a structural public deficit. Despite its high level, taxation does not seem to serve as a strong disincentive to different economic actors. It is largely based on indirect taxation, especially on consumption. Taxation on labor is significant, but it also supports a highly developed social protection system and extensive public services. Firms generally oppose high taxes, but benefit from a variety of exemptions. The effective average tax on business has decreased significantly since 2016, but still ranks above the OECD average. However, this has not harmed France’s attractiveness for international investors, as it was ranked sixth worldwide in 2022 (Business France 2022; Ernst&Young 2023).
In international comparison, the fiscal administration has been recognized for its high capacity levels, although it has also been one of the targets for the reduction in the number of civil servants. It maintains a broad ability to manage the complex fiscal system, which to date has been simplified only marginally. Tax evasion rates remain significant. Following monitoring and enforcement measures, authorities have collected €14.6 billion in additional revenues, indicating the broad prevalence of these practices (Court of Accounts 2023). While the end of bank secrecy with Switzerland has improved the situation on this front, the fight against “fiscal paradises” is far from complete.
Citations:
Business France. 2022. “La France au 6e rang mondial des pays les plus attractifs.” https://www.businessfrance.fr/decouvrir-la-france-actualite-la-france-au-6e-rang-mondial-des-pays-les-plus-attractifs
Court of Accounts. 2023. “La détection de la fraude fiscale des particuliers.” https://www.ccomptes.fr/fr/publications/la-detection-de-la-fraude-fiscale-des-particuliers
ErnstYoung. 2023. “France Attractiveness Survey 2023.” https://assets.ey.com/content/dam/ey-sites/ey-com/fr_fr/topics/attractiveness/barometre-de-l-attractivite-de-la-france-2023/ey-attractivite-france2023-episode1-executive-summary-uk.pdf
In international comparison, the fiscal administration has been recognized for its high capacity levels, although it has also been one of the targets for the reduction in the number of civil servants. It maintains a broad ability to manage the complex fiscal system, which to date has been simplified only marginally. Tax evasion rates remain significant. Following monitoring and enforcement measures, authorities have collected €14.6 billion in additional revenues, indicating the broad prevalence of these practices (Court of Accounts 2023). While the end of bank secrecy with Switzerland has improved the situation on this front, the fight against “fiscal paradises” is far from complete.
Citations:
Business France. 2022. “La France au 6e rang mondial des pays les plus attractifs.” https://www.businessfrance.fr/decouvrir-la-france-actualite-la-france-au-6e-rang-mondial-des-pays-les-plus-attractifs
Court of Accounts. 2023. “La détection de la fraude fiscale des particuliers.” https://www.ccomptes.fr/fr/publications/la-detection-de-la-fraude-fiscale-des-particuliers
ErnstYoung. 2023. “France Attractiveness Survey 2023.” https://assets.ey.com/content/dam/ey-sites/ey-com/fr_fr/topics/attractiveness/barometre-de-l-attractivite-de-la-france-2023/ey-attractivite-france2023-episode1-executive-summary-uk.pdf
To what extent do existing tax institutions and procedures consider equity aspects?
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9
9
The tax system is fully aligned with the goal of ensuring equity.
8
7
6
7
6
The tax system is largely aligned with the goal of ensuring equity.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of ensuring equity.
2
1
1
The tax system is not at all aligned with the goal of ensuring equity.
France’s tax system is highly redistributive. According to the French public observatory on inequalities (Observatoire des inégalités 2023), the Gini coefficient (rate between the average primary income of the richest 10% compared to the 10% poorest) is 19.6 for primary incomes; it drops to 5.5 through the effect of taxation and welfare transfers. This is one of the most redistributive effects within the OECD.
The tax system is overall fair across different actors with similar capacities. Looking at individuals, the main difference lies in the status of the person, depending on whether he or she is self-employed or a salaried employee. Taxation tends to be higher for the self-employed, but with more specific exemptions. A few professions, such as journalists, also benefit from partial tax exemptions with disputable grounds.
Taxation is progressive when it is direct. Income tax is paid by roughly half the population, and the highest marginal rate is about 45%. For companies, the logic of redistribution is less present. Larger firms tend to pay more taxes, but also have more ways to avoid them. Recent debates have particularly concerned the implementation of a new minimal tax rate for global companies (Laffite et al. 2021). Usually, labor-intensive companies tend to pay more taxes than capital-intensive companies. In all cases, the highest-earning individuals and companies tend to pay relatively less than other income categories. Bach et al. (2023) show that the tax rate declines from 46% for the 0.1% of the richest households to 26% for the 0.0002% richest.
Citations:
Bach, L., Bozio, A., Guillouzouic, A., and Malgouyres, C. 2023. “Quels impôts les milliardaires paient-ils?” Note de l’Institut des Politiques Publiques 92. Retrieved 15 January 2024 from https://www.ipp.eu/wp-content/uploads/2023/06/Note_IPP_Billionaires-version-actualisee.pdf
Laffitte, S., Martin, J., Parenti, M., Souillard, B., and Toubal, F. 2021. “Taxation minimale des multinationales: contours et quantification.” https://www.cae-eco.fr/staticfiles/pdf/cae-focus064.pdf
Observatoire des inégalités. 2023. “Redistribution: comment les impôts et les prestations réduisent les inégalités.” https://www.inegalites.fr/Redistribution-comment-les-impots-et-les-prestations-reduisent-les-inegalites
The tax system is overall fair across different actors with similar capacities. Looking at individuals, the main difference lies in the status of the person, depending on whether he or she is self-employed or a salaried employee. Taxation tends to be higher for the self-employed, but with more specific exemptions. A few professions, such as journalists, also benefit from partial tax exemptions with disputable grounds.
Taxation is progressive when it is direct. Income tax is paid by roughly half the population, and the highest marginal rate is about 45%. For companies, the logic of redistribution is less present. Larger firms tend to pay more taxes, but also have more ways to avoid them. Recent debates have particularly concerned the implementation of a new minimal tax rate for global companies (Laffite et al. 2021). Usually, labor-intensive companies tend to pay more taxes than capital-intensive companies. In all cases, the highest-earning individuals and companies tend to pay relatively less than other income categories. Bach et al. (2023) show that the tax rate declines from 46% for the 0.1% of the richest households to 26% for the 0.0002% richest.
Citations:
Bach, L., Bozio, A., Guillouzouic, A., and Malgouyres, C. 2023. “Quels impôts les milliardaires paient-ils?” Note de l’Institut des Politiques Publiques 92. Retrieved 15 January 2024 from https://www.ipp.eu/wp-content/uploads/2023/06/Note_IPP_Billionaires-version-actualisee.pdf
Laffitte, S., Martin, J., Parenti, M., Souillard, B., and Toubal, F. 2021. “Taxation minimale des multinationales: contours et quantification.” https://www.cae-eco.fr/staticfiles/pdf/cae-focus064.pdf
Observatoire des inégalités. 2023. “Redistribution: comment les impôts et les prestations réduisent les inégalités.” https://www.inegalites.fr/Redistribution-comment-les-impots-et-les-prestations-reduisent-les-inegalites
To what extent do existing tax institutions and procedures minimize compliance and collection costs?
10
9
9
The tax system is fully aligned with the goal of minimizing compliance and collection costs.
8
7
6
7
6
The tax system is largely aligned with the goal of minimizing compliance and collection costs.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of minimizing compliance and collection costs.
2
1
1
The tax system is not at all aligned with the goal of minimizing compliance and collection costs.
The tax system is transparent in principle but complex in practice.
Forms are usually simple in the most straightforward cases. Digitalization of most functions has even made partially automatic completion of various forms possible, starting with the income tax form. However, such automation is far from systematic. Numerous specific cases and exemptions make it difficult for people to understand forms, and facilitate optimization strategies. People who are not accustomed to working with computers, a group which constitutes a significant section of the population, often find the digitalized functions difficult to use. A number of practical guides exist in these markets, as well as various consulting services. For private individuals, only a small minority of generally high income earners has to use this type of service. As the tax system also involves refunds, the fact that people do not claim what they are entitled to is significant.
For firms, the use of specialized internal and external services is almost mandatory. This is a specific burden for small companies, whereas bigger ones tend to have a streamlined process.
According to a calculation by PwC (n.d.) for 2020, taxpayers spent an average of 28 hours on corporate income taxes, 80 hours on labor taxation and 31 hours on VAT. The corresponding totals in Germany were 41 hours, 134 hours and 43 hours, and in Switzerland were 15 hours, 40 hours and eight hours.
Tax institutions represent a sizable state expense, estimated at more than $5 billion in 2016 (Court of Accounts 2016). The Court of Accounts has argued that substantial reform is needed to increase the overall efficiency of the tax collection system. Simplification seems the best strategy. Specific litigation on tax issues does not seem problematic.
Citations:
Court of Accounts. 2016. Simplifier la collecte des prélèvements versés par les entreprises. Report. Retrieved January 15, 2024 from https://www.ccomptes.fr/fr/publications/simplifier-la-collecte-des-prelevements-verses-par-les-entreprises
pwc. n.d. “Interactive Tax Data Explorer.” https://www.pwc.com/gx/en/services/tax/publications/paying-taxes-2020/explorer-tool.html
Forms are usually simple in the most straightforward cases. Digitalization of most functions has even made partially automatic completion of various forms possible, starting with the income tax form. However, such automation is far from systematic. Numerous specific cases and exemptions make it difficult for people to understand forms, and facilitate optimization strategies. People who are not accustomed to working with computers, a group which constitutes a significant section of the population, often find the digitalized functions difficult to use. A number of practical guides exist in these markets, as well as various consulting services. For private individuals, only a small minority of generally high income earners has to use this type of service. As the tax system also involves refunds, the fact that people do not claim what they are entitled to is significant.
For firms, the use of specialized internal and external services is almost mandatory. This is a specific burden for small companies, whereas bigger ones tend to have a streamlined process.
According to a calculation by PwC (n.d.) for 2020, taxpayers spent an average of 28 hours on corporate income taxes, 80 hours on labor taxation and 31 hours on VAT. The corresponding totals in Germany were 41 hours, 134 hours and 43 hours, and in Switzerland were 15 hours, 40 hours and eight hours.
Tax institutions represent a sizable state expense, estimated at more than $5 billion in 2016 (Court of Accounts 2016). The Court of Accounts has argued that substantial reform is needed to increase the overall efficiency of the tax collection system. Simplification seems the best strategy. Specific litigation on tax issues does not seem problematic.
Citations:
Court of Accounts. 2016. Simplifier la collecte des prélèvements versés par les entreprises. Report. Retrieved January 15, 2024 from https://www.ccomptes.fr/fr/publications/simplifier-la-collecte-des-prelevements-verses-par-les-entreprises
pwc. n.d. “Interactive Tax Data Explorer.” https://www.pwc.com/gx/en/services/tax/publications/paying-taxes-2020/explorer-tool.html
To what extent do existing tax institutions and procedures internalize negative and positive externalities?
10
9
9
The tax system is fully aligned with the goal of internalizing externalities.
8
7
6
7
6
The tax system is largely aligned with the goal of internalizing externalities.
5
4
3
4
3
The tax system is only somewhat aligned with the goal of internalizing externalities.
2
1
1
The tax system is not at all aligned with the goal of internalizing externalities.
The internalization of negative externalities is sometimes achieved by taxation even if this goal was not intended. The example of the high gasoline tax rates in France illustrates such a case. In recent years, the attempt to impose a duty on carbon emissions from transport has largely failed due to fierce resistance from the “red hat” (2013) and “yellow vest” (2018 – 2019) social movements. However, the principle that polluters should pay for their pollution is firmly stated in Article 110-1 of the Environmental Code. Its effective application is generally restricted to situations in which the pollution has a direct, immediate and visible impact even if various contributions have been put in place – for instance, to fund recycling industries for disposable products.
The internalization of positive externalities has mostly been applied to agriculture, with specific programs for contributions to landscapes or biodiversity. This is also the case for the energy-saving domains, as companies and individuals can receive direct reimbursements or subsidies for insulating buildings or buying appliances used to generate renewable energy. Furthermore, the government has subsidized electric vehicle leases for low-income households. Research by companies is also largely subsidized.
The internalization of positive externalities has mostly been applied to agriculture, with specific programs for contributions to landscapes or biodiversity. This is also the case for the energy-saving domains, as companies and individuals can receive direct reimbursements or subsidies for insulating buildings or buying appliances used to generate renewable energy. Furthermore, the government has subsidized electric vehicle leases for low-income households. Research by companies is also largely subsidized.
Graph View
To what extent do existing budgetary institutions and procedures support or hinder sustainable budgeting?
10
9
9
Budgetary institutions and policies are fully aligned with the goals of sustainable budgeting.
8
7
6
7
6
Budgetary institutions and policies are largely aligned with the goals of sustainable budgeting.
5
4
3
4
3
Budgetary institutions and policies are only somewhat aligned with the goals of sustainable budgeting.
2
1
1
Budgetary institutions and policies are not at all aligned with the goals of sustainable budgeting.
France has run persistent budget deficits since 1973. No public surplus has been registered since then. Since 1992, France has seldom respected the Maastricht rule limiting the yearly public deficit to 3% of GDP (INSEE 2024). A clear trend toward an ever-increasing deficit appears quite clearly. Beyond the Maastricht treaty principle, there is no specific national rule prescribing a limit to public indebtedness. Consequently, public debt has regularly increased, and surpassed the symbolic threshold of 100% of GDP in 2020. The current government, like its predecessors, has generally tried to limit deficits, but none has credibly declared its intention to achieve a balanced budget. Budget rules are tougher for local governments than for the central state, but even here constraints are limited.
Deficits do not prevent long-term planning. For instance, a law on budget planning for the years 2023 – 2027 was adopted in September 2023. The annual deficit is planned to decrease to 2.7% in 2027. In the same perspective, many programming laws – laws relating to general strategy and spending horizons in specific sectors for the coming years – are proposed for areas such as military equipment or research. Investments are planned. Some policymakers argue that specific investments, such as those for the green transition or defense, should not be included in evaluations of the Maastricht public-deficit objectives.
The budgetary process is rather transparent, with the constitution limiting the degree to which legislation with budgetary impact can be passed via regular bills. However, all budgets since 2022 have been adopted through the procedure specified in Article 49.3, which enables the government to pass legislation without the direct approval of parliament if the National Assembly does not manage to approve a motion of no confidence toward the government.
The preparation of the budget now always takes into account issues of sustainable development and the transformation of the state. For instance, the government has indicated it has made “unprecedented” efforts on behalf of sustainable development, with the budget dedicated to this goal rising from $33 billion in 2023 to $40 billion in 2024 (Jacque 2023). The consistency of this aim across all budget areas can, however, be discussed (Blatrix et al. 2021).
Citations:
Blatrix, C., Ledenvic, P., Marcus, V., and Tordjman, F. 2021. “Témoignage. Le budget vert, une vue d’ensemble de l’incidence environnementale du budget de l’État.” Revue française d’administration publique 2021/3 (179): 657-667. Available at 10.3917/rfap.179.0143
Jacque, M. 2023. “Budget 2024 : 7 milliards d’euros de plus pour « verdir » la France.” Les Echos. Retrieved 15 January 2024 from https://www.lesechos.fr/politique-societe/societe/budget-2024-7-milliards-deuros-de-plus-pour-verdir-la-france-1982244#:~:text=Sur%20un%20seul%20exercice%20budg%C3%A9taire,milliards%20d’euros%20en%202024
INSEE. 2024. “Tableau de bord de l’économie française.” https://www.insee.fr/fr/outil-interactif/5367857/tableau/10_ECC/15_FIN
Deficits do not prevent long-term planning. For instance, a law on budget planning for the years 2023 – 2027 was adopted in September 2023. The annual deficit is planned to decrease to 2.7% in 2027. In the same perspective, many programming laws – laws relating to general strategy and spending horizons in specific sectors for the coming years – are proposed for areas such as military equipment or research. Investments are planned. Some policymakers argue that specific investments, such as those for the green transition or defense, should not be included in evaluations of the Maastricht public-deficit objectives.
The budgetary process is rather transparent, with the constitution limiting the degree to which legislation with budgetary impact can be passed via regular bills. However, all budgets since 2022 have been adopted through the procedure specified in Article 49.3, which enables the government to pass legislation without the direct approval of parliament if the National Assembly does not manage to approve a motion of no confidence toward the government.
The preparation of the budget now always takes into account issues of sustainable development and the transformation of the state. For instance, the government has indicated it has made “unprecedented” efforts on behalf of sustainable development, with the budget dedicated to this goal rising from $33 billion in 2023 to $40 billion in 2024 (Jacque 2023). The consistency of this aim across all budget areas can, however, be discussed (Blatrix et al. 2021).
Citations:
Blatrix, C., Ledenvic, P., Marcus, V., and Tordjman, F. 2021. “Témoignage. Le budget vert, une vue d’ensemble de l’incidence environnementale du budget de l’État.” Revue française d’administration publique 2021/3 (179): 657-667. Available at 10.3917/rfap.179.0143
Jacque, M. 2023. “Budget 2024 : 7 milliards d’euros de plus pour « verdir » la France.” Les Echos. Retrieved 15 January 2024 from https://www.lesechos.fr/politique-societe/societe/budget-2024-7-milliards-deuros-de-plus-pour-verdir-la-france-1982244#:~:text=Sur%20un%20seul%20exercice%20budg%C3%A9taire,milliards%20d’euros%20en%202024
INSEE. 2024. “Tableau de bord de l’économie française.” https://www.insee.fr/fr/outil-interactif/5367857/tableau/10_ECC/15_FIN
Graph View
How committed is the government to utilizing research and innovation as drivers for the transition to a sustainable economy and society?
10
9
9
The government is clearly committed to utilizing research and innovation as drivers for the transition to a sustainable economy and society.
8
7
6
7
6
The government is largely committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
5
4
3
4
3
The government is somewhat committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
2
1
1
The government is not at all committed to utilizing research and innovation as drivers for the transition toward a sustainable economy and society.
Although the government has made rhetorical commitments to sustainable development and research, the two seldom form a national roadmap together. Of course, the national roadmap for research includes a dedicated section on the environment and sustainable development, entailing both a technological dimension and a social dimension. Conversely, the France 2030 roadmap for investment (which foresees €54 billion in investment expenditures) includes research as one of its policy domains. However, industrial innovation is considered more relevant in this regard. These roadmaps are not binding.
Overall, President Macron has sought to aid the business sector. “Start-up France” was one of his early leitmotifs, and his government has implemented several regulatory reforms aimed at facilitating the creation and support of emerging startups. Innovation in eco-friendly technologies is only a limited part of this narrative. The biggest exception is nuclear power, for which the government has articulated a general strategy that involves funding large-scale nuclear plants and developing innovative smaller reactors. The France 2030 investment strategy has been the primary governmental program to support start-up development. Up to €5 billion has been dedicated to this program for the period 2021 – 2025, under the supervision of the prime minister. Calls for proposals have been used to select the companies that will receive funding and aid in their industrial development.
Research and innovation progress are monitored by the government office as part of the country’s key indicators. A research law sets a series of objectives in terms of funding and achievements, for instance with regard to the country’s publication and patent ratings. Yet observers often argue that France has declined compared to other countries in Europe and worldwide (Larousserie 2021). Grounds for this decline are found in the relatively low productivity of French research, which in turn results from equipment investments lower than in other comparable nations, and the country’s loss of attractiveness due to low average incomes among the country’s research professionals.
The European Innovation Scoreboard (EIS 2022) ranks France 11th out of 27 countries. France is seen as belonging to the second-highest group of countries – the “strong innovators” (behind the “innovation leaders”) – with a performance level slightly above the EU average. Similarly, the Eco-Innovation Index created by the European Environment Agency (EEA 2022), which assesses innovation linked to environmental objectives, ranks France seventh out of 27 countries, with a performance above the EU average.
Citations:
Larousserie, D. 2021. “Les raisons du déclin de la recherche en France.” Le Monde September 28. https://www.lemonde.fr/sciences/article/2021/09/28/recherche-les-raisons-du-declin-francais_6096227_1650684.html#:~:text=Une%20productivit%C3%A9%20en%20baisse,OST%20dans%20son%20dernier%20rapport
EIS. 2022. “European Innovation Scoreboard.” https://op.europa.eu/en/publication-detail/-/publication/f0e0330d-534f-11ed-92ed-01aa75ed71a1/language-en/format-PDF/source-272941691
EEA. 2022. “Eco-innovation Index.” https://www.eea.europa.eu/en/analysis/indicators/eco-innovation-index-8th-eap
Overall, President Macron has sought to aid the business sector. “Start-up France” was one of his early leitmotifs, and his government has implemented several regulatory reforms aimed at facilitating the creation and support of emerging startups. Innovation in eco-friendly technologies is only a limited part of this narrative. The biggest exception is nuclear power, for which the government has articulated a general strategy that involves funding large-scale nuclear plants and developing innovative smaller reactors. The France 2030 investment strategy has been the primary governmental program to support start-up development. Up to €5 billion has been dedicated to this program for the period 2021 – 2025, under the supervision of the prime minister. Calls for proposals have been used to select the companies that will receive funding and aid in their industrial development.
Research and innovation progress are monitored by the government office as part of the country’s key indicators. A research law sets a series of objectives in terms of funding and achievements, for instance with regard to the country’s publication and patent ratings. Yet observers often argue that France has declined compared to other countries in Europe and worldwide (Larousserie 2021). Grounds for this decline are found in the relatively low productivity of French research, which in turn results from equipment investments lower than in other comparable nations, and the country’s loss of attractiveness due to low average incomes among the country’s research professionals.
The European Innovation Scoreboard (EIS 2022) ranks France 11th out of 27 countries. France is seen as belonging to the second-highest group of countries – the “strong innovators” (behind the “innovation leaders”) – with a performance level slightly above the EU average. Similarly, the Eco-Innovation Index created by the European Environment Agency (EEA 2022), which assesses innovation linked to environmental objectives, ranks France seventh out of 27 countries, with a performance above the EU average.
Citations:
Larousserie, D. 2021. “Les raisons du déclin de la recherche en France.” Le Monde September 28. https://www.lemonde.fr/sciences/article/2021/09/28/recherche-les-raisons-du-declin-francais_6096227_1650684.html#:~:text=Une%20productivit%C3%A9%20en%20baisse,OST%20dans%20son%20dernier%20rapport
EIS. 2022. “European Innovation Scoreboard.” https://op.europa.eu/en/publication-detail/-/publication/f0e0330d-534f-11ed-92ed-01aa75ed71a1/language-en/format-PDF/source-272941691
EEA. 2022. “Eco-innovation Index.” https://www.eea.europa.eu/en/analysis/indicators/eco-innovation-index-8th-eap
Graph View
How committed and credible is the government in its activities to guide the effective regulation and supervision of the international financial architecture?
10
9
9
The government is clearly committed to ensuring the stability of the global financial system.
8
7
6
7
6
The government is largely committed to ensuring the stability of the global financial system.
5
4
3
4
3
The government is somewhat committed to ensuring the stability of the global financial system.
2
1
1
The government is not at all committed to ensuring the stability of the global financial system.
France implements most international agreements designed to prevent high-risk financial activities, and also seeks to participate in defining these agreements. A minimal tax on financial transactions is in place, although it was slightly reduced during President Macron’s first term. More generally, France participates in all euro zone institutions, and has tried to develop regulations enhancing stability during crises, whether these are more like the COVID-19 pandemic or the financial crisis of 2009.
In the context of the IMF, the French government has also acted in favor of restructuring sovereign debt in developing countries in order promote sustainable development. For example, France organized a summit discussing a new international financial pact in June 2023.
The Authority for Financial Markets (AMF) and the Bank of France have worked jointly to promote transparency among financial intermediaries. While this could have been regarded as a sign of collusion with banks to protect domestic markets, this also reflects France’s overall integration within the EU institutions in this regard. For instance, specific actions were taken to regulate Bitcoin in 2022 and 2023 (Desbois 2023), aligning its fiscal status with other financial instruments.
President Macron renewed the fight against tax havens in 2023. This was done in order to curb tax evasion. While the government was tempted to establish specific exemptions in the hope of attracting international sports organizations to France in 2023, this attempt was short-lived. On the contrary, tax havens within the EU and outside the EU have been regularly denounced, with limited effective impact so far beyond the case of Switzerland.
Citations:
Desbois, D. 2023. “Crypto-actifs: déboires financiers, turpitudes juridiques et réglementations lacunaires.” Terminal. Technologie de l’information, culture & société 136.
In the context of the IMF, the French government has also acted in favor of restructuring sovereign debt in developing countries in order promote sustainable development. For example, France organized a summit discussing a new international financial pact in June 2023.
The Authority for Financial Markets (AMF) and the Bank of France have worked jointly to promote transparency among financial intermediaries. While this could have been regarded as a sign of collusion with banks to protect domestic markets, this also reflects France’s overall integration within the EU institutions in this regard. For instance, specific actions were taken to regulate Bitcoin in 2022 and 2023 (Desbois 2023), aligning its fiscal status with other financial instruments.
President Macron renewed the fight against tax havens in 2023. This was done in order to curb tax evasion. While the government was tempted to establish specific exemptions in the hope of attracting international sports organizations to France in 2023, this attempt was short-lived. On the contrary, tax havens within the EU and outside the EU have been regularly denounced, with limited effective impact so far beyond the case of Switzerland.
Citations:
Desbois, D. 2023. “Crypto-actifs: déboires financiers, turpitudes juridiques et réglementations lacunaires.” Terminal. Technologie de l’information, culture & société 136.