France’s recovery plan: multifaceted, and a challenge for auditors

By Lionel Vareille, France’s Cour des comptes

European Court of Auditors
Published in
9 min readFeb 8


Source: FrenchGovernment

The NextGenerationEU initiative and the RRF instrument in particular have a major impact on the audit activities not only of the ECA but also of the Member States’ audit institutions. The National Recovery and Resilience Plans (NRRPs) include a major EU financing component, as well as a substantial national component. In addition, for most auditors from the national audit institutions, the delivery and governance set‑up of the RRF and the NRRPs may require new audit approaches to provide the best possible information for accountability purposes. Lionel Vareille is a senior official at France’s Cour des comptes and is currently responsible for the overall audit of France’s state budget, as well as being his institution’s Rapporteur‑General for the report on the ‘Preparation and implementation of the French Recovery Plan.’ Below, he provides insights on some of the challenges his audit team have faced and on some key conclusions published by the Cour des comptes.

Economic contraction triggering substantive measures

The COVID‑19 pandemic and the related work and travel restrictions led to an unprecedented 8 % contraction of GDP in France in 2020. Faced with this economic shock, and after implementing emergency measures to limit the reduction in activity during the crisis, the French government set up a recovery plan — France relance — to enable economic activity to return rapidly to its pre‑pandemic level. France relance (see Box 1), which was announced on 3 September 2020, is therefore devoting €100 billion to economic recovery, including €39 billion refinanced by the European Union, mainly through subsidies from the NextGenerationEU programme. With resources amounting to 4.1 % of GDP in 2019, the plan is on a scale equivalent to the plans of countries that are comparable to France in the euro zone (see Table 1).

Table 1 — Financial comparison of European countries’ recovery plans (percentage of 2019 GDP)

In 2021, the French Senate asked France’s Cour des comptes to audit the preparation and implementation of the plan. In this article, I present the main findings and recommendations set out in the Cour des comptes’ report, which was published in March 2022. I also elaborate on the challenges faced by the audit team.

A recovery plan with several objectives and a wide range of measures

France relance is structured around two objectives: ensuring the recovery of economic activity in the short term, and transforming the French economy in the medium term, on the basis of three priorities:

  • an ‘ecology’ component with a total budget of €30.4 billion, which brings together measures to support the ‘ecological transition’;
  • a ‘competitiveness’ component with a budget of €34.4 billion, which aims to transform production structures and strengthen the sovereignty of national production in certain strategic areas; and
  • a ‘cohesion’ component with a budget of €35.7 billion, which aims to strengthen social and regional cohesion.

In many cases, France relance, which was designed over a very short period in the summer of 2020, extends existing arrangements by allocating funds to measures already in force (e.g. aid for the energy renovation of private homes) or to measures awaiting funding (e.g. investments in the railway network). However, France relance also supports new measures, such as aid to develop the hydrogen industry, funds to transform derelict urban and industrial land, and aid for employing young people.

The Cour des comptes noted that as France relance overlaps with other plans and financing programmes that are currently being implemented, this makes its measures more difficult to understand. Some are not related to recovery, and others are more like emergency measures to offset the effects of the pandemic. Lastly, incorporating measures included in the new ‘Investments for the future’ programme into France relance creates confusion between the two initiatives.

Source: DepositPhotos/gstockstudio

France relance comprises a very large number of measures which benefit many economic sectors. One major difficulty in analysing the plan is the fact that no exhaustive, updated and shared list of measures was available at the time of the Cour des comptes’ audit.

Refinancing of €39.4 billion from the EU, subject to conditions

France relance is partially funded by the European Union, from which it receives €39.4 billion. However, EU funding for certain measures, which are grouped together under the ‘National Recovery and Resilience Plan’ (NRRP), is contingent on structural reforms — most often referred to as ‘milestones’ — being achieved, and on quantitative targets for certain measures being met. The Cour des comptes notes that these requirements are a source of risk for EU funding in the event of non‑compliance with the milestones or failure to meet targets. Furthermore, the system for auditing and checking the implementation of the measures that is required by the EU imposes management costs on the French State, and may be difficult to apply to decentralised measures (i.e. those implemented by the regions) because of the large number of intermediaries. Of the €39.4 billion, France received €5.1 billion in 2021 and €7.4 billion in 2022, with the remainder expected between 2023 and 2026 (see Table 2).

Table 2 — Disbursement schedule for the European Recovery and Resilience Facility — France

Implementation is swift but complex

A large number of stakeholders are involved in implementing France relance, primarily central State administrations, various decentralised ministerial departments, operators and agencies, prefectures, and local authorities. The measures have different allocation arrangements: simple public procurement; one‑stop‑shop arrangements, which allow aid to be distributed quickly; and calls for projects, possibly preceded by calls for expressions of interest, which are used to select beneficiary projects, but require deadlines.

In all cases, the measures were subject to rapid decision‑making processes, but with the risk of the quality of the selected projects being lower and priority being given to projects that were already prepared at the expense of those that actually needed to be designed. The fact that specific engineering was required to develop certain projects may have disadvantaged those stakeholders that did not have such resources (e.g. very small companies or rural municipalities).

Implementation of the plan is monitored at several levels. The recovery plan’s general secretariat, a small department in the Ministry of Finance, monitors the measures’ progress on the basis of targets set in advance by the ministries. However, at the time of the Cour des comptes’ audit, the monitoring tool provided an imperfect view of the plan, as the targets are fairly conventional and not all the measures are covered by the tool, which is not accessible to the public: monitoring of only about 30 measures (out of 300 measures monitored at budget level) is made public via the France relance ‘scoreboard’.

Overall budgetary monitoring of the plan is carried out using the State’s budget and accounting application. However, this is limited to the consumption of appropriations by the State, and so does not provide information on the amount of appropriations actually paid out to final beneficiaries as far as appropriations whose management is entrusted to operators are concerned. In general, administrations have set up very detailed monitoring of the measures they implement, but there is no centralisation or linking of this detailed information.

Under France relance, just over €10 billion is devoted to measures for which allocation is decided at regional level. Regional implementation of the plan was largely decided by France’s prefects, who had a role in coordinating all the local stakeholders (local authorities, decentralised State departments, local operator departments, etc.) and who had the power to choose beneficiaries for some measures. However, the Cour des comptes noted a lack of coordination between the State and local authorities in drawing up contracts. Furthermore, not all local authorities benefited from France relance under the same conditions, with some remaining outside the contracting procedure or not having the engineering resources needed to present a project. Lastly, the Cour des comptes noted that the way the recovery plan is monitored meant that, at the time of its audit, it was unable to identify all the beneficiaries of all the measures in a given region. Overall, we saw that implementation is swift but complex due to the large number of measures and stakeholders involved.

Questions about the continued implementation of the recovery plan

Assessing the plan at the end of 2021 led to difficulties as regards how much an auditor can say, even though it is important to identify issues as early as possible. The Cour des comptes noted that the Government’s objective of using up €70 billion in commitments by the end of 2021 was achieved. For 2022, the aim is to use up all commitments by the end of the year.

Consumption of payment appropriations was necessarily slower, i.e. €42.1 billion at the end of 2021. Disbursements should continue well beyond 2022, and at least until 2026. Given the scale of the plan, and the staggering of disbursements linked to certain measures, detailed progress reports should be published at regular intervals.

Lastly, the Cour des comptes noted that continuing to implement the plan beyond 2021 raises several questions:

  • although the objective of France relance was to help economic activity to return to its pre‑pandemic level by mid‑2022, this was actually achieved by the end of the third quarter of 2021. However, the recovery has created tensions in certain sectors. In order not to exacerbate these problems, the remaining credits should now be implemented more selectively;
  • evaluating the effectiveness of the France relance measures, as the Government planned to do from the outset, will need to take account of the related objectives, i.e. reviving activity, transforming the economy, and developing the regions; and
  • lastly, making certain measures permanent, if deemed desirable, can only be envisaged by keeping to a trajectory for public finances that is compatible with the sustainability of public debt.

Moreover, a new situation has emerged since the audit, i.e. the economic impact of Russia’s invasion of Ukraine (inflation, tensions on the energy markets, and effects on growth). This situation will necessarily have to be taken into account by the evaluation of France relance which the Cour des comptes has called for.

How do we audit a €100‑billion stimulus package that is already being implemented?

The audit team was faced with several challenges, relating not only to the scope but also to the timing of the audit.

Auditing a €100‑billion plan comprising several hundred measures and involving all ministries over a very short audit period (less than three months for the actual investigation phase) means that choices have to be made in terms of:

  • prioritising the measures to be audited (on the basis of the financial stakes and risks involved);
  • setting up a multi‑disciplinary audit team with sound knowledge of French budgetary organisation and ministries, so that financial and operational information on the implementation of the plan can be easily found; and
  • drafting a report that necessarily provides both a summary and an overview, as requested by the French Senate, with a focus on certain subjects.

Lastly, one particular difficulty is the timing of the audit: following the request by the French Senate, the audit was carried out while France relance was still being implemented. As a definitive evaluation of the effects of the plan was therefore not possible, the Cour des comptes recommended that the plan should be evaluated only once it has been fully implemented.

This article was first published on the 2/2022 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.



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