MFA: Strategic opportunities for foreign exporters
As a result of the covid-19 pandemic, in 2020 the French economy recorded the largest drop in GDP since World War II. At the same time, household consumption decreased by 7%, investments by 10.3%, exports by 16.3% and imports by 11.5%. The state budget ended with a deficit of EUR 178 billion, i.e. almost double the originally planned EUR 93 billion. At the same time, this deficit was EUR 30 billion higher than in 2010 during the then global financial crisis. However, tax increases are not being considered yet.
Although the ratio of public debt to GDP increased by 1/5, thanks to the long-term decline in interest rates on the financial markets, the ratio of debt service to GDP decreased from 3.4% in 1996 (when France stopped observing the Maastricht limit of 60% for relative indebtedness) to approx. 1.4% with the prospect of its further possible decrease to 0.7% in 2022.
In the event that no further waves of the epidemic occur, the recovery of the economy can be relatively quick and economic activity could return to the level of 2019 as early as the end of 2022. The realization of part of the excess savings of French households from unrealized consumption due to anti-epidemic trade restrictions could significantly contribute to this and services as well as consumer caution. This surplus of savings is estimated to reach EUR 165 billion by the end of 2021.
At the same time, a plan called France Relance was adopted for the post-covid recovery of the economy. It is intended to contribute both to the correction of the consequences of the coronavirus crisis and to the further economic development of France. It is aimed at ecological transformation, the development of the competitiveness of enterprises and the strengthening of social and territorial cohesion in the country. It will provide financial support in the total amount of EUR 100 billion, mainly for medium-term investments. 60% will be financed from the 2021-2022 state budget and 40% from the EU contribution. The planned support will expand the demand for the material security of prospective modernizations and thus the opportunities for supplies, especially in the following sectors.
The opportunities for Czech exporters after the coronavirus crisis can be estimated in the continuing trend of the current French course towards the greening of the economy, the perception of which was further strengthened by the aforementioned crisis. Newly also in a more emphasized interest in maintaining and modernizing production in France instead of delocalizing it to a distant cheaper foreign country, in order to reduce the risk of supply disruptions in similar crises in the future. Furthermore, also in the introduction of work procedures with greater use of equipment and programs for process automation and remote work communication.
The France Relance plan mentioned above includes a change of over 100,000 official vehicles of state bodies and institutions for electric cars or hybrid cars. At the same time, EUR billion will be issued for bonuses for the purchase of emission-free or low-emission vehicles and the installation of charging stations.
In total, the annual production of 1 million cars with an electric or hybrid drive is planned to be achieved in France by 2025. This will represent growth in demand and opportunities for the supply of electrical components and equipment for the production of cars with new types of propulsion and driving methods.
Civil aviation industry
According to allcountrylist, the mentioned plan will support the maintenance of know-how and production capacities of the aviation industry as well as its ecological transformation, especially the modernization of production in small and medium-sized enterprises of this sector. This will bring opportunities for the supply of equipment and materials for the digitization and robotization of the production of aircraft parts and new technologies for the use of hydrogen as the primary energy source of aircraft.
Transport industry and infrastructure
In order to protect the air, the development of emission-free and low-emission transport will be supported by building charging stations for electric cars on highways and expressways, establishing cycle paths and safe bicycle parking spaces, modernizing waterways and locks on river courses and water channels, as well as modernizing maritime traffic management infrastructure and maritime rescue services.
In the energy sector, support will be focused on the modernization of nuclear industry enterprises in order to maintain their capacity to ensure the safe operation of nuclear power plants and the safe disposal of decommissioned nuclear facilities, as well as innovations in the management of radioactive waste and the development of small modular reactors. In the field of electricity transmission, the plan will focus on supporting investments to improve the quality of the distribution network, mainly in rural areas, increasing its resistance to weather extremes and adapting it to the connection of renewable energy sources.
This will include mechanically strengthening the transmission line, moving it into the ground, replacing uninsulated wires and installing battery parks to the connected renewables. In an effort to achieve so-called carbon neutrality by 2050, the development of hydrogen technologies and the development of their use in practice will also be supported. That is, the production of hydrogen by electrolytic decomposition of water, its storage, distribution and use in land transport. At the same time, also the development of hydrogen drives for sea and air transport and for industry.
Support in the field of information and communication technologies is focused on the completion of the optical network throughout France by 2025, on the development of digitization in state offices, local and regional governments, small and medium-sized enterprises, on the adaptation of technical and communication means for working from home and distance education, to increase cyber security and the development of quantum technologies with a significant focus on cooperation in Europe, which can represent an interesting opportunity for the involvement of Czech development workplaces and modern production facilities.
At the same time, the coronavirus crisis has strengthened manufacturers’ considerations of the need to reduce the risk of interruption of sub-supply of production parts from distant countries, which is an opportunity for offers of equipment and instructions for flexible local production of some parts by 3D printing. Further growth in demand can also be estimated for software engineering products for the automated control of production and logistics processes at a distance and for technologies for hygienic contactless identification of people at controlled entrances.
Plastics and rubber industry
In order to protect the environment, support will be directed to the production and consumption of plastic materials with the aim of recycling 700,000 tons of plastic waste per year. Growth opportunities for the supply of equipment for the collection, sorting, cleaning and recycling of plastics can thus be expected. At the same time, there is also a demand for the modernization of production facilities for production from recycled plastics and, on the other hand, for technologies for the production of new, easily biodegradable plastics.
By 2050, the modernization of all residential and public buildings and operating spaces of small and medium-sized enterprises to the level of low-energy demands of their operation is planned and will be supported. This will increase the demand and opportunities for the supply of thermal insulation and new energy equipment, for example gas boilers instead of old diesel ones, as well as other less energy-intensive technical equipment of buildings, such as air conditioning, elevators or security systems.
Water management and waste industry
The support will be focused on the modernization of water supply networks, wastewater treatment plants and other water management treatment. In the waste industry, it will support and bring the development of waste sorting facilities and its recycling with the growth of opportunities for the supply of equipment for the production of energy or compost from bio-waste. Furthermore, also for the production of solid fuels from non-recyclable combustible waste with the aim of achieving the production of up to 1 million tons of such fuels per year.
Healthcare and pharmaceutical industry
In the field of healthcare, support is focused on the modernization of equipment and the construction of new healthcare facilities and the digitization of their administration. This means more public contracts for various hospital equipment and emergency supplies of medical supplies, and thus more opportunities for the supply of medical devices. At the same time, new opportunities can be expected for offers for the medical use of nanomaterials and research services in the development of biotechnological procedures for the production of drugs.
Agricultural and food industry
In order to strengthen food self-sufficiency, increase the quality and safety of food, as well as their competitiveness on foreign markets, support will be provided for investments in the cultivation and processing of pulses as a replacement for imported soybeans, with the aim of doubling their sowing area to 8% of agricultural land by 2030.
Furthermore, also to new agrotechnical procedures (for example, combined sowing, cultivation of mixed crops and their sorted harvesting), to agricultural techniques that are more environmentally friendly and more effective in the event of greater weather fluctuations due to climate change, to the construction of fences to protect the pastures of farm animals to prevent their contact with wild animals and dangerous infections possibly transmissible to humans. In the area of food production, support will go towards the modernization of slaughterhouses and food processing and packaging facilities.
With regard to the national and EU commitment to achieve carbon neutrality by 2050, support for increasing the energy efficiency of industrial production is expected by expanding electrical equipment in industry and decarbonizing heat production. Furthermore, also with the support of investments in technologies with less waste production or replacing single-use plastic products, especially in the packaging industry, as well as the modernization of wood processing operations for its wider use.
Rail and rail transport
In order to reduce emissions of pollutants and greenhouse gases in transport, increasing the capacity of rail transport will be supported by modernizing railway lines, building railway sidings to production plants and warehouses, completing barrier-free access at railway stations by 2025, expanding night and suburban train connections to double within 10 years and expanding tram lines according to local requirements and conditions.