France considers benefit freeze and SME takeover pact for 2027 budget

The French government is considering several measures as part of its 2027 budget preparations. Labor Minister Jean-Pierre Farandou is contemplating a freeze on the ‘prime d’activité’, a benefit that currently supports approximately 4.52 million households with an annual expenditure of 11 billion euros. This proposal follows suggestions from the Court of Auditors to exclude certain beneficiaries to achieve significant savings.

Additionally, the government is developing the ‘pacte Papin’, named after SME Minister Serge Papin. This initiative aims to facilitate the takeover of small and medium-sized enterprises (SMEs) by their employees, rather than through family succession. Inspired by the existing ‘pacte Dutreil’, the mechanism seeks to address the challenges posed by an aging demographic of business owners. While the Medef Lille Métropole has expressed support for the direction, the proposal must still undergo parliamentary examination as part of the upcoming finance bill.