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France moves to unlock ‘overprotected’ economy

France’s Socialist government has unveiled a controversial package of reforms to energise its crisis-hit economy, including a plan to expand Sunday trading for shops that is sowing discord within the ruling party.

Emmanuel Macron's proposals are unpopular with the ruling Socialists
Emmanuel Macron's proposals are unpopular with the ruling Socialists AFP
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The measures unveiled by Emmanuel Macron, France's youthful banker turned economy minister, are designed to prove to EU officials that Paris is serious about reforming the eurozone's second-biggest economy.

They include steps to open up traditionally closed-shop sectors of the economy, such as for bailiffs and notaries, who plan to hit the streets in an unusual white-collar protest.

"This is a law which seeks to remove, in a pragmatic way, obstacles we have identified in several sectors to free up untapped potential for growth and activity," the proposed law states.

Other moves include deregulating certain "protected" professions such as pharmacists and taxi drivers, opening up inter-city coach travel within France, and selling between five and 10 billion euros ($12 billion) in state-owned assets.

“By over-protecting, we end up protecting nothing,” Macron is fond of telling reporters, opportunely quoting France’s brand new Nobel laureate for economics, Jean Tirole.

But it is the proposal to extend Sunday shopping that has touched off a firestorm of criticism, even among fellow members of the ruling Socialists.

Retail outlets may currently apply to local authorities to open on five Sundays per year, but Macron wants to expand that to 12.

Shops situated in "international tourist zones" would also be allowed to open until midnight and on Sundays year-round.

"Do we want millions and millions of tourists -- notably Chinese -- who come to the capital to leave us and go and do their shopping in London on a Sunday?" asked Prime Minister Manuel Valls in an interview with France 2 television last week.

France’s ‘three diseases’

Macron was presenting the measures under the watchful eye of the European Union and Germany, which has recently chided its neighbour for not doing enough to revamp its economy.

German Chancellor Angela Merkel took a pot-shot at Paris over the weekend, saying French reforms were "insufficient", and Brussels has slammed the "limited progress" made by Paris, whose public deficit is expected to be above the EU’s three percent ceiling until 2017.

The French economy is badly in need of a fillip. Growth was a sluggish 0.3 percent in the third quarter, after two consecutive periods of zero growth.

Unemployment is stuck at a record high 10.4 percent and President François Hollande has vowed not to stand for re-election if he fails to reverse the trend.

Macron, 36, has cast himself as a doctor-in-chief presiding over France’s “ailing economy”.

In his first outing as economy minister in September, he singled out "mistrust", "complexity" and "corporatism" as the "three diseases" he believes are stifling France’s economy.

But critics have portrayed him as an out-of-touch technocrat, pointing to his four-year spell at investment bank Rothschild, which made him a millionaire.

The left wing of the Socialist Party has said it will vote against Macron’s proposals after a parliamentary debate expected in January, believing they "cast doubt over all the historical battles of the (political) left".

Diego Iscaro, France analyst at IHS Global, told AFP there was "a relatively high risk of the bill being significantly diluted during the parliamentary process."

Even if the reforms were approved and implemented in full, Iscaro said there were doubts over whether they would have a significant impact over the short term, "although they should help to lift the economy's long-term growth potential".

(FRANCE 24 with AFP)

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