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Open for business? France reviews Sunday trading

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The French government has decided to review its legislation on Sunday trading after two DIY chains defied the law and opened their doors to customers over the weekend.

Flouting France's Sunday trading laws, Castorama and Leroy Merlin, decided to open 14 of their stores in and around Paris, a move that prompted the Prime Minister, Jean-Marc Ayrault, to call for an urgent meeting on Monday morning.

In a press release following the meeting, it was revealed that the government had tasked Jean-Paul Bailly, former CEO of French postal service La Poste, with clarifying "the legal framework" for Sunday trading and highlighting its"current weaknesses" as well as the pros and cons of extending shops' opening hours.

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There are currently a number of restrictions concerning Sunday trading in France, with only selected stores allowed to operate. Under the current legislation, food shops, such as bakeries, can trade until 1pm. Other shops including tobacconists,florists, garden centres and furniture stores can trade all day. Finally,stores in highly touristic areas are also allowed to trade on Sundays, such as on the Champs Elysees.

However, any other shop has to ask for an exemption, but even those are limited to five a year.

The confusing nature of the legislation has left many retailers frustrated. A spokesperson for Castorama has said that "There are some shops that can open peacefully on Sundays and others who have to ask for an exemption. It would be nice if everybody could be treated equally"

The debate on this issue is not a new one in France where "Sunday rest" is treated as a sacrosanct and repealing this law is often seen as a way to force unfair hours on unwilling employees. However, France's economy is struggling and unemployment is high at 11 percent. Several economists have called on the government to extend Sunday opening hours so that the French and tourists could spend more and retailers could employ more staff.

For Michel Sapin,the French Labor minister, there is "no way" France will backtrack on "Sunday rest", but many politicians have had more measured words on Monday.

Segolene Royal, former presidential candidate for the socialists and the President's former partner, declared herself in favour of more flexibility and said it should be on a voluntary basis.

Natalie Kosciusko-Morizet, opposition candidate for the mayoral elections in Paris, explained that opening shops "is possible today in Paris with only the mayor's signature and it's been promised for years in some neighborhoods", but that by refusing to do so, Paris now had "a huge problem as tourists go spend in London. We're losing around 10,000 jobs".

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Jean-Marc Genis, executive president at the Federation of Clothing Retailers, told CNBC: "We should give retailers the right to choose, agree on social laws, and move on."

He added that France should equip itself with a system similar to the one in the U.K. where shops are open on Sundays, but only in places that make "commercial sense" and estimates that between 10,000 and 20,000 jobs would be created if Sunday trading was generalised.

"In Paris, department stores remain completely closed so no tourists can spend their cash in them which is bad for trade balance and bad for employment."

"It's an economic nonsense" said Michel Martinez, chief European economist at Société Générale, who said "historical weight" was behind this "lack of rationality". Highlighting economic arguments including job creation, improved competitivity and gains for the consumer, the economist added that "retail opening hours are one of the parameters that permit to judge the degree of openness of global markets".

Even French unions have called for a clarification of the law, but in an interview with the RTL radio station, Jean-Claude Mailly, general secretary of the Force Ouvriere union stressed that "the rule is closure" and that opening should only be an exception. "We say, that when one works on Sunday, we should be paid double," Mailly said.

Jean-Paul Bailly has until the end of November to hand in his report to the prime minister.

(Read more: France's Silicon Valley to launch start-up hub)

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