France flags deregulation measures as budget clash with EU looms

[October 15, 2014]  PARIS (Reuters) - The French government on Wednesday outlined measures to let more stores open on Sundays and free up competition in some job sectors, an attempt to convince EU partners it can reform its economy as a clash loomed over unkept deficit-cutting promises.

Economy Minister Emmanuel Macron gave an advance view of previously flagged measures including limited deregulation of pharmacies, legal jobs and inter-city bus transport on the same day as Paris sent its 2015 budget to Brussels for review.

The as yet incomplete measures, which will be sent to parliament in December, followed repeated calls from Europe's executive arm to cut red tape and unleash economic growth.

But Macron's show of goodwill risked being overshadowed by a clash with the European Commission, which is expected to demand changes after Paris acknowledged that it would not be able to keep its deficit-cutting promises.

"The weight of laws and rules has become unbearable... We need to simplify, drastically," Macron told a news conference.

Paris has confirmed it would not bring its budget deficit down to 3 percent of gross domestic product until 2017, four years after it should have done. EU officials have warned they could use their powers to reject the budget outright - a potential humiliation for Europe's second-largest economy.

France long resisted pressure to deregulate protected job sectors from notaries - equivalent to Britain's solicitors, or notaries public in the United States - to taxi drivers and pharmacists, even as smaller European states enforced rules governing the bloc's internal market.

Macron said the so-called "activity law" would allow more stores to open on Sunday - a practice currently restricted to some tourist zones - by expanding those areas and letting neighborhood mayors grant more special authorizations to open. Rules restricting night work will also be loosened.

The Socialist government will also encourage bus transport, currently under-developed, by allowing private firms to open lines, while rules surrounding dental practices and pharmacies are to be loosened. Barriers to entry to several legal professions are to be lowered so that more diploma-holders, now unable to open practices, can do so, and tariffs lowered.

Hundreds of highly-paid notaries last month held their first-ever street protests against Macron's move, fearful that they would lose a cap on the number of professionals, following marches and strikes by bailiffs and taxi drivers.

(Reporting By Nicholas Vinocur and Yann Leguernigou)

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