Crisis theatens Spaniards' day of retail rest
* All shops allowed to open 24/7 in Madrid from mid-July
* Shake-up could boost jobs but squeeze smaller stores
* Big cultural upheaval for Spain as govt seeks to broaden move
* Religious holidays could also be shifted to Mondays in reforms
By Sarah White and Clare Kane
MADRID, June 19 (Reuters) - Religious festivals and leisurely Sundays could be the next casualties of the economic crisis in Spain, with a shake-up of shop opening rules and new dates for holidays rocking deep-seated traditions.
Under current law, the bulk of businesses have to close on most Sundays, but from mid-July the central region of Madrid, which includes the country's capital, will allow all shops to open 24 hours a day, seven days a week.
The change is part of centre-right Prime Minister Mariano Rajoy's drive to make Spain's economy more competitive as he tries to steer the country out of the euro zone debt crisis.
Politicians say the move could create thousands of jobs, is supported by some stores and consumer groups, and would be welcomed by tourists. Almost one in four in Spain is now unemployed, and economic turmoil has forced the country to seek a European rescue for its banks.
But the more flexible rules would mean a big cultural shift in a traditionally Catholic society. Even many non-church goers see Sunday as a time for family and friends, not for shopping or work.
Madrid's new opening hours will be further reaching than even some of the most liberal European regimes, such as in Britain, where Sunday trading was relaxed in 1994, but where most bigger stores can still only trade for six hours.
Countries of similar Catholic tradition, such as Italy, have looser opening hours than most of Spain as things stand, but restrictions still apply.
Germany is at the stricter end of the scale, with Sunday openings still heavily resisted.
Independent shops worry they will suffer as department stores have the resources to make the most of the reforms, squeezing out the specialist sandal and hat shops, tailors and crockery stores that still have a place on Madrid's high streets.
Many small outlets are reluctant to shift working patterns and take on the cost of paying extra staff on Sunday. Very small shops such as convenience stores already had permission to open on Sunday but typically chose not to.
"Small businesses have always been the lifeblood of this country and continue to be. (But) big businesses will open (on Sundays) and we will be hurt," said Eugenia Sanchez, who runs a hardware store in the central business district of Madrid.
Sanchez said she was still not sure she would open on Sundays - most likely not.
"We work 10 to 12 hours a day already ... Sunday is family time," she said.
The small and medium-sized enterprise (SME) sector in Spain is bigger and contributes more to the economy than the European average, but it shed 1.5 million jobs, or 14 percent of its workforce, between 2008 and 2010, according to a European Commission study.
Relaxing shopping hours in Madrid is likely to be just the beginning of a greater shift.
The ruling People's Party is pushing to export similar reforms across the rest of the country's 17 autonomous regions.
Plans have not been finalised, but the central government is also studying moving three holidays, including two religious ones, to the closest Monday or Friday. The government argues this would increase productivity in Spain by keeping huge numbers of workers from taking extra-long weekends.
Portugal has already decided to suspend four out of 14 public holidays from 2013, for five years, to boost growth.
Some of the backlash against the new shopping regime in Madrid has come from religious groups that say Sunday is important for society, whether people use it for worship or not.
"It's important to have a day when we can assemble with others, which in the European tradition has been Sunday," said Maria del Pino Jimenez, president of the Catholic Action Workers group. "It's important for people to develop facets that go beyond mere consumerism."
Spain's economic turmoil has put the shop hours debate at the heart of recovery plans. One recent IE Business School study said relaxing business opening hours across Spain would boost business volumes 2.8 percent in the following year and create at least 20,000 jobs in the next three years.
Spain's economy ministry, meanwhile, has argued that changing habits, such as the rise of online shopping available around the clock, made such reforms an imperative.
The rise of small convenience stores and other types of shops run by a growing Chinese population in Madrid - which tend to open for longer hours and on Sunday - has also shown there is some demand for more flexible opening times.
"It's all the same to me because I don't work, but for people with jobs it's much more convenient to be able to go shopping on Sunday," said Navidad Hernandez, a retired Madrid resident, out with a friend on Sunday.
But the bulk of jobs created would be in large stores and shopping centres, and some doubt the reforms would mean more employment on a net basis.
"It might take away more jobs from small retailers than it's going to create in big chains," said Carlos Hernandez, an analyst at Planet Retail analysis firm in Madrid.
Sceptics over the benefits of a shake-up say the Madrid move would at least provide data on its impact on job creation, but doubted it would encourage more spending.
"The level of consumption (in Spain) is what it is," said Manuel Garcia-Izquierdo, president of the Spanish Confederation of Commerce. He warned of the danger of the new rules for small companies and for family structures, in a society based on what he called a "Mediterranean model".
Occasional Sunday shopping promotions have so far had a mixed reception from businesses. Starting in May, in Madrid's plush Salamanca neighbourhood, shops have been allowed to open on Sunday. Big international designers have opened their doors, but other shops stayed shuttered.
"In principle this is to create jobs," said shop worker Juana Maria Barra, on a Sunday in Salamanca's upmarket Serrano street.
"But in this neighbourhood people go away at the weekend, and it's only tourists," she said pointing to the empty street. "And in July and August, Madrid is completely deserted. There won't be anyone." (Editing by Fiona Ortiz and Will Waterman)
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