"I seek acquittal for all the accused on all charges," prosecutor Michel Maes told the court.
Chirac, 78, is accused on two counts of hiring members of his political party for non-existent municipal jobs in Paris, where he was mayor from 1977 to 1995, effectively using the civic payroll to employ his own campaign staff.
The first French former head of state to go on trial since World War II has himself been excused from the trial after doctors said he was afflicted by memory lapses.
The charge sheet alleges that he was the "inventor, author and beneficiary" of a conspiracy to use public funds to "support his political influence" and serve his own "interests and ambitions, or those of his party".
Chirac is still a hugely popular figure in France -- his approval ratings still far outstripping his embattled successor President Nicolas Sarkozy -- and his trial had been keenly anticipated as a moment of political theatre.
If found guilty of using public funds to illegally pay for political work he faces up to 10 years in jail and a fine of €150,000 ($210,000).
"It has not been proven that Jacques Chirac knew about individual situations," Maes said.
Jerome Karsenti, lawyer for anti-corruption group Anticor that is a civil party in the case, said:
"This is a caricature, almost ridiculous (and) shows the illness of the French justice system, we can see clearly its subjugation to political power."
Hearings continued on Tuesday. The trial is set to end on Friday, with a judgement not expected for weeks or months later.