French restaurants – bad news, good news
An article worth reading this morning on the internet is on the BBC Europe page and is entitled “French restaurants feel the crunch”. The article (http://news.bbc.co.uk/2/hi/europe/8021292.stm) describes how many of the restaurants in France are being forced to tighten their belts and lower prices as recession eats into their profits.
So, the BAD NEWS
The report says that because of the downturn in trade more than 6,000 restaurants are reported to have closed in France last year - and that was before the economic crunch really started to bite.
For many years, The French government has been lobbying the European Union so they could be allowed to lower the VAT charged on meals. They, or more precisely, the café owners and restaurateurs, wanted the VAT (TVA in French) lowered from 19.6% to 5.5%. They claimed this would enable them to lower the prices and at the same time create jobs.
And now the GOOD NEWS
Today the Secretary of State for Commerce Hervé Novelli announced that, following the agreement reached in Brussels, VAT charged in cafés and restaurants would be lowered to 5.5%, effective from July 1 this year. This should mean good news for holidaymakers in France as the owners of the restaurants have promised to lower the prices charged, rather than keep the money as extra profit. We’ll keep an eye open to see if prices really do come down as promised.