The Daily Heralds editorial suggests a more relaxed attitude towards drinking and driving as a way for the French side to regain business. The French Chamber of Commerce President suggests (more) tax breaks for failing businesses. Here's why both ideas are terribly, terribly bad.
Boo hoo. I loved the editorial in today's Daily Herald. It made me laugh. In 428 words, it managed to mention every myth that exists why the French side is doing so miserably. In my opinion, the arguments brought up are so far from the truth you can get. The French have only their selves to blame for the situation.
Myth #1. French business owners are suffering because of the strong euro
Well... lets start with the French restaurant owners. In what currency do you think they buy their products? In dollars, of course. The euro/dollar rate is currently 1/1.42. In other words, buying groceries for the restaurants is getting cheaper by the day. They should be thriving. Do you think this is reflected in the restaurant's pricing? Of course not. They are happy about the currency gain they are doing and they expect 100% of it to land in their pockets. Well, I'm sorry it doesn't work that way. The restaurant owners in Grand Case can sit there with their 20 euro pastas and feel sorry for themselves until they undertand the concept of business and value for money. French stores buy their merchandise from the US or from Dutch side wholesalers. Still, they claim they cannot do 1 to 1 with the Euro. They don't have a problem buying in USD, but when they calculate their own prices it is "impossible" to adjust for the discount they are getting themselves. Again, this is just plain stupid, and if they don't understand better, they should go out of business. Misguided greed is what I would call it.
Myth #2. Fiscal and social charges kills the French entrepreneurs
The reason the prices are so high is that French restaurant and store owners are paying so much taxes. Yeah, right. The other day I ran in to a French woman who just arrived on the island and told me she found a job at a French restaurant. She said getting a job wasn't difficult, but trying to find someone who would pay her a salary "on the books" so she could declare an income was very difficult.
Similiarly, if you try to pay a French restaurant with a French cheque and write the name of the establishment on it, they will not accept it. This has happened to me on numerous occasions. They are not even trying to be discrete about it.
Remember that French St Martin is part of EU but not part of EU tax zone. In order to compete with the Dutch side the French side is also duty free and there is no VAT. Don't forget that the Dutch side has a 3% turnover tax.
French St Martiners have a lot of tax breaks compared to the mainland French, duty free cars just being one of them. Yet they have access to the same generous health care system, free education, housing allowences etc, that all French people have. In fact, the social benefits are so attractive that there are business owners on the Dutch side that set up "fake" companies on the French side only to declare incomes and pay taxes on the French side in order to enjoy French public health insurance and retirement plans.
In Italy the “finance police” will check up on business owners to make sure they give receipts to all customers. How much of the revenue in the French stores do you think is being declared?
The tourist related business sector in French SXM is an all cash economy. The benefits the business owners receive from the society is more generous than what their dutch counterparts receive, but I dare say that the taxes they pay are not going to drive them out of business.
I was in Germany this summer and was chocked by how cheap eating out was. Germany is a country with and generous social welfare, taxes, and the currency is Euros as well. Surprisingly enough, eating at a nice venue on a tourist resort in Germany is a lot cheaper than getting a plate of over cooked pasta at a diner in St Martin, French or Dutch side. Bare in mind that there is a world outside of SXM and neither Dutch or French side restaurants are generally particularly good value for money.
“The solution”
"He [Chamber of Commerce President Raymond Helligar] says the burden of fiscal and social charges is the main problem and perhaps government can do something with his suggestion to create schemes whereby certain charges are waived when a business is doing badly, as apparently is done in Guadeloupe."
Here is a novel idea that hasn’t been tried before (and failed miserably). Take these businesses who are not able to survive on their own because of bad management, bad pricing or because they are selling products the consumers are not asking for, and give them more tax breaks or even subsidies.
"It’s a public secret that one of the factors that make people go to the French side less is the alcohol controls on motorists by Gendarmes. (...) but considering that there are no real highways on the island, perhaps the way the controls are held and violators are dealt with can make a difference."
Oh, I loved this one. Do we need to remind the French Chamber of Commerce/editors of the Daily Herald (I wasn't really clear who's opinion this was) that the reason drinking and driving is illegal in most countries is that it is dangerous and it actually kills people? Let me suggest something even simpler for the business owners trying to attract business to Grand Case. How about lobbying for a reliable bus line so people can leave their cars at home? The parking situation in Grand Case is already ridiculous. And how about metered cabs, so people feel comfortable about using them and a centralised dispatcher so you know how to call one?
Here are few bonus suggestions…
1. How about keeping the stores open when people can shop?
If the French wants to get serious about the tourist market they need to cut down on their lunch breaks.
Have you actually tried to purchase something on the French side? Some stores and offices close at noon, some at one and some don't reopen until three o'clock in the afternoon. Some stores close already at 5pm. This doesn't give you much of a window to do your shopping. And it is not like in Greece and Spain where they have these annoying siestas but where they, in return, stay open until 10 pm. We always say jokingly that it seems like even the French lunch restaurants are closed for lunch.
American tourists arrive on Saturday. On Sunday Marigot is a closed and depressing ghost town. How about realising that we live in an economy fuelled by tourist and try accommodate the opening hours for the people who spend their euros/dollars?
PS. The photo on this blog entry was actually the main photo on the front page of the Daily Herald on the same day the "drink and drive" remedy was offered. See it for yourself by clicking here.
Submitted by daphne on Mon, 2007-10-22 21:09.
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