Reopening terraces of hospitality establishments as of 1 March is a new step in easing coronavirus restrictions, pleasing cafe and restaurant owners across Croatia, but it is also important to retain aid measures for the sector as long as restrictions continue, cafe and restaurant owners have said.

“Easing the measures is a positive development for all because it means that the epidemiological situation has improved in the whole country. Most hospitality establishments have terraces they can now reopen, but it can hardly be expected that many will actually profit from this. Restaurants will certainly not, because it is not warm enough for people to sit and eat outside, but cafes could operate better, even though they need to ensure the required distance between the tables and, like restaurants, they cannot operate indoors, i.e. at full capacity,” the deputy chair of the national association of cafe and restaurant owners (NUU), Zdravko Karna, told Croatian state news agency Hina.

Karna said that more details would be known on Friday when the new measures would be formally announced. He added that it was important that cafes and restaurants would now be allowed to reopen, albeit partly, because they had been shut since the end of November.

Although in the last two weeks cafes and restaurants have been allowed to serve take-away coffee, drinks and food, the earnings from this were low, so Karna said they expected the government job-retention measures to continue because their earnings under the present circumstances would not be enough to cover all the costs.

Karna said that earlier this week he and NUU president Jelena Tabak had met with Finance Minister Zdravko Maric and Labour Minister Josip Aladrovic who showed them a report from HOTREC, the umbrella association of hotels, restaurants, pubs, cafes and similar establishments in Europe, about aid measures for the hospitality sector in Europe over the last year.

“The report puts Croatia somewhere in the middle in Europe on aid measures it has adopted to deal with the pandemic. What we see as an important difference is aid through financial compensation, such as tax relief for beer, coffee, wine, and soft beverages. Cafe and restaurant owners in Croatia do not have that, and, as the pandemic continues, we do not see a better solution for our survival than tax cuts,” Karna said.

In terms of the tax burden, Croatian cafes and restaurants are among the most affected in Europe because “the VAT rate in Europe ranges from below to above 10%, while in Croatia it is the highest, at 25%, which has always made doing business difficult, and particularly now during the pandemic,” he said.

“According to calculations for 2019, which was the last normal business year, tax cuts would have cost the government about HRK 450 million, or slightly below 300 million for 2020, which is negligible compared with the benefits that would have had. Here we mean not just prices for customers, but also business investment and workers’ wages,” he added.