It was a controversial week in Swiss business as one of the country's most famous companies announced a major reorganisation and the government made a surprise appointment to head the central bank.

The Winterthur-based technology company, Sulzer, said it was selling off five divisions which account for around two thirds of its turnover and that it was to merge with Sulzer Medica.

The management said it wanted to concentrate on the growth areas of medical devices and materials technology. Unions slammed the decision which they argued put many more jobs at risk than the 300 admitted by the company.

The government surprised financial circles by naming the current vice-president of the Swiss National Bank as its next president.

Jean-Pierre Roth will take over when the current chairman, Hans Meyer, steps down at the end of the year. The announcement was seen as a snub to the bank's supervisory board which had favoured the SNB's number three, Bruno Gehrig.

In other business stories, the Italian national carrier, Alitalia, said it was in talks with Swissair and Air France to cement a new alliance. Few details were released, and Swissair refused to comment.

The euro fell to new lows against the Swiss franc this week, slipping below the SFr1.51 level, before staging a recovery.

The economics ministry said it did not expect the recent rise in the price of oil to impact negatively on the Swiss economy. It is forecasting a drop in the oil price in the medium term.

Credit Suisse announced the launch this week of a pan-European online investment service aimed at attracting one million customers over the next five years.

The Global Investment Portfolio Service intends to build up more than SFr50 billion in funds under management.

by Michael Hollingdale

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