The Swiss parliament has given the green light to an additional CHF770 million ($841 million) requested by the government to manage the Covid-19 crisis.This content was published on September 10, 2020 - 10:59
The Senate on Thursday approved unanimously the budget supplement - half of which will come from money already earmarked that will be reassigned to deal with the pandemic. The House of Representatives had agreed the funds the day before.
The supplement includes CHF288.5 million for Covid-19 tests until the end of 2020, which is estimated to cover an average of 8,000 tests per day. Since June 25, the government has been covering testing costs.
A special railway infrastructure fund will receive a boost of over CHF220 million. The national rail operator said passenger numbers had dropped by a third in 2020 due to the pandemic.
The government also plans to free up an additional CHF3.5 million for the 18 Swiss schools abroad that had to close because of Covid-19. Another CHF5.8 million is also expected to be used to build up stocks of ethanol at Alcosuisse, which is used to produce disinfectant.
One of the few items of disagreement was a capital injection of CHF150 million for Skyguide, the air traffic controller. This amount is said to be needed to stabilise the company's finances even if European airlines come to a risk-sharing agreement.
The government had already approved CHF31 billion in bailout funds as well as guarantees of CHF42 billion in the first half of 2020. The government is forecasting a debt of about CHF15 billion by 2021. However, this should not lead to tax increases or savings programs in the next few years according to Finance Minister Ueli Maurer.
"The consequences of this corona crisis are likely to be drastic for the budget, but they should be manageable," said Maurer. The government doesn’t expect to return to the pre-pandemic economy until 2024.
A ranking of 122 countries by the Geneva-based consulting firm Horizon Group published on Wednesday, placed Switzerland fourth in terms of how well it has managed the economic effects of the crisis. Finland took the top spot followed by Norway and Germany.
The Alpine nation’s performance is due to its strong GDP and stable financial market as well as strong social support system that has helped vulnerable groups cope with the crisis.
Government economists now believe the impact of the pandemic will be less severe than earlier feared. Economic output this year is now expected to be 5% lower than 2019, compared to a -6.2% forecast in June. The unemployment rate (that was expected to be at 3.8% by the end of 2020) is now predicted to be 3.5%.