With elections looming in Switzerland, the Swiss Business Federation (economiesuisse) has urged swift and effective political action to improve both the state of the economy and trading conditions.
Faced with a strong franc, uncertainty over the corporate tax landscape and increasing frostiness from the European Union, the business community has been lambasting lawmakers for some time for failing to solve some heavyweight political problems yet putting forward business-unfriendly referendums such as the 2014 initiative to curb immigration.
“In the past 12 months Swiss voters have been asked to decide on ten business-relevant initiatives,” economiesuissse President Heinz Karrer said at the lobby group’s annual conference in Lucerne on Friday.
While most initiatives that could have had negative repercussions on the economy had been comprehensively rejected by voters, Karrer expected more to come. “In light of the current political climate, there remains a high potential to damage our business environment.”
With Justice Minister Simonetta Sommaruga listening to his speech, Karrer then turned his fire at the failure of politicians to make significant progress on solving Swiss-EU tensions or the ticking social time bomb of an ageing population.
The issues of finding a solution to immigration and reforming corporate tax are also still lying on the to-do list pile, Karrer complained.
“It has been a year since I last stood before you at our ‘Day of the Economy’ [annual meeting] and spoke of gathering storm clouds,” he told delegates. “Nothing has changed.”
Federal elections will be held in Switzerland on October 18.
Aymo Brunetti, former chief government economist and now University of Bern professor, was on hand to compare the present economic situation with that of the mid-1990s when a period of stellar growth was poised to collapse.
Then, as now, the rising franc, the spectre of growing state debt, strained EU relations and overheating house prices were concocting a lethal cocktail against economic prosperity, Brunetti said.
Sommaruga said that while improving EU relations was top of the government’s objective list, achieving it was proving more difficult than wishing for it.
“Isolationist politics and economic participation in the EU economy do not go together,” she said during her address. “Either we seal ourselves off or we take part in the European business arena.”
Other politicians who took to the stage in Lucerne gave a rather more feisty account of themselves, refusing to be cowed by the assembled business leaders and their demands. Prisca Birrer-Heimo of the leftwing Social Democratic Party and head of the Consumer Protection Association, reminded delegates that retaining consumer confidence was essential to businesses selling their products.
“I hear all the time that there are too many regulations,” she said. “But in this world of rapidly changing technology we need to make sure that new innovations, such as nanotechnology, are safe for consumers.”
But the over-riding theme of Friday’s event was the negative effects of the strong franc on Swiss exporters – a problem that was exacerbated on January 15 when the Swiss National Bank abandoned its franc-euro exchange rate cap.
Last month’s second-quarter gross domestic product (GDP) figures provided the unexpected relief that there had indeed been some growth, thus avoiding a recession in the Swiss economy.
But Karrer was not convinced that this signalled a better future for companies. “The situation is not merely bad, it is extremely serious,” he said.