The Swiss government should scale up its efforts to help businesses overcome the coronavirus crisis, according to the director of the KOF Swiss Economic Instituteexternal link. Transport companies are also calling for more assistance.
“If many companies are over-indebted after the crisis, they will not invest for years,” says Jan-Egbert Sturm. Then there will be no more resources for innovation and the economy will grow less strongly.
The measures taken so far to support the economy, such as shorter work hours and loans, will not be enough, he argues in an interview published on Monday by CH Media newspapersexternal link.
The government should further lighten the burden on companies by, for example, covering the costs of rents or interest payments, he says.
“This would be a kind of partial unemployment scheme for capital,” Sturm says. The state would not have to pay for everything, but a certain amount would be appropriate. Companies, their owners and lenders also have obligations, he adds.
“Anything we don’t do now will cost us more later,” Sturm warns. The unemployment rate in Switzerland, for example, could rise sharply. In addition, hardly any jobs are being created during the crisis and even afterwards companies will remain cautious at first.
According to Sturm, Switzerland can make such a non-repayable financial contribution without exceeding the CHF100 billion ($102 billion) threshold for support measures.
Struggling transport sector
Public transport companies are already requesting additional subsidies from the federal government and cantonal authorities due to the heavy financial losses triggered by the coronavirus pandemic, reports the Swiss news agency Keystone-SDA.
In a letter to cabinet minister Simonetta Sommaruga, who holds the transport portfolio, the Swiss Public Transport Association bemoans losses to the tune of several hundred million francs. These losses cannot be offset by emergency aid, short-time work compensation and the suspension of investment plans, according to the letter, dated March 26, which was published in the SonntagsZeitungexternal link newspaper.
The transport association complains that most of the revenue from individual tickets is lost due to the measures taken against the pandemic. At the same time, the railways must continue to provide a basic service. In addition, season ticket holders are asking for refunds. And several transport companies are still paying full wages to employees despite shorter working hours.
The association says it is impossible to calculate the additional costs and losses associated with the situation. In normal times, almost CHF500 million a month is collected through the sale of tickets and season tickets by transport companies, according to the association’s director Ueli Stückelberger, quoted in the SonntagsZeitung. Since the imposition of semi-confinement, 60-80% of this revenue has been lost, he says.
On April 3, the Swiss government doubled its coronavirus emergency loan scheme to CHF40 billion after being flooded by requests for help by businesses. More than 76,000 agreements have been made.