Euro puts pressure on Swiss economy

Jean-Pierre Roth says the Swiss economy needs some major restructuring in order to remain competitive Keystone Archive

The introduction of the Euro has put pressure on the Swiss domestic market, says the head of the Swiss National Bank, Jean-Pierre Roth.

Speaking at an economic forum in the German town of Tuttlingen, Roth said Switzerland would have to become more competitive in the near future to keep up with its European neighbours.

He recalled the creation of the European domestic market in the 90s, pointing out that this move was an incentive for Switzerland to put more importance on the revitalisation of the economy. However, he lamented that after a short period of success these efforts have recently been neglected.

In his speech, Roth also referred to the high cost of living in Switzerland, which he partly blamed on the fact that the Swiss economy has not been open to competition from private companies in past decades.

He added that without major restructuring, some sectors of the economy would suffer as a result of increased competition from the Euro Zone.

Privatisation measures

However, Roth admitted that privatisation measures could lead to redundancies, but explained that the flexible nature of the Swiss labour market would enable the jobless to rapidly be reintegrated into the workforce.

He also underlined that the Swiss export industry is being harmed by the current strength of the franc, which investors are increasingly turning to as a safe haven currency.

“Nobody would be sad if the franc would lose some of this nimbus,” he said. However, Roth added he was expecting this to happen over the next few years with Switzerland being surrounded by a dynamic European domestic market.

swissinfo with agencies