Parliament has approved a government plan to set up a controversial charity using proceeds from the sale of Switzerland's gold reserves.

Both houses of parliament backed the plan on Friday, quelling fears that right wing parties would scuttle the proposed fund, and expose Switzerland to international criticism.

The fund still faces a crucial public test before becoming concrete, with a nation-wide vote expected later this or next year.

The Swiss People's Party failed in its campaign to reject the measure during the final reading of the Solidarity Foundation bill. The foundation motion was passed by 104 votes to 66 in the House of Representatives, and 33 to five in the Senate.

Opponents of the Solidarity Foundation said it had only been proposed because of pressure from groups critical of Switzerland's role during the Holocaust era. They also accused the government of giving in to campaigns waged from abroad.

The government, however, defended the foundation as a tenet of Swiss identity and an investment in the future.

Holocaust debate

Plans for the charity were launched to coincide with the debate over Switzerland's role during the Second World War. When it outlined the plan in March 1997, the government said it wanted to reinforce Switzerland's humanitarian tradition by using proceeds from the sale of gold reserves.

The Solidarity Foundation, which has run the parliamentary gauntlet for almost five years, will be financed by the sale some 1,300 tons of excess gold reserves held by the National Bank.

A third of the money from the gold sales will be used to fund prevention projects aimed at combating poverty, illness and hardship, mainly among young people.

The funds will be spent both in Switzerland and abroad over the next 30 years.

The remaining two thirds of the gold money will be divided equally between the state pension scheme and Switzerland's 26 cantons.

Support shaky

Support for the foundation looked to be eroding in recent months, with an increasing number of politicians from various parties distancing themselves from the charity.

The strongest opponent, the People's Party, argued that the money would be better used to shore up Switzerland's troubled old age pension scheme.

The National Bank plans to sell the excess gold reserves by the second half of 2004, in line with an agreement with 15 European central banks.

by Jacob Greber

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