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Swiss industry pummelled by weak euro

Nine per cent said they had transferred their operations to euroland Keystone Archive

Switzerland's machine, electronic equipment and metal industries have been hit hard by the weakening of the euro against the Swiss franc.

According to a survey by the industries’ umbrella organisation, Swissmem, 80 per cent of the 278 companies polled recorded reduced margins. Nearly half said they had seen a drop in orders because of the weak euro.

In 2001, the euro fell to SFr1.44, and now stands at SFr1.48.

The euro was valued at SFr1.62 in January 1999, but subsequently fell by more than nine per cent against the Swiss franc. Because of the drop, 65 per cent of companies questioned said they incurred exchange rate losses.

For instance, if the value of the euro falls, then the value of the deal also falls for the Swiss producer.

In order to lure orders from European Union customers, 35 per cent said they were forced to increase business done in euros. Some nine per cent of those questioned said they had transferred their operations to euroland.

Swiss companies said in the survey they did not expect any significant improvement this year, with half of them anticipating an exchange rate of SFr1.45 – SFr 1.50 against the euro.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR