Several Swiss universities are fearing considerable financial losses following the Swiss National Bank’s decision on January 15 to abandon the cap on the franc against the euro.
The Federal Institute of Technology Lausanne (EPFL) is estimating the damage at CHF15 million ($15.8 million). This is based on a euro exchange rate of between CHF1.00 and CHF1.05, EPFL vice-president André Schneider told Swiss public radio, RTS.
The University of Basel estimates its losses at CHF5-6 million, the University of Lausanne CHF1.7 million and the University of Applied Sciences of Western Switzerland CHF900,000. The University of Geneva has set up a task force to assess how much it could be out of pocket.
Significantly, these figures are not consolidated – the exchange rate is still fluctuating. One euro is currently worth CHF1.07.
Swiss universities are exposed to variations in the exchange rate because the European Union has funded various research projects in Switzerland in euros. These are then converted into francs to pay researchers and cover other project costs.
The contracts with researchers were finalised when the floor of CHF1.20 was in place. When that disappeared and the franc surged, the universities were unable to come up with the amounts initially agreed.
In order to cope with the shortfall, the institutions will either dip into their reserves, as at Lausanne, or ask their researchers to postpone certain expenses, while waiting for the exchange rate to stabilise.
But according to those questioned by RTS, if the euro situation does not develop favourably, they will have to appeal to the government for assistance. In 2011, the cabinet released CHF43 million to make up for losses experienced by higher education institutions.