Switzerland Today

Greetings from Lausanne!

Inflation may be much lower in Switzerland than in neighbouring countries, but Swiss consumers are starting to feel the pinch as prices rise across a range of products – from furniture to food and petrol. A litre of petrol now costs CHF2.12 ($2.12) versus CHF1.60 in August 2021.

This is not a huge change, you might argue, but the overall economic outlook is looking pretty bleak, according to Swiss economist Sergio Rossi. Read more in his interview below.

On a lighter note, we have news for marmot fans. Did you know that Graubünden’s marmots are more talkative than their cousins in the central canton of Bern?  And they communicate in regional dialects, according to new research.

Keystone / Dominic Steinmann

In the news: Covid vaccine for 6-11 year olds, UBS banker convicted, Swiss Overshoot Day and marmot research.

• The Swiss medical regulator Swissmedic has approvedModerna’s Spikevax Covid-19 vaccine for use by children aged 6 to 11 years. Currently, 6% of 5-11 year olds have been double-jabbed against Covid-19, while 8% have received a single dose. This is well below the European median.
• The Swiss Federal Court has dismissed an appeal by a former UBS banker who had been convicted of industrial espionage for passing secret bank data about wealthy clients to the German tax authorities.
• Switzerland will consume 2.8 planets’ worth of natural resources by the year’s end, says the NGO Global Footprint Network, which marked ‘Swiss Overshoot Day’.
• Swiss-German speakers are known to converse in distinctive regional dialects, but the phenomenon has now been found to extend to marmots. A study of different marmot groups in cantons Bern and Graubünden found that their warning signals were unique to each area.
• A petition signed by almost 6,500 people was handed in to the Federal Chancellery today urging the Swiss authorities to grant asylum to conscientious objectors and people who oppose the war in Russia.

• Social media account holders are not legally responsible for monitoring comments that others make on their posts, a Swiss court has decided.

© Keystone / Urs Flueeler

Swiss economist: “The economic outlook is quite bleak’.

Prices will continue to rise in Switzerland, but wages won’t follow this upward trend, warnsExternal link economist Sergio Rossi on Swiss public radio, RTS. He wants the government to intervene to help middle- and lower-class families.

Petrol, clothing, food, furniture and health insurance premiums – price rises can be seen almost everywhere in Switzerland. Although inflation is low compared with many other countries, it rose to 2.4% in March, having risen at a gentler momentum of 0.6% during the whole of last year, it is a concern for consumers, as a recent survey highlighted.

“The Swiss are still protected from a surge in consumer prices because the franc is stronger than before and it is still a safe haven currency. But the sharp rise will come,” said Rossi, who is professor of macroeconomics and monetary economics at the University of Fribourg.

“This will affect all consumer prices because you have to use gasoline to transport goods to points of sale. It will be a fairly slow, but painful progression, because wages will not go up. They won’t follow this dynamic.”

The war in Ukraine will also have an impact, he says: “As this problem persists, as Western sanctions against Russia take effect, we will have to pay more for the products we consume every day.”

“Once [pandemic] savings are exhausted, problems in the labour market are going to be observed – namely that prices are going up but wages are not – people are going to start thinking that consumption has to slow down, otherwise they will not have enough to pay the bills at the end of the month. There is a delay effect, but it will happen,” said Rossi.

“There are many young people, and also not so young people, who are unemployed or who have trouble getting to the end of the month with their salary. Retired people do not have enough AVS [old age] pensions. In my opinion, the prospects for Switzerland are quite gloomy.”

Keystone / Senior Airman Joseph Barron

Swiss Defence Minister Viola Amherd ends her working visit to Washington in the United States.

This week she attendedExternal link the Munich Leaders’ Meeting organised by the Munich Security Conference and held bilateral talks on security issues, including with Deputy Defence Secretary Kathleen Hicks. A press conference is planned this evening.

Much of the focus of her trip has been on Swiss plans to purchase 36 F-35A fighter jets (photo above) from the US company Lockheed Martin to replace its ageing fleet.

The Le Temps newspaper todayExternal link outlines some of the technical and logistical challenges she faces. The article highlights a US Government Accountability Office (GAO) report from April that suggests the newest version of the fighter jet will not be ready before 2029 – three years later than planned. Swiss deliveries are supposed to begin in 2027.

Lockheed Martin and the Swiss procurement office, Armasuisse, are confident that the purchase will not be affected. But questions remain about possible delays and whether additional costs mentioned in the GAO report may be passed on to the Swiss. A final contract between the Swiss government and the US has not yet been signed.

The CHF6 billion ($6.37 billion) credit for the US-Swiss fighter jet deal was narrowly approved by Swiss voters in 2020, but it has since become subject to debate after left-wing campaigners started gathering signatures to force another ballot.

In June 2021, the Swiss government asked parliament to approve the procurement of 36 F-35A fighter aircraft from Lockheed Martin, arguing they “offered the highest overall benefit at the lowest cost”. The F-35A beat off Boeing’s Super Hornet and European competitors Eurofighter Typhoon and Dassault Rafale.