The Week in Switzerland
Dear Swiss Abroad,
Last week’s news from Switzerland was dominated by politics, with a special session of the House of Representatives making progress on a decades-old issue. Ethics also featured in the week’s political news, with the misadventures of a Green Party politician.
On the economic front, the return of the notorious negative interest rates is once again being discussed.
Enjoy your reading!
Meeting for a special three-day session, the House of Representatives has accepted the idea of individual taxation for married couples. This marks progress on an issue that has occupied Swiss politics for a good quarter of a century.
In Switzerland, the tax rate increases with income. This progression penalises married couples: a couple with a combined income of CHF120,000 ($144,538), for example, pays more tax than two unmarried individuals earning CHF80,000 and CHF40,000 respectively. As early as 1984, the Federal Court ruled that this situation was discriminatory, but no solution had been found until now.
The House of Representatives has now accepted a popular initiative from women in the Radical-Liberal Party calling for the introduction of individual taxation, as well as a counter-proposal along similar lines. The proposal passed by a very narrow majority, thanks to an unprecedented alliance between the liberal right and the left.
The matter is far from settled. The dossier must now return to the Senate, where there is strong resistance from the conservative right and the Centre Party, who believe that individual taxation would disadvantage “traditional families” reliant on a single income.
Ever since Geneva politician Pierre Maudet’s ill-fated trip to the Gulf, it has been clear that holidays in the region can spell trouble for Swiss politicians. This week, Green Party member Céline Vara, recently elected to the cantonal government in Neuchâtel, found herself in the spotlight.
Blick revealed that Vara had taken a family holiday to a luxury resort in Oman following her election. There was nothing unlawful about the trip, but a 5,000km flight to a country not known for democracy raised eyebrows, particularly for a representative of a party that prioritises climate action and democratic values.
While the matter may seem minor, it has attracted widespread media attention, reigniting debate over the duty of politicians to lead by example.
Initially calling it a “private matter”, Vara later explained herself in Arcinfo. The future Senator, set to take office on June 1, said the trip was long-planned and aimed at observing sea turtles and wildlife. She rarely travels by air, she noted, but conceded she may have been “naïve” and dismissed the backlash as a “cheap media and political stunt”.
Vehicle pollution is often associated with emissions from engines – but tyre abrasion is another major source of pollution. A new study has found that this can even end up in our food.
Traces of additives used in tyre manufacturing have been found in all categories of fruit and vegetables commonly consumed in Switzerland. This is according to a joint study by the Swiss Federal Institute of Technology Lausanne (EPFL) and the Federal Office of Food Safety and Veterinary Affairs.
These tyre residues fall under the category of micropollutants and can be found even in remote areas far from road traffic.
The effects on human health are still unclear. More studies are needed, particularly on how these chemicals behave inside the body. However, the risk is not negligible – previous studies on rodents have shown a decline in male fertility.
Economic uncertainty driven by US tariff policy is not only affecting the global economy – it may also impact Swiss monetary policy. The return of negative interest rates is now back on the table.
You don’t need to be an economist to understand the basics: current uncertainty is pushing up the value of the Swiss franc, long considered a safe haven. Since the start of 2024, the franc has appreciated by nearly 9% against the US dollar. This has pushed inflation down – year-on-year inflation hit 0% in April, the lowest rate in four years.
In response, the Swiss National Bank (SNB) is considering another rate cut. The key interest rate is currently 0.25%. “If necessary, we are prepared to consider reintroducing a zero or even negative interest rate policy,” SNB President Martin Schlegel said on Tuesday.
Negative rates mean money on deposit loses value – banks must pay to hold it – which encourages spending and investment. It also makes the franc less attractive to foreign investors. The SNB last used negative interest rates in 2015 before ending the policy in 2022.
The week ahead
It’s not often that Switzerland becomes the centre of international attention – but this week it will.
US Treasury Secretary Scott Bessent is visiting Geneva for talks with a Chinese delegation. The meeting comes as tensions between the two countries escalate due to steep reciprocal tariffs.
Meanwhile, Basel will be in the spotlight for lighter reasons – it is hosting this year’s Eurovision Song Contest. The opening ceremony is on Sunday, with the grand final on Saturday May 17.
Elsewhere, the week will feature national traditions and cultural events. The Hérens cow fighting final will take place on Sunday, and the Federal Office of Culture will present the Swiss Grand Prize for Music on Thursday – which also marks the 150th anniversary of the Swiss Federal Court.
Translated from French using DeepL/amva
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