Switzerland Today
Dear Swiss Abroad,
Today’s briefing is largely about money. Wage costs at the Swiss federal administration are rising, milk prices are falling, and unemployment in Switzerland is expected to ease slightly this year for the first time in two years.
We also look at why Foreign Minister Ignazio Cassis is expected in Moscow on Friday, following his visit to Ukraine.
Best wishes from Bern
Swiss Foreign Minister Ignazio Cassis has travelled to Kyiv in his role as OSCE Chairperson-in-Office, seeking to strengthen the organisation’s role as a platform for peace. Amid a deep crisis within the OSCE, he is pursuing direct dialogue with both Ukraine and Russia to ensure readiness in the event of a possible ceasefire.
At the World Economic Forum (WEF) annual gathering in Davos in January, Cassis underlined the need for the Organization for Security and Co-operation in Europe (OSCE) to deploy monitoring teams within 24 to 48 hours should a ceasefire be agreed. According to the Neue Zürcher Zeitung (NZZ), he aims to position the organisation as an indispensable technical instrument for implementing future peace agreements, despite current political blockades.
Following talks with Ukrainian President Volodymyr Zelensky, Cassis is due to meet Russian Foreign Minister Sergei Lavrov on Friday, according to Russian sources – a meeting since confirmed by the OSCE. The talks are intended to help find a way out of the organisation’s existential crisis, which has been paralysed by Russia’s war against Ukraine and the resulting polarisation, including over budget decisions.
Key negotiations are not currently taking place in Switzerland, but in countries such as the United Arab Emirates and Turkey. According to the NZZ, Switzerland is struggling to maintain its traditional role as a mediator under the current US administration, while new diplomatic actors are gaining influence and are less inclined to follow established diplomatic conventions.
You can earn an average salary of CHF130,000 ($167,117) if you work for the Swiss federal administration. But a reform planned for 2027 is set to change the system. The Tages-Anzeiger reports on why starting salaries are rising sharply despite savings pressures – and what this means for the job market.
Federal employees currently earn an average of more than CHF10,000 per month, around 11.6% more than comparable positions in the private sector. Some benefit from annual pay increases of up to 4%. These automatic rises are increasingly under scrutiny, as they are seen as distorting competition with private employers.
From 2027, the federal government plans to introduce a more market-oriented pay system. Paradoxically, entry-level salaries are set to rise sharply to attract young talent, while career progression will be flatter. This is expected to generate additional costs of around CHF10 million in the first year, with savings of CHF35 million anticipated only in the medium term.
Business leaders such as UBS CEO Sergio Ermotti have criticised the federal government for recruiting skilled workers straight after graduation with attractive salaries and job security. “We must ensure that more well-trained people work in the private sector and help alleviate the skills shortage there,” he told the Tages Anzeiger newspaper.
After two years of rising unemployment, signs now point to a turnaround in 2026. Current indicators suggest a gradual recovery and improving job prospects.
While the State Secretariat for Economic Affairs (SECO) puts Switzerland’s unemployment rate at 3%, the internationally comparable figure calculated by the International Labour Organization (ILO) stands at 5% – an increase reminiscent in scale of the 2008 financial crisis. Nonetheless, there are growing signs that the Swiss labour market is easing: the KOF economic barometer and employment indicator have been rising for several months, according to Watson.
The main driver of this cautious optimism is improved business sentiment. More companies are planning to expand their workforce than to cut jobs. The construction sector in particular is acting as a growth engine and has reached record levels, while retail and hospitality continue to lag behind.
Overall, the outlook for 2026 is one of measured confidence. The Swiss economy appears to have bottomed out, even though the recovery remains uneven across sectors.
Falling milk prices may sound appealing, but they are a symptom of a deeper crisis: Switzerland is producing far too much milk. A system without effective volume controls is pushing farmers to the brink, while surplus butter piles up and resources are wasted.
Thanks to favourable weather conditions and high-quality feed, Swiss cows produced 126 million kilograms of excess milk last year. With the European Union also struggling with overproduction, prices are falling globally. To ease pressure on the domestic market, Swiss butter is now being subsidised with millions of francs and exported at rock-bottom prices – a last-ditch attempt to reduce surplus stocks.
Critics such as Werner Locher, secretary of the Interest Group for a Fair Milk Market, argue that the abolition of quotas in 2009 removed the system’s “brake”. Production is geared towards growth, leaving individual farms with little room to react quickly. Under planned measures, any producer delivering more than 105% of the previous year’s volume would receive only around CHF0.20 per kilogram for the excess – far below production costs.
For many farmers, the situation threatens both livelihoods and mental well-being. Reducing herd sizes to curb overproduction is often seen as a last and painful resort. This trend could ultimately undermine grassland-based agriculture, economist Mathias Binswanger of the University of Applied Sciences Northwestern Switzerland told the Swiss public broadcaster SRF.
Translated using AI/amva/sb
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