The week in Switzerland
Dear Swiss Abroad,
“Switzerland isn’t what it used to be,” we sometimes hear. But as this week’s stories show, that statement may not be entirely off the mark.
From tensions over Gaza to economic setbacks, construction controversies and even quarrels over the price of bread, the week’s news has dented the image of a peaceful and untroubled Switzerland.
Enjoy the read
The key international story this week was the cessation of fighting in Gaza and the release of the last Israeli hostages. But the Middle East crisis continues to dominate Swiss headlines.
The pro-Palestinian protest in Bern last Saturday, which caused millions of francs in damage and left several injured, remains at the centre of public debate. Calls are growing for tougher measures against violent demonstrators, while organisers have accused the police of “brutality”.
Meanwhile, a coalition of NGOs and left-wing politicians launched a popular initiative to have Switzerland recognise the State of Palestine – an issue that could one day be decided at the ballot box. For now, the federal government says the conditions are not met, particularly with regard to security.
On the humanitarian front, Swiss Solidarity has taken advantage of the ceasefire to launch a new fundraising campaign. “Swiss solidarity is more essential than ever to help the exhausted civilian population,” said the foundation.
Switzerland is known abroad for its natural beauty – and for the laws that protect it. But two government decisions this week angered environmentalists.
The federal government approved a 2% increase in construction outside building zones from 2026, double the original target. This despite its earlier commitment to strictly implement the Spatial Planning Act in exchange for the withdrawal of the initiative “Against the concreting of our landscape.” The environmental group Pro Natura accused the government of fuelling construction through new ordinances.
The “Transports 2045” report has also provoked numerous reactions in recent days. Produced by federal technology institute ETH Zurich’s professor Ulrich Weidmann on behalf of the Federal Department of Transport, the report sets out the priorities for Switzerland’s major rail and road projects over the next 20 years.
Motorways are again at the centre of the debate. The report proposes reviving projects such as Basel’s Rhine tunnel. Environmental groups and left-wing politicians have condemned the plan as “undemocratic”, arguing that voters rejected motorway expansion on November 24.
It has been a difficult week for the Swiss economy. On Thursday, Nestlé announced plans to cut 16,000 jobs over two years – 12,000 of them administrative. The Vevey-based food giant, which employs 277,000 people worldwide and 8,600 in Switzerland, is reacting to falling sales.
UBS, another flagship of the Swiss economy, has also been left in the cold. The banking giant could inherit an additional debt of CHF16.5 billion ($20.90 billion) following the takeover of Credit Suisse (CS). The Federal Administrative Court has ruled that the total write-down of CS’s AT1 bonds had no legal basis. The ruling points to a long legal battle between UBS and the federal government, which oversaw the Credit Suisse rescue.
The bad news is not just affecting the big names in the SMI. The entire Swiss economy is feeling the strain. The State Secretariat for Economic Affairs (SECO) revised its growth forecast downward to 0.9% for next year, from 1.2% in June. Unemployment is expected to rise to 2.9% in 2025 and 3.2% in 2026, mainly due to the impact of the 39% US tariffs on exports.
And on the labour front, a few clouds are already appearing. On Thursday, the unions announced that more than 20,000 construction workers were in favour of strike action, a relatively rare occurrence in Switzerland. Negotiations between unions and employers remain deadlocked over working hours, breaks and unpaid travel time to construction sites.
Switzerland is generally regarded as a wealthy country, so controversy over the price of bread may come as a surprise.
The German discount chain Aldi has sparked a price war by slashing the cost of a 500-gram loaf of half-white bread from CHF1.19 ($1.51) to less than CHF1.
As of this week, a 500-gram half-white loaf will cost CHF0.99 instead of CHF1.19, a reduction of 19%. Aldi says it wants to ease pressure on consumers’ wallets. This is certainly a laudable intention, but it has sparked a price war. Other supermarket chains quickly announced plans to match its prices.
Bakers and confectioners, however, call this “unfair competition” that threatens small businesses unable to match the big retailers’ costs. They argue supermarkets treat bread as a “loss leader” to lure customers, making prices unsustainable for local producers.
The week ahead
The political weekend will be marked by several elections. On Saturday in Bern, delegates of the Radical-Liberal Party will elect a new leader to succeed Thierry Burkart. On Sunday, cantonal elections will take place in Jura, along with a second-round vote in Geneva to replace Green politician Antonio Hodgers on the cantonal government.
On the economic front, Thursday and Friday will provide an opportunity to take the real pulse of the economy. Third-quarter results from Lonza, Roche, Sika, Schindler, Holcim and Galenica will provide a clearer picture of the economic slowdown.
On the cultural front, Lausanne will celebrate the 750th anniversary of its cathedral with an official ceremony on Monday.
Translated from French using DeepL/amva
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