The unemployment insurance fund is likely to be more than SFf10 billion ($8.8 billion) in the red by the end of 2011.

Serge Gaillard, head of the labour directorate of the State Secretariat for Economic Affairs (Seco) told the Zurich-based paper NZZ am Sonntag that although the fund was well prepared for the recession, the extra measures being taken – such as courses for the unemployed - would amass further debts.

When the economy improves again the fund must be brought into balance. Unemployment benefits will have to be reduced and contributions increased. He said the government had already sent parliament proposals to this effect, which he hoped would be speedily approved.

Earlier this month Seco forecast an unemployment rate of 5.2 per cent in 2010. However, Gaillard described this as "pessimistic", while admitting that the situation was still uncertain.

In compliance with the JTI standards

More: SWI swissinfo.ch certified by the Journalism Trust Initiative