Veteran diplomat to take on financial headache

Michael Ambühl is widely regarded as Switzerland's go-to negotiator EQ Images

Switzerland has assigned Michael Ambühl, a top diplomat, to defend the country’s battered financial sector from increasing international political pressure.

Occupying the top post in a newly created department, Ambühl will effectively become the number-two man in the finance ministry when he begins his tenure as State Secretary for International Financial and Tax Matters on March 1.

The move, widely welcomed by the media, academics and financial industry watchers, will see the 59-year-old career diplomat dropped into the pressure cooker of ongoing tax and banking negotiations with both the United States and countries in Europe.

Alongside his deputy, Alexander Karrer, Ambühl will lead a team of around 40 experts in finance, monetary policy and law. At a news conference on Wednesday, Foreign Minister Micheline Calmy-Rey said Ambühl would continue to cooperate with the foreign ministry.

Stéphane Garelli, a competitiveness specialist at Lausanne University and the city’s prestigious IMD management school, calls Ambühl’s appointment a step forward for a federal administration in which ministries often don’t talk to each other as much as they ought to.

“I think the message is clearly that Switzerland is going to become much more proactive on the international scene to explain what our legislation is and our objectives on financial and economic matters,” Professor Garelli said.

Finance Minister Hans-Rudolf Merz and Calmy-Rey, his current boss, had agreed over the Christmas holiday to Ambühl’s transfer. He was among eleven candidates considered for the job, Merz said.

The appointment was announced after Wednesday’s weekly cabinet meeting. Ambühl’s replacement at the foreign ministry will be Peter Maurer, Switzerland’s ambassador to the United Nations in New York.

“A change in the mindset”

Garelli told swissinfo.ch that Ambühl’s appointment represented “a change in the mindset” within the government, which has in the past been criticised for its wait-and-see response to serious problems. Critics berated the government – and Merz in particular – for the attempted defence of banking secrecy in 2009.

“The fact that Mr Ambühl has been appointed in such an important position indicates that people in Bern are waking up to reality,” Garelli added.

Ambühl, the highest ranking diplomat within the foreign ministry, brings an extensive knowledge of financial matters and is regarded as the architect of a set of key bilateral agreements with the European Union negotiated in the first half of the decade.

The Bernese has played central roles in critical issues ranging from the US government’s pursuit of bank UBS to Swiss mediation efforts in Iran’s nuclear stalemate.

“We’re confident he’s going to represent Switzerland’s interests in a most competent manner. He’s the right man for the job,” said James Nason, a spokesman for the Swiss Bankers Association.

Konrad Hummler, head of the Switzerland’s Private Bankers Association, also had kind words for Ambühl. At a news conference on Thursday, Hummler said the government’s good intentions had to be followed by deeds.

Challenges

Ambühl will begin his tenure implementing the government’s new financial strategy and ensuring the country’s banks and insurance companies operate on a level playing field globally.

In December, the government said it had ruled out the automatic exchange of bank client information with other countries, a contentious point in international negotiations.

Ambühl will face issues relating to the “fiscal sovereignty in a very intensive globalisation of financial services,” Nason said. The diplomat will negotiate tax accords with countries including Italy and Germany.

“Switzerland will definitely need his competence at that level,” said Garelli. “The story with UBS has left a lot of bitterness on both sides of the Atlantic. We have to resolve that also.”

But Garelli, a former managing director of the World Economic Forum, sees other benefits to the appointment. Each of Switzerland’s seven cabinet ministers hold a major portfolio and several smaller ones, although not all have state secretaries.

“What we have seen recently is that our cabinet members cannot know everything, cannot do everything,” Garelli said.

Justin Häne, swissinfo.ch

Michael Ambühl

Michael Ambühl was born in 1951. He is from canton Bern.

Since 2005, Ambühl was State Secretary and Head of the Directorate of Political Affairs at the foreign ministry.

He led last summer’s negotiations concerning bank UBS in the US.

His postings include Kinshasa, New Delhi and Brussels. He also played a role in mediation efforts on Iran’s nuclear programme and helped negotiate a gas deal between Switzerland and Tehran.

Ambühl studied management science and applied mathematics at the Federal Institute of Technology in Zurich. He has a doctorate in technical sciences.

Banks under pressure

Switzerland’s banking industry has been under attack since the start of 2009 for helping foreign tax evaders hide their assets. The global crusade coincided with the devastation of the financial crisis leaving large holes in the budgets of many countries.

The OECD placed Switzerland on a “grey list” of uncooperative tax havens in April. They were removed in September after renegotiating various double taxation treaties, but the Swiss have refused to automatically transfer information to tax investigators without proof of crimes.

Several countries, including Italy, France, Britain and the ÛS launched tax amnesties this year in efforts to repatriate assets from tax cheats.

The most damaging tax evasion case involved the activities of UBS bank in the US. In February, UBS was fined $780 million after admitting helping US citizens to dodge taxes.

In September, the Swiss government was forced to hand over the details of 4,450 UBS clients to the US – in effect violating Swiss banking secrecy to prevent a ruinous court case for UBS.

Canada and India have also issued warnings that they will not tolerate Swiss banks sheltering tax evaders’ assets.