Sharjah24 – AFP: Germany, which is known for strict budgets, has tapped debt markets to prop up its virus-hit economy, while neighbouring Switzerland has consistently curbed borrowing despite calls to change course.
With Swiss firms struggling through another lockdown, the federal government last week finally loosened its purse strings a bit, doubling emergency aid to 10 billion Swiss francs ($11.2 billion, 9.3 billion euros) as part of a programme to boost the economy.
But when he presented the package for companies worst hit by the latest Covid restrictions, Finance Minister Ueli Maurer again lamented that Switzerland had to borrow to boost the economy.
Some 10 billion francs in debt will have to be paid off within six years according to a constitutional debt brake rule, Maurer warned.
He promised to present various options to do so as soon as the economic outlook cleared a bit.
Despite mounting criticism that the wealthy Alpine nation isn't doing enough to support companies, Maurer has repeated time and again that the Swiss government has "no money".
The government is already borrowing "150 million francs a day, or six million per hour, or 100,000 a minute," he notes.
In 2020, Switzerland's federal government spent 15 billion francs ($16.7 billion, 13.8 billion euros) to support the economy, and preliminary data shows it ended the year with a deficit of 15.8 billion ($17.6 billion, 14.5 billion euros).
A study published by Graff in January argued the nation's post-crisis finances would remain healthy even if borrowing rose, primarily because the country entered the pandemic with one of the world's lowest debt ratios.
National debt stood at 25.8 percent of gross domestic product (GDP) at the end of 2019.
That was less than half the European Union's widely breached target of 60 percent.
After debt soared at the end of the 1990s owing to a crushing real-estate crisis, Switzerland became a champion of fiscal rectitude, introducing a debt brake into its constitution in 2003.
For an optimal experience, please
