The rapidly agreed plan hatched behind closed doors last weekend to merge Switzerland’s two largest banks has sparked widespread anger across Switzerland. A poll published this week showed that 66% of Swiss surveyed were either very (37%) or fairly (29%) angry about the merger, reported RTS.

© Alan Gignoux | Dreamstime.comLate last week, a crisis in investor confidence in Credit Suisse Group gave way to the beginnings of a bank run. To restore calm, a merger of Credit Suisse and UBS was arranged behind closed doors over the weekend. In the end the holders of CHF 16 billion of AT1 bonds (also known as CoCo or bail-in bonds) had the value of their assets written to zero, and shareholders, who at the end of 2022 held stakes in a business with an equity book value of CHF 48 billion, were

On 22 March 2023, the Federal Tribunal, Switzerland’s highest court, decided that Uber drivers are employees and the companies that employ them must deduct and pay social security taxes, according to a press release. The decision concerns drivers for UberX, UberBlack, UberVan and UberPop working for Uber B.V. and Rasier Operations B.V. and the money paid to them in 2014.

Photo by Airam Dato-on on Pexels.comIn 2019, Zurich’s compensation fund decided drivers working for Uber Switzerland GmbH were employees and their pay was subject to regular social security taxes payable by the company employing them. However, a year later this decision was overturned by Zurich’s social security tribunal and then the Federal Tribunal.

However, in 2021, the question was revisited when Zurich’s social

On 22 October 2023, Switzerland will hold its four-yearly parliamentary federal election. A poll published on 23 March 2023 suggests the biggest loser, compared to the last vote in 2019, could be the Green Party.

Photo by Louis on Pexels.comThe Swiss People’s Party (26.6%) and Socialist Party (17.8%), which continued to lead the poll, both progressed by 1 percentage point compared to 2019, while the PLR/FDP (15.6%) in third place gained 0.5 percentage points, reported RTS.

The biggest loser was the Green Party (10.7%), which lost 2.5 percentage points, followed by the Centre Party, which lost 0.5 percentage points.

In contrast to the Green Party, support for the Liberal Green Party (8.3%) rose 0.5 percentage points in the poll. The Liberal Green party combines a liberal economic

On 23 March 2023, the Swiss National Bank (SNB) lifted its policy rate by 50 basis points (half a percent) to 1.50%.

The SNB said that it was tightening its monetary policy further to counter the renewed increase ininflationary pressure. In addition it said that it could not rule out additional rises as part of its focus on ensuring price stability over the medium term.

Inflation has risen again since the beginning of the year, and stood at 3.4% in February, above the range the SNB equates with price stability. The latest rise in inflation is principally due to higher prices for electricity, tourism services and food. However, price increases are now broad-based, said the SNB in a statement.

Stronger second-round effects and the fact that inflationary pressure from abroad has

On 16 March 2023, Switzerland’s State Secretariat for Economic Affairs (SECO) published updated economic forecasts for the year.

Photo by Pixabay on Pexels.comA team at SECO focused on business cycles largely reaffirmed its previous assessment. Growth for the Swiss economy is projected to come in significantly below average at 1.1% in 2023, rising to 1.5% in 2024. The energy situation in Europe has eased in recent months. However, inflationary pressure remains high internationally.

Switzerland’s GDP was flat in the fourth quarter of 2022. The more cyclical industrial sectors were held back by a challenging international environment, and goods exports contracted, said the agency. Meanwhile, domestic demand continued to strengthen, buoyed in part by a robust increase in employment.

Married couples in Switzerland are taxed together on their combined income, something that is not applied to unmarried couples who are taxed individually. This often acts as a tax disincentive for one member of a married couple to work, disproportionately affecting women. Politicians and organisations focused on improving women’s career chances would like to see this combined taxing of income go, something the Federal Council has been working on.

Photo by Emma Bauso on Pexels.comHowever, this week a majority of political parties came out against the Federal Council’s proposal, reported RTS. The Swiss People’s Party (UDC/SVP), Centre Party, Green Party and Socialist Party all said they were against the Federal Council’s proposal. Only the PLR (FDP) and Liberal Greens supported a variant

It’s been a tough week for share and bond owners of Switzerland’s second largest bank. Shares in Credit Suisse Group started the week at CHF 2.46 and ended the week at CHF 1.86, a fall of 24%. However, at one point they were down 37% at CHF 1.56.

Credit Suisse © Yulan | Dreamstime.comOn 15 March 2023, the Swiss National Bank (SNB) and regulator FINMA published a statement asserting that the problems experienced by certain banks in the US do not pose a direct risk of contagion for the Swiss financial markets, underlining the strict capital and liquidity requirements applicable to Swiss financial institutions. In addition, the statement said that Credit Suisse meets the capital and liquidity requirements imposed on systemically important banks and, if necessary, the SNB would provide

Switzerland’s much discussed work pension reform was accepted by parliament this week after a number of changes, reported Parlament.ch.

Photo by Monica Silvestre on Pexels.comLike Switzerland state pension, compulsory work pensions are under strain as the population ages and people live longer. This week, Switzerland’s parliament voted 113 versus 69 in favour of a package of reforms.

Key reforms include lowering annuity rates from 6.8% to 6% and transitionary top up payments, but only for those with modest pension pots. Annuities are constant payments made until the holder dies. Someone with CHF 100,000 in savings would get CHF 500 per month for the rest of their life with an annuity rate set at 6%.

Shifting the annuity rate from 6.8% to 6.0% will reduce annuity incomes by 12%.

Buying has become much more expensive than renting in Switzerland, according to a report by the bank Credit Suisse.

Photo by Curtis Adams on Pexels.comThe market for owner-occupied homes is currently undergoing a reversal of fortunes, triggered by the spike in mortgage interest rates in 2022, said the bank. Although owners enjoyed unprecedented low mortgage rates for a decade, rates have more than doubled over the past year.

After 13 years, buying is more expensive than renting again. In aggregate the annual financial cost of owning a residential property is now 47% higher than renting a comparable apartment. This difference, expressed as an ownership premium, is shown by the gap between the dotted blue and dotted yellow lines in the chart below. The chart also shows how most of

Toblerone, the iconic Swiss chocolate brand, will soon be forced to remove the Matterhorn mountain peak logo from its branding, reported RTS.

Photo by Safwan C K on Pexels.comThe Toblerone chocolate brand is owned by the US company Mondelez, which plans to move production of the product from Switzerland to Slovakia this year.

Strict Swiss rules introduced in 2017 restrict the use of national symbols to promote milk-based products that are not made exclusively in Switzerland. Slightly less stringent rules apply to other products.

Moving production to Slovakia means the pointy chocolate will no longer be Swiss, according to the rules. This means the Matterhorn logo, a national symbol, must come off the branding and packaging.

The original Toblerone chocolate was produced by the

On 8 March 2023, a case was brought against the boss and three employees of the Zurich office of Gazprombank in a Zurich court. The four face charges of alleged money laundering that may be linked to Russian president Vladimir Putin, reported RTS.

© Leigh_1 | Dreamstime.comThe case has garnered international interest as it may provide insights into how Putin hides the huge fortune it is claimed he has.

The public prosecutor in Zurich alleges that between 2014 and 2016 four bankers, three Russian and one Swiss, were involved in allowing CHF 30 million of dividends to flow into two accounts at the Zurich subsidiary of Russian state-owned Gazprombank.

The bankers are accused of maintaining a relationship with the man at the centre of the allegations, cellist Sergei Roldugin, known

In Europe, Gruyère, the name of a cheese and a small picturesque Swiss town (Gruyères), is legally reserved for specific cheeses from parts of Switzerland and France made to strict recipes. However, in the US it is also applied loosely to a type of cheese that differs from the Swiss and French originals. European producers have tried to end the confusion by legally reserving the name for their product. But on 3 March 2023, a US court of appeal upheld a lower court ruling in favour of American cheesemakers’ looser use of the name.

Gruyere Cheese © David Taljat | Dreamstime.comThe recent US appeals court decision is part of a legal battle that began in 2013 when an association of European producers of Gruyère cheese legally opposed the application of the name to US cheeses on the grounds

With Swiss rents high and rising it should follow that more would be invested in building new homes. However, that isn’t the case. The newspaper Blick asks experts why.

As rents rise landlords should stand to make more from their investments. Many are also quick to assume that higher rents mean landlords are making excessive profits at the expense of renters.

However, in practice it isn’t that simple. Firstly, when deciding to invest investors must consider yield. When the value of real estate rises yield – the percentage return on investment – falls, making other investments relatively more attractive. Current high home prices mean that yields, or the percentage of rent to home value, is fairly low. The head of one Swiss property company analysed 10,000 apartments and found the

Four times a year the rate of interest used to set the rents in Switzerland is reviewed. If the aggregate average mortgage rate goes down some renters can request lower rent. If it goes up some landlords can raise rents. This time the rate remained at 1.25%, however it was close to moving to 1.5%.

Photo by Ketut Subiyanto on Pexels.comThe interest rate used to set the rent reference rate was the average rate on Swiss mortgage loans outstanding at 31 December 2022. The average rate this time was 1.33%, up from 1.18% in the third quarter of 2022. This rate is then rounded to the closest 0.25%. If the average interest rate had been 1.375% the reference rate would have risen to 1.5% and triggered higher rents.

Since its introduction in 2008 the rent reference rate has never risen.

In December 2022, parliament sent a recommendation to the Federal Council to increase state pensions by the rate of inflation. However, this week a parliamentary majority voted not to, reported RTS.

© Mcxas | Dreamstime.comThe Federal Council had already boosted state pensions by 2.5% from 1 January 2023 before calls were made to bump them up by 2.8% in line with the increase in the consumer price index (CPI) in 2022.

On 1 March 2023, 97 versus 92 (1 abstention) members of parliament voted against the extra 0.3% boost.

Political parties on the centre and left argued in vain for a full inflation boost to pensions, highlighting rising rents, energy costs and health insurance premiums.

However, others argued against it based on its cost, projected to be CHF 418 million. The

Upward pressure on prices continues in Switzerland. Recently published data show annual inflation rising to 3.3% to the end of January 2023, up from 2.8% at the end of 2022.

© Sam Lee | Dreamstime.comPublic sector workers in parts of Switzerland have been demanding salary increases. In Vaud they have been demanding indexation.

Looking back across a longer period of time Swiss inflation doesn’t look so bad. Between the end of 2010 and the end of 2022, prices have risen by 2.5%. Focusing on the 12 months to the end of January 2023 is misleading because it excludes three periods of deflation when prices fell by around a percent.

For salary earners prices rises are painful and falling prices tend to be overlooked. This means falling prices rarely lead to salary reductions and pay

In 2021, 1.4 million households in Switzerland owned their home, 36.3% percent of all households, according to statistics published on 23 February 2023.

© Stbernardstudio | Dreamstime.comThe rate of homeownership in Switzerland has remained fairly stable since 2000. Back then it was 34.6%. After rising to 38.4% in 2016, it has declined gradually to where it is today (36.3%).

Cantons with the lowest rates of homeownership tend to be urban and expensive. Basel-City (16.0%), Geneva (18.7%), Zurich (27.6%), Vaud (29.9%), Neuchâtel (31.4%), Zug (31.8%) and Luzern (34.0%) all have rates below the Swiss average (36.3%).

Cantons with high rates tend to be rural and less costly. Home ownership rates are highest in Appenzell-Innerrhoden (56.0%), Valais (55.2%), Jura (49.6%), Glarus (48.4%)

More and more soil is being impacted by drought. Clay soils in particular are affected by drought. These soils expand and contract depending on their water content and often crack when dry. Building on them can be risky and requires a particular structural design.

© Zimmytws | Dreamstime.comHome owners in parts of France have already been impacted by recent dry spells. Roughly half of France is at risk of the effects of droughts on clay soil and 10 million homes have already suffered important damage. For example, 44% of the Loire Valley is at medium or high risk of drought-based soil movement. Large parts Italy, Spain and the UK are also at risk.

Switzerland also has areas with clay-based soils. For example, much of the city of Yverdon-les-Bains is built on clay and much of the

On 15 February 2023, Switzerland’s federal government published finalised figures showing it spent CHF 4.3 billion more than it received in 2022. Excluding extraordinary expenses related to the Covid pandemic left an underlying operating deficit of CHF 1.9 billion, the first shortfall of this kind since 2005.

© Marekusz | Dreamstime.comSwitzerland’s federal government is required to operate under a system known as a debt brake. This requires it to achieve a breakeven budget over a business cycle, forcing it to generate and set aside excesses in good times to cover losses during lean periods.

The debt brake, introduced in 2006, was working well until 2020. Spending rose, but revenue rose more. In addition, the temporary central bank profits that flowed at least in part from attempts

After a rising number of attacks on cash machines across Switzerland, Migros Bank has decided it will probably close all of its machines overnight, reported RTS.

© Denis Linine | Dreamstime.comLast year, at least 38 cash dispensing machines were blown up and robbed across Switzerland. The most recent attack at the end of January 2023 was on a machine in the town of Neuendorf in the canton of Solothurn.

In 2021, the explosive charge used on one machine was so large that it destroyed part of the bank branch as well as the cash dispenser.

Faced with the rising number of attacks, Migros Bank has been reducing the number of machines open at night. From the end of February 2023, the policy of closing the machines from 11pm until 5pm is likely to be extended across all of Switzerland.

Since 1 December 2022, contracts that online platforms often get hotels to sign to stop them offering prices lower than those offered via the platform are no longer legally enforceable in Switzerland due to a change in law. This week, broadcaster RTS published the results of a market test it performed to see if the legal change had had any effect.

© Boumenjapet | Dreamstime.comRTS checked the prices of 287 rooms across Switzerland directly on hotels’ own websites and via the platform Booking.com. In one case it found reserving on Booking.com 54% more expensive. Two nights at the Hotel Rössli in Weggis in the canton of Luzern cost CHF 279 booking directly and CHF 429 (+54%) reserving on Booking.com. This made booking directly 33% cheaper than reserving via the platform. Another hotel,

© Ngampol Thongsai | Dreamstime.com The 2022 Corruption Perceptions Index (CPI), published on 31 January 2023, shows that most countries are failing to stop corruption. The CPI ranks 180 countries and territories around the world by their perceived levels of public sector corruption, scoring on a scale of 0 (highly corrupt) to 100 (very clean). …

Accident insurer Suva recorded a record number of recreation-related accidents in 2022, reported RTS.

Photo by Irene Lasus on Pexels.comSuva, a not-for-profit insurance company in Switzerland, insures around 2 million individuals in Switzerland every year. In 2022, it recorded around 290,000 non-work related accidents, a record figure, 14% higher than in 2021 and 4% higher than before the pandemic in 2019.

A large number of accidents occurred outside, suggesting that the good weather over spring and summer was behind the rise in accidents. The weather in March 2022 was exceptionally good, with little rain and plenty of sunshine, said Suva.

Last year offered ideal conditions for skiing, biking and hiking, and related accidents.

More on this:RTS article  (in French)  – Take a 5

The 2022 Corruption Perceptions Index (CPI), published on 31 January 2023, shows that most countries are failing to stop corruption. The CPI ranks 180 countries and territories around the world by their perceived levels of public sector corruption, scoring on a scale of 0 (highly corrupt) to 100 (very clean).

© Ngampol Thongsai | Dreamstime.comThe global average remains unchanged for over a decade at just 43 out of 100. More than two-thirds of countries score below 50, while 26 countries have fallen to their lowest scores yet. Despite concerted efforts and hard-won gains by some, 155 countries have made no significant progress against corruption or have declined since 2012, said the report.

Denmark remained at the top with a score of 90, two points higher than in 2021. In second

When workers in Switzerland change employers they typically take their salary-based pensions with them. However, if they leave the country without making any pension transfer arrangements, after six months, their pension money ends up with the Substitute Occupational Benefit Institution, a kind of backstop holding place for forgotten pensions.

© Ginasanders | Dreamstime.comAt the the end of 2022, the organisation held around CHF 5.6 billion of unclaimed money, reported RTS. The names, social security numbers and birth dates of beneficiaries are known. However, current addresses and contact details are missing for 62% of owners.

Many of the beneficiaries lose track of their pensions after changing jobs or leaving the country. Most of the time they are eventually reunited with the

Swiss resident’s are regularly reminded of the large financial gap is Switzerland’s state pension system. Despite this, several attempts at reform have failed to gain sufficient support. Those that have still leave a large shortfall. On 24 January 2023, UBS published four additional reform scenarios. Only the fourth, with a life expectancy adjusted retirement age of 68.2 years eliminates the current projected shortfall.

Photo by cottonbro studio on Pexels.comMany nations have large liabilities that are not included in their official debt piles. Typically, these promises of money in the future, such as pension payments or healthcare coverage dwarf debts recorded in government ledgers. Switzerland is no exception.

In 2019, the projected state pension deficit was CHF 1.165 trillion,

Like many governments across the world, Switzerland’s federal government is spending more than it collects. Extraordinary spending on Covid and refugees has pushed Switzerland’s finances into the red, a situation Karin Keller-Sutter, the current finance minister, hopes to eliminate by 2024.

Photo by Louis on Pexels.comDuring its meeting on 25 January 2023, the Federal Council made preliminary decisions to ensure a balanced budget in 2024 and beyond. It hatched a plan to boost revenue and reduce spending in order to comply with the country’s debt brake requirements, with a focus on spending cuts.

According to the Federal Council, cuts will be applied in all areas, with details to be agreed by February and March 2023.

The key elements outlined so far are removing CHF 600 million

After slaughtering and freezing 12,000 pigs, Switzerland still has 50,000 more pigs than it can digest, reported RTS. With Swiss pig farms so full, vets are concerned animal welfare may be compromised.

Photo by Mark Stebnicki on Pexels.comDuring the Covid pandemic when movements across national borders were restricted, Swiss farmers increased the number of pigs. When restrictions eased and imports returned Switzerland was left with a surplus of animals.

The Swiss porc market is unregulated, so producers must react to changes in supply and demand. The current excess is pushing prices down, encouraging farmers to keep their pigs for longer. And older bigger pigs take up more space.

Suisseporcs, an association representing pig farmers, described the lack of space as exceptional.

At a meeting in Bern on 19 January 2023, Werner Luginbühl, the head of Elcom, Switzerland’s electricity regulator, called on the sector to be careful to manage consumer expectations, reported RTS.
Photo by SHVETS production on Pexels.comAccording to Luginbühl, many consumers are confused by Switzerland’s rising electricity prices. Some think the electricity consumed in Switzerland comes from hydro and nuclear production where production costs have been unaffected. This understanding does not fit with rising prices – up on average by 27% since last year – leaving people confused.
In reality, there is a significant mismatch between Switzerland’s production and consumption. While the amounts of electricity produced and consumed in Switzerland over a year are roughly

Switzerland offers workers the possibility of obtaining professional qualifications while working. Around 27,500 people graduate from these federally recognised higher vocational education programmes every year.

© Elmirex2009 | Dreamstime.comSix years after graduating from these programmes the median income for a full-time job is about CHF 7,800 per month, compared with the CHF 5,300 received five years before obtaining professional training or a tertiary qualification. This average pay boost of CHF 2,500 represents a raise of around 46%.

The earnings boost varies significantly depending on the qualification obtained, the field of training and gender. In three fields of colleges of professional education and training, the training phase is linked to substantial income decreases as