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Debt-shy Switzerland announces record-breaking budget deficit

Switzerland announced Wednesday that it ended 2020 with a record-breaking budget deficit of 15.8 billion Swiss francs ($17.6 billion, 14.6 billion euros) due to the Covid-19 pandemic.

Published: 17 February 2021 18:07 CET
Debt-shy Switzerland announces record-breaking budget deficit
The coronavirus pandemic has taken its toll on Switzerland. Photo: FABRICE COFFRINI / AFP

The wealthy Alpine country had ended 2019 with a surplus of 3.6 billion francs and its budget for 2020 initially assumed a 344-million-franc surplus.

“On the one hand, federal receipts were lower as a result of the economic downturn; on the other hand, the confederation incurred high extraordinary expenditure to cushion the economic impact of the pandemic,” the government said in a statement.

Usually exceptionally disciplined with its budgets, Switzerland saw its tax receipts shrink by 3.4 percent due to the economic slowdown, but also saw its expenditure soar with the measures intended to prop up the economy.

Some 15 billion Swiss francs went on pandemic-related expenditure in 2020, including 10.8 billion related to short-time working and 2.2 billion to cover lost earnings, notably for the self-employed.

Overall, “the economic downturn was less severe than anticipated in 2020”, the government added.

For 2021, ministers asked parliament to allocate eight additional credits for a total amount of 14.3 billion Swiss francs to finance pandemic support measures.

“According to current estimates, a financing deficit of approximately 20 billion Swiss francs is expected for 2021,” the government said. “In 2022 to 2024, the confederation expects the federal budget to break even or be slightly positive.”

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STRIKES

EXPLAINED: How could government intervene to settle Denmark nurses’ strike?

Over one in four people in Denmark are in favour of political intervention to resolve an ongoing nurses’ strike, but political resolutions to labour disputes are uncommon in the country.

Published: 21 July 2021 13:46 CEST
EXPLAINED: How could government intervene to settle Denmark nurses’ strike?
Striking nurses demonstrate in Copenhagen on July 10th. OPhoto: Ida Guldbæk Arentsen/Ritzau Scanpix

In a new opinion poll conducted by Voxmeter on behalf of news wire Ritzau, 27.3 percent said they supported political intervention in order to end the current industrial conflict was has almost 5,000 nurses currently striking across Denmark, with another 1,000 expected to join the strike next month.

READ ALSO:

Over half of respondents – 52.6 percent – said they do not support political intervention, however, while 20.1 percent answered, “don’t know”.

That may be a reflection of the way labour disputes are normally settled within what is known as the ‘Danish model’, in which high union membership (around 70 percent) amongst working people means unions and employers’ organisations negotiate and agree on wages and working conditions in most industries.

The model, often referred to as flexicurity, is a framework for employment and labour built on negotiations and ongoing dialogue to provide adaptable labour policies and employment conditions. Hence, when employees or employers are dissatisfied, they can negotiate a solution.

But what happens when both sides cannot agree on a solution? The conflict can evolve into a strike or a lockout and, occasionally, in political intervention to end the dispute.

READ ALSO: How Denmark’s 2013 teachers’ lockout built the platform for a far greater crisis

Grete Christensen, leader of the Danish nurses’ union DSR, said she can now envisage a political response.

“Political intervention can take different forms. But with the experience we have of political intervention, I can envisage it, without that necessarily meaning we will get what we are campaigning for,” Christensen told Ritzau.

“Different elements can be put into a political intervention which would recognise the support there is for us and for our wages,” she added.

A number of politicians have expressed support for intervening to end the conflict.

The political spokesperson with the left wing party Red Green Alliance, Mai Villadsen, on Tuesday called for the prime minister Mette Frederiksen to summon party representatives for talks.

When industrial disputes in Denmark are settled by parliaments, a legal intervention is the method normally used. But Villadsen said the nurses’ strike could be resolved if more money is provided by the state.

That view is supported by DSR, Christensen said.

“This must be resolved politically and nurses need a very clear statement to say this means wages will increase,” the union leader said.

“This exposes the negotiation model in the public sector, where employers do not have much to offer because their framework is set out by (parliament),” she explained, in reference to the fact that nurses are paid by regional and municipal authorities, whose budgets are determined by parliament.

DSR’s members have twice voted narrowly to reject a deal negotiated between employers’ representatives and their union.

The Voxmeter survey consists of responses from 1,014 Danish residents over the age of 18 between July 15th-20th.

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