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Keystone
Many in Switzerland still could not imagine what the cost of the crown crisis would mean for our prosperity. This is what Thomas Jordan (57), president of the Swiss National Bank (SNB) says in an interview with the “SonntagsZeitung”. The crisis could have serious consequences for the high standard of living in Switzerland.
Switzerland had to be prepared for the “greatest depression since the Second World War or the Great Depression of the 1930s”. In his first interview since the outbreak of the pandemic, Jordan talks about a “dramatic global development” that is also affecting the “Swiss economy”: “We will have to live with the consequences of the crown crisis even more.”
Prosperity at risk
Accordingly, economic activity in Switzerland has plummeted by 20-30% since the outbreak of the crisis, causing huge costs of around CHF 11 trillion to CHF 17 trillion per month: “Many still cannot imagine What these numbers would do for the prosperity of the country Switzerland means, “Jordan said.” But we will have years to chew on these costs. “
Jordan sees the greatest danger in a second pandemic shock if there is another crisis: “If economic activity falls shortly to just 70 percent of normal level, a rich country like Switzerland cannot simply handle it. »»
Switzerland would have to prepare for a comparable emergency in the future, “without having to make such extreme restrictions on the economy. Otherwise, our prosperity will be greatly reduced.
Swiss recovery depends on development abroad
If there were no rapid recovery, healthy businesses that would have survived a normal recession would collapse and jobs would also be lost.
According to Jordan, around half of the Swiss economy is export-oriented. Therefore, it is also “decisive to what extent overseas markets remain open and to what extent measures taken there can stabilize the international economy.”
Huge upward pressure on the franc
The BNS plans to take more currency interventions against an overly strong Swiss franc, Jordan said. At the moment, it does not see a further rate cut as the main instrument to combat the strength of the Swiss franc, which is detrimental to the export industry.
“If necessary, we still have room for maneuver. But now we are focusing on exchange rate intervention to limit pressure on the Swiss franc, “Jordan said in an interview with the” Tribune de Genève. “
Negative interest rate necessary to “avoid further damage”
It sees no alternative to the continuation of the current ultra-loose monetary policy. “It really isn’t that we’re happy with the negative interest rate,” Jordan said. “We will pick it up as soon as circumstances allow.” But the negative interest rate of minus 0.75 percent is currently necessary to avoid further damage to the country. (kes / SDA)
