The Swiss finance minister wants to treat the financial year 2020 as a special case and find an exceptional solution to repay the debt accrued through the corona crisis.

The measures taken by the Swiss government to limit the economic damage from the lockdown will cost between 30 and 50 billion Swiss francs ($30.9 to 51.4 billion) and wipe out the reduction in debt achieved over the past two decades.

SNB Profit to Repay Coronadebt

Finance Minister Ueli Maurer wants to treat the current financial year as a special case and proposes an exceptional solution to repay the debt accrued, he told «Neue Zuercher Zeitung» (behind paywall, in German) in an interview. He suggests to use the entire annual allocation from the Swiss National Bank’s distribution reserves for the corona debt. Add to that exceptional revenue, such as through the sale of mobile phone network licenses.

The SNB in normal years is giving 2 billion francs to the federation and the cantons out of its distribution reserve. For 2019, the bank agreed to give the double (4 billion francs) due to the extraordinary profit it had generated and also promised to do so this year (but this depended on the result of 2020). The SNB is independent. It has earned vast amounts of money in past years following investments in foreign-currency assets it had bought to prevent the franc from appreciating.

But even if the government reaches an agreement to use the money it gets from the SNB every year to repay the corona debt, it will still take a quarter of a century before the total money has been paid back.

«Extreme Cuts»

Should the government (and cantons) not reach an agreement as proposed by Maurer, he said that the government faced making «extreme cuts» to the budget in coming years.

In the interview, Maurer also suggested that he was most skeptical about the way the government had handled the crisis and pointed to the much more liberal approach taken by the Swedish government – as it was discussed by finews.com in several instances.