Finance Minister Ueli Maurer again lamented that Switzerland had to borrow to boost the economy. — Reuters picZURICH, Feb 21 — 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.
Some 10 billion francs in debt will have to be paid off within six years according to a constitutional debt brake rule, Maurer warned.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”.
“Switzerland could be much more generous,” said Michael Graff, an economics professor at ETH Zurich, a public research university.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.That was less than half the European Union’s widely breached target of 60 per cent.
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.“This fear of going into debt is something irrational,” argued Cedric Tille, an economics professor at Geneva’s Graduate Institute of International and Development Studies.
With negative rates, Switzerland can borrow “all it needs for its economy”, he said in a recent interview with Leman Bleu television.