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. He promised to present various options to do so as soon as the economic outlook cleared a bit. In 2020, Switzerland's federal government spent 15 billion francs to support the economy, and preliminary data shows it ended the year with a deficit of 15.8 billion.
According to Graff, if the Swiss debt ratio rose by 10 percentage points, or even 20, and"if things take a turn much worse than expected" the country would still be at a level that is"extremely low, compared to other nations, once the crisis is overcome". "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.