Switzerland Deploys Further $33 Billion for Virus-Hit Economy
Switzerland Announces Additional $33 Billion Aid for Its Economy
(Bloomberg) --
The Swiss government wants to unlock a further 32 billion francs ($33 billion) in aid, increasing its support to the equivalent of 6% of economic output to help struggling businesses through the coronavirus crisis.
The lion’s share of that package will consist of bridge loans worth 20 billion francs for otherwise healthy small- and medium-sized companies that have seen income drop off as a result of the epidemic. The lending will be either fully or partially backed by the government, it said in a statement on Friday.
“We’ve got companies that can’t pay,” Finance Minister Ueli Maurer said at a press conference in Bern. If the government doesn’t provide liquidity, “we will get into a negative spiral we can’t get out of again.”
Despite effectively being able to borrow money for free, Switzerland has a sterling credit rating and has run surpluses for years. Last year’s federal budget surplus amounted to 3.1 billion francs. That, Maurer said, meant that there was now ample room to support the economy.
“It’s really simple: People who need money go to their normal bank, and it checks and says ‘yes, he’s got concerns because of corona’,” and the bank pays out as much as 500,000 francs without further bureaucracy, with the funds backed by the federal government.
Maurer said this would mean possibly 10,000 companies would be able to get hold of cash next week. Amounts in excess of 500,000 francs will have an 85% government backing.
Other measures announced on Friday include companies being allowed to postpone social insurance contributions, federal tax payments and customs duties without being penalized.
The spending plans will have to be approved by lawmakers, which is due to happen next week.
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