THE EFFECTS OF THE EURO CRISIS ON SWITZERLAND

The financial crisis will reshape sustainable the Swiss economy and society. The financial industry is weakened; Europe the main business partner will be weak and the social inequality in Europe will grow. Companies and Politician’s will have to adapt their strategies and behaviour to these trends.

The effects of the financial and the € crisis on the Swiss financial industry are already very present; the job generator for the last few years has become the job killer. The financial industry needs to cut costs everywhere. But not only the financial industry is suffering; the export industry and tourism are in difficulties as well. Only companies focusing strongly on Asia flourish.

The pressure on the Swiss financial industry will remain high. Due to the high deficits of the European countries and the increasing social inequality, tax evasion will be more and more abolished. At the same time the increasing tax burden on the citizens of the debt-ridden States will increase. If the Switzerland manages to be attractive, we will notice an increased immigration of high net worth individuals. It will be the challenge of politics to create an attractive environment; additional taxes will certainly be negative. The increased immigration will have as well some negative effects. The most important will be that the properties in the preferred locations will be too expensive for the Swiss citizens; it will be the task of our politician to find intelligent solutions. There are several approach to overcome this. Guernsey for example has real estate dedicated only to locals. I personally wouldn’t recommend such a rigorous measure.

The export industry and tourism will have to act. They will have to diversify more geographically or disappear. The EU will lose importance as a trading partner and Asia, Russia, United States, Canada and South America will be the strong partners in future. Thus shifts also the priority in the free trade agreements, the EU is no longer top priority. This may as well change the political enviroment in Switzerland as parties focused on europe will loose their main topic.

Due to the social instability in Europe, the absence of strikes will be again an increasing advantage and if Switzerland manages to maintain and to restore its long tradition of social peace, this will becomes a decisive advantage for Switzerland as a production location. A constructive and sustainable politicswill be needed and not the eternal opposition politics. This type of politics we find enough in other countries and it would be good for Switzerland to find his way back to the old school of fair and solution driven discussions.

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