The Swiss government is set to announce the next stages of its plan to slowly unwind its coronavirus restrictions and rekindle its beleaguered economy.
The Federal Council meets Wednesday to map out a lockdown exit strategy for everything from sports and cultural activities to tourism, restaurants, and big events such as conferences. Talks on when to reopen Swiss borders and ease bans on gatherings of more than five people are also on the agenda.
“What awaits us next week is an extremely important menu to face the next stages,” Interior Minister Alain Berset said last Wednesday.
Swiss officials are also expected to announce an aid package worth about CHF 1.5 billion for Lufthansa unit Swiss and CHF 500 million for other companies in the industry, Tages-Anzeiger reported on Tuesday. The package, promised several weeks ago, is said to consist mainly of state guarantees for bank loans.
The government has already scheduled three phases of the transition to normality, or at least a semblance of it. The first began this week with the reopening of a few businesses, including hairdressers, garden centers, and hardware stores.
If the infection remains under control, children can go back to school and more shops will reopen on May 11. Institutions of higher education, museums, zoos, and libraries will have to wait until June 8.
What happens next is the big question. Officials are weighing risk factors, such as the increase in social contact and the ability of businesses to protect people, against the economic benefits.
After six weeks in limbo, Switzerland is headed for its deepest downturn since 1975 in the aftermath of the oil price shock, according to the State Secretariat for Economic Affairs, or SECO. It is forecasting a slump of 6.7 percent for the year, followed by a gradual rebound in 2021.
The jobless rate shot up in April even as the government began helping companies cover the costs of keeping workers on their payrolls to avoid mass layoffs. Unemployment will probably reach 3.4 percent by the end of April, up from 2.9 percent in March, said Boris Zürcher, head of SECO’s labor department.
Governments across the globe are rolling out rescue packages for their ailing airlines as the travel slump drags on. The International Air Transport Association has warned that the pandemic could bankrupt half the world’s airlines.
Lufthansa is pressing Angela Merkel’s coalition for a multibillion-euro bailout that doesn’t involve ceding control to the German government. European rival Air France-KLM last week received pledges of 11 billion euros in loans and guarantees from the French and Dutch governments.
Eric Jakob of SECO warned on Monday that residents of Switzerland shouldn’t plan to travel internationally before 2021. Jakob said that even if air travel starts up again, it would remain uncertain for a long time.
Coronavirus fuels record sales of computer screens
Screens and other office supplies are in great demand these days as the coronavirus forces people to work from home. Digitec Galaxus is among retailers who say they are seeing record-breaking sales of some items.
Start-ups struggle to survive coronavirus
Cash-strapped start-ups that manage to stay afloat in the coming months may struggle to survive the economic aftermath of the coronavirus, says Jordi Montserrat, co-founder of Venturelab, a group that supports entrepreneurs in Switzerland. He predicts that investors will reconsider some existing projects and hold off funding for new ones.
Will hotel industry be gutted by coronavirus?
Hotels are especially exposed to the effects of coronavirus, from the spate of recent cancellations to travelers not even booking because of the current uncertainty. Ari Andricopoulos, the CEO of RoomPriceGenie, a company that helps small and medium-sized hotels price their rooms, is already feeling the pinch. “Hotel owners are fearing the worst at this stage,” he says. “There’s a good spirit of solidarity in the hotel industry, but I think we all know it’s not a good time.”
Why you can’t trust coronavirus counts
At least 613 people have tested positive for coronavirus in Switzerland, but that number isn’t a reliable measure of the outbreak. The Swiss government is abandoning efforts to keep a precise count of coronavirus cases to focus instead on easing the burden on the healthcare system and protecting the most vulnerable—the elderly and those with preexisting conditions. “The government has decided that they will only test people who are at risk, who have strong symptoms,” said Michael Hengartner, president of the ETH Board. “Young people, who might have weak symptoms, will simply be asked to stay at home to minimize contagion.” The Cantonal Hospital of Lucerne has received a recommendation from the government to limit testing to the most vulnerable or severe cases, said spokesman Markus von Rotz. “Only patients who are hospitalized and health care staff will be tested for coronavirus,” said Claude Kaufmann, a spokesman for Hirslanden Private Hospital Group, which operates 17 hospitals. “Patients with fever and cough must stay at home so that they do not infect anyone.” The Swiss Federal Office of Public Health confirmed that the cases could be far higher than reported and that “people at especially high risk are tested as a priority.“ No test, no infection This raises the question of whether the count reflects the true scale of the outbreak. Many people have been keeping tabs on the daily tally from the federal health office, relying on it to provide a measure of the severity of the situation in Switzerland. The country reported its third coronavirus death Tuesday as the outbreak worsens in neighboring Italy, which has logged over 9,000 infections and 460 deaths. It also marks a change in strategy from the early days of the outbreak, when the government ramped up testing following the first confirmed case on Feb. 25. Back then, even mild cases were being counted and traced in the effort to contain the crisis. The Swiss Federal Council said Friday that tracing the infection would continue “as long as possible.” At the same time, it indicated that protecting people by minimizing contact—at work or social events—was now the bigger priority. Large events have been banned across the country but, unlike in Italy, no blanket travel restrictions have been imposed. And the Swiss border remains open to commuters from Italy. “With the infection rate that this virus has, it will basically cross across the human population,” Hengartner said. “It will become a pandemic. And the challenge for governments is to keep the infection rate low enough that we can always manage the patients that need to get hospitalized.”
Coronavirus shuts down Italy but Swiss border remains open
Despite a nationwide shutdown in Italy, cross-border workers are still welcome in Switzerland. CNNMoney Switzerland reports from Chiasso as the number of cases of the virus continues to grow.
Swiss border open for business
The 68,000 Italians employed in Switzerland are vital to the economy, says the president of AITI, the industry association of Ticino, which explains why the Swiss border remains open despite the lockdown in neighboring Italy.
World is losing battle to contain coronavirus, says president of ETH Board
Countries including Switzerland are abandoning efforts to keep a precise count of coronavirus cases and are focusing instead on helping hospitals cope with patient overload, says Michael Hengartner, president of the ETH Board and chairman of the Executive Committee. With a pandemic inevitable, the challenge now is to “keep the infection rate low enough that we can always manage patients that need to get hospitalized.”
COVID-19 may tip world into financial crisis, UN warns
The world is vulnerable to a financial crisis if the coronavirus epidemic drags on because it is already so deep in debt, the United Nation’s trade body warned in a report on Monday. An enduring health emergency will likely trigger margin calls, tighten borrowing conditions, and increase the risk of a stampede to sell assets not hit in the first round of market turmoil, the UN Conference on Trade and Development said. “This raises the prospect of a credit crunch in a period of high indebtedness,” despite very low interest rates, the report says. Hopes of a recovery will hinge on sustained and coordinated liquidity injections by central banks, more active fiscal policies, and renewed efforts to bolster trade. “Central banks should do whatever it takes in the face of the COVID-19, including directing credit for production and employment,” UNCTAD said. The world has been on a borrowing binge since the 2008 meltdown, when central banks pumped vast sums into cash-strapped markets and banks to shore up the system. At the start of 2020, total debt stocks exceeded more than $250 trillion, about three times global gross domestic product, according to the Institute of International Finance. Developing countries most at risk Developing countries are particularly vulnerable to a credit crunch, as many are already struggling with the highest debt levels on record. “For many developing countries that are facing debt distress already, I think we’re going to have to look at more radical solutions,” Richard Kozul-Wright, who oversees globalization and development strategies at UNCTAD, said in an interview Monday with CNNMoney’s Kasmira Jefford. “The need for a moratorium on debt servicing in some countries will also be necessary.” Economists have warned for years that such massive debt is a risk for the global economy. Record-low interest rates in countries around the globe have made it easier and cheaper for corporates, individuals, and governments to borrow. Last week, the U.S. Federal Reserve, which cut rates three times last year, slashed them by half a percentage point in response to the economic threat from COVID-19. The European Central Bank meets this week, and markets are pricing in a much smaller cut, given that rates are already in negative territory. There is also speculation that the ECB is preparing measures to provide liquidity to businesses hit by the outbreak.
More women in Swiss boardrooms
The percentage of women on the executive boards of Switzerland’s 100 largest employers has edged up to reach 10% for the first time, according to executive search firm Schilling Partners. When taking into consideration a broader boardroom study by Deloitte, that figure rises above the global average to just under 19%.