The economic restart of Switzerland? A journey in three stages

Federal Council defines the contents of a transition strategy for the economy: normalisation, accompanying recovery and revitalisation

On 18 June 2021 the Federal Council defined the contents of the transition strategy for economic policy.
The aim is to accompany the recovery with the tried and tested instruments of promotion and innovation, education and labour market policy.
To ensure that the recovery is not only temporary, the Swiss government also wants to strengthen the country’s long-term growth potential.
Thanks to the improvement in the epidemiological situation, it has already been possible to grant far-reaching relaxations in recent months and further relaxations are planned for the future.
According to the Federal Council’s three-stage model, as soon as all adults who wish to be vaccinated have been fully vaccinated, it will no longer be necessary to impose severe social and economic restrictions, and the removal of most of the restrictions still in place can then proceed.
As expected, following the easing in early March, the domestic economy has begun a rapid recovery.
The outlook for the world economy, and thus for Swiss exports, has also improved.

Digital economy in Switzerland performs well

Growth of 3.6 percent expected by the end of 2021

The federal government’s expert group forecasts growth of 3.6% in 2021, which is well above average.
The unemployment rate is expected to fall further to an annual average of 3.1%.
It is also expected that the recovery will continue in 2022 with economic growth once again above average.
To accompany the announced economic recovery, the Federal Council defined the contents of a three-stage transition strategy for economic policy on 18 June 2021: normalisation, accompanying recovery and revitalisation.

Consumer confidence in Switzerland at pre-crisis level

Standardisation in step with relaxation

As envisaged in the COVID-19 Act, the planned further loosening should also make it possible to phase out the extraordinary support measures for the economy.
However, this does not imply the sudden elimination of all support.
The loss of earnings allowance for the coronavirus and the aid for the cultural and sports sector will remain in force until the end of 2021.
The extraordinary entitlement to short-time work allowance will probably be extended to 24 months, i.e. until the end of the year.
In addition, the validity of the summary procedure for apprentices, permanent on-call workers and persons with a fixed-term employment relationship could also be extended until the end of September 2021.
In addition, the Federal Council has decided to give the cantons the option of increasing aid for particularly hard-hit companies by means of specific amendments to the Hardship Ordinance.
In an effort to prevent new restrictions, the Federal Council will continue its efforts in the vaccination plan, the testing and contact-tracing strategy as well as in the purchase of medicines.

More federalism means higher Gross Domestic Product

Accompanying the “resurgence” with familiar instruments

Some companies may need more effort to adapt than others; the Federal Council intends to support them by enhancing the instruments deployed so far.
Already in the fall of 2020, it launched Innosuisse’s impulse program “Swiss innovation capacity” and by the end of the summer it plans to lay the first cornerstones of the tourism recovery program.
With regard to the events sector, the measures of the “Protection for public events” will remain in force between June 2021 and April 2022, allowing organizers to improve planning security.
In the area of unemployment insurance, there are already tried and tested cantonal measures available to effectively support unemployed persons in their search for employment.

Swiss export industry relies on innovation

Increasing the long-term potential for revival

Thanks to numerous proposals, such as the abolition of the issue tax on capital or the abolition of customs duties on industrial products, the recovery in the coming years could be sustainably strengthened.
Finally, the Federal Council intends to take advantage of the possibilities offered by digitalisation by implementing more than 90 of the measures currently included in the “Digital Switzerland” action plan; for example, the further development of the “EasyGov.swiss” one-stop electronic shop for companies.

With the anti-COVID measures gone, Switzerland will start running