“We need to collaborate even more closely with the general population”

“We need to collaborate even more closely”

A strong franc, tax policy, foreign trade and economic policy in Switzerland: Monika Rühl, Chairwoman of the Executive Board of economiesuisse, talks about the biggest challenges currently facing the Swiss economy.

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Monika Rühl, Chairwoman of the Executive Board of economiesuisse

Monika Rühl, Chairwoman of the Executive Board of economiesuisse

In terms of being a place to do business, what is the situation currently like in Switzerland?

As a business location, Switzerland remains on a very solid basis. Underpinning this are a number of known success factors such as open markets, legal certainty, political stability, efficient infrastructure, a competitive tax environment, an excellent range of educational and training opportunities and – for the moment at least – continued access to skilled labor from abroad. The situation, however, is characterized by a whole range of uncertainties, with the biggest and most relevant probably being the strength of the franc or the weakness of the euro, depending on one’s point of view. The exchange rate is currently very volatile and there is no telling in which direction it will move over the next few months. In this strained climate, there is a huge amount of pressure on the export industry, tourism and the retail trade, although not all sectors and businesses in Switzerland are to the same degree sensitive to the exchange rate. All in all, we nevertheless expect economic growth to slow and unemployment to rise by the end of the year.

These are worrying prospects for the next few months. What is your primary concern in the medium term?

The focus in the medium term is clearly on implementing the mass immigration initiative. This poses a major challenge to businesses and organizations on two counts. First, there is the question of access to foreign skilled labor, which our economy urgently relies on. Second, there is the issue of preserving bilateral agreements with the EU. We still have until February 2017 to find a solution to this. The direction we take in terms of the relationship with our neighbors is the most crucial issue that needs to be solved in the near future.

What are the next policy measures that need to be taken? Where does Switzerland need to focus its efforts now?

I like to compare the current situation with that of a juggler who has to keep many different balls in the air at the same time. While this inevitably involves an element of risk and painful experiences, it is also an opportunity to tackle several problems and developments simultaneously, thereby creating a stable foundation for the future. The strong franc means that we have to help those businesses affected to lower their costs. For us, and as far as policy is concerned, this means that we need to cut fees and charges and, more generally, stem the flood of regulations. On the one hand, we are fighting against the creation of new regulatory interventions that will have cost implications for the economy, such as the Energy Strategy 2050 or the commitment to a green economy. On the other hand, we have prepared a document listing around 40 existing regulations that could easily be reversed. Policymakers and interest groups would also need to summon up the courage and foresight to discuss unpleasant and difficult issues, such as the introduction of a single VAT rate for instance.

Those are mostly measures that we could implement ourselves. How do we deal with topics such as the free movement of persons and bilateral agreements, where we rely heavily on the involvement of the EU?

Both the business sector and economiesuisse, in our capacity as an umbrella association, have developed a proposal for implementing legislation on immigration for submission to the Federal Council. Any legislation clearly needs to be implemented in a way that is not detrimental to the economy, which means that access to skilled labor from abroad needs to be guaranteed. As a reminder, I would like to point out that for decades Switzerland’s prosperity and its economic force has largely been thanks to skilled workers from abroad coming to our country. Our proposal is based on three pillars: With the aid of a safeguard clause, a certain level of skilled workers could continue to enter Switzerland in accordance with the principle of free movement of persons. Thereafter, a quota principle would apply until an upper limit is reached. The second pillar supports making better use of the potential offered by Swiss nationals, whereby our focus is primarily on older people and women. A huge reserve of potential among these two groups is still untapped. The third pillar of our plan envisages equally strong efforts on the part of public enterprises and the administration. We expect these organizations to cooperate in this measure and, in particular, to improve the efficiency of their work. At the same time, however, we need to make Switzerland more competitive internationally. This is, among other things, the aim of the Corporate Tax Reform III, which is another ball to juggle, but is absolutely paramount for our country.

As the umbrella association for Swiss business, where can economiesuisse exert the greatest influence, using the resources and skills at its disposal?

Our task is to influence the open issues in such a way that they reflect the interests of the business community. It is not about supporting or improving the position of individual industries, or even companies. Our concern is instead the well-being of the entire country as a location for business. Companies are innovative, flexible and mobile. They are also, increasingly, part of international networks. If Switzerland is no longer able to provide an attractive platform for entrepreneurial freedom and development, businesses will move to other countries. We also need to start working more closely again with the field of politics and the population. This is a matter of major concern to me personally. Economic policy affects us all. We need to explain the economy and its importance better as well as allay fears and overcome prejudices with regard to an economic elite that has become suspect in the eyes of many people. The next few months and years will once again see initiatives being put to the vote that are harmful to the economy. However, we will only be able to exert our influence over these initiatives and referendums if we can provide the population with a credible explanation regarding the implications of political decisions.

Has the role of the electorate and politics as a guarantor of a liberal economic system changed in Switzerland?

Nowadays, the number of actors involved in the political process has clearly increased. This fragmentation in terms of both issues and content makes it more difficult for us to form alliances and gain majorities. As well as the political balance becoming increasingly polarized, loyalty towards authority is also dwindling. People are questioning politics and scrutinizing business and institutions. At the same time, the way they vote and the decisions they make are increasingly based on a gut feeling or emotions.

Do you expect any changes in this regard following the parliamentary elections in the fall?

I expect the elections in the fall to once again see more familiar figures make the move into parliament. This includes more entrepreneurs and opinion leaders whose involvement in politics lends support to the idea of the ‘militia’ system. In cooperation with the Swiss Employers Association, we encourage businesses in Switzerland to grant their employees the necessary freedoms to enable them to hold political office.

In your view, what contribution do audit and advisory services make to the Swiss economy?

Audit and advisory companies play a key role at the interface between national and international regulations. Within our global economy, the degree of complexity of many regulations is such that individual companies or government agencies are no longer able to handle these on their own. In this context – but also for key issues of business optimization of course – companies, such as KPMG, play an essential role in the view of the financial market.

What changes do you expect to see for Switzerland as a location over the next ten years?

We live in an aging society. Until now, we have all underestimated the consequences that this will have not only for the labor market but also for health and social care. I am, however, a firm believer in technological progress in all areas of life. I believe in the power of innovation and am eager to see how Switzerland will develop as a location over the next few years. If we look at the changes that have taken place over the last decade, we need to prepare ourselves for what is about to come...

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