More cycling paths are on the way in Vaud
LAUSANNE, SWITZERLAND – Canton Vaud’s governing council has earmarked CHF425 million for improvements to the transport system over the next seven years, it said Thursday 12 January. The bulk will go to public transport and road improvements, the rest to improved and increased use of renewable energy.
The money comes from unspent funds that are the result of federal and cantonal redistribution of tax monies and is in addition to some CHF300m from the regular budget.
The projects that will receive financial support earlier than planned include: the Vaud RER (regional public transport) system, top-quality bus service for the Lausanne-Morges area and several regional trains: Lausanne-Echallens-Bercher, BièreApples-Morges, Nyon-St Cergue, Yverdon-Ste Croix. The road improvement monies will go to park and ride (P+R) areas, cycling paths and a number of upgrades.
The Swiss Federal Council spent the day out of the office, instead holding their official meeting at the Chateau Mercier in Sierre
Update 20:00 BERN, SWITZERLAND – The Swiss franc rose yet again Wednesday 17 August, turning around after a dip at the start of the week against most major currencies. The shift comes in the wake of a Franco-German meeting that left investors lukewarm and efforts by the Swiss National Bank to reduce its strength that appear to have been viewed as not too onerous.
The currency developments were accompanied by the news late Wednesday that Switzerland could well have a 2011 budget surplus, rather than the deficit earlier predicted.
The franc finished the day in Switzerland at CHF.78 for the dollar, from a dollar high of CHF.80. The euro was trading at CHF1.1394 from a euro high of CHF1.1554 (figures, Reuters).
Tougher mortgage rules part of Swiss franc fallout
An undesirable side effect of the measures taken to rein in the Swiss franc is that banks are loaning out money for mortgages too easily, with very low interest rates, says the Federal Council. Strict rules about mortgage deposits are not being observed as much as they should, argues the council, so starting in January 2012 banks will face tougher restrictions and will be required to ask for larger deposits. The announcement was one of several linked to news of the federal surplus.
Central bank expands supply of liquidity to Swiss franc money market
The SNB announced early in the day that it was taking three steps, effective immediately, to “expand again significantly the supply of liquidity to the Swiss franc money market. In so doing, it is increasing the downward pressure on money market interest rates with a view to further weakening the Swiss franc exchange rate”:
- it aims to expand banks’ sight deposits at the SNB, from CHF 120 billion to CHF 200 billion
- to achieve this new target level as quickly as possible, it will continue to repurchase outstanding SNB bill
- for the same reason it will continue to employ foreign exchange swaps.
Budget surplus won’t have an impact on 2012 budget
The Swiss Federal Council, after a special summer session at the Chateau Mercier in Sierre Wednesday, announced that the 2011 budget is likely to have a CHF2.5 billion surplus instead of the CHF600 million deficit predicted earlier. The turnaround is due mainly to higher than forecast revenues, with companies’ profits higher than predicted in 2010 as the economic recovery proved to be stronger than expected. Government spending was also lower than predicted.
The new figures are based on accounts at the end of June 2011.
The 2012 budget was approved in May, at which point it was already clear that revenues for 2010 would be higher than expected, so the Federal Council says the new, mid-year predictions, will have no impact on the 2012 budget.
CHF2 billion industrial aid programme set up to avoid sending jobs abroad, reduce price fixing
The cabinet announced Wednesday it is setting aside CHF2 billion to rapidly boost industry, which is suffering from the role of the Swiss franc as a safe haven for foreign investors. The fund, the Federal Council acknowledges, is “large” and will be used to “strengthen industries that have been hit hard by the negative foreign exchange situation and to prevent jobs from going abroad”, including tourism.
The council will also seek a rapid change in the laws covering competition that would touch a number of price-fixing areas and it plans to provide Comco, the competition commission, with four additional posts for two years, to better enforce existing legislation.
Federal Council press release, details of the CHF2 billion industrial aid fund (Fre)
GENEVA, SWITZERLAND – Credit ratings agency Moody’s announced 13 July that it will review the US debt rating, since the country is not yet making significant progress on resolving the budget and debt ceiling crisis that could lead to a US default 2 August if not resolved soon. The announcement was followed a few hours later by President Barack Obama walking out of heated talks between Republicans and Democrats. It also prompted the head of the US Federal Reserve, Ben Bernanke, to say that a default would constitute a major crisis that would send ripples through the financial world.
“The review of the US government’s bond rating is prompted by the possibility that the debt limit will not be raised in time to prevent a missed payment of interest or principal on outstanding bonds and notes. As such, there is a small but rising risk of a short-lived default.
“Moody’s considers the probability of a default on interest payments to be low but no longer to be de minimis. An actual default, regardless of duration, would fundamentally alter Moody’s assessment of the timeliness of future payments, and a Aaa rating would likely no longer be appropriate. However, because this type of default is expected to be short-lived, and the expected loss to holders of Treasury bonds would be minimal or non-existent, the rating would most likely be downgraded to somewhere in the Aa range.”
Links to other sites: BBC, Financial Times, Moody‘s, Washington Post
GENEVA, SWITZERLAND – US President Barack Obama told congressional leaders Monday 11 July that they will have to meet for daily talks to resolve the impasse over the US budget, as he pushes for a long-term agreement with Republicans that would raise the national debt ceiling. The budget has already overshot the ceiling of $14.3 trillion and the US is currently running an annual budget deficit of $1.5t.
Republicans are unhappy with Obama’s call for tax increases and his fellow Democrats are unhappy with his insistence on cutting social welfare programmes. But Obama told reporters in Washington Monday that he won’t back off on his demand for a longer term deal rather than a quick fix to the ceiling issue before 2 August. If the budget is not passed by then, the day the budget runs out, the US will risk defaulting on its debt.
Meanwhile, as the budget debate heats up, 15 states in the Midwest are under heat wave advisories, meaning temperatures are expected to rise above 105F (41C), coupled with high humidity in some areas, such as Kansas City and St Louis, Missouri. CNN cites specialists who recommend that people avoid caffeine and alcohol in these areas.
Links to other sites: BBC, CNN, Washington Post
WHO headquarters in Geneva
Geneva, Switzerland (GenevaLunch) – Geneva prides itself on its international role, but if you sense that the city’s native sons and daughters are outnumbered by foreign guests at the moment, you’re right. Runners, weather and climate specialists, world health workers have all converged on the city for three weeks of events.
Geneva Marathon has massive increase in runners
The Geneva Marathon races 14-15 May brought out 5,700 runners, a massive increase of 2,100 over the 2010 race, and they were cheered on by 47,000 spectators. This year’s Marathon for Unicef also saw a sharp increase in international participation, with runners from 191 countries. The winner of the men’s marathon was Ethiopian Hailu Begashaw, and Pascale Prevel from France won the women’s marathon. Geneva-based New Zealander Guy Simpson came in second in the men’s and Tsige Germa from Ehtiopia was third.
Weather and disaster preparedness the focus at Meteorological Congress
The World Meteorological Congress opens Monday 16 May and runs until 3 June. A key item on the agenda is a new recommendation to create a Global Framework for Climate Services. The recommendation was made last week, as part of a report and plan of action to help countries adapt to climate change, approved in Geneva during the Global Platform on Disaster Risk Reduction meeting.
World Health Assembly opens with several contentious issues on the agenda
Budget deal not worked out by Thursday evening, shutdown looms for midnight Friday
“I’m not yet prepared to express wild optimism,” a cautious President Barack Obama told reporters late Thursday 7 April, after talks with House and Senate leaders at the White House, in an attempt to avoid the US government shutting down at midnight Friday. The key issue is a spending bill that Congrress has not managed to pass because of differences over what the NY Times calls “only a few billion dollars . . . a relatively small gap in a $3.5 trillion budget.
Abortion funding and environmental protection projects are two of the key issues, with Republicans insisting on spending cuts for projects Democrats are determined to fund.
Republicans were behind a stopgap bill that would provide one week of funding for most government agencies and one year of military funding, but Obama has said it is a “distraction” and he will veto it.
Federal departments are reportedly preparing to lay off workers and shut down services if a bill is not passed Friday.
Links to other sites: Fox, New York Times, NPR
City also celebrating western Lausanne urban development award
Lausanne, December 2010: city reduces its debt but will continue investment programme
Lausanne, Switzerland (GenevaLunch) – Lausanne handed its taxpayers good news Wednesday 19 January, saying it will reduce the city’s debt by CHF25 million in 2010, after a reduction of CHF2 million in 2009.
The city, which has grown by 6,500 inhabitants since 2007, has invested more than CHF600m in the past four years for what it calls “modernization and efforts to increase its attractiveness”.
The city’s mayor, Daniel Brélaz, has come in for heavy criticism for the size of the debt and 24 Heures (Fr) points out that some investments planned for 2010 were not carried out in order to reduce the debt, possibly in time to woo voters before coming elections.
The debt reduction covers 1.1 percent of the city’s CHF2.3 billion debt, which has grown by CHF44.55m in the past four years and which includes a CHF141 million increase to cover recapitalization of the city’s pension fund for municipal workers.
More housing on the books as international population boosts city’s size
Lausanne at dusk, December 2010
The local government says it plans to continue its investment programme, pointing to the debt reduction as a positive sign that city finances are under control, even if the debt remains substantial.
It points out in its statement about the payoff that the city’s assets are greater than its debt.
One part of the current investment programme is increasing housing by 3,000 homes. Future investment projects call for an additional 5,000 homes by 2020 to ease the tight housing market.
Canton Geneva in the distance and the city of Geneva with its jet d'eau fountain
Update 17:00 / Geneva, Switzerland (GenevaLunch) – Standard & Poor’s, the credit rating institution, at the end of 2010 gave the canton an AA-/stable rating. The full report, in English, was made available this week by the canton. S&P’s assessment for Geneva was mostly upbeat: “The rating on the Republic and Canton of Geneva in Switzerland reflects Standard & Poor’s Ratings Services’ view of Geneva’s very stable, predictable, and supportive institutional framework; the canton’s recent sustained solid budgetary performance; and its large debt reduction since 2006.”
S&P’s notes that while the canton has finished paying out for the losses of BCG that resulted from a mismanagement scandal in the 1990s, a weakness is its “still sizable unfunded pension liabilities, even though a reform of public pension pensions is under way”.
The forecast for Geneva is relatively bright, with a short-term dip in the tax revenues that make up the bulk of the canton’s resources, expected to fall by 13 percent in 201o compared to 2009 as the impact of the economic recession is felt. But S&P’s expects this revenue to pick up again in 2011-2012, “even if at a low pace. Despite management’s strong commitment to control costs, this expected trend in tax revenues will likely result in a slightly negative operating margin over 2010-2012.”
Source: Standard & Poor’s, reproduced with permission
Economic profile of Geneva shows wealth, higher wages, far higher than average foreign population
S&P’s report profiles the city using a rich set of statistics that include these details:
SSR cost-cutting part of the deal
Bern, Switzerland (GenevaLunch) – Billag, the company that charges households a Swiss television and license fee which forms a key component in the budget of SSR, Swiss public broadcasting, will bill only once a year starting in 2011, the Swiss government has decided. The annual fee for private households is a little over CHF460.
Billag currently bills quarterly, sending 12 million bills annually for total annual fees of CHF1.4 billion. The shift will provide administrative cost savings of CHF9-10 million, mainly for printed paper, that can be passed on to SSR, says Bern.
SSR has lobbied heavily for higher license fees and greater freedom to advertise, in order to meet the growing cost of continuing to produce original material. The Federal Council in June 2010 approved a budget of CHF134.5 million, but it refused to accept SSR’s proposals for CHF14m to improve the state of the pension fund, CHF16m to increase its capital and CHF3.5m for various expenses. It called on SSR to economize in order to cover these and other costs, but it also relaxed some of the public media advertising restrictions slightly.
The June decision also emphasized a stronger role for French media programmes, insisting that some of the budget be deployed to create more original material in French.
One part of the budget cuts proposed by SSR has been to eliminate swissinfo, but a spokeswoman at the federal communications office confirmed to GenevaLunch that the move would require the approval of the federal government. World Radio Switzerland is also part of the SSR family, as are TSR television and RSR radio.
British media are describing the budget that Chancellor George Osborne is expected to unveil Tuesday 22 June as the most “austere” in a generation, with sharp tax increases and cuts in spending. The budget deficit is 11 percent of GDP. US President Barack Obama, in the runup to the G20 Toronto meeting in four days, has cautioned other countries not to move too quickly to remove economic stimulus packages, but Prime Minister David Cameron’s spokesperson said Monday that “For some countries, such as our own, there is a need to get on and deal with the deficit more quickly,” reports Reuters UK. The tough budget cuts and tax increases, possibly including higher VAT (value-added tax) are being viewed as the first real test of the coalition government, with warnings from the left that the country should well until it is stronger before taking such strong measures or it risks falling back into recession. Nearly one million of the country’s lowest paid workers will no longer pay income tax under the new measures.
The G20 meeting 26-27 June in Toronto, where the contrast between sluggish growth in advanced economies and more robust growth in developing countries will play an important role in determining the agenda.
Links to other sites: Financial Times, Guardian, Reuters, Telegraph, Xinhua
Deficit for 2010 expected to soar due to sports coverage
Bern, Switzerland (GenevaLunch) - SSR, Swiss public broadcasting, is seeking the right to raise more funds through advertising and license fees, saying its funding situation is “critical” with a third annual deficit of CHF75 million expected for 2010. The figure was put forward Tuesday 27 April when the group published its key financial figures for 2009, showing a CHF46.7m deficit. The figure was better than the loss SSR had in 2008 of CHF79.1m, but the group needs the government’s approval to increase the level of advertising or license fees to add revenue, just as it needs the cabinet (Federal Council) to give it the right to cut back editorially, on content.
SSR owns TSR television, RSR radio, WRS English radio and the swissinfo web site for the Swiss abroad, as well as German, Italian and Romansch radio and TV stations.
The company blames the loss for a sharp drop in commercial sales in 2009, down more than 26 percent, when Swiss media in general suffered from a large decline in advertising revenue.
The Vancouver Winter Olympic Games are over and it’s back to business as usual in British Columbia, Canada, starting with the budget. Finance Minister Colin Hansen presents the new budget 2 March. He said during a photo opportunity where he played wheelchair rugby to draw attention to upcoming Paralympic Games that it will be a belt-tightening budget, with little room to maneuver and stimulus spending coming to an end.
Link: Globe & Mail
TVA revenues fell sharply, sign of weaker economy in 2009, but withholding tax revenue up
Bern, seat of the Swiss federal government
Bern, Switzerland (GenevaLunch) – Gloom and doom scenarios for 2009 turned out to be less serious than expected for the Swiss federal government: the year closed with an operating surplus of CHF2.7 billion. An additional CHF7.2b in sales of UBS convertible bonds provided the government with enough money to reduce the federal debt by CHF11 billion. It now stands at CHF111b, some CHF20b less than at its peak in 2005.
Switzerland’s federal government accounts for only about half the national debt, spokesperson and newly named finance director Fritz Zurbruegg told GenevaLunch: the federal debt is now 20 percent of GDP while the general figure, which includes cantonal and communal governments, is 40 percent.
“But that’s still much lower than the 100 percent which is the norm for the G20 countries,” he notes, where the national debt is, on average, now 100 percent of GDP and “rapidly climbing – although that’s partly because Japan is at about 200 percent,” says Zurbruegg.
Recently renovated La Suisse paddleboat, Ouchy-Lausanne
Lausanne, Switzerland (GenevaLunch) – The CGN (Compagnie 
Générale de Navigation) has fully subscribed the additional capital it wanted to raise, CHF2 million, to ensure the renovation of one of its Belle Epoque boats, the Simplon. The money allows it to also set aside a provision for work on another paddleboat, the Italie.
The group is 80 percent owned by 10,000 small investors, with 40 communes who use its services making up the difference. Cantons Geneva, Valais and Vaud provide loans for major renovations of the fleet and they contribute an annual fee for the services CGN provides.
Swiss 2009 budget: not quite smiling, but close
Bern, Switzerland (GenevaLunch) – The Swiss federal government appears set to finish 2009 in the black, despite the economic downturn. The federal finances department Wednesday 12 August announced it expects a CHF0.4 billion surplus, noting that while revenues are lower than what was budgeted, they are higher than feared earlier in the year.
Fetes de Geneve poster 2009, ©FDG 2009
Geneva, Switzerland (GenevaLunch) – Jean-Pierre Jobin, the president of Genève Tourisme, the organizers of the Fêtes de Geneve, says that the 2009 festivities attracted over two million people, and that this year’s edition was “exceptional”, thanks in great part to the weather. The budget this year was about CHF 3 million, and the Fêtes are estimated to have brought in CHF 120m in revenues for the city and canton of Geneva.
The largest state budget in the US and the world’s eighth largest economy, that of California, has been saved in a last-ditch effort compromise between Governor Arnold Schwartzenegger and state legislators: the $26.3 billion deficit will be closed by deep spending cuts of $15.5 billion, but taxes will not be raised. The state began its fiscal year 1 July 2009 without an approved budget and the threat of having to write IOUs to pay its bills. Los Angeles Times, Reuters
Paris, France (Le Temps, Fre) – Switzerland and France Friday signed a new tax treaty that could go into effect as early as January 2010, which for the first time promises the French more help in catching tax evaders.
rough sailing for swissinfo
Bern, Switzerland (romandie/ats, Fre) – The CHF26 million budget for Swissinfo could be cut by one-quarter, or some CHF7 million, the board of SSR, its parent company says. It has ordered the head of the Internet site, TSR and DRS (Swiss German radio) to study a series of options for streamlining operations in order to cut costs.
Updated 8 April 08:10 Geneva, Switzerland (GenevaLunch) – The canton of Geneva will not see the likes of it again before 2012-2013, says David Hiler, finance director for the canton, who Tuesday 7 April announced results for 2008: a surplus of CHF492 million for the budget of CHF7.2 billion. Le Temps Wednesday morning shows a more dire picture in its analysis of the situation, noting that some costs, such as staffing, have risen and that while the city’s infamous debt has been reduced to CHF11.4 billion, it remains “astronomical.” Zurich, Le Temps notes in its article, is ending 2008 with a deficit of CHF179.3, largely due to the banking sector crisis.
Swiss debt, GDP
Bern, Switzerland (GenevaLunch) - The Swiss federal government has posted a CHF3.6 billion deficit for 2008 despite a budget surplus of CHF7.3b before extraordinary expenses of CHF11b.
Geneva, Switzerland (GenevaLunch) – Wipo, the World Intellectual Property Association, has a new strategic plan under its Director General Francis Gurry. The plan sets out nine goals, but top priority goes to “activities in support of development” and a balanced budget, with “tight fiscal discipline.”
Gordon Brown refused to tell the BBC whether or not a 2.5% cut in the VAT sales tax is part of Monday’s announcement of a UK pre-budget package but he did say “substantial” measures are planned.
Lausanne, Switzerland (20 Minutes, Fre) – A new park between Flon and Sévelin, under the Pont Chauderon, and an elevator car running from the Vallon quarter up to the University hospitals (CHUV) are among the new project proposals that Lausanne’s council will be considering in coming weeks.
Lausanne, Switzerland (24 Heures, Fre) – Vaud’s capital city, Lausanne, will see its debt deepen slightly, to CHF2.3 billion in 2009, if the budget proposed by Mayor Daniel Brélaz is approved.The debt has increased steadily, despite tight budget controls, while at the same time Vaud has cut its debt by one-third, reports 24 Heures, which runs a lengthy interview with Brélaz.
Lausanne, Switzerland (GenevaLunch) – City budgets have possibly never been more difficult to plan, with the impact of the global economic crisis leaving forecasts with large question marks over them. In this context, Lausanne’s city council Wednesday labouriously approved a 2009 budget, finally opting for a CHF10.1 million expected deficit.
Geneva, Switzerland (GenevaLunch) – It’s the season for announcing new government budgets and Geneva is no exception: the 2009 budget proposal was unveiled Thursday, showing an expected surplus of CHF68.1 million francs, but a large debt that will cost taxpayers CHF300 million a year to finance.
