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)
Merger approved by Competition Commission, but Tamedia recently accused of “abuse”
Recycling newspapers: it's taking longer to fill up the bin
Geneva, Switzerland (GenevaLunch) - Tamedia and Edipresse, two of Switzerland’s largest print and online media companies, will celebrate their marriage sooner than expected. The complete merger was expected in 2013, but the companies now say they will merge this year, when Tamedia’s purchase of 50.1 percent of the shares is completed.
Tamedia will spend a total of between CHF269.8 and 330.2 million, plus 250,000 registered Tamedia shares, to buy out Edipresse, it says in a press release issued 7 April.
The news comes as the shakeout of Swiss media continues, with several developments in recent days:
- newspapers in French-speaking Switzerland again had a serious bleed of readers in 2010, including the number one, free paper 20 Minutes, Mach (industry agency that tallies official circulation figures) reported 22 March 2011, with German-speaking areas doing better, but nevertheless seeing falling sales
- Tamedia was accused 1 April of abusing its position of power following its takeover of Edipresse, for sharply increasing advertising rates
- five regional newspapers joined forces this week, with a shared platform starting 5 April for international, national and business/economic news.
French language papers in “free fall”
Remp publishes an annual Mach reports in March of every year on how Swiss media fared the previous year, with sales and circulation details which serve as the bible of the advertising industry.
Circulation figures have been falling for a number of years but the process appears to have speeded up in 2010, with public television TSR reported that French-speaking newspapers in particular were in “free fall” last year, in terms of losing readers.
Bern, Switzerland (GenevaLunch) – Comco, Switzerland’s competition commission, has opened an investigation into possible cartel activity that restricts online home appliance sales. Specifically, the six to 12 month investigation, in cooperation with the two companies in question, will look into Electrolux’s and V-Zug’s refusal to allow distributors to sell their products via the Internet. The two are not liable for fines, since there is no question of horizontal or vertical price-fixing, but Comco’s decision is expected to have a wide-reaching impact on Swiss online sales in general.
The two companies argue that their online sales restriction is part of very selective marketing programmes that protect the quality of their brands.
This one wasn't at the Hallenstadion
Bern, Switzerland (GenevaLunch) - Switzerland’s competition watchdog Comco is to investigate the five-year agreement, which came into force early 2009, between the country’s largest ticket-seller, Ticketron, and the Hallenstadion Zurich (AGH), one of its biggest concert venues. Comco will look into the details of the agreement which obliges the organizers of events at the Hallenstadion to offer least 50 percent of the tickets for sale through Ticketcorner.
Ticketcorner has been in the sights of the Federal Competition Commission before. In 2006, after an appeal, it was absolved of monopolistic behaviour.
Update 14:15 Zurich, Switzerland (GenevaLunch) – Three pharmaceutical companies, Pfizer, Eli Lilly & Co. and Bayer AG have been fined CHF5.7 million in total for price fixing, linked to their over-the-counter erectile functioning drugs Viagra, Cialis and Levitra. Bayer Switzerland promptly reacted, saying that it has not participated in price-fixing and has respected Swiss law. According to Dow Jones/CNN Money, the company is considering taking legal action against the decision.
The Swiss competition commissioner levied the fines saying the fixing was done using public price recommendations, which have been illegal in Switzerland since 2000.
© 2009 Swisscom
Bern, Switzerland (GenevaLunch) – Swisscom has been handed a fine for CHF 219 million for alleged anti-competitive behaviour in its DSL business until 2007. The company says it will appeal the decision by the federal Competition Commission (ComCo) 5 November, arguing that Swiss consumers have ample choice in the supply of DSL service.
ComCo had argued that Swisscom, the dominant market operator and owner of most of the infrastructure, set the price it charged to its competitors too close to what it charged its customers, thus squeezing out its competitors.
Links to other sites: Romandie News, Swisscom, TSR
...and then there was one
Bern, Switzerland (GenevaLunch) – The Swiss Competition Commission has given its blessing to the proposed sale of Edipresse’s Swiss operations to Zurich-based Tamedia on the grounds that competition is not threatened by the takeover. Edipresse, Switzerland’s third-largest media company, is based in Lausanne and its operations in Switzerland are limited to the French-speaking area. Tamedia owns media mostly in the German-speaking part of the country.
The competition authorites say that there is no significant overlap in the market coverage.
Bern, Switzerland (GenevaLunch) – The Swiss federal competition commission will take a closer look at the proposed fusion of the Swiss business of the country’s second and third largest media groups, Ediresse and Tamedia.
Bern, Switzerland (TSR, Fre) – The lower house of the Swiss parliament has voted to bring back fixed prices for books, but given that the Federal Council has said clearly it opposes the idea, the proposed legislation has an uneasy future. In practice, the Conseil national is insisting that the Federal Council review to see if it is working efficiently, every three years, a price-setting system.
