Ekonomske študije
Switzerland

Switzerland

Population 8.1 million
GDP 86,468 US$
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Synthesis

major macro economic indicators

  2013 2014 2015(f)  2016(f)
GDP growth (%) 1.8 1.9 0.9 1.3
Inflation (yearly average) (%) -0.2 0.0 -1.2 -0.5
Budget balance (% GDP) -0.3 -0.2 -0.2 -0.5
Current account balance (% GDP) 11.1 7.3 8.0 8.0
Public debt (% GDP) 46.0 46.2 46.0 46.0

 

(f) Forecast

STRENGTHS

  • Political, economic and social stability
  • Balanced public accounts
  • Limited sensitivity of exports to exchange rates / high technology, quality
  • Relatively low taxes
  • Low unemployment and diversified labour
  • High standard of living 

WEAKNESSES

  • Very dependent on trading, financial services and the presence of multinationals
  • Overvaluation of the Swiss franc
  • Uncertainty about the migratory policy and its impact on the relation with the EU
  • Low-productivity agriculture
  • High housing prices and household debt
  • Highly concentrated banking sector 

RISK ASSESSMENT

 

Gradual adjustment to the appreciation of the franc through a fall in prices (and margins)

Following the Swiss National Bank’ removal of the exchange-rate ceiling (in place since 2011) of 1.2 franc per euro on 15 January 2015 and the resulting appreciation (17% straight away, but 10% after stabilisation), the Swiss economy, which is very open, has slowed down markedly in 2015. Barring a further significant appreciation, the adjustment to the new exchange rate should be completed and growth increase slightly in 2016. The main contributor will be domestic demand. Household consumption should confirm its resilience since, while unemployment will probably increase slightly, real disposable income will benefit from the imported fall in prices. Furthermore, the resident population will continue to grow due to the additional immigration. Corporate investment is more uncertain. On the one hand, the capacity utilisation rate is far from its all-time highs and companies' margins - for which the fall in the cost of imported input will not offset the reduction in selling prices granted to dampen the impact of the appreciation of the franc on their competitiveness - have decreased (muted increase in bankruptcies in 2015 among industrial SMEs in the cantons of Zurich, Basel, Zug and Vaud). On the other hand, credit is cheap, prices of imported capital goods have decreased and investment, in particular in automation, can make it possible to live with high labour costs and, given the prospect of a tightening of the migratory policy by 2017, with reduced availability of skilled labour. From negative in 2015, the contribution of external trade to growth is likely to become zero or slightly positive. With a moderate recovery in Europe and a vigorous North-American market, the fall in exports, more marked in value terms than in volume terms after the price reductions granted to make up for the appreciation of the franc, should come to an end. Sales of pharmaceuticals (29% of the total) and watches (11%) are likely to resume their growth. By contrast, it will be more difficult for machines (12%), chemicals (9%), precision instruments (7%) and electronics (6%). Financial services will benefit from their excellent reputation. The tourism sector, rather upmarket, will probably be resilient; especially since the increase in US visitors will dampen the impact of the reduction in the number of European visitors.

                                                         

Atypical external accounts, not very sensitive to exchange rates

The current-account surplus is comfortable. It results, in particular, from a surplus in traditional trade of goods (3.9% of GDP in 2014), a services surplus (3.1%) primarily generated by financial services and royalties for licences and patents, sizeable transfers from foreign workers to their home countries (3.1%), contributions to international organisations (0.6%) and pay to foreign cross-border workers (3.1%). However, if we deduct the commodity trading activity (3.9%) and foreign revenues (estimated at 1.4%) of multinationals and wealthy non-residents established in the country for tax reasons, the surplus is only 0.8%. The domination of atypical factors in the current account partly explains the relatively limited impact of the appreciation of the Swiss franc. Traditional exports are holding up quite well due to their strong non-price competitiveness linked to their sophistication, their quality reputation and the low level of personnel costs (cf. pharmaceuticals: 7% of GDP but 0.8% of jobs).

 

Solid public accounts likely to reinforce the accommodating monetary policy

In accordance with the budgetary rule, public accounts post a structural equilibrium. In the event of a significant deterioration in the economic situation, the federal and cantonal authorities, by a simple vote of the representative assemblies, would have significant fiscal stimulus capacity. The public debt is divided equally between the federation on the one hand and the cantons and the municipalities on the other hand. Its cost is extremely low with negative interest rates on 10-year issues. Given the imported deflation, the upward pressures on the franc and the cyclical slowdown, the central bank has a negative monetary policy rate (-0.75% in December 2015), likely to be lowered in 2016. We cannot rule out the possibility that it will start buying foreign assets. Furthermore, in order to encourage credit, it applies a similar negative interest rate on banks’ deposits as soon as they exceed 20 times the amount of required reserves.

 

The financial sector is reforming

Under the pressure from the OECD and the major partners which seek to combat money laundering and tax evasion, the Swiss authorities are imposing transparency and external supervision on their financial sector, especially the banking sector (10% of GDP and 6% of jobs). From 2018, the banks must automatically provide some countries’ tax authorities with data relating to their residents. This will strengthen a sector made up of, both, two large institutions with a significant investment activity and quite high leverage effect, and a multitude of small actors.  

 

(Last update : January 2016 ) 

Payments

 

Bills of exchange and cheques are not commonly used owing to prohibitive banking and tax charges; the stamp duty on bills of exchange is 0.75% of the principal amount, for domestic bills, and 1.5% for international bills.

Similarly, commercial operators are particularly demanding as regards the formal validity of cheques and bills of exchange as payment instruments.

 

Domestic and international payments are commonly made by bank transfer, especially via the SWIFT electronic network to which the major Swiss banks are connected and which provides speedy and efficient processing of payments at low cost.

 

 

Debt collection

 

The Swiss legal system presents technical specificities, as follows :

 

  • The existence of an administrative authority “Enforcement and Bankruptcy Office”(e.g. Office des poursuites et des faillites / Betreibungs und Konkursamt / Ufficio di esecuzione e fallimenti) in each canton, with several offices at local government level, which is responsible for executing court orders and whose functioning is regulated by federal law.

Interested parties may consult or obtain extracts of the Office’s records.

 

  • The issuance of a new unified civil procedure code, set up by a commission of experts, approved by the Federal Council and which became effective as of 1st January 2011.

The enactment of this code entails the repeal of the 26 cantonal procedure laws which were an obstacle to a safe and timely justice.

However a lawsuit requires the assistance of a lawyer familiar with the court organisation of the place where the case is instituted, as well as with the language to be used to conduct the litigation (French, German or Italian).

 

This Act states several sorts of procedures depending on the content or the monetary value of the dispute and stipulates that the parties must make an attempt at conciliation or submit to mediation, before requesting full trial.

 

The debt collection process commences with the issuing of final notice preferably by recorded delivery (thus making it possible to accrue past-due interest) asking the debtor to pay, within two weeks, the principal amount increased by past-due interest calculated – unless otherwise agreed by the parties – at the legal rate which is 5%.

 

In the absence of payment, the creditor will submit a duly completed and signed petition form (réquisition de poursuite) to the Enforcement and Bankruptcy Office which then serves the debtor with a final order to pay within twenty days starting from the date of the notification of the petition.

 

While very easy to use by creditors, that procedure nonetheless permits debtors to oppose the order within ten days of being served, without having to specify grounds.

 

In such case, the only alternative for creditors is to seek redress through the courts.

 

Conversely, where a seller holds unconditional proof of debt signed by the buyer (any original document in which the buyer recognises his debt, bill of exchange, cheque, etc.), he may request the temporary liftingof the debtor’s opposition (main levée de l’opposition) without having to appear before the court.

 

This is a simplified procedure, quick and relatively easy to obtain, in which the court’s decision is based upon the documents submitted by the seller.

 

Once this lifting order has been granted, the debtor has twenty days in which to refer the case before the judge to obtain the debt’s release (libération de dette) and, in turn, obtain an executory order.

That entails initiating a formal and now unified procedure – including a written phase and an oral phase with possible examination of witnesses during court hearings – lasting from one to three years according to the canton.

Legal costs vary widely depending on the rates charged by the various cantons.

 

Once the court hands down a final ruling, upon request of prosecution, the Enforcement and Bankruptcy Office delivers an execution order or a winding-up petition (commination de faillite).

This winding-up petition enables the creditor to send to court a request of bankruptcy. Upon receipt of this request, the court will fix a hearing by inviting both, creditor and debtor in written.

Without payment from debtor or withdrawal of the request on the part of the creditor who made the request, the court will declare the debtor company bankrupt.

 

Either a court of first instance or a district court hears legal procedures. Commercial courts, presided by a panel of professional and non-professional judges, exist in four Germanic cantons : Aargau,Berne, Saint-Gall, and Zürich.

 

Once an appeal has been lodged with the cantonal court, as a last resort for claims exceeding 30,000 Swiss francs (CHF), cases are heard by the main federal judicial institution, the Swiss Federal Court (Tribunal fédéral Suisse / Schweizerisches Bundesgericht / Tribunale federale svizzero) located inLausanne.

 

The other federal institutions are the Federal Criminal Court (Tribunal pénal fédéral / Bundesstrafgericht / Tribunale penale federale), located in Bellinzone, which was set up in April 2004, and the Federal Administrative Court (Tribunal administratif fédéral / Bundesverwaltungsgericht / Tribunale amministrativo federale), which began operations in January 2007, and has been established in Saint-Gall since July 2012.

Insolvency trend Switzerland 2014
Vrh
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