echo-interview with Heinz Karrer, Chairman of the Board of Directors of economiesuisse, Swiss Business Federation
elipsLife echo: Mr Karrer, economiesuisse is the umbrella organisation of the Swiss business sector, representing around 100,000 companies with two million employees. What is its core task?
Heinz Karrer: We represent the interests of the business sector in the political process. Our goal is to foster the best possible environment for Swiss companies and for Switzerland as a business hub.
As a non-EU member, Switzerland has a rather isolated position in Europe, particularly since the adoption of tighter immigration controls. How much isolation can the country handle, or put in another way: how much does the country need to open up?
I wouldn't say the country is isolated. In fact, it's the world's most networked country, even as a non-EU member. Switzerland ranks 94th in the world measured by the number of inhabitants. But in economic terms, it ranks 19th. Of our exports, 56% go to EU countries, and 75% of all imports come from them. This highlights the importance of our relationship with this group of nations. We call this relationship the "bilateral agreements". And up to now, they have worked very well and we want them to continue. The second pillar is the free trade agreements with other non-EU countries. For example, Federal Councillor Schneider-Ammann has set an important milestone in this connection with Switzerland's new free trade agreement with China.
The abandonment of the euro peg caused a stir in many business circles. What's the sentiment in your Federation about this move one month after the decision?
When talking about the scrapping of the euro floor, we have to look a bit further into the past. We come from a time when we still paid CHF 1.60 for a euro. In other words, the Swiss economy has had to face many challenges in the past five years. Adjustments were needed, at the structural as well as the corporate levels. The pegged exchange afforded security when it came to exchange rate fluctuations. All of this ended suddenly on 15 January with exchange rates inevitably going through the roof. This was a shock for many companies, in particular those that mainly export to the eurozone. For many it will be very difficult to master the current exchange rate situation. Of course, this is not true for the economy as a whole, as companies that are broadly diversified in geographic terms are less affected. But every firm is affected to some extent, at least. There is also uncertainty about where the exchange rate will finally stabilise. From our point of view, this is a long-term issue characterised by much volatility. Finding the right way to handle the situation is going to be tricky.
Did some businesses rely too much on the euro peg floor?
I wouldn't say that was the case. I should point out that the Central Bank had always made it crystal clear that the pegged exchange rate was not going to be a permanent measure. Everybody knew this. The only question was when the peg would be abandoned.