Swiss could pay off COVID debt pile over 15 years

ZURICH: Switzerland could start reducing the debt pile it accumulated to help cushion the coronavirus pandemic's impact in two to three years and finish repaying it over 15 years, Finance Minister Ueli Maurer said in a radio interview.

If all goes "very, very, very well", the extra debt the state is taking on to help fund short-hour work schemes and aid to businesses could hit 20 billion Swiss francs ($21.15 billion), he told broadcaster SRF in the interview aired on Saturday.

Otherwise the debt pile could hit 35 billion, he said. This is still less than the 40 billion francs the government originally projected for extra debt, but Maurer cautioned there was still lots of uncertainty about the numbers.

The government said this week it anticipates a budget deficit of around 1 billion francs next year, and said it would decide at year's end how to pay back the billions of debt it has accumulated to provide relief for struggling business.

Maurer reiterated the state would not raise taxes to do so. He said a likely option for debt reduction was to earmark yearly profit distributions it gets from the Swiss National Bank, and dismissed calls for a special one-off SNB payout.

The central bank has to be independent, and politicians should not touch the assets it needs to intervene on currency markets to rein in the safe-haven Swiss franc's strength, he said, calling this an important contribution to the export-led economy.

"It cannot be that we print money to pay state debt," he said, calling for spending discipline.

The government last month phased out most restrictive measures as coronavirus cases waned, declaring the country better equipped to handle any fresh flare-ups. But new cases have been rising again as public contacts pick up.