Eco­nomic pol­icy ac­tion plan to tackle the Corona cri­sis

The Corona pan­demic hit Switzer­land with full force. Dur­ing the Corona cri­sis, gov­ern­ment in­ter­ven­tions and fi­nan­cial sup­port mea­sures for the econ­omy have reached a level, the coun­try has not ex­pe­ri­enced since the Sec­ond World War. After the phase of emer­gency mea­sures, Switzer­land will now enter a phase of "lim­ited nor­mal­ity", with fluc­tu­at­ing case num­bers and con­tin­ued re­stric­tions in every­day life. Eco­nomic pol­icy mea­sures taken dur­ing the new phase must pur­sue two main ob­jec­tives:

1. Eco­nomic costs of the Corona cri­sis must be kept as low as pos­si­ble with­out over­bur­den­ing the Swiss health sys­tem.
2. Mea­sures must have a pos­i­tive long-term im­pact on the com­pet­i­tive­ness of the Swiss econ­omy so that Switzer­land and its pop­u­la­tion can main­tain pros­per­ity. De­spite the pan­demic, the state foot­print must re­main con­stant. Ef­fec­tive com­pe­ti­tion in the mar­kets should be main­tained.

Pre­vent­ing a sec­ond par­tial lock­down has ab­solute pri­or­ity

Keep­ing all busi­nesses open is the best eco­nomic stim­u­lus pack­age and the most ef­fec­tive way to re­duce the eco­nomic costs of the cri­sis. For this rea­son, a max­i­mum level of eco­nomic ac­tiv­ity must be made pos­si­ble. How­ever, if due to a sec­ond wave of ris­ing COVID-19 in­fec­tions, re­stric­tions should again be nec­es­sary in order to avoid over­bur­den­ing the health­care sys­tem, tar­geted mea­sures with the low­est eco­nomic costs must be cho­sen. To this end, a plan of mea­sures to con­trol a po­ten­tial sec­ond wave should be pub­lished in order for the econ­omy and the pop­u­la­tion to pre­pare them­selves ad­e­quately.

Im­prov­ing frame­work con­di­tions is the key

The pri­mary goal of keep­ing the econ­omy open should be com­ple­mented by tar­geted eco­nomic pol­icy mea­sures. Pol­i­cy­mak­ers should focus on im­prov­ing the frame­work con­di­tions for com­pa­nies that can op­er­ate dur­ing "lim­ited nor­mal­ity". The emer­gency mea­sures taken by the Fed­eral Coun­cil must be phased out as soon as pos­si­ble. Travel ac­tiv­i­ties should again be per­mit­ted to a lim­ited ex­tent. There must be a re­duc­tion of bur­dens on busi­ness (e.g. in terms of cus­toms du­ties and rais­ing cap­i­tal) as well as a mora­to­rium on cost-dri­ving reg­u­la­tions. In ad­di­tion, in­vest­ments are to be pro­moted so that de­mand short­falls do not spill over to pre­vi­ously less af­fected com­pa­nies, and the frame­work con­di­tions for the ex­port in­dus­try are to be im­proved. Tra­di­tional eco­nomic stim­u­lus pack­ages should be aban­doned. These do not take ef­fect in a timely man­ner or in the wrong place and gen­er­ate large scat­ter­ing losses and dead­weight ef­fects. Reg­u­la­tory sins (such as the cre­ation of a sov­er­eign wealth fund) should be avoided and a mod­er­ate struc­tural ad­just­ment be al­lowed.

Bal­anced bud­get amend­ment as a proven in­stru­ment

The fi­nan­cial mea­sures taken in the con­text of the Corona pan­demic will in­crease the gov­ern­ment deficit in 2020 by 30 to 50 bil­lion Swiss francs. These are ex­tra­or­di­nary ex­penses and must be amor­tised. Both the mech­a­nism and the du­ra­tion have yet to be de­fined. The bal­anced bud­get amend­ment is a flex­i­ble tool and pro­vides a long pe­riod for debt re­duc­tion, which does not put pres­sure on the or­di­nary bud­get at the wrong time. De­spite the cur­rent cri­sis, the Swiss par­lia­ment is asked to take a long-term growth per­spec­tive and to strengthen the com­pet­i­tive­ness of our coun­try. This should be based on the suc­cess­ful, lib­eral Swiss eco­nomic pol­icy with its proven in­stru­ments.
 

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