World Economy

Swiss Government to Further Cut Spending

Swiss Government to Further Cut Spending  Swiss Government to Further Cut Spending

Switzerland must cut an additional 3 billion Swiss francs ($3.1 billion) from budgets in 2018 and 2019, Finance Minister Ueli Maurer was quoted saying on Monday.

“The situation is strained,” he said in an interview with Swiss newspaper Aargauer Zeitung. “At the end of May we will present a stabilization program. Beyond that, it needs new savings programs in 2018 and 2019 each of around 1.5 billion francs,” Reuters reported.

Cuts could come in budgets for foreign relations, the army, agriculture and, to some extent, education, the paper quoted Maurer, who has been in his current role since January, as saying.

In January, the Swiss government projected rising structural budget deficits through 2019 due to infrastructure spending, corporate tax and pension reforms and rising numbers of asylum requests.

The shortfalls were expected even after the government last year decided to slash spending by up to two billion francs to help offset sharply lower revenue projections as the strong franc hit the export-dependent economy.

Public spending in Switzerland is kept in check by a “debt brake”, enacted in 2003, which forces the government to link spending with revenues and build up surpluses when economic growth is strong.

The Swiss have kept prospering as one of the world’s richest countries despite opting for treaties instead of membership to define their relationship with the bloc that surrounds them. While the EU accounts for 1 in 3 francs earned by Switzerland, the economy even weathered the region’s debt crisis well enough to avoid any recession since 2009.