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The slogan of Federal Council member Karin Keller-Sutter (59) is: save, save, save. “There are other ways to balance the budget,” says economist Cédric Tille (53) in an interview with SonntagsBlick. “The Federal Ministry of Finance (FDF) is far too pessimistic in its calculations.” In a study for the umbrella organization Alliance Sud, the Geneva professor concluded: “To stabilize debt, you don’t need to save that much.”
Tille calculates differently from the Keller-Sutter economists. He does not base himself on Switzerland’s absolute deficit, but on the relationship between debt and gross domestic product (GDP). He is concerned about the actual need to refinance the national debt. That is why he calculates with an uninterrupted trend towards lower interest rates.
think more American
Tille also argues with opportunity costs. “Even the assumption that the financial room for maneuver will decrease in the future blocks our chances.” In plain language: Switzerland needs to think more American, save less and spend more money. “The country tolerates it,” says Tille. “Switzerland says almost every year that the economy has gone better than originally expected. That’s why we have to calculate differently.”
Tille also asks, “What level of debt does the debt brake want?” Its purpose is currently unclear. “As a private person you do not want to be in debt. However, as a state it makes sense to take on debt.”
Tille writes that a slightly higher government debt-to-GDP ratio could significantly increase the scope for action in the federal budget. “Without a savings focus there would be more room for manoeuvre,” says Tille. “Politicians have to decide whether it is for development aid, fighter jets or lower taxes. Economically, more is possible.”
Ukraine vs Global South
Alliance Sud represents Swiss aid organizations active in the South. They fear that the Federal Council wants to channel money from the budget for development aid to Ukraine for austerity reasons. But that would pit Ukraine and developing countries against each other. “This is at the expense of people in developing countries, who are already suffering from the dramatic consequences of the war and the hunger crisis,” said Andreas Missbach, 57, General Manager of Alliance Sud.
Next week, parliament will debate funding for reconstruction in Ukraine. Alliance Sud is already certain: “Switzerland has the financial space that allows more money for Ukraine and at the same time expands development cooperation in poorer countries,” says Missbach: “Both are urgently needed – and also serve Switzerland’s security.”
The FDF reports on Sunday: “The elements of the debt brake are enshrined in the federal constitution. This means that the Bundesrat and parliament are bound by the debt brake.”
Source:Blick
I am Liam Livingstone and I work in a news website. My main job is to write articles for the 24 Instant News. My specialty is covering politics and current affairs, which I’m passionate about. I have worked in this field for more than 5 years now and it’s been an amazing journey. With each passing day, my knowledge increases as well as my experience of the world we live in today.
