UBS deal is about to happen

class=”sc-3778e872-0 cKDKQr”>

On March 19, 2023, the Bundesrat rescues the broken Credit Suisse and arranges its takeover by UBS. The government is giving excessive guarantees – 100 billion for SNB liquidity support and 9 billion as default insurance for the new mega bank.

On the same day, Parliament’s financial delegation agreed. Because the federal government is applying emergency law, it must submit the deal to the Federal Assembly for approval in an extraordinary session. But what they say about it doesn’t really matter, explains the Finance Department (EFD) of FDP federal councilor Karin Keller-Sutter before the start of the session: the billions have already been “fully committed”.

A decision without consequences

On March 24, the secretariat of the Finance Committee handed over to parliamentarians a “note on the legal options for the committees and councils in case of subsequent adoption”. It reads: “If the councils subsequently refuse approval, it amounts to a political reprimand to the finance delegation. The non-approval has no legal effect.”

Last Wednesday, Parliament even rejected the commitment appropriations – believing that they would not substantially affect the course of events. Actually absurd: the assembled legislature makes a decision without effect. This is questionable in terms of democratic politics. But is it at least according to the law?

“Later Approval” Required

SRF journalist Philipp Burckhardt this week referred to the 2010 “federal law on the preservation of democracy, the rule of law and the ability to act in extraordinary situations” – a response to UBS’s 2008 state emergency rescue. What was the purpose of the parliament? Bernhard Rütsche (52), professor of public law at the University of Lucerne: “Among other things, the law in question ensures that by amending the law on the financial budget, the federal assembly can also have a say in urgent spending decisions of the federal council.”

Articles 28 and 34 of the Financial Budget Law stipulate that urgent loans require not only the prior approval of the financial delegation, but also the “after approval” of Parliament. The word “approval” is crucial, says Andreas Stöckli (40), professor of constitutional law at the University of Freiburg. “It means that Parliament’s decision is legally binding.”

Are the loans now invalid?

This is also how Bernhard Rütsche sees it: from the purpose of the federal law, the drafting history and the wording “subsequent approval” it can be concluded “that urgent commitment credits decided by the Bundesrat with the consent of the finance delegation lose their legal validity if they not be approved by the Federal Assembly.” Nevertheless, according to Rütsche, legal obligations entered into by the Bundesrat before parliament failed to approve them remain in force due to the protection of legitimate expectations and legal certainty.

Are there such obligations? The FDF says there is a guarantee agreement for the liquidity support from the SNB. It is different with the loss protection for UBS worth nine billion: it is not yet contractually fixed. However, according to the FDF, it is part of the overall concept of the measures related to UBS. “The written warranty contract has not yet been negotiated. The key figures and the amount of nine billion are in the emergency ordinance. »

Is that an obligation? Professor Stöckli is skeptical: “The warranty agreement requires a written form. The relevant article in the emergency decree does not constitute an obligation, but only an authorization.” It also does not include all essential points of the guarantee. According to Stöckli, it should be clarified in detail whether the declarations of intent of the Bundesrat will have legal consequences for the federal government. It is a tricky situation because the deal could fail if the Bundesrat does not sign the contract. “But it is doubtful whether the Bundesrat will be allowed to sign the contract after parliament has voted no.”

‘Then Keller-Sutter must resign’

Does UBS seek damages if there is no contract? “We are not making any statements about this,” says the bank. The FFD insists: “The rejection does not affect the warranties.”

The reactions of the parliamentarians are sometimes harsh: “If the interpretation of the finance department is not legally valid, it is a state political scandal,” says a national councilor. “Then Keller-Sutter should resign.”

The SVP and the Greens will submit applications to the State Political Commission next week. “A serious analysis of the legal situation is needed,” said SVP National Councilor Lars Guggisberg (45). SP group leader Roger Nordmann (50) says: “The legal issues must be properly clarified. You cannot avoid a parliamentary committee of inquiry.”

SVP, SP and Groenen are responsible for the consequences

Green alderman Mathias Zopfi (39) emphasizes: “It was communicated that a no would have no legal consequences. It is the task of the Federal Council to propose the consequences.” The leader of the Mitte parliamentary group, Philipp Matthias Bregy (44), also thinks that the Federal Council should clarify the legal issues. But he also says: ” SVP, SP and Groenen are responsible for the consequences of resisting no.”

FDP State Councilor Andrea Caroni (42) defends his Federal Councilor: The government can urgently oblige the federal government with the prior approval of the financial delegation. A later non-approval does not change the obligations entered into, at least in the external relationship between the federal government and third parties. “On this basis, the pool parties only dared to reject it with great frankness. If you had seen yourself as responsible, a majority would probably have agreed.”

It turned out differently. And now the UBS deal is on shaky legal grounds.

Source:Blick