Federal Councilor Guy Parmelin: “The energy crisis will continue for a few more years” The financial situation of pension funds continues to deteriorate

It has been weeks since Minister of Economic Affairs Guy Parmelin (SVP) last explained himself in an interview. There are many unanswered questions: there is great uncertainty in the economy, in Ukraine the war is concentrated on the energy infrastructure, winter and with it the fear of electricity and gas shortages is approaching. In an interview with CH Media, Parmelin talks about the challenges of the present and the future – and comments for the first time on his party’s race in the Federal Council.

Let’s start with you personally: you lose your ally in the Bundesrat. How much does the resignation of Ueli Maurer hurt you?
We had a very good relationship and worked well together. Replacing him will not be easy. But I am also looking forward to a new colleague.

Who would you like to have as a new colleague in the Bundesrat?
I can live with anyone.​

At the time, you were not a favorite in the Bundesrat race. Do you have any advice for current candidates on how to get into the state government?
That cannot be said in general terms. You have to be in the right place at the right time. It takes skill, but also a bit of luck. And: You should always be yourself.​

Will you remain Minister of Economic Affairs?
As always, the division of the departments is the subject of an informal special meeting after the election of the Federal Council …

The energy crisis will certainly keep you busy. Nuclear power stations in France seem to be starting up, gas storage in Europe is full – do we have to be prepared for a harsh winter?
First of all, this is good news. But one should not underestimate the situation. No one knows how the war in Ukraine will unfold or how severe the winter will be. That’s why you need to prepare as best you can. We have started the energy saving campaign and the first results are satisfactory: the population has been sensitized. Energy prices are still high and these costs encourage people to save.

You talked about the war. What could happen in Ukraine that directly affects Switzerland?
Winter is coming, which could lead to increasing refugee flows. If 30,000 extra people suddenly come to Switzerland, it has an impact: these people need a roof – and also more energy.

How do you personally prepare for winter?
Some time ago my brother and I filled the cellar with wood pellets on our farm. Of course I also save energy: turning off the light is a matter of course. And: Some time ago we replaced the windows and placed a PV system on the roof. We should be just as prepared.​

You mentioned high energy prices. Do you lend a helping hand to companies in need?
The Federal Council has set up an interdepartmental working group for this purpose. 5 departments with 12 federal offices examine the most diverse proposals. At the end of October, the balance will be drawn up and the Federal Council decides.​

During the pandemic, short-time work was a proven way to secure jobs.
This resource is always there to secure jobs. Even now. We need to analyze whether we can facilitate access to short-time working in the wake of the energy crisis. But high electricity prices alone are not sufficient as a criterion at the moment.​

The trade association also advocated that companies should be allowed to return to the basic supply from the free electricity market.
The interdepartmental working group is also investigating this. But I must say that the rules of the game were clear at the time: anyone who buys electricity in the short term on the open electricity market is taking an entrepreneurial risk. Changing the rules afterwards can also lead to distortions of competition. But no one expected such price increases as we are experiencing now

You give the key word: rules of the game. It is now the end of October and the economy is pushing to finally know the rules of the game in a deficit. When is it?
We have presented a regulation for gas. When it comes to electricity, all specialists tell us: the chance of a shortage before the end of March next year is very small. We want to use this time until the end of November and are working with the associations to make the regulations even more business-friendly. But it’s complicated and we want to base the decisions on a broad basis. There is criticism, but the work is constructive.

When will the Electricity Shortage Ordinance come out? The economy expects it every week.
I hope in November. The proposal will then be discussed and the Federal Council will then make a decision. I would like to emphasize once again that preliminary consultations are currently taking place with the sector organizations and that we have already communicated the basic course of the measures for a long time.​

So it will actually be December before it becomes clear how Switzerland will function in the event of a power shortage. Meanwhile, economic impatience is growing.
I also talk to business and see how people are looking for ways to save electricity. The willingness to work is high.​

But at this point, everything is optional. We hear from the Federal Council that every kilowatt hour counts, but in the coming weeks kilometers and kilometers of piste will be covered with snow, which takes a lot of energy. How does that go together?
Due to the high energy costs, the ski stations will think carefully about how much snow they want to make. You know the relationship between energy consumption and the economic importance of peripheral regions. They are aware that they cannot just turn to the federal government so that we can help minimize these costs. The measures must be weighed up and, if necessary, adjusted again and again. And remember: we are currently in a normal situation. Gas and electricity are available. But it certainly helps if we turbine less water now and keep more reserves in our reservoirs. In addition, we are part of the European energy system, we contribute to security of supply for the whole of Europe.​

Couldn’t we do that better with a binding savings target?
According to figures from Swissgrid, we voluntarily saved 13 percent in September. If we now set a savings target of 5 or 10 percent, no one is willing to save anymore. For now, we’d better go with recommendations. Even during the pandemic crisis, Switzerland was often better off with recommendations than regulation. In this situation, a different balancing of interests must take place. This is a tried and tested Swiss policy. And even in times of crisis it has delivered good results. If there is a shortage, we must be ready to enact regulation.​

In the case of gas, you have already submitted the shortage regulation for consultation. However, it is not yet known whether people are allowed to heat their homes to a maximum of 19 degrees in an emergency. Do you already know more?
We are evaluating the consultation and will be able to say so shortly.​

But do you adhere to the 19-degree rule, even though homeowners and the cantons reject it?
We have heard the criticism. The Federal Council will communicate this shortly.​

And then the heating police come to check it?
Look, we have to be pragmatic in a crisis. With Covid-19, the police didn’t check whether there were five or six of us eating together.

Hand on heart, how many were you then?
Up to five, as permitted. Once we would have been six, three couples. We had to postpone this meal. As a federal councilor, like any citizen, I must respect the law.​

How do you estimate the development in the long term: will this energy crisis become an economic crisis?
This danger exists. In other countries we see high inflation. In Germany, our most important trading partner, a recession is imminent. This could also have consequences for the Swiss economy. The problems are not only related to the crisis in Ukraine. There are several factors that cause uncertainty.​

Which?
Will China continue with its zero-covid strategy? Do we still have delivery problems? Or is the Chinese economy growing again, with a corresponding need for oil and gas? Such questions affect our energy prices. The same goes for food: if the Turkey-brokered food deal between Ukraine and Russia collapses, it would have catastrophic consequences for global food security. Similar rumors have recently led to price increases

Can Switzerland prepare for such scenarios?
We try that as much as possible. But we depend on foreign countries. We have our system with mandatory stocks, but if a crisis lasts longer, it becomes difficult.​

With regard to the impending energy shortage, do you expect the situation to improve in the winter of 2023 or 2024?
No, on the contrary. I expect an energy crisis that will last several years. We must not only think about this winter, but do everything we can to ensure that we produce more in Switzerland: more renewable energy, more efficiency. But in 2023 and 2024, we will still be dependent on oil and gas. What it will look like in the coming years will depend on how quickly we can expand our production.​

How much does it hurt you that Switzerland has not concluded an electricity trade agreement with Europe? When the solidarity agreement failed, it became particularly clear: Switzerland seems isolated.
This complicates the situation, but does not alter the fact that we have to expand our own production and that energy is scarce throughout Europe. However, discussions on the solidarity agreements continue.​

With the expansion of renewable energy sources that do not provide basic energy such as nuclear energy, the international market becomes more important. Switzerland is clearly at a disadvantage due to the lack of market access. Shouldn’t this agreement be postponed quickly?
It is essential that we stabilize our relations with the EU again. But for both sides: we also contribute to the energy supply in southern Germany. Explorations are underway with Brussels, but to find a solution, two sides are needed.

Does it need an energy general, as your party and the Bundesrat candidate Albert Rösti demand?
It’s not a general’s question, it’s whether we can build faster. Parliament has now taken important decisions here.​

Has the federal government underestimated the crisis?
When it comes to energy, the risks have been underestimated and in recent decades people have relied on imports when in doubt. An expert told me that the problems stem from the decision not to build the Kaiseraugst nuclear power plant. Now we have become very dependent. They failed to make fast enough progress in domestic expansion. Also with renewable energy sources such as hydropower.