Swiss Review 4/2020

Swiss Review / July 2020 / No.4 THEODORA PETER In Namgyal Studer’s words, the lock- down was a “huge shock”. Studer owns a hairdresser’s salon in Berne. Her businesswas goingwell. Fromone day to the next, she had to shut up shop, cancel customer appointments and send her two employees home. Tens of thousands of shop owners, tradespeople, restaurateurs and other service providers shared this predic- ament in mid-March. Some 190,000 businesses around the country – in- cluding Studer’s private limited com- pany – consequently applied to the un- employment insurance (ALV) to put almost two million employees on short-time working hours. The ALV subsidised 80 per cent of the resultant wage shortfall in order to prevent re- dundancies. More than a third (37 per cent) of employees in Switzerland were furloughed in this way during the coronavirus crisis. In Ticino, the canton hit particularly hard by the ep- idemic, the proportionwasmore than half (54 per cent). Over 14 billion Swiss francs will flow from the federal cof- fers into the ALV in order to fund this bailout. Had the government not stepped in, employees would have faced higher wage cuts to prevent a welfare imbalance. Multibillion loans “Help is on its way,” promised Eco- nomics Minister Guy Parmelin (SVP) at the beginning of the crisis. In ad- dition to the furlough scheme, loans were used to keep businesses afloat. With minimal fuss, companies were COVID-19 and the Swiss job market “ Help is on its way ” – Switzerland’s multibillion bailout COVID-19 brought parts of the Swiss economy to a standstill, affecting a third of all employees. Tens of thousands of shops had to close. Almost two million people were put on short-time working hours. The Federal Council drew up an unprecedented financial support package. 10 Focus able to apply for emergency liquidity from their banks – covered by a gov- ernment-guaranteed credit worth up to 40 billion francs. Hairdresser Namgyal Studer also obtained a small bridging loan. Despite a complete loss of revenue, this allowed her to pay her outstanding bills and give her two employees an advance on their wages before unemployment benefit kicked in. Studer herself received a lump-sum allowance during the lockdown, which the Federal Coun- cil had capped at 3,320 francs per month for all people in a position similar to that of an employer. She had been fretting for a long time about whether she would have to pay full rent for her salon during the six weeks she remained closed: “I hope my landlord shows some goodwill.”