Swiss Review 4/2020

Swiss Review / July 2020 / No.4 11 Parliament finally came down on her side in June, because landlords are now obliged to deduct or waive a sig- nificant portion of the rent that was due during the government-enforced lockdown. Up to twice as many unemployed The self-employed are in a precarious situation, with no entitlement to fur- lough. They were able to obtain com- pensation if the lockdown had pre- vented themfromworking or severely restricted their ability towork. Yet, for many, these allowances were barely enough to live on, forcing them to tap into their savings in order to make ends meet Short-time working hours never- theless allowed companies to avoid mass redundancies – in the initial few months at least. The number of unem- ployed rose to over 155,000 by the end of May – up 50,000 year-on-year. At the beginning of June, experts were cautiously optimistic that the night- mare scenario of up to 200,000 un- employed could be averted – which would have been twice as high as in 2019, when the jobless rate fell as low as 2.1 per cent at one stage. Controversial dividends What caused considerable displeasure within parliament and among the general public was that companies were still paying shareholder divi- dends for the 2019 financial year de- spite the ALV subsidising most of these companies’ wage costs. The Na- tional Council voted in favour of a par- liamentarymotion calling for a ban on dividends during the furlough period. However, the Council of States ulti- mately blocked this decision, viewing it as an unacceptable restraint on eco- nomic freedom. Studer can only dream of dividends. After six weeks in lockdown, she was able to reopen her salon at the end of April – naturally adhering to safety protocols. She had plenty of appoint- ments during the first couple of weeks. However, her shop in Berne’s Läng- gasse university quarter relies on walk-in trade. It may be some time be- fore students and staff pop in again for a haircut. Studer remains unper- turbed. “I will take things as they come.” Severe recession likely The consequences of the pandemic will hit the Swiss economy hard. According to the Swiss Economic Institute (KOF) at ETH Zurich, GDP will fall by 5.5 per cent in 2020. Unlike previous recessions, which mainly came at the expense of exports, service industries such as hospitality and tourism will also suffer this time. Business analysts predict a slow economic recovery from summer onwards. Due to the economic downturn, the Confederation, cantons and municipalities expect significant de- clines in tax revenue totalling more than 25 billion francs, says KOF. Coping with the fallout from COVID-19 has been extremely costly for the public sector. In some cantons such as Berne, there are increasing concerns that new austerity measures may be necessary due to the imminent hole in public finances. (TP) The lockdown was a “huge shock” for Berne- based hairdresser Namgyal Studer. Thankfully, help was at hand (left). Federal Councillor and Finance Minister Ueli Maurer put together a multibillion aid package (middle). These protestors in Lausanne have no wish to return to the “ab­ normal normality” of pre-pandemic life (right). Photos: Danielle Liniger, Keystone