On January 15, 2015 the Swiss central bank lifted its cap on the Swiss Franc leading to a soaring currency. As a result more and more Swiss businesses, for the most part industrial exporters, have started to announce partial layoffs or unpaid extensions to working time. Other companies are looking at paying their cross border workers in euros or replacing existing employment contracts with new ones that pay lower salaries. At the moment, the Federal government, business leaders’ federations, unions and economists all stand against lower salaries that could drive the economy into a recession. In a country where businesses have more or less free rein as regards labor law, unions are battling to negotiate arrangements for working conditions in order to safeguard against companies profiting from a situation that they consider as not necessarily penalizing them.
A wave of unease and a series of preventative measures. On January 15, 2015 the Swiss central bank stunned financial markets by unexpectedly announcing it was scrapping the artificial cap on the currency that had been fixed at 1.2 Swiss francs per Euro. The next day the exchange rate with the Euro was at parity and as a consequence Swiss export products prices rose between 10% and 15%. The Federation of Swiss Businesses believes that growth prospects in the Eurozone and in the US are sufficient to stave off a shock to Switzerland’s internal economy.
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