Corporate tax, managing the pandemic, relations with the EU: in an interview with swissinfo.ch, Christoph Mäder, president of economysuisse, discusses the major challenges facing the Swiss economy. And minimizes the influence of the country’s most powerful economic association on political decisions in Switzerland.
This content was published on January 25, 2022 – 4:11 PM
swissinfo.ch: What do you see as the main challenges for the Swiss economy in the coming years?
Christoph Mäder: The future global taxation of at least 15% on the profits of large companies is a major challenge. The aim of this approach is to damage Switzerland’s competitiveness in favor of other, less tax-disciplined countries. Since we cannot get around these new OECD rules, we have to apply them as favorably as possible, for example by abolishing other taxes (stamp duties, etc.) and allowing more tax deductions (patent box, etc.)
Are these rules so problematic? In large cantons like Zurich or Bern there should be no change; in other cantons (Geneva, Vaud) the increase will be only 1%.
But in other cantons such as Zug or Nidwalden, the increases will exceed 3%. In addition, each percent can mean significant amounts for large companies. More generally, as costs are high in Switzerland, we absolutely need to maintain our fiscal competitiveness in order to continue exporting.
“We absolutely have to maintain our fiscal competitiveness to be able to continue exporting”
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What about Switzerland’s energy supply, a topic that recently made headlines with Economic Affairs Minister Guy Parmelin’s call on companies to prepare for electricity shortages as early as 2025?
This is another big challenge. A stable supply is a precondition sine qua non to ensure the competitiveness of our industries and thus our jobs. It is clear that the Federal Council’s forecasts were too optimistic. On the one hand, energy savings have been overestimated and on the other hand, the increase in energy demand has been underestimated. In addition, decarbonisation solutions – for example electric mobility – often lead to an increase in energy consumption.
What do you think of the management of the pandemic by the Federal Council and Parliament?
Switzerland’s balance sheet is quite positive compared to many other countries. On the other hand, the indebtedness of our public finances is a cause for concern. It is essential that our generation works to reduce the debt caused by Covid, without passing it on to future generations.
After the failure of the framework agreement with the European Union, economysuisse encourages the Federal Council to give priority to the non-discriminatory participation of Swiss companies in the European market. How should he handle it?
It was the Federal Council that decided to break off negotiations with the European Union with a view to a framework agreement, so I would say that it is up to it to find solutions. And to get to work right away, because the bilateral agreements are constantly being eroded. Obviously, this task is extremely difficult and we should not expect miracle solutions. In any case, economysuisse is not arguing for a framework agreement bis. The best approach may be to rely on sectoral negotiations.
Some observers believe that Switzerland is systematically opposed to a political alliance with the European Union and that this road is a dead end…
In order to negotiate, each side must be willing to make concessions, without trying to do “cherry-picking”. In my opinion, the Bundesrat is well aware of this, because it is interested in finding a stable long-term solution and avoiding the isolation of Switzerland. But the way is hard to find, especially with the question of political alliance or not. Moreover, the strict stance of the European Union – “our way or no way” – does not make Switzerland’s position any easier.
Should the Swiss government prioritize new extra-European free trade agreements rather than stabilizing its relations with the European Union?
I do not think so. These two axes are very important and both should be pursued with the same intensity.
In voting, economysuisse sometimes has to convince people. How do you improve your image among the population?
Credibility is our only asset† We believe that taking informed positions in itself generates the respect of the population and thus increases our credibility with them.
In Switzerland, political party financing is not very transparent, but it is common knowledge that some big companies are big financiers…
First of all, as you point out, it is certain companies – and not economysuisse – that contribute to party financing. In principle, I do not see any particular problems with this situation, which is not much different from what is happening in other countries. In addition, in December 2021, the Federal Council sent the ordinance on the transparency of the financing of political life for consultation. According to this regulation, the political parties represented in the Federal Assembly will have to declare every year their income and donations, the value of which exceeds 15,000 francs per donor and per year.
How much money does your organization invest annually in political campaigns?
We do not communicate these figures for strategic reasons. If the future regulation is in effect, we will adhere to what is required by law. In any case, it is completely illusory to think that we can ‘buy’ political decisions. On the contrary, we must present convincing arguments.
Economic lobbies are well organized and funded. When it comes to making laws, do you have as much influence as the federal administration or even more weight than Parliament and the Federal Council?
I do not completely agree with these statements. The federal administration has considerable resources; recently these resources have even been strengthened. The Federal Parliament has undoubtedly lost ground in recent years. In addition, parliamentarians are increasingly influenced by societal trends, rather than by the positions of their respective parties. Although our positions are reasonably well represented within the Federal Council, we do not have a majority.
“It is an illusion to think that economysuisse can ‘buy’ political decisions”
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economysuisse is certainly an influential player on the federal scene, but we are in constant competition with a growing number of other interest groups, for example those promoting environmental issues. In short, there is a real ideas competition.
Is the president of economysuisse somehow the eighth federal councilor?
This is an old legend that doesn’t match reality!
Yet you have very regular contact with the Federal Council and parliamentarians. For example, you are the person who participates most in federal advisers’ travels.
Maintaining regular contact with the Federal Council and parliamentarians is an integral part of my job. Moreover, these contacts go both ways. With regard to missions, economysuisse is responsible for setting up the economic delegations that accompany the federal councilors. It is therefore normal that I am part of these delegations.
Do you defend liberal beliefs or rather the interests of some of your members? For example, are you in favor of compensation when purchasing combat aircraft?
economysuisse is clearly in favor of economic liberalism. At the same time, we may take a pragmatic stance on certain sectors, as is the case in many other countries. In that sense, we wholeheartedly support compensation cases.
You would be attending the annual meeting of the World Economic Forum (WEF), which has been postponed yet again. What do you take away from these events?
These meetings in Davos are a unique opportunity to meet a host of other leaders and have in-depth discussions on topics of common interest, such as climate protection.
The costs of these meetings are partly covered by the government. With what benefits for the taxpayer?
These events significantly enhance Switzerland’s reputation. At the annual meetings of the WEF, the whole planet talks about Davos and Switzerland. In addition, the presence in Davos of all (or almost all) Federal Councils underlines the importance of these events for our country.
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