Swiss economy at risk: bureaucracy and internal divisions

Context

TL;DR

• Swiss economy threatened by excessive federal bureaucracy
• Federal administration now includes multiple offices with varying interests
• Internal divisions and power shifts disadvantage private economy
• Cross-border workers face more complex administrative procedures

Key facts

• Main Concern: Excessive interference of federal bureaucracy in Swiss economy
• Key Example: Federal Council introducing stricter rules for companies despite economic resistance
• Change in Administration: Multiple federal offices now involved in economic issues, not just Seco
• Historical Context: State previously had to justify regulation, now must justify lack of it
• External Influences: Federal bureaucracy affected by directives from OECD, G20, EU, and UN
• Impact on Economy: Continuous regulation shifts power balance against private economy
• Future Threat: Swiss economic hub seriously threatened by bureaucratic interference
• Cross-border Workers: Face more complex administrative procedures and potential job market impacts

Rudolf Walser's Warning

Economist Rudolf Walser has raised a concerning alarm about the Swiss economy, criticizing the excessive interference of federal bureaucracy and the Confederation. In an interview with the Neue Zürcher Zeitung (NZZ), Walser painted a worrying picture for the country's future, dominated by increasingly influential bureaucracy and less impactful economic associations.

Walser, a former member of the Vorort (predecessor of Economiesuisse), cited a concrete example: the Federal Council wants to introduce stricter rules for companies to counter the popular initiative “For responsible large companies - to protect human beings and the environment”, despite the resistance of economic organizations. 'It is inexplicable to me that a government with a bourgeois majority decides on such a project,' says Walser.

Federal Bureaucracy and External Influences

According to Walser, the federal administration has changed: 'Today, not only the State Secretariat for Economic Affairs (Seco) deals with economic issues, but also numerous other federal offices in the sectors of energy or the environment. These entities bring their viewpoints and interests.' As a result, 'the Seco has much more difficulty asserting itself within the administration than before.'

Historian Tobias Straumann added a key element: 'Before, the state had to justify why it regulated, today it has to justify when it does not: this is a fundamental change in state action. For me, this is the big political issue of the present.' According to Straumann, federal bureaucracy is also affected by directives from abroad: the OECD, G20, EU, and UN continuously issue new rules, and if parliament does not pay close attention, 'these regulations are simply adopted.'

Internal Divisions and Power Dynamics

Walser recalled that the Vorort had 'reliable partners' among the liberal-radical federal councillors and in parliament. 'Today, colleagues at Economiesuisse certainly do a good job, but they find themselves in a much more difficult environment than we had back then. Such ties no longer exist in that form. And therefore, it does not surprise me that the economy no longer finds as much attention as before.'

Straumann also highlighted the change at the personnel level. 'The president of the Vorort was traditionally a business leader from one of the two strongest sectors, chemistry or mechanical industry. Today, top positions are no longer held by the heads of large companies.' The European issue, then, 'has completely divided the economy.' Walser confirmed: 'Today we can no longer achieve anything. The main reason for the success of the past was that we had to unite: economy, politics, and administration.'

Power Dynamics at a Disadvantage for the Private Economy

According to Straumann, the balance of power has shifted to the disadvantage of the private economy due to 'continuous regulation.' 'The administration drafts the ordinances, the Federal Council has too little time for thorough examination and approves them. The administration is always on the offensive, can threaten, and it is tough for companies. This did not exist before.' The consequence is that for economic actors, it is advisable 'to get on good terms with the administration,' but 'this is not a good development.'

Walser sounded the alarm: 'The Swiss economic hub is seriously threatened, not in the next two or three years, but slowly and steadily.' The expert cited the German economist Carl Christian von Weizsäcker: 'In Switzerland, everything happens simply ten years later than abroad. I fear that we are on this slippery slope.'

Operational details

Implications for cross-border workers

The critical issues highlighted by Walser and Straumann could have significant repercussions for cross-border workers employed in Switzerland, particularly in the Canton of Ticino. The increasingly influential federal bureaucracy and continuous regulation could make administrative processes more complex for transnational workers.

More complex administrative procedures

With the increase in rules and ordinances, cross-border workers may have to deal with more complex administrative procedures to obtain or renew work permits. This could include the need to present more documents or follow additional steps, resulting in delays and additional costs.

Impact on the labor market

The internal division within the Swiss economy and the power imbalance favoring the private economy could impact the labor market. Companies may be less inclined to hire new employees, especially those from foreign countries, due to increased bureaucratic complexities and additional costs.

Future scenarios

If the situation worsens, cross-border workers may face more difficult working conditions or even job loss. It is important for transnational workers to be aware of these potential challenges and prepare accordingly.

What cross-border workers can do

Monitor regulations

Cross-border workers should carefully monitor the regulations and ordinances issued by the Swiss government and federal bureaucracy. This can help stay informed about changes and adapt promptly.

Consult experts

In case of doubts or need for assistance, cross-border workers should consult experts in labor law and administrative issues. This can help navigate bureaucratic complexities better and avoid costly mistakes.

Plan for the future

Cross-border workers should plan for the future, considering potential negative scenarios and preparing for possible changes in the labor market. This can include diversifying skills or seeking new job opportunities.

Useful tools to protect your net income

To reduce FX leakage, compare CHF-EUR exchange options and banks for cross-border workers.

Key points

Concrete actions for cross-border workers

Document verification

Cross-border workers should regularly verify their work and residence documents to ensure they are up-to-date and compliant with new regulations. This may include the work permit, residence permit, and other relevant documents.

Updating skills

To remain competitive in the job market, cross-border workers should consider updating their skills. This can include participating in training courses, learning new languages, or acquiring relevant certifications.

Using online tools

Cross-border workers can use online tools to stay informed about regulations and manage their documents. For example, the salary calculator can help calculate net income after taxes and social contributions.

Legal advice

In case of doubts or need for assistance, cross-border workers should consult a lawyer specialized in labor law and administrative matters. This can help navigate the bureaucratic complexities better and avoid costly mistakes.

Financial planning

Cross-border workers should carefully plan their finances, considering potential changes in the job market and regulations. This can include creating an emergency fund, diversifying investments, and planning for retirement.

Conclusion

The alarm raised by Rudolf Walser and Tobias Straumann regarding federal bureaucracy and internal divisions in the Swiss economy should be taken seriously by cross-border workers. It is important to carefully monitor regulations, consult experts, and plan for the future. By using online tools and carefully planning their finances, cross-border workers can better face future challenges and protect their economic future.

Source: tio.ch