The financial delegation from the Federal Councils (FinDel) gives the green light for the urgent loans decided by the Federal Council amounting to CHF 30.7 billion. This is intended to cushion the negative effects of the corona virus on the economy.
“We support the measures of the Federal Council,” said Councilor Peter Hegglin (CVP / ZG), President of FinDel, on Monday evening in front of the Bundeshaus media. The FinDel recognizes their urgency and the effectiveness of the proposed instruments. That is why all the advances requested were approved.
Hegglin gave no information about the voting ratio in the six-member FinDel. With one exception, the decisions were broadly based. The representatives of both chambers and different party colors had approved the Federal Council’s approach.
Money for the economy in need
“We have the resources and can now use these resources,” said Hegglin. Thanks to the debt brake, the federal government has been able to reduce debt significantly in recent years. “This debt will now increase again.”
According to Hegglin, emergency loans are needed, for example, “for people who are affected by short-time work and for companies that would otherwise have to close down”. Many would be left with nothing from one day to the next.
“We didn’t just nod it off”
Hegglin praised the Federal Council’s quick response. The latter has put together a “balanced package” that covers the “decisive areas”. Extraordinary situations demanded extraordinary solutions. It was the first time since the UBS rescue that the FinDel had to decide on loans worth billions.
“We didn’t just nod it off,” said Hegglin. The Federal Council had to answer questions for hours. The conditions that companies have to meet in order to apply for bridging assistance would have given rise to discussions.
The criteria are strict, said Hegglin. For example, businesses that seek help should not pay dividends or bonuses.
Unloved solidarity guarantees
Solidarity guarantees were the most controversial in FinDel. In June 2019, FinDel, in its old composition, recommended that the Federal Council no longer use this instrument. Not so in the corona crisis: Now such solidarity guarantees are to be taken again.
Hegglin said that the comparison with the ocean-going debacle is limp. “Now it’s about small and medium-sized companies in Switzerland, not about companies that do business in distant oceans.” The instrument is therefore entitled to “cushion liquidity shortages”.
Solidarity guarantees are risky, but still better than À-fonds-perdu contributions. So there is “more the possibility that something will come back”. In addition, the banks are liable for 15 percent of amounts in excess of CHF 500,000. “They want to meet their responsibilities.”
Details are still to be clarified
Specifically, FinDel approved emergency mitigation measures amounting to around CHF 30.7 billion, for example in favor of unemployment insurance. It also deals with emergency aid to companies, cultural workers and the procurement of medical supplies.
Formally, it is about an urgent commitment loan with an advance (CHF 20 billion) and a late registration for Supplement I in the 2020 estimate (CHF 10.7 billion).
The details of the use of credit, for example the amount of the interest rate on the guarantees, have not yet been finalized by the Federal Council. He will adopt the relevant regulation next Wednesday.
The parliament will presumably approve the loans released by FinDel in an extraordinary session. The Federal Council requests one. If a quarter of a council so requests, a special session must be convened within three weeks. In the present case that would be between April 13th and 17th.
The coordination conference – the offices of both councils – will meet on Thursday to determine the date of the extraordinary session and to refer any requests made by the Federal Council to the preparatory commissions, according to a statement. What is certain is that the Federal Assembly currently only wants to concentrate on coping with the situation around the corona virus.
The Federal Council is organizing – also next Thursday – a “Von Wattenwyl discussion” on the coronavirus situation, which will be extended to all parties.