Swiss Finance Minister wants to use SNB payouts to cut debt

In an interview with a Swiss daily, Neue Zuercher Zeitung, Switzerland’s Finance Minister Ueli Maurer said that the government wants to use payouts from the Swiss National Bank (SNB) exclusively to cut the ballooning debt, as the country boosted its borrowing to fight the economic impact of the coronavirus pandemic.

Key quotes

“SNB had said it would double its payout to Switzerland's regional and central governments to 4 billion francs.

This payout could be used to pay down the government's debts, which he thinks may push the budget into a deficit this year as the virus triggers the worst Swiss recession in 45 years.

My proposal is that in future we use all the SNB's distributions to reduce our corona debt.

The new debt of 30 to 50 billion Swiss francs in this one year is so large that we will not be able to reduce it again so quickly.

Otherwise we would have to make extreme cutbacks in the budgets for the coming years.

We assume the plans get adjusted again, especially with the call for a minimum tax, but nothing has been officially decided yet.”

Market reaction

The Swiss franc is little affected by the above comments, as USD/CHF remains depressed near 0.9725 region, down 0.21% on the day.