Switzerland: Small, but Global
Jean-Pierre Roth, Chairman of the Governing Board of the Swiss National Bank
Swiss-Argentine Chamber of Commerce, Buenos Aires, 16 November 2004, 16.11.2004
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Globalisation and the changing European environment are the challenges facing Switzerland today. One example of this is the opening up of the Swiss labour market to the European Union. While this may provide access to an enormous labour market, the move also gives rise to fears. A number of supporting measures introduced by the federal authorities address these concerns. The attempt to avert any wage adjustments by introducing minimum wages across the board, for instance, would be counterproductive. The Swiss labour market would become less flexible, and the country would lose one of its most crucial locational advantages.
As a small and open country, Switzerland is also strongly exposed to globalisation, making improvements in efficiency and rigorous cost controls a must. This development also affects the internationally focused Swiss financial sector. The days when banks and insurance companies were reliable job machines are gone and will probably not return in the foreseeable future.
In the past few years, a reform process has gotten under way in Switzerland that aims to promote economic growth and, in particular, stimulate the domestic market. However, this process has been implemented only somewhat half-heartedly, with the result that some observers now firmly believe that Switzerland is incapable of introducing extensive reforms. There are no grounds for this pessimistic view. Switzerland is well aware that neither the European environment nor globalisation will take its national feelings into account. However, experience has also shown that a small country can indeed exist in a globalised world provided that it considers its comparative strengths.