The relation of the Swiss franc to the euro

Thomas Jordan, Alternate Member of the Governing Board

"Europa Institut" of the University of Zurich, Zurich, 23.06.2004

The introduction of the euro has ushered in a new era in monetary policy for the member countries of the European Monetary Union. Monetary union offers the participating countries numerous advantages, but also some disadvantages. The chief disadvantage is forfeiting the possibility of adjusting monetary policy to the needs of the individual countries.

The introduction of the euro has definitely had positive effects on Switzerland. Europe now enjoys considerably greater monetary stability than in the past, and this is a decided advantage for Switzerland as a very open economy. At the same time, the Swiss franc's independence has not been jeopardised. The euro has not displaced the Swiss franc as legal tender in Switzerland, nor has it established itself as a parallel currency.

The Swiss National Bank's scope for conducting an autonomous monetary policy has not been diminished by the introduction of the euro. There is no reason for the National Bank to peg the Swiss franc to the euro, and the relation of the Swiss franc to the euro is likely to remain harmonious in future too.