Trade union Unia has called for Swiss companies to be banned from paying employees’ salaries in euros after the central bank placed a cap on the franc's exchange rate against the European currency. 

 

"/> Trade union Unia has called for Swiss companies to be banned from paying employees’ salaries in euros after the central bank placed a cap on the franc's exchange rate against the European currency. 

 

" />
SHARE
COPY LINK

FRA

Union calls for Swiss ban on euro salaries

Trade union Unia has called for Swiss companies to be banned from paying employees’ salaries in euros after the central bank placed a cap on the franc's exchange rate against the European currency. 

 

Unia representatives from the Swiss mechanical and electrical engineering industries (Swissmem) delivered a petition with around 2,000 signatures to the parliament in Bern on Friday. 

The labour organisation’s move came as some Swiss companies consider pegging salaries to the euro amid an export crisis fueled by the strength of the franc.

Unia co-president Renzo Ambrosetti said:

“We insist on the principle of Swiss salaries for work in Switzerland,”

Unia’s petition also demanded “strict control of the banks” and the introduction of a foreign exchange trading fee that could help finance foreign exchange risk insurance for the export industry.

Before handing the petition over to the government, Ambrosetti called on the Swiss National Bank (SNB) to take further measures:

“The SNB must defend a reasonable rate of 1.40 francs to the euro, with political support. They must follow up on their first step,” he said. 

However, the Bundesrat has rejected outright a ban on payment of Swiss salaries in foreign currencies.

Such a ban would be counterproductive and could even disadvantage employees, the government said in a press statement.

“A ban would offer no effective protection against the financial consequences of the strong franc. It would even disadvantage employees in certain situations, such as when they work abroad.”

The Bundesrat said it is taking the effects of the strong franc seriously, but added that a ban would “overshoot the mark”.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

SWISS NATIONAL BANK

ECB announces major bond buying program

The Swiss franc edged higher against the euro on Thursday after European Central Bank president Mario Draghi announced the bank will buy €60 billion of European debt every month from March 2015 until September 2016.

ECB announces major bond buying program
ECB president Mario Draghi. Photo: DPA

"The combined monthly purchases of public and private sector securities will amount to €60 billion" Draghi told assembled journalists at a press conference in Frankfurt.

The bond-buying programme will continue "until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, two percent", he added.

Spending €60 billion a month for that long would mean the bank injecting over €1.1 trillion into the region's sputtering economy.

The euro immediately dropped sharply against the US dollar on the news, to below $1.15 – its lowest since 2003 – in a sign that the programme was more aggressive than markets had been expecting.

The Swiss franc rose to 1.01126 euros, but slipped against the dollar after several days of advances.