MPs vote in Widmer-Schlumpf as president

Switzerland ushered in a new government on Wednesday, with its popular finance minister and new president successfully fending off attempts by a far-right party to claim a second cabinet seat.

MPs vote in Widmer-Schlumpf as president
Swiss Federal Chancellry (File)

The parliament re-elected six out of seven members of the Federal Council, maintaining Bern’s previous power share among five of the country’s political parties.

Finance Minister Eveline Widmer-Schlumpf of the centre-right Conservative Democrats held onto her seat and was selected to replace outgoing leader, Social Democrat Micheline Calmy-Rey, as president for the coming year.

The cabinet vote was a blow for the far right Swiss People’s Party (SVP), which had been eager to boost its representation in government given that it is the country’s largest political party.

It has just one seat on the Federal Council while smaller parties have two.

Widmer-Schlumpf, 55, was elected to the cabinet as an SVP member in 2007 but following a split she and other parliamentarians went on to form their own Conservative Democrats.

Thanks to her popularity she not only remains in government but won the top post, even though her party is too small to hold a ministerial portfolio.

The presidency is rotated each year among members of the cabinet and it is a largely symbolic role.

Following the vote SVP lawmaker Hans Fehr said the traditional power share agreement was “broken” while other parties voiced their support for Widmer-Schlumpf’s re-election.

“It’s good news for Switzerland’s stability,” said Christian Democrats head Christophe Darbelley.

Conservative Democrat president Hans Grunder said he was “relieved and very happy” with the outcome.

“It’s a good sign for the next four years when many challenges await us,” said Grunder.

The new government enters into office amid concerns over a slowing economy.

While Switzerland is relatively cushioned against the kind of debt problems that have beset eurozone nations, it is suffering from the fallout.

Its economy is highly dependent on exports, which are suffering as demand drops in Europe.

This is exacerbated by the relative strength of the Swiss franc against the euro and the dollar.

The government on Tuesday cut its 2012 growth forecast to 0.5 percent from 0.9 percent, citing the eurozone crisis as a factor.

Calmy-Rey’s seat on the cabinet was filled by fellow Socialist Alain Berset following the Federal Assembly vote.

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Luxembourg urges fight to guard banking centres

Financial centres such as London, Singapore and Switzerland should hit back after being on the receiving end of attacks over banking secrecy, Luxembourg's Finance Minister Luc Frieden says.

Luxembourg urges fight to guard banking centres
Luxembourg Finance Minister Luc Friedan. Photo: Government of Luxembourg

Luxembourg, which has come under pressure over its role as a tax haven, must step up cooperation with its peers to protect the right of client confidentiality, Frieden said on Tuesday.

He made the remarks after meeting with Swiss President Eveline Widmer-Schlumpf, who is also Switzerland's finance minister.

“We need to step up coordination with other financial centres and come to a common understanding on client secrecy,” Frieden said.

At the same time, they would also have to meet “indispensable and absolutely necessary” standards of honesty on tax matters, he added.

“It is all about better protecting the privacy of clients,” he said, speaking alongside the visiting Widmer-Schlumpf.

Financial centres such as Luxembourg and Switzerland have been on the defensive since the global financial crisis in 2008 on charges that their secrecy laws made money flows harder to track, so enabling tax evasion.
Increased cooperation now should go beyond the issue of privacy since “there were other regulatory initiatives which we we need to come together on,” Frieden said.

“In a crisis, many states looked only to their national markets,” he said.

“We need to show that international financial centres are needed.”

Clients now come to Luxembourg or Switzerland not for secrecy or tax avoidance but to benefit from the financial services they provide, he said.

Widmer-Schlumpf made a similar point.

“We work with money that has been notified to the fiscal authorities and we should build our business model on the . . . quality of our financial services.”

Frieden noted that he had just begun talks with the US authorities so as to comply with the Foreign Account Tax Compliance Act (FATCA) which allows for an exchange of information on the assets of US citizens living abroad.