Who can apply for coronavirus financial assistance in Switzerland?

Switzerland has made billions of francs available for those hit hard by the economic impacts of the coronavirus. Here's everything you need to know about who can apply.

Who can apply for coronavirus financial assistance in Switzerland?

What economic measures has Switzerland taken to soften the impacts of the coronavirus? 

On Friday, March 20th, Switzerland announced two major economic measures to tackle the fallout from the coronavirus. A total of CHF42 billion has been set aside to fund the measures

These are targeted at helping the self-employed by allowing them to access the existing employment benefit scheme, as well as small to medium-sized Swiss businesses through a loan scheme. 

The goal of the measures is to ensure that the economy functions at a minimum of 80 percent during the crisis. 

Although the announcement represents the largest financial bailout in Swiss history, it has been criticised for not going far enough to help those impacted by the virus. 

Allowing self-employed people to access unemployment benefits

The first was to extend the current unemployment benefit scheme to the self-employed, of which there are an estimated 330,000 in Switzerland. 

Pursuant to these rules, the unemployed will receive 80 percent of their previous salary up to a maximum of CHF196 daily. 

Unemployed people who have children also receive an additional supplement. 

Loans for small to medium sized businesses

The second component of the coronavirus stimulus package is making loans available to businesses in order to prevent bankruptcy. 

Although these loans are administered by Swiss banks, they are guaranteed by the government. 

Loans of less than CHF500,000 will be completely underwritten by the government; loans of over CHF500,000 will be 85 percent guaranteed by the government. 

Photo by Claudio Schwarz | @purzlbaum on Unsplash

Companies can borrow up to 10 percent of their annual income to a maximum of CHF20 million. 

After initially saying that the interest rates for these loans will be “very low”, on March 25th the rate was set at 0.5 percent

The amount of money made available for loans is CHF20 billion but the government indicated on March 30th that more could be made available if necessary. 

The loans are only available to small to medium sized companies. Larger companies are expected to have the resources to get themselves through the crisis themselves. 

Who else can apply for assistance? 

Money has been made available for loans for the tourism sector amounting to CHF350 million in total. 

For sports clubs and organisations, CHF100 million has been made available as aid payments. 

In the Swiss cultural sector – which is defined as including performing arts, design, film, visual art, literature, music and museums – CHF280 in emergency aid has been made available.

More information is available here.

Who misses out?

The measures are not exhaustive and there are some who miss out. As reported by Swiss daily Watson, the assistance only applies to those who are no longer able to work due to the coronavirus. 

There are many who have taken significant financial hits as a result of the coronavirus but are still able to work and therefore are not eligible for assistance. 

There are several professions in Switzerland such as taxi drivers, physiotherapists, podiatrists, gardeners, graphic designers and dentists who are still allowed to work but have seen sharp declines in income. 

What are the options for anyone who has missed out?

Those in the above category still have options available to them, however these are comparatively limited. 

They may apply for a loan from their bank, which will be restricted to 10 percent of their turnover in the last financial year. 

They can also apply for an extension of the deadline for rent payments. 

There are also a range of potential options at the cantonal level. 

What support are the cantons providing?

Switzerland’s cantons have also stepped in to provide assistance, however this of course varies significantly. 

In Zurich, small businesses with at least two full-time positions can apply for a one-off payment of CHF2,500. 

In Grisons (Graubünden), CHF200 million has been made available for small businesses as loans. SMEs can apply for loans of up to 25 percent of annual turnover. 

Applications for social assistance have also increased in Bern and Lucerne, reports Watson. 

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EXPLAINED: How the strong Swiss franc has been a boost for Switzerland

The Swiss franc is breaking records against the euro, giving the Swiss economy a temporary boost as central banks battle inflation -- although experts remain cautious about the months ahead.

EXPLAINED: How the strong Swiss franc has been a boost for Switzerland

Seen as a safe haven, the Swiss currency briefly hit a high of 0.94 francs to the euro on Monday following the Italian general election.

While it has since eased back a little, it is nevertheless at the highest levels since the launch of the single currency more than 20 years ago, outside a brief flash crash in 2015.

“It’s more about the weakness of the euro than the strength of the Swiss franc,” Credit Suisse economist Maxime Botteron told AFP, citing the franc’s steadier performance against the US dollar.

“European growth is showing signs of running out of steam, even recession,” he said, noting that “these indicators come in a context where the Swiss National Bank (SNB) has changed its monetary policy”.

Switzerland’s central bank has abandoned the negative rate it has imposed since 2015 to combat the overvaluation of its currency.

Like other central banks, the SNB seeks to prevent inflation from taking root. But in the midst of soaring energy prices, the franc’s rise is providing it with welcome help in curbing price increases.

“In Switzerland, two-thirds of inflation is due to imports. An appreciation of the Swiss franc therefore reduces the rise of these goods a little,” said Botteron, adding that the SNB “therefore has less need to tighten monetary policy” than other central banks.

In August, inflation rose to 3.5 percent, its highest level in 29 years, but far behind the 9.1 percent recorded last month in the eurozone.

Tourism boost

“There is a very clear strategy to shield Switzerland the against the rising inflation coming from the eurozone, the US and other trading partners,” said Thomas Flury, UBS bank’s global head of currency strategy.

The franc’s rise has not triggered panic, unlike in 2015 when exporters feared their production costs and export prices would explode.

“High inflation in the eurozone makes the real appreciation much less dramatic than in the past,” said Flury.

“Acceptance is coming because companies in Switzerland would rather have a stronger Swiss franc than discussions on wage rises that French or German companies will have to do, as well the cost pressures from imports.”

If this rise in the franc eases somewhat the pressure on their imports, Swiss companies, with well-filled order books, also have some leeway to increase their prices, said Botteron.

In tourism, another sector sensitive to the exchange rate, the franc’s rise has enabled Swiss hoteliers to increase their prices to a lesser degree than in neighbouring countries given the lower inflation, a spokesman for the Hotellerie Suisse hotel industry body told AFP.

“For hoteliers, this means that they should become even more competitive against foreign countries,” he explained.

As Switzerland nevertheless remains an expensive destination, the group remains cautious, fearing that “consumer budgets will tighten”.

However, this boost to the Swiss economy may only be short-lived.

“We’ll have to see how this develops over the winter,” said Flury.

Even if it is too early to guess how the exchange rate might develop, recession or weak growth in the European economy would hamper Swiss companies and the franc’s value may become a much more sensitive subject.