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UPDATE: How Switzerland could be impacted by the Russian invasion of Ukraine

The Russian invasion of Ukraine that began on Thursday and European countries were braced for any potential fallout. Here's a look at how seriously the war could impact Switzerland

UPDATE: How Switzerland could be impacted by the Russian invasion of Ukraine
A Ukraine army soldier walks in the town of Schastia. Photo by Aris Messinis / AFP

After Russian troops invaded Ukraine, Swiss Foreign Affairs Ministry (FDFA) issued a swift statement saying that “Switzerland condemns the Russian attack on Ukraine and urges Russia to immediately cease military aggression and withdraw its troops”. 

“We are very concerned about the danger to innocent civilians”, (FDFA) added.

How will Switzerland be impacted by the political situation in Ukraine?

Switzerland doesn’t directly depend on any essential goods from the conflict-ridden areas, the impact on the country is expected to be minimal.

Russia sits in 34th place in the list of most important trading partners with Switzerland, between Mali and Taiwan. 

“But an armed conflict could indirectly lead to shortages,” according to Thomas Grünwald, spokesperson for  Federal Office for National Economic Supply (OFAE). That’s because international supply chains for food and fuel could be interrupted.

However, if the economy can no longer supply stores and service stations, the government will draw on its stock of “mandatory reserves” kept for emergencies, which should be sufficient for three to four months.

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They include such non-perishables as sugar, rice, edible oils and bread grains, along with fertiliser for agriculture and fodder for livestock.

How reliant is Switzerland on Russian energy?

Russia is a major producer of oil and gas, although the direct impact of the conflict is unlikely to be significant for Switzerland. 

Around a quarter of Switzerland’s petroleum needs come from the Swiss refinery in Cressier. Russia supplies relatively little crude oil for this plant, with the majority coming from the United States, Nigeria and Libya. 

The remainder of Switzerland’s petrol imports, around 75 percent, is already refined, with the majority of that coming from France and Germany.

Swiss news outlet Watson reports that it is difficult to determine exactly how much of the refined petrol originally comes from Russia, although approximately 25 percent of the European Union’s crude imports are of Russian origin. 

While the reliance on Russian oil is comparatively minimal, Switzerland has a heavier reliance on Russian gas. 

Switzerland buys most of its gas through various European distribution centres, although an estimated 47 percent of this is of Russian origin. 

Although this appears to be a potential vulnerability, experts are not convinced the conflict will see Russia turn off the tap. 

Grünwald is convinced that “Russia will continue to honour its delivery contracts”, regardless of how the conflict plays out.

As a last resort, Switzerland would be able to buy petrol from other countries, especially the United States, while Switzerland could also increase its import of Norwegian and EU natural gas, which is currently at 24 percent and 19 percent respectively. 

READ MORE: Ukraine conflict: Will Switzerland impose sanctions on Russia?

Swiss companies working in both Russia and Ukraine also don’t expect any major consequences on their operations.

Among them is Stadler Rail: the Thurgau train manufacturer signed several “memorandums of understanding” with Ukrainian partners in 2021 regarding the development of the railways in that country.

The current crisis “could possibly lead to delays in the development of the market”, said said Gerda Königstorfer, group communications director.

The Zurich industrial group Sulzer, for its part, considers that its exposure to Russia and Ukraine is “minimal”. Russia accounted for only 3 percent of orders in 2021, and Ukraine for none.

“The impact for Sulzer in the event of sanctions is negligible.”

Other companies that could be somewhat affected include Zug-based Nord Stream. This international consortium counts the Russian group Gazprom among its shareholders. It is responsible for the construction of two pipelines.

At this early stage, no other substantial consequences are foreseen in Switzerland.

READ MORE:  Ukrainians in Europe: How will Russia’s invasion and the war impact your lives?

What about impact in tourism?

The country’s tourism body, Switzerland Tourism, is concerned that the armed conflict between the two Eastern European countries could  have repercussions on Swiss tourism.

Not only are tourism officials predicting fewer visitors from Russia, but they also fear that insecurity it creates will keep overseas visitors from coming to Europe altogether, considering such travel unsafe.

However, according to the tourism board’s  director Martin Nydegger, Switzerland’s tourism sector has weathered geopolitical crises before, proving to be resilient to such events, so the hope is there will not be much fallout either on the current ski season or summer travel.

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Ukraine and allies lay foundations for reconstruction at Swiss conference

Allies of Ukraine meeting in Switzerland were due Tuesday to adopt a declaration spelling out the principles and priorities of rebuilding the war-shattered country, estimated to cost at least $750 billion.

Ukraine and allies lay foundations for reconstruction at Swiss conference

Leaders from dozens of countries, international organisations and businesses have been meeting in the southern Swiss city of Lugano under tight security since Monday, discussing the best path forward for reconstruction, even as Russia’s war continues to rage in Ukraine.

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Speaking on the first day of the Ukraine Recovery Conference, Ukrainian President Volodymyr Zelensky and a long line of government ministers described the massive destruction caused by Russia’s February 24 invasion.

“Reconstruction of Ukraine is not a local task of a single nation,” Zelensky said via video message. “It is a common task of the whole democratic world,” he said.

Prime Minister Denys Shmyhal said the recovery “is already estimated at $750 billion”. “The key source of recovery should be the confiscated assets of Russia and Russian oligarchs,” he said.

“The Russian authorities unleashed this bloody war. They caused this massive destruction, and they should be held accountable for it”.

READ MORE: Switzerland extends sanctions against Russia over Ukraine invasion

The conference, which had been planned before the invasion, had originally been slated to discuss reforms in Ukraine before being repurposed to focus on recovery.

Shmyhal laid out the government’s phased reconstruction plan, focused first on the immediate needs of those affected by the war, followed by the financing of thousands of longer-term reconstruction projects aimed at making Ukraine European, green and digital.

Those priorities are expected to be reflected in a final Lugano Declaration setting out the general principles defining a framework for rebuilding Ukraine, which should be adopted when the conference wraps up around midday Tuesday.

As billions of dollars in aid flow into Ukraine, lingering concerns about widespread corruption in the country mean far-reaching reforms will also be seen as a condition for any recovery plan decided.

The former Soviet state has long been ranked among the world’s most corrupt countries by Transparency International.

In Europe, only Russia and Azerbaijan ranked worse.

The Ukrainians have proposed that allied countries “adopt” specific regions of Ukraine, and lead the recovery there to render it more efficient. Britain has proposed taking on the Kyiv region, while a diplomatic source said France would concentrate on the heavily-hit Chernihiv region.

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In all, around 1,000 people are attending the conference, including European Commission President Ursula von der Leyen, who let out an enthusiastic “Slava Ukraini” (glory to Ukraine) after insisting on the importance of rebuilding a Ukraine better than before the war.