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UKRAINE

How will the war in Ukraine impact the cost of living in Switzerland?

Aside from an acute humanitarian crisis it has created, Russian invasion of Ukraine is also impacting economies and consumer prices around the world, including in Switzerland. This is how it might touch your life in Switzerland.

How will the war in Ukraine impact the cost of living in Switzerland?

The war that started on February 24th has sent wave shocks through the global economy almost immediately.

This is how it has impacted Switzerland, and its population, so far. 

Euro – franc parity

The value of the European currency declined due primarily to the war in Ukraine, with the euro reaching parity with the Swiss franc earlier this week.

READ MORE: Parity with the euro: Why the Swiss franc is now so strong

This impacts Swiss consumers in a number of ways.

That’s because the new 1 to 1 exchange rate will have a huge effect on the export-oriented industrial sector — the backbone of Switzerland’s economy — which trades mostly with eurozone nations.

Companies could compensate for their losses by passing part of the cost increase on to consumers — that is, you. Prices of many everyday goods may go up as a result.

You can read more about the effects of the euro-franc parity here:

EXPLAINED: What does euro-franc parity mean for Switzerland?

The price of fuel

Like many European countries, Switzerland imports natural gas and oil for energy production from Russia. While these imports do not account for the major portion of Switzerland’s gasoline and oil supply, the effects are already felt at the pump.

With the current petrol price of 2 francs per litre, the cost per kilometre rose by two centimes to 71 centimes. That’s an additional 300 per year for petrol for 15,000 kilometers driven, according to motoring organisation Touring Club Suisse (TCS). 

As a comparison, when the average price of gasoline was 1.67 per litre, in 2021, an average car journey cost 69 cents per kilometre.

So depending on how much and how far you travel by car, you are likely to spend more for your journeys than before.

READ MORE: Where in Switzerland can you find the cheapest fuel?

At this point it is impossible to predict how the price of petrol will continue to develop, said Timo Ohnmacht, traffic sociologist at the Lucerne University of Applied Sciences and Arts.

“Energy costs are heavily dependent on world events. The gas price has already risen by 60 percent. If this happens with petrol, a price of 3.20 francs per litre would be conceivable”, he said.

Ohnmacht added that the price hike would not necessarily push Swiss drivers to give up their cars or take public transport instead.

“Drivers are very stable in their behaviour. In ‘what-if studies’, many often state that they would switch to public transport if petrol prices were higher, but in reality they change very little”.

READ MORE: Ukraine invasion: How reliant is Switzerland on Russia for energy?

Beyond the pump

Higher gasoline prices, however, impact not only the cost of filling up the car; they also have a so-called ‘domino effect’ on the cost of common products and household goods.

While they may not have obvious connections to oil, petroleum derivatives are used to manufacture cosmetics, medical devices, clothing made from synthetic materials, smartphones, computers and TVs —as well as everything else made from, or packaged in, plastic.

This means that a price hike will affect a very wide array of everyday goods, some essential and others less so.

READ MORE: How the cost of living will change in Switzerland in 2022

“A blow to agriculture”

Russia and Ukraine are major exporters of agricultural raw materials, including wheat necessary to make flour for bread and other baked goods, as well as corn and barley.

The prices of baked goods will not climb  significantly, however, as “the cost of flour is just over 10 percent of the price of bread in total”, according to agricultural cooperative Fenaco.

The major problem for agriculture lies in the price of fertiliser, which is essential for cultivation of healthy crops.

Fertiliser prices have increased since the Russian invasion of Ukraine.

What connection is there between fertilisers and the war?

It’s about natural gas, which Switzerland imports from Russia.

Fenaco points out that up to 80 percent of the production costs of nitrogen fertilisers are influenced by energy prices, in particular those of gas.

“To make the fertiliser, you need ammonia and nitrogen,” Philippe Rezzonico, financial analyst at Heravest investment service, said in an interview with RTS public broadcaster. “And the ammonia comes from the hydrogen that comes from natural gas”.

“We are faced with an increase in production costs, which is estimated at around 6 percent this year”, said Francis Egger, vice-director of the Swiss Farmers Union. “And that will ultimately have effects on the prices paid by consumers, for example on vegetables.”

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UKRAINE

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Ukraine won the Eurovision Song Contest Sunday with an infectious hip-hop folk melody, boosting spirits in the embattled nation fighting off a Russian invasion that has killed thousands and displaced millions of people.

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Riding a huge wave of public support, Kalush Orchestra beat 24 competitors in the finale of the world’s biggest live music event with “Stefania”, a rap lullaby combining Ukrainian folk and modern hip-hop rhythms.

“Please help Ukraine and Mariupol! Help Azovstal right now,” implored frontman Oleh Psiuk in English from the stage after their performance was met by a cheering audience.

In the Ukrainian capital Kyiv, the triumph was met with smiles and visible relief.

“It’s a small ray of happiness. It’s very important now for us,” said Iryna Vorobey, a 35-year-old businesswoman, adding that the support from Europe was “incredible”.

Following the win, Psiuk — whose bubblegum-pink bucket hat has made him instantly recognisable — thanked everyone who voted for his country in the contest, which is watched by millions of viewers.

“The victory is very important for Ukraine, especially this year. Thank you from the bottom of our hearts. Glory to Ukraine,” Psiuk told journalists.

Music conquers Europe

The win provided a much-needed morale boost for the embattled nation in its third month of battling much-larger Russian forces.

Mahmood & BLANCO  performing for Italy at Eurovision 2022

Mahmood & BLANCO perform on behalf of Italy during the final of the Eurovision Song contest 2022 in Turin, Italy. (Photo by Marco BERTORELLO / AFP)

“Our courage impresses the world, our music conquers Europe!” he wrote on Facebook.

“This win is so very good for our mood,” Andriy Nemkovych, a 28 year-old project manager, told AFP in Kyiv.

The victory drew praise in unlikely corners, as the deputy chief of the NATO military alliance said it showed just how much public support ex-Soviet Ukraine has in fighting off Moscow.

“I would like to congratulate Ukraine for winning the Eurovision contest,” Mircea Geoana said as he arrived in Berlin for talks that will tackle the alliance’s expansion in the wake of the Kremlin’s war.

“And this is not something I’m making in a light way because we have seen yesterday the immense public support all over Europe and Australia for the bravery of” Ukraine, Geoana said.

British Prime Minister Boris Johnson called the win “a clear reflection of not just your talent, but of the unwavering support for your fight for freedom”.

And European Council President Charles Michel said he hoped next year’s contest “can be hosted in Kyiv in a free and united Ukraine”.

‘Ready to fight’
Despite the joyous theatrics that are a hallmark of the song contest, the war in Ukraine hung heavily over the festivities this year.
 
The European Broadcasting Union, which organises the event, banned Russia on February 25, the day after Moscow invaded its neighbour.
 
“Stefania”, written by Psiuk as a tribute to his mother before the war, mixes traditional Ukrainian folk music played on flute-like instruments with an invigorating hip-hop beat. The band donned richly embroidered ethnic garb
to perform their act.
 
 
Nostalgic lyrics such as “I’ll always find my way home even if all the roads are destroyed” resonated all the more as millions of Ukrainians have been displaced by war.

Kalush Orchestra received special authorisation from Ukraine’s government to attend Eurovision, since men of fighting age are prohibited from leaving the country, but that permit expires in two days.

Psiuk said he was not sure what awaited the band as war rages back home.

“Like every Ukrainian, we are ready to fight as much as we can and go until the end.

Britain’s ‘Space Man’

Ukraine beat a host of over-the-top acts at the kitschy, quirky annual musical event, including Norway’s Subwoolfer, who sang about bananas while dressed in yellow wolf masks, and Serbia’s Konstrakta, who questioned national healthcare while meticulously scrubbing her hands onstage.

Coming in second place was Britain with Sam Ryder’s “Space Man” and its stratospheric notes, followed by Spain with the reggaeton “SloMo” from Chanel.

After a quarter-century of being shut out from the top spot, Britain had hoped to have a winner in “Space Man” and its high notes belted by the affable, long-haired Ryder.

Britain had been ahead after votes were counted from the national juries, but a jaw-dropping 439 points awarded to Ukraine from the public pushed it to the top spot.

Eurovision’s winner is chosen by a cast of music industry professionals — and members of the public — from each country, with votes for one’s home nation not allowed.

Eurovision is a hit among fans not only for the music, but for the looks on display and this year was no exception. Lithuania’s Monika Liu generated as much social media buzz for her bowl cut hairdo as her sensual and elegant
“Sentimentai”.

Other offerings included Greece’s “Die Together” by Amanda Georgiadi Tenfjord and “Brividi” (Shivers), a duet from Italy’s Mahmood and Blanco.

Italy had hoped the gay-themed love song would bring it a second consecutive Eurovision win after last year’s “Zitti e Buoni” (Shut up and Behave) from high-octane glam rockers Maneskin.

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