EXPLAINED: The biggest challenges facing Switzerland this winter

In many respects, Switzerland is faring better than its neighbours and other nations across the EU — for instance, its inflation and unemployment rates are lower and its economy is stronger.

However, the country is facing several challenges that it must resolve sooner rather than later.

These are the three most urgent ones:

Rising healthcare costs

The rising cost of Switzerland’s obligatory health insurance scheme — set to increase by 8.7 percent in 2024 to absorb spiralling costs of medical treatments and medications, among other factors — is a huge headache not just for the population, but for authorities as well.

The government has been trying to bring down costs of the healthcare, without actually cutting any services, so that insurance premiums don’t keep rising, but so far nothing concrete came out of these efforts.

Among the measures the Federal Council has vowed to examine are coordinated care networks, which are seen as a way to reduce unnecessary medical services; pricing agreements with pharmaceutical companies in order to reduce the cost of drugs; and introduction of electronic invoicing to replace the paper-based system for a quicker, more effective and — most importantly — cheaper way to transmit billing information.

While there is a political will to cut these, concrete outcomes are not on the horizon for the time being.

Housing shortage

This is another major problem impacting Switzerland that the government has not been able to resolve.

Whether this is due to increasing numbers of new immigrants who, according to some, put added pressure on housing and rent prices, scarcity of building land, or just the general evolution of the market, the fact is that the number of residents in Switzerland’s major cities is growing, and the supply of accommodation is lagging behind the demand.

How is the government tackling this problem?

While the scarcity of land can’t be solved, various other suggestions are being looked at, including, for instance, simplifying building permit procedures.

Among those that appear to be easily implementable (assuming there is sufficient political will to make it happen) is loosening certain regulations currently in place.

Among them are noise ordinances, which have slowed down construction activity.

Swiss construction and environmental legislation regulates the level of noise allowed in housing projects, but in order to build more so that demand can be met, strict regulations such as those relating to noise protection would have to be relaxed.

READ ALSO: How bad is Switzerland's housing shortage and what can be done about it

Lack of workers 

Workforce scarcity in a number of sectors  — including healthcare, IT, and technical trades — has become increasingly difficult in the past few years, and is even threatening Switzerland’s economy

Currently, the shortage is “at its highest level in Switzerland,” according to a report by the University of St. Gallen.

While employers’ associations are looking at various measures to combat the shortage, at the political level, focus is on allowing more immigrants from outside the EU / EFTA to come to Switzerland by better regulating the distribution of quotas for foreigners from third countries.

This particular suggestion has gained some political momentum in March, when MPs decided to allow non-EU / EFTA students who graduate from Swiss universities with a degree in a field suffering from a shortage of qualified professionals to remain in the country. 

However, this proposal suffered a setback recently because legislators decided the measure would be difficult to implement from a constitutional point of view, and are currently seeking ways to create legal basis allowing them to enact this change.

READ ALSO: Why is Switzerland's chronic labour shortage worsening