Swiss Trade Association Says Central Bank Should Distribute 1,000 Francs to All Citizens
Prominent Swiss Trade Association "Handel Schweiz" calls upon the Swiss national Bank to distribute 1,000 francs to all citizens in order to boost domestic demand.
In Switzerland, the heavy weight organisation Handel Schweiz (Swiss Trade) is seeking new monetary policy approaches.
Recently, the executive committee of the interest-group arrived at a decision and called the central bank to action: “we demand the ability of the SNB to directly distribute a distinct ration of money to every Swiss resident”, says Jean-Marc Probst, president of Handel Schweiz. In his view, the SNB should distribute around 1’000 francs over the course of a year.
This concept has been called "helicopter money" by economists and is one way that QE for People could work in the euro zone too.
Handel Schweiz represents the interests of 3800 companies and 30 associations. Except for the big two grocery chains Migros and Coop, the 80 year old organisation represents the top of the crop of the Swiss trade sector.
Probst is CEO and president of the construction machine producer Probst Maveg, but also Vice-president of the Federation of Employers. Probst thinks helicopter money would strengthen the population’s purchasing power. "We see and feel that the real economy lacks money," says Probst. And further, “we have to make use of every opportunity.” He evaluates the risk as smaller than that of the current interventions in the currency market.
"Switzerland suffers from an overrated currency"
Switzerland suffers from an overrated currency. Negative interest rates are not calming down the situation. “Those who fear a collapse of the euro zone or high inflation, find a safe harbour in the Swiss currency area. People buy goods in foreign countries, then calculate the prices back to francs and ask for the same.”
Looking at the list of members of Handel Schweiz, proves that there is broad discomfort about the described pressure. Prominent names are Fenaco and the cheese dairy enterprise Bel. From the retail industry, there are well known names such as Manor, Ikea, Maus Frères, Volg and the industry’s union the Swiss Retail Federation. Tech heavy weights are represented by Panasonic, Canon or IBM and the Union Swico. AutoSchweiz represents the car import industry in Handel Schweiz.
The intellectual father of Handel Schweiz' initiative is the economist Michaël Malquarti, vice-president of the asset management company SYZ. According to Malquarti, the payout, which he calls a “monetary ration”, could be distributed via the health insurance system. This mechanism is already successfully used when the Swiss Confederation pays back its fiscally-neutral carbon tax revenues to the whole population. Since every resident has a health insurance account, the whole population could be reached accurately and cost-effictively.
Malquarti wants to protect the independence of the central bank. “Legislators would be in charge of providing this instrument. Then, the central bank would decide independently, how much money must be distributed to achieve its monetary goals.”
He went on: "I'd like to see Switzerland become a pioneer in this area. It could break a taboo, helping other countries, where such a measure might arguably be more difficult to implement, to consider it seriously.”