‘Political earthquake’: papers react to Swiss pension vote

Many pensioners in Switzerland are struggling to make ends meet KEYSTONE

Foreign and domestic media are speaking of a “political earthquake” and “shock” following Swiss voters’ decision on Sunday in favour of a 13th monthly pension payment.

“Which would you rather have: more money or more work?” This, according to the Neue Zürcher Zeitung (NZZ)External link, is probably how most voters interpreted the two popular initiatives on Sunday (they also rejected raising the retirement age from 65 to 66). “From a narrow economic perspective, this comes as no surprise: yes to higher pensions, no to a higher retirement age.”

However, for Le MondeExternal link in France, this “shock vote” was a “serious setback” for the Swiss government and the parties on the political right, whose “many warnings were in vain”. The paper described the “astonishing” victory of the forces of the left as “a genuine political earthquake in a country where the seismograph is usually flat”.

Nevertheless, it said Switzerland was “still a long way from resembling the social ‘self-service’ that the NZZ recently fearedExternal link”.

On Sunday, 58.2% of Swiss voters defied their government and backed the “Better living in retirementExternal link” initiative, which will grant an additional 13th pension payment to help retirees struggling to make ends meet in the face of rising living costs. A massive 74.7% of voters rejected working until 66.

The BBC explained on its websiteExternal link that the “voters in Switzerland often take their government’s advice about money matters: a few years ago they actually rejected an extra week’s holiday a year. This time they said enough was enough, using the power that Switzerland’s system of direct democracy gives them to vote themselves an extra month’s pension each year”.

It was now the turn of the Swiss to “examine the thorny issue of pensions”, wrote Le FigaroExternal link in France, where a year ago reforms led to massive industrial action. It added that the particularly high turnout (over 58%) was “a sign of the liveliness of the debates”.

“Here, pensioners now get a 13th month’s pay,” was the headline in German tabloid BildExternal link, above a photo showing banknotes falling from the sky. Die Welt, also in Germany, spoke of a “sensation on the left”.

‘Existential fears’

“It’s a historic verdict,” reckoned the Tages-AnzeigerExternal link in Zurich. “Never before have Swiss voters accepted an initiative on [pensions]. Never before has the left achieved a majority at the ballot box with an expansion of the welfare state. Never before has it won over so many middle-class voters.”

The paper saw three reasons for what it described as a “sensation”. First, the problem is real: “many senior citizens are plagued by existential fears. Higher rents, health insurance premiums and electricity prices are becoming increasingly difficult to pay with pensions. And unlike the reticent previous generations, baby boomers, who are now retiring in large numbers, are asserting their concerns with confidence”.

This combination explains why an initiative to increase pensions by more than 8% now has majority support, it said. “Just eight years ago, the almost identical proposal was defeated by a clear margin at the ballot box.”

The Tages-Anzeiger also noted that the trade unions had played their cards well – “they mobilised not only the left-wing sections of the population, but an entire generation of pensioners” – and their opponents, notably the right-wing Swiss People’s Party, had played theirs badly.

‘Wake-up call’

Many pensioners could no longer afford to live decently, said the Tribune de GenèveExternal link, noting that in Geneva 75% of voters had backed the initiative.

However, it also pointed out mistakes. “First there was the lack of a counterproposal. The initiative will benefit all pensioners, even billionaires, at the expense of working people. Yes, that’s a major flaw. But why didn’t the right put forward a more targeted and better-crafted version? Out of arrogance and a certainty of victory,” it said. “A decisive mistake.”

The paper also panned the poor campaign run by the opponents, saving particular criticism for the five former government ministersExternal link “having made their fortunes and enjoying comfortable pensions, who came to explain to the good people why the 13th pension should be rejected. They would have been better off disappearing after their service”.

Beyond pensions, the Tribune de Genève concluded that this clear yes showed the government and parliament the way forward: “they should give priority to the standard of living of the Swiss people, particularly the middle class. This wake-up call will do them no harm”.

‘Only bad alternatives’

“We now need to talk about the bill,” said the pragmatic Neue Zürcher Zeitung (NZZ). “Anyone who hasn’t been living on the moon in recent months knows that the [initiative] doesn’t create any wealth at all but only redistributes it even more than was previously the case – from young to old and from top to bottom.”

The majority of voters would benefit on balance from the 8.3% pension increase, it calculated. “But the bill for this will be spread over decades and paid mainly by younger people – whether through higher taxes, larger salary deductions or a higher retirement age.”

The NZZ hoped the issue of pension financing would now be raised very quickly. “Anyone who wants at least a little intergenerational fairness would have to recoup some of the costs by increasing the normal retirement age from 65 to 66; this would cover around 40% to 50% of the additional costs.” It admitted, however, that the resounding rejection on Sunday of raising the retirement age cast doubt on this approach.

“Otherwise, there are only bad alternatives. If pensioners are to make at least a small contribution to the additional costs, at least a portion would have to be financed via VAT. Additional salary deductions, on the other hand, would be the ultimate punishment for younger people, but would be in line with the logic of Sunday’s referendum,” it said. The NZZ pointed out that a 20-year-old would have to pay higher salary deductions for another 45 years, a 60-year-old for only five years, and pensioners would pay nothing at all. “That sounds attractive to most voters.”

National mood has changed

“The importance of this historic vote on Sunday cannot be overestimated,” the Tages-Anzeiger concluded, saying the mood in the country had changed. “It sends out a signal for the other ballots this year.”

One of the four issues on which voters will have their say on June 9 is the “10% initiative” from the left-wing Social Democratic Party, which calls for no policyholder to have to pay more than 10% of their income on health insurance premiums. “Its promoters can now have justified hopes,” the Tages-Anzeiger said.

“Here, too, there is an inadequate counterproposal, and this initiative also entails high costs. However, it’s quite possible that working people and younger families will argue in favour of [a yes vote], saying ‘now it’s our turn’,” it said.

“In other words, the big redistribution debate is not over – it’s only just beginning.”

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