Cabinet warns of plan to quash universal accords

The Swiss National Bank would hold a monopoly in granting loans if the so called Sovereign Money initiative were approved by voters Keystone

The government has come out against two separate proposals to put Swiss law above international law and to reform the monetary system, giving the central bank the exclusive right to print money.

The cabinet recommended voters reject a rightwing initiative which aims to suspend all international treaties considered incompatible with the Swiss constitution, including the European Human Rights Convention.

Approval of the initiative could have serious negative economic and diplomatic consequences, a statement warned.

“It could lead to legal insecurity and damage the Swiss economy,” said a statement published by the justice ministry on Wednesday following the weekly cabinet meeting.

A committee led by the rightwing Swiss People’s Party collected more than 116,000 signatures, forcing a nationwide vote on the issue.

“The Swiss people and cantons must again be the supreme legal authority,” campaigners argue, because parliament, the government and the courts have allegedly been giving priority to “foreign law and foreign judges”.

Human rights organisations have strongly criticised the initiative.

‘Sovereign money’

The cabinet has also rejected a separate initiative by critics of the current monetary system.

“The initiative promises too much and carries unforeseeable risks,” said Finance Minister Ueli Maurer at a news conference.

The proposal is tantamount to “nationalising the monetary system” and jeopardises the independence of the central bank, he continued.

Maurer also warned that a radical change in the Swiss monetary system was unlikely to be successful in a globalised financial system.

For their part, the organisers of the “Sovereign Money” initiative say their proposed reform is aimed at preventing economic crises by creating a more stable banking system.

Their proposal wants to make the Swiss National Bank the sole institution allowed to generate money, including bank deposits, while commercial banks would no longer be able to grant loans.

They also hope Switzerland could be a model for other countries.

Parliament still has to discuss both initiatives before setting a date for each of the proposals to be put to voters for the final say.