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Swiss government aims to pay back Covid-19 debt by 2035

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© Keystone / Gaetan Bally

The government has given itself 11 to 13 years to balance the books on debt incurred due to the coronavirus pandemic. 

The total debt burden caused by the pandemic is expected to amount to CHF25-30 billion ($26.7-32 billion) by the end of 2022. Most of it (CHF20.3 billion) was due to extraordinary spending in 2020.

The so-called debt-brake rule requires the government to make up the shortfall in six years. The government proposes to extend this period to the next three legislative periods, i.e. until 2035. In the event of special circumstances, the deadline may be further extended by four years.

The government is counting on the Swiss National Bank (SNB) to loosen its purse strings and stump up CHF1.3 billion a year. In addition, it intends to tap into unused budgets and financing surpluses of an average of CHF1 billion a year. So far, no budgetary relief programme or tax increases are planned. 

The government submitted its strategy to parliament on Friday. The goal is to have the amendment on debt repayment come into force by 2023.

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