Switzerland Today

Dear Swiss Abroad,

A lot has been happening in Switzerland today with two significant and eagerly awaited announcements. This morning, the Swiss National Bank revealed the latest key interest rate, and the Federal Court heard an appeal challenging the vote on raising the retirement age for women.

Find out what was decided in both cases in today’s briefing.

Best wishes from Bern

Keystone / Gaetan Bally

Retirement age for women remains 65 despite incorrect figures in the voting booklet.

At midday, the Federal Court delivered its much-anticipated judgement: the 2022 vote on raising the retirement age for women to 65 will not be declared invalid.

Here’s the background: In the summer, the Federal Social Insurance Office disclosed that incorrect figures were published in its old-age and survivors’ insurance forecast. The reality is that the insurance scheme’s financial outlook is better than initially presented, with pensions expenditure expected to be CHF4 billion ($4.5 billion) lower than previously assumed by 2033.

The 2022 referendum narrowly approved raising the retirement age for women. However, given that inaccurate data had been included in the voting booklet, the Greens and the Social Democrats filed a legal challenge.

Today, the Federal Court in Lausanne, composed of three men and two women, unanimously ruled that cancelling the vote would lead to unmanageable consequences.

• The live-ticker from 20 MinutenExternal link (in German)

Keystone / Peter Schneider

New proposal for pension funding: inheritance tax suggested

Despite the improved old-age and survivors’ insurance forecasts, a significant deficit still looms. From 2030, the shortfall is expected to reach several billion francs.

Various ideas to address this gap, including a wealth tax, have been floated but have failed to gain broad support. The Swiss federal government has until 2025 to present a viable stabilisation plan to Parliament.

Interior Minister Elisabeth Baume-Schneider has now suggested a new solution: an inheritance tax. Speaking to Swiss public television, SRF, she noted that most inheritances go to people over 60, adding, “You could say that a tax there would be no drama.”

Baume-Schneider has also left the door open to raising the retirement age, acknowledging, “The 13th pension payment will cost – and all of that needs to be funded.”

• Swiss public television, SRFExternal link article (in German)

Keystone / Gaetan Bally

Should dementia patients be allowed access to assisted suicide? Switzerland debates

Is assisted suicide ethically justifiable for people with advanced dementia? While Switzerland has a liberal stance on assisted suicide, the Netherlands has gone further, allowing it even in advanced stages of the disease.

As highlighted by the Neue Zürcher Zeitung (NZZ), Dutch law permits euthanasia for dementia patients under strict conditions, provided they have previously prepared a living will while still capable of making decisions.

In Switzerland, assisted suicide is only available for dementia patients who remain capable of judgement. Those eligible must administer the medication themselves.

Stefanie Becker, director of Alzheimer Switzerland, challenges the assumption that life with dementia is inherently unfulfilling, noting that many people express a desire to continue living even in later stages of the disease. In such cases, living wills requesting assisted suicide are disregarded.

• Neue Zürcher Zeitung (NZZ)External link article (paid article)

Keystone / Peter Schneider

Swiss National Bank cuts key interest rate by half a percentage point

Today, the Swiss National Bank (SNB) surprised many by reducing its key interest rate from 1% to 0.5%. chairman of the SNB governing board, Martin Schlegel, referred to this move as part of a “rapid interest rate turnaround.” At the beginning of the year, the rate stood at 1.75%.

The Luzerner Zeitung writes that while the SNB successfully managed inflation in recent years, it now faces a new challenge: the risk of inflation becoming too low or even negative. Prices for goods and services have already fallen, and this trend is projected to continue into 2025, raising concerns about deflation.

Falling prices may benefit consumers but are less favourable for businesses. Balancing monetary policy to suit both borrowers and lenders presents an ongoing challenge for the SNB.

• Luzerner ZeitungExternal link article (in German, paid article)
• Swiss public television, RTSExternal link article (in French)
• Swiss public radio, RSIExternal link article (in Italian)

Keystone / Martial Trezzini

Picture of the day

As Switzerland embraces the darker days of winter, the glowing candles of the Bô Noël Christmas market in Lausanne shine even brighter. They light up the city’s festive spirit, making this our picture of the day.