Swiss Watching: Inside the Land of Milk and Money

by Diccon Bewes

Low unemployment, minimal national debt, no housing bubble – while other economies crashed and burned, the Swiss was a beacon of responsibility and prudence, so the demand for francs exploded. With both the euro and US dollar collapsing, 2011 was the year when investors turned to the ever-reliable Swiss franc as a safe haven. It gained up to 30 per cent in value in just 15 months, rushing past parity with the dollar and then reaching it with the euro. Great news for Swiss going abroad, disastrous for Swiss industry dependent on exports and tourism. As quickly as the foreign visitors stopped arriving, the Swiss were leaving to shop in Germany, France and Italy. Same products, half the price. Not only that, but what had been the last resort for the Swiss tourist industry – loyal domestic guests – also started to disappear. Even the most patriotic Swiss realised that switching to a holiday abroad was a bargain not to be missed. The solid Swiss economy was battered from all sides – tourism down, exports down, shops closing down. Having survived the banking and housing crashes, Switzerland finally tasted economic distress, albeit of a very unusual nature. Only the Swiss could turn success into a crisis.