"We need to stand together as a country, despite COVID-19"
Public confidence in the Federal Council has grown enormously. But expectations are also high – for the Council to guide Switzerland safely through the COVID-19 crisis. An interview with Federal Councillor Guy Parmelin, conducted by Manuel Rybach.
Manuel Rybach: Councillor Parmelin, seemingly out of nowhere the COVID-19 pandemic and its consequences have come to be the number-one worry of the Swiss population. How do you see people's perceptions of this problem?
Guy Parmelin: I can certainly understand what people are feeling. The pandemic is currently placing enormous demands on our society and economy. And this is true not only in Switzerland, but worldwide. The fact is that Switzerland's economy fell into a deep recession during the second quarter of 2020. There is reason to be concerned about the effects that measures to contain the pandemic have had on the global economy and international trade. While the prospects for 2020 may be less gloomy than we feared in the middle of the year, we are still facing the most dramatic decline in GDP since 1975. Since the beginning of the crisis, I have been focusing on how we can cushion the immediate negative effects of the pandemic, while also maintaining Switzerland's strengths as an economic, educational and innovation center.
And what conclusions have you reached? Have you succeeded in cushioning these effects?
I firmly believe that in Switzerland, we have been able to prevent even more serious consequences for businesses and workers, thanks to our strong institutions and the rapid, effective support measures that continued until early autumn. Short-time compensation, among other things, has played an important role. This is one of the tools that has enabled us to avoid a sharp decline in employment up to now. Support has been provided for employees' incomes, and thus far we have managed to prevent a wave of corporate bankruptcies.
Nevertheless, unemployment has increased – although thankfully not as much as we feared in the spring and summer. The same holds true for youth unemployment.
With the second wave of the pandemic, however, we can expect unemployment to rise again in the coming months. The COVID-19 crisis is not yet over. Unfortunately, it cannot be ruled out that companies, over the medium term, will have to make adjustments to these new circumstances, and that some layoffs may be necessary.
What do you see as the greatest challenges facing our country?
We need to do everything we can to ensure that when the coronavirus crisis is over, the economy recovers as quickly and completely as possible. For that to happen, we will still need well-trained people. We mustn't cut corners when it comes to basic and ongoing training. Moreover, we need to continue to innovate and to promote innovative activity, which is essential for our ability to compete.
To be competitive, our business sector needs access to foreign markets. In this context we must clarify our relations with the EU, and we need to gain preferential access to other markets by entering into bilateral agreements. In short, everything is interrelated. We're not going to run out of work.
What effect is the COVID-19 pandemic having on your own work, and how do you expect it to affect the working world in general?
Normally, I attach great importance to personal contact and face-to-face conversations. During the past few months, people in many parts of the Federal Administration, and in my department, have been working from home. The COVID-19 crisis has led to the further digitalization of day-to-day work. The situation has been similar in the private sector. I expect the world of work to become more digital over the medium and long term, too. But it is still too early to draw conclusions about the long-term effects of the pandemic with respect to new types of work.
The Worry Barometer shows how great the need is for security in the current situation. Specifically, respondents attach great importance to a secure supply of things like energy and medical products. How do you see interactions between the business sector and the government in this regard? How should Switzerland coordinate with other countries?
As an export-oriented economy, Switzerland is an integral part of international supply and production chains. The Swiss economy depends on the procurement of intermediate products from abroad, as well as on opportunities to sell our products in foreign markets. According to estimates by the State Secretariat for Economic Affairs (SECO), foreign trade activities account for roughly one-third of Switzerland's GDP. Over the course of the past few months, we have been reminded of the enormous importance of international trade for our country, but also of our dependence on international production and supply chains. One thing is clear to me: It is essential to maintain access to foreign markets, free from obstacles and discrimination. The Federal Council and SECO are working to that end, particularly within the WTO, OECD and the G-20. Of course, we are cultivating and expanding our network of free trade agreements.
Unemployment once again ranks higher on the list of people's worries. What needs to be done to maintain the strengths of the Swiss labor market as we move into the future?
During the first phase of the pandemic, it was crucial to support employment and incomes in order to prevent harmful and excessive job cuts. We were quite successful, providing support through short-time compensation, unemployment benefits and labor market measures. As we cope with the second wave of infections, these things will continue to play an important role. Over the long term, it will be crucial for us to create incentives in our social welfare system so that the people who are affected can again find employment. As much as possible, in other words, we must keep people from falling into long-term unemployment.
A perennial concern expressed in the Worry Barometer is the future of Federal Old Age and Survivors' Insurance and retirement provision. Over the medium to long term, what are the most important steps that should be taken to secure our system of retirement provision for the future?
We all know that it is extremely difficult to find a solution that secures retirement provision in a way that meets the needs of as many people in our country as possible. My colleagues at the Federal Department of Home Affairs have been dealing with this challenge for years, and will no doubt be doing so for quite some time. The Federal Council, too, will have to address this issue again in the foreseeable future.
We need to allow for a certain degree of structural change.
Federal Councillor Guy Parmelin
Another perennial issue in Swiss politics is Switzerland's relations with the EU. While a majority of people want to see an expansion of the bilateral relationship, there is considerable debate as to what form this should take. How does the federal government intend to move forward?
For Switzerland, as a medium-sized economy with a relatively small domestic market, continued prosperity requires access to foreign markets that is, as much as possible, free from discrimination, legally certain and expandable. The Federal Council is working to ensure the sustainability of Switzerland's international economic relations, which are critically important. The EU is our most important trading partner. Through an institutional agreement, the Federal Council is seeking to ensure reciprocal market access in a sustainable way. The aim is to create legal certainty regarding the market access that currently exists and build a foundation for expanding trade relations. If such an agreement is to be concluded, however, three matters of crucial significance for Switzerland must be clarified: protection for wage and working conditions, EU citizenship and government subsidies.
Of political and administrative actors, the Federal Council is one that is benefiting from an increase in popular confidence; the Council currently ranks second only to the police in terms of the public's trust. How do you explain this?
The rapid, unbureaucratic aid provided by the Federal Council during the coronavirus crisis has undoubtedly played an important role. We have been able to help a large number of entrepreneurs as well as employees. The results of the survey might possibly be different today, however. More than a few people are dissatisfied because we have not been able to help them, or we have failed to provide sufficient help.
The Federal Council is working to ensure the sustainability of Switzerland's international economic relations, which are critically important.
Federal Councillor Guy Parmelin
Interest in politics has steadily increased since 2016, and the percentage of young people participating in political demonstrations has doubled in Switzerland since 2018. However, the share of young people who want to join a party remains very low. How do you explain this, and what connections did you have to politics when you were young?
My youth is no longer representative of today's young people. I grew up in the country, where clubs and other organizations provided a place for local people to come together. In my case, that eventually led to involvement with a political party. Young people today are faced with a much broader selection of leisure activities that they have to choose from. Becoming a member of a party is rarely their first choice.
Young people are extremely mobilized by environmental issues. As a trained agriculturist and winemaker, you surely have a special connection to this topic. What are your thoughts about the current discussion?
I certainly understand the concerns of young people. I, too, am watching with growing concern as arable land is being paved over and natural resources are wasted. But I would like to see people not just criticize, but focus more on finding solutions and actively contributing to solving environmental problems.
Today, when we talk about drinking water, agriculture and environmental pollution, we tend to lose sight of the fact that we, as a country, are dependent on trade. Switzerland is able to satisfy only half of its food requirements. The other half comes from abroad. This is something we must never forget when discussing these issues.
As Vice President of the Federal Council, you can look forward to your election as President in December. What are your wishes for Switzerland and for you, personally, during the year of your presidency?
Before commenting on a possible presidency, I first need to be elected. And the election will be held in December. But that aside, my wish for Switzerland and for me personally is that we as a country, with its various regions, and we as a people, across all generations, will stand together despite COVID-19, and that this virus will soon be no more than a bad memory.