While banks and citizens are suffering from inflation everywhere in Europe, Switzerland has gotten off lightly so far. The inflation rate in the small German neighboring state is only 2.9 percent. These five reasons show why Switzerland does it differently and what mistakes Germany makes.
Listening to the German Minister of Finance or the President of the ECB Christine Lagarde could get the impression that the high inflation is the result of a curse from the gods. It is currently impossible to meet a politician or central banker in Berlin, Frankfurt, Brussels or Washington who would be willing to take responsibility for this massive intervention in the financial freedom of citizens.
“It was Putin. The oil sheikhs are to blame. These devilish late effects of Corona!” And then the mother of all arguments: We are not alone; all countries suffer from inflation. This is the vocabulary from the treasure chest of eternal excuses.
There is one wealthy country in Europe that is debunking references to Putin, the oil sheikhs and Covid as fairy tales. Because this country lives in our midst and has so far not experienced currency devaluation that would significantly exceed the ECB inflation target of 2 percent. Perhaps it is also because this country is not a member of the eurozone. We’re talking about Switzerland.
Bordering France, Italy, Liechtenstein, Germany and Austria, this country of over 8.7 million people is deeply integrated into the world economy with its banking sector and manufacturing sector. Among wealthy nations, Switzerland ranks second in the world in terms of per capita national product.
Currency depreciation has also increased slightly among the Confederates over the past twelve months – but only to 2.9 percent. Switzerland is thus showing a level of price stability that is just above the target set for Europe by the ECB. Germany is more than double the Swiss and almost four times the ECB target.
All long-term studies identify Switzerland as an anchor of stability – even before the current wave of inflation. A comparison with Austria shows that the inflation rate between 2006 and 2021 rose by two percent on average in Austria, but only by 0.2 percent in Switzerland. This means that the current situation is not a product of chance, but the result of a strategically different leadership by the state and the central bank.
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Here are five solid reasons that show us exactly what the Swiss are doing differently and what we are doing wrong:
Conclusion: We should distrust the acquittals of the ECB and its associated finance ministers. They are acquittals in their own right. In these circles, the cynical motto of the powerful applies, as formulated by Spiegel founder Rudolf Augstein: “The hand that forges the bill of exchange must not tremble.”
The state cuts taxes, but fuel prices remain high. The suspicion: The oil multinationals put money in their own pockets. Economics Minister Robert Habeck now wants to tighten antitrust law. Previously, calls for a tougher crackdown had been growing louder.
On Sunday evening, a 36-year-old drove his car into a group of cyclists. A 71-year-old was fatally injured. Before that, the man who fled is said to have killed his father in Rhineland-Palatinate. The police were able to arrest him and are now investigating the background to the crime.
Federal President Frank-Walter Steinmeier advocates the introduction of compulsory service in the social sector or in the Bundeswehr for all young women and men.