20 May 2020 – Policy Brief
The COVID-19 crisis generates extraordinary expenditures for the federal government, particularly due to the sizable cost of supporting workers’ incomes. As a consequence, Switzerland will have a higher level of government debt after the conclusion of the crisis. While the foreseeable level of debt does not threaten the stability of the Swiss economy, the debt-break mechanism detailed in Swiss law requires that the debt is eventually paid down. This policy brief discusses options for debt repayment, and advocates repayment over a longer time period than the six years stipulated by the law.