20 May 2020 – Policy Brief

How to repay the government debt resulting from the COVID-19 crisis?

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Executive summary

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.

Date of request:
Date of response: 20/5/2020

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Expert groups and individuals involved: Economics

Contact persons: David Dorn (david.dorn@econ.uzh.ch)