In the midst of Europe, but not part of the EU – experience and perspectives of Swiss monetary policy

March 26, 2003
Deutsch-schweizerische Gesellschaft, Hamburg, Hamburg

Summary

Although it is not a member of the European Union (EU), Switzerland is anything but an island in the middle of Europe. In terms of its trade flows, Switzerland is more closely integrated into Europe than the average EU member country. The appropriateness of conducting monetary policy in isolation is thus all the more doubtful. Looking back at the recent experience of coexistence with the euro, the course chosen appears on the whole to have been beneficial. It had been feared that the launch of European Monetary Union would trigger turbulence in the Swiss franc/euro exchange rate. This has not materialised, however, and the opportunity for the Swiss National Bank (SNB) to provide its own monetary stimuli has proved beneficial to the business cycle.

The economic trend is fraught with numerous uncertainties, both globally and within Switzerland. Even if the usual range of instruments has been virtually exhausted, the SNB will still take action – using unconventional means if necessary. There is a considerable risk of a downturn in the business cycle, and 2003 will be another year of low GDP growth. A return to expansion in line with the growth trend of approximately 1.5 percent before 2004 now looks impossible. Inflation is unlikely to pose any problems this year or next, remaining at between half and one percent.

Download file now

The file can be downloaded with the button below.

Additional files

Related content

Author(s)

  • Bruno Gehrig
    Vice Chairman of the Governing Board

Your settings

Required: These cookies (e.g. for storing your IP address) cannot be rejected as they are necessary to ensure the operation of the website. These data are not evaluated further.
Analytics: If you consent to this category, data such as IP address, location, device information, browser version and site visitor behaviour will be collected. These data are evaluated for the SNB's internal purposes and are kept for two years.
Third-party: If you consent to this category, third-party services (used, for example, to add social multimedia content to the SNB's website) will be activated which collect personal data, process these data, disclose them abroad - worldwide - and place cookies. The relevant data protection regulations are linked in the 'Privacy statement for the website of the Swiss National Bank'.

Choose your preferred settings:

This website uses cookies, analytics tools and other technologies to provide requested features, content and services, to personalise the content shown, to provide links to social media, and to analyse the use of the website in anonymised form for the purposes of improving usability. Personal data are also disclosed abroad - worldwide - to video service providers and the analytics tools of these providers are used. More information is available under 'Manage settings'.