Franc no longer pegged to euro
The Swiss National Bank abandoned its policy of capping the Swiss franc against the euro in a surprise move on Thursday. In reaction the Swiss share index dipped by 14 percent intermittently, while the euro dropped to its lowest exchange rate in eleven years. Switzerland's carefree decades have come to an abrupt end, some commentators observe. Others see the decision as completely understandable in view of the dramatic problems in the Eurozone.
Switzerland's preemptive decoupling
The timing of the Swiss National Bank's decision is not pure coincidence, the liberal-conservative Der Tagesspiegel writes, pointing out that the ECJ has just signalled that the ECB will be allowed to buy government bonds on a large scale: "The Swiss National Bank is apparently acting on the assumption that ECB chief Mario Draghi will announce a major bond-buying spree on January 22. ... That means Germany's long-standing resistance to the bond-buying scheme has been broken. If the ECB announces such purchases it's probably because it sees no other alternative for getting the Eurozone economy back on its feet. This indicates the gravity of the situation. The prospects are not good. It's by no means certain that the bond-buying and the increased cash flow it aims for will resolve the structural problems in the Eurozone. At any rate it will be a long time before things improve. Switzerland is already decoupling."
Switzerland must question its entire existence
After Switzerland has been able to bask in prosperity for years its politicians can now no longer avoid asking themselves some truly important questions, the weekly magazine L'Hebdo writes in view of the turbulence in the country's economy: "Within a year Switzerland has lost two important factors that have ensured its shameless prosperity in the last decade: monetary tranquillity and the confidence that it could recruit the best talents on the European labour market. That's a big loss. ... The smooth-running Swiss economy that filled the state's coffers and kept unemployment to a minimum is experiencing a major earthquake. The party's over, and the politicians will have to give up their tricks and focus on the real problems. Join the Eurozone? Enter the European Union? All these questions they were so keen to avoid are now looking them straight in the eye."
Financial markets triumph over central banks
The Swiss National Bank (SNB) has pulled out its weapons but the financial markets are jubilant at the prospect of the ECB's large-scale bond buying programme being implemented, writes the left-liberal daily La Repubblica: "The financial markets can see a positive side to the SNB's decision because they see it as confirmation that the Eurotower is poised to change course and that that change of course will be even more radical than expected. ... They have won this Stalingrad. We live in a time of all-powerful central bank chiefs. They're the champions in creating infinite amounts of money per mouse click. But Switzerland threw in the towel yesterday because the financial markets have proven that they are even stronger. Particularly when the central banks overestimate their own power. The bells are ringing in Bern but their echo can be heard all the way to Frankfurt."
Croatians look on helplessly
The sharp rise of the Swiss franc is dragging thousands of Croatians who took out loans tied to the currency into insolvency. National sovereignty and self-determination, as promised by the politicians, are being exposed as nothing but an illusion, the left-liberal daily Novi List admonishes: "All it takes is a stroke of the pen by the Swiss to show us how fragile our sovereignty is, how powerless we are and how meaningless the rhetoric in the presidential elections for everyday life. Especially for the 60,000 Croatians who took out their loans in francs, the euphoria of the elections has been replaced by disillusionment. ... Neither the government nor the new president can help them. Their lord and master is the Swiss National Bank. It is the one true power, capable of driving up your loan instalments to unaffordable levels overnight without blinking. And it can't even tell you it in your own language, and it doesn't have a clue about the problems and worries that plague you every day here in Croatia."