Es gilt das gesprochene Wort!
Deputy Prime Minister,
Excellencies,
Ladies and gentlemen,
The Russian Economic and Financial Forum has firmly established itself on the Swiss economic agenda. It is the ninth time that Switzerland has been chosen as a platform for its discussions and conclusions which will be followed by a wide audience.
I would therefore like to welcome you warmly in Switzerland and in the City of Zurich, my former home town. I wish you an excellent stay. As President of the Council of States I have the pleasure of extending to you the best wishes of the Federal Assembly. We are delighted that you are holding this gathering in Zurich.
The financial and economic crisis has been the dominant topic for almost two years now. It has been - and still is - the main challenge for political, financial and economic circles alike. You all know the many rescue and stimulus programmes, worth billions, smoothening the impact of what has happened, but generating enormous mountains of debt in the process; debts which will have to be paid off by our and most probably also by future generations.
The Swiss recession is relatively mild in comparison with what we see in other countries. Indirectly this is also the reason why other countries – suffering from huge deficits - need to generate more tax revenues to fill their empty coffers. Many Governments have taken action to pursuing tax dodgers or pressuring them to rethink. And they do so, knowing full well that the underlying problem will remain. Amazingly enough little thought is given to the reasons for tax avoidance.
I should like to go a little deeper into this matter because it has become an important topic all over the world. Switzerland is a country with stable conditions, an exemplary legal system, healthy finances and a finely-tuned tax system. It is not surprising that my country has, since the Second World War, come to be seen as a safe haven for monies from countries around the globe which do not enjoy these same conditions. That is how banking secrecy evolved.
Within Switzerland it is an institution which has become symbolic of the Swiss understanding of mutual trust between citizen and State and the other way round. In a direct democracy people vote on the taxes they are willing to pay and dictate ultimately the degree of activity of the state. This understanding has remained so to this day.
The attack on banking secrecy which I am addressing here is therefore an attack from outside and not from within Switzerland. And indeed, Switzerland as the world’s seventh largest financial centre, finds itself under international pressure.
In line with its tradition of seeking to foster friendly relations with all countries, Switzerland has already reacted to international criticism: Switzerland is willing to incorporate the OECD guidelines into its newly negotiated double taxation agreements. This as a supplement to the agreement on the taxation of savings income with the EU. Under this agreement – as you might know - Swiss banks collect income on interest that has not been declared abroad on behalf of the states concerned. A unique case worldwide! And Switzerland offers now gradually mutual and administrative assistance for tax offences by foreign bank clients.
In the centre of international and internal discussion is one fundamental question: Should Switzerland remove the distinction between tax evasion and tax fraud in our dealings with foreign countries, or even within Switzerland? I cannot go into details of the complex issues dominating this issue. But I guess it could be part of discussion between you and Swiss financial specialists present during this forum.
If I were to venture a medium to long term prediction, I would say that Swiss banks will one day no longer accept un-taxed money from abroad. But I believe that our Federal Council, along with the majority of political parties, will resolutely reject demands for what is being called automatic exchange of information.
The majority of Swiss citizens supports this position of the Federal Council. Let me illustrate this with the result of a recent survey, according to which two thirds (67%) are in favour of administrative assistance where there is a suspicion of tax fraud and tax evasion by foreign account holders. However, a majority of 56% would not agree if banks were to automatically disclose account information to foreign tax authorities.
Regarding the new double taxation agreements, which contain an extended clause on administrative assistance, the Swiss people will have the ultimate say. This is in line with our democratic tradition to allow citizens to take political concerns into account, be it internal, be it in relation to other nations. Switzerland has no desire to jeopardise its international reputation. The agreements negotiated in accordance with OECD criteria will renew trust and mutual respect. We do expect, however, that those states now exerting pressure on Switzerland will be equally active in their own countries in order to ensure a level playing field.
Next week Swiss parliament will debate the first five new double taxation agreements with the USA, Denmark, France, Mexico and the UK, and later those with Austria, Luxembourg, Norway, Finland and Qatar. At the same time, I expect that parliament will enact legislation under which our country will refuse requests for administrative assistance from other states if they are based on stolen data. I also assume that a referendum will be sought on one or more of the agreements and that the final decision will rest with the people.
Ladies and gentlemen
In designing the framework for the future Swiss financial centre, the OECD standards will take centre stage. For the future of the Swiss workplace, however, free trade agreements are going to be decisive. Their importance is going to increase in a modern world, which is ever more dependent on the international division of labour. I am very pleased, therefore, that Switzerland is expressing an interest in pursuing a free trade agreement with Russia. From a Swiss point of view, a trade agreement would naturally offer optimistic prospects. But for the same reason, I can also see positive prospects for Russia, too.
As you know, Russia is becoming an ever more important economic partner for Switzerland. Exports in particular have vastly increased in recent years: In terms of value, they have exceeded the 3-billion-franc mark, while imports amount to more than a billion Swiss francs. Pharmaceutical products account for almost a third of Swiss exports with machinery accounting for a quarter.
In this respect, it is very good news that Swissmem and the trade representation of the Russian Federation agreed last December in Bern to intensify cooperation and institutionalise the exchange of information. This has created the basis on which the upward trend in the exchange of goods, which trebled between 2002 and 2008, can continue.
Today, some 150 Swiss companies operating in Russia are registered with the Swiss Embassy in Moscow. Russian sources speak of roughly 600 companies with Swiss equity participation. The largest investors are Nestlé, ABB, Holcim and Kronotec AG (wood processing) along with companies in the financial services sector. By the end of 2007, Swiss direct investment in Russia reached 5.6 billion Swiss francs. This is an increase of 955 million over the previous year, or 20.3 per cent.
Besides facilitating market access, a free trade agreement with accompanying measures would also help to better secure investments and add momentum to our bilateral economic relations – a fact which is of great interest to both our countries once we hopefully leave the economic crisis behind us.
In the context of innovation, it is worth mentioning that foreign scientific policy has become an important aspect of Swiss foreign policy. It is in our interests to increase awareness of Switzerland’s advantages as an internationally competitive location for scientific research and technological development and to promote worldwide cooperation in R&D at personal and institutional levels.
Among scientists, universities and businesses, cooperation between Russia and Switzerland has been a reality for a long time and the networks are continuing to develop. Switzerland supports this cooperation in the shape of special programmes. It offers research projects, exchanges between scientists, institutional partnerships or shared access to infrastructure. Russia is one of four countries involved in these programmes.
The success of the programmes has been proven: in less than a year, 24 joint research initiatives and approximately 50 other projects have been initiated.
Both the Russian and the Swiss governments have confirmed the importance of cooperation in research and science and they have successfully drawn up a framework agreement. This agreement would be the centrepiece of mutual efforts and hopes, and Switzerland is looking forward to signing it soon.
Ladies and gentlemen
Given the enormity of the current global crisis, a free trade agreement and close cooperation in the domain of research and science are indeed but a drop in the ocean. Nevertheless, each of these agreements will offer new prospects to many a business and its employees, as well as to scientists and students - and this, I believe, is the foundation for success for all concerned.
Thank you for your attention and I wish you a successful forum.