During the recent months Europe has seen a great deal of economic turbulence, with the bail out in Greece and declining GDP in many countries. It was forecasted that europe would see a minor recession during the winter months, and Switzerland was included in this category. Even with their survival during the most recent months, the Swiss are not forecasted to see much improvement in growth over all, in fact they are hitting somewhat of a stagnation in growth and are not seen to change much until later this year.
http://www.4-traders.com/news/Swiss-Economy-Stagnating-Rather-Than-In-Recession-BAKBasel--14198997/
5 comments:
You have to wonder how much the welfare state economic system hinders a country like Switzerland to use fiscal policy to help with recessions.
Even with the growth stagnation, the franc is rising in strength against the dollar and the euro so it seems that overall the economy cannot be suffering too much, or at least in comparison with the US and Europe.
Even it is Switzerland it needs to ensure the recession. Even it is not in the EU or Euro Zone, its economy would still be influenced.
The change from economic downturn to economic stagnation in many of the European countries collectively demonstrates the special characters in the European system. For example, the increasing unemployment rate. It might link to the motivation system. The high unemployment and social security warfare system discourage people to find a job. In the economic downturn, when the firms are hit and looking for a job is already not as easy as before, people more tend to giving up looking.
In terms of my view, the economic crisis took place in 2008 is only a trigger of the recession (or even a stagnation) of the Swiss. The essential problem is its economic and social system. Although a high social welfare system provides citizens a guaranteed life, the high tax rate also prevent people from working hard. In other words, the current policies are not incentive for people to work—if you don’t work, you still could have a guaranteed life; if you work hard, yet,you will not benefit from it too much.
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