Blowing hot and cold
Hot(ter) inflation, the Swiss Soros and trash
Dear Insider,
What can you tell by a country’s sh**?
A lot, as a matter of fact…
Almost as much as you can tell about a person based on what they flush down the toilet.
In this edition of The Swiss Insider, we highlight all the figurative faeces flowing out of Switzerland - its trash, to be precise.
While Switzerland generally enjoys the reputation of an environmentally-conscious country, it sends an awful lot of waste “overseas” instead of dealing with it at home. The reason for this is simple…
Meanwhile, last week’s World Economic Forum in Davos might cause some people to think - depending on your politics - that Switzerland was importing trash - of the human kind.
Fortunately, the country does a better job of caring for “the cream of the crop” than it does for the leftovers of the crop….
After reading this edition - be sure to share your thoughts. Is there an angle we missed? ⁉️
People in the news
Ignazio Cassis (Swiss Federal Councillor) - Swiss Foreign Minister Ignazio Cassis met with his Russian counterpart Sergei Lawrow to discuss key issues amidst Switzerland's reaffirmed neutrality and alignment with human rights—a meeting seen as vital ahead of a key peace conference and planned official visits to Asia.
Nick Hayek Jr. (CEO of Swatch Group) - After disappointing annual results that led to a 10% drop in Swatch's share prices, CEO Nick Hayek Jr. was dismissive and crude toward critical queries during an internal conference call. Shares at Swatch have been among the worst performing since Hayek Jr.’s takeover of the top spot in 2003.
Stefan Walter (New FINMA Director) - Stefan Walter, the current general director at the European Central Bank (EZB), has been appointed as the new FINMA director starting April 1st, following the resignation of Urban Angehrn last year.
🔎Special Spotlight
Hansjörg Wyss - the Swiss target of American conservatives
Swiss billionaire Hansjörg Wyss - long known for his active support of environmental and social projects - is being portrayed by US conservatives as the "New Soros".
Their methods go so far as producing special briefing documents about Wyss that label him as a “radical Swiss billionaire” who possesses a “dark money ATM” to push a dodgy agenda.
Critics argue that his financial influence should be scrutinized like that of renowned philanthropist George Soros, who has been the scion of right-wing politicians and thought leaders for decades.
Wyss, who is worth over $10 billion, has primarily donated to environmental causes through his Washington-based philanthropy, the Wyss Foundation, and has also made contributions to liberal groups fighting against gerrymandering and funding Democratic super PACs via his Berger Action Fund. He also sits on the board of the Center for American Progress and has disclosed giving over $208 million to Sixteen Thirty Fund, a clearing house for the left that doesn’t disclose its funders.
Conservative groups such as Americans for Public Trust have filed complaints alleging Wyss's groups were violating US campaign finance regulations, but the Federal Election Commission has found no evidence of wrongdoing, and the funds maintain that they comply with US laws prohibiting contributions from foreign nationals for political purposes.
🗑️ Unwanted exports
When Swiss trash goes abroad
The details:
Construction waste exports from Switzerland to neighbouring countries have risen dramatically, reaching 827,000 tons in 2022, up from 254,000 tons ten years ago.
Germany alone received 394,000 tons of the waste, mostly construction waste.
According to Swiss environmental laws, construction waste should be kept within the country, as almost 100% of it is recyclable.
The big picture:
Experts are calling for increased oversight and responsibility to address this issue and its considerable environmental impact.
The current lack of enforcement and monitoring, including inspection of disposal concepts and site control, undermines Switzerland’s reputation as environmentally friendly.
However, the lack of strict enforcement and exceptions in the law have enabled the current export practice
The flow of trash is mostly economically driven - cheaper disposal costs in the EU make it attractive to dump across the border.
🪖 Mountain monitors
The Swiss army fulfils its Davos duties
The details:
Over 5,000 Swiss army personnel were deployed for the protection of the World Economic Forum (WEF) annual meeting in Davos, Switzerland.
This is the maximum number of army personnel allowed for the rendezvous as decided by the parliament.
The deployment for the WEF annual meetings of 2022, 2023, and 2024 were approved by Parliament with a budget of 2.55 million Francs each year, which is less than previous years due to increased funding from the WEF Foundation.
The big picture:
As in years past, the Swiss army presence is supplemented by a strong police presence. This was even greater in 2024 given the attendance of Ukrainian president Volodmyr Zelenski.
Many in Switzerland quietly acknowledge that budget expenses for WEF protection are a small price to pay to maintain Switzerland’s reputation as a key international hub and business partner.
Swiss President Viola Amherd not only played host to the Ukrainian president, but also took pains to put on a good show for Chinese premier Li Quiang. Chinese business relations - as much or more than European ones - take on an increasingly important meaning.
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🪙 Holiday explosion
Inflation takes a jump
The details:
The prices for Swiss holiday apartments, or "Parahotellerie," surged by 22.4% in December 2023 compared to the same month last year, while hotel prices increased by 2.5% as reported by Comparis, a Swiss comparison portal.
Two main reasons for the increase are a much higher demand for holiday apartments compared to the available supply, and consumers readily accepting the higher prices.
Other prices that rose in December include airfares (a 6.4% increase), services for individual transportation, jams, honey, margarine, and cooking fats.
The big picture:
Despite a strong franc, foreign holiday-goers flocked back to Switzerland pushing up demand yet again.
The strong demand for holiday apartments - especially in ski resort areas like Arosa, Zermatt and Davos - have made them attractive investments for wealthy Swiss with extra cash.
Proposals to add extra tax to second apartments owned as holiday homes will likely meet with strong opposition.
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💡The Insider Advantage
Once again, market economics take centre-stage in Switzerland.
As an island of high prices and high wages surrounded by countries with lower costs and greater markets, the “basis trade” play - also for trash - makes perfect sense.
The question remains, however, how long these inequalities can be exploited. Capacity inside of Switzerland is, naturally, limited and ongoing trade negotiations with the EU will likely require some concessions that bring the Swiss and European markets onto a more level playing field.
When it comes to the percentage of exported waste coming from construction, the lesson is even deeper: new home construction is an expensive project - in more ways than one. If post-project waste disposal is also costly, no wonder construction of new living space doesn’t happen faster.
A solution might be to export trash to China, but that could complicate diplomatic relations more than needed.
The Bonus
☕ Super Starbucks? - The American coffee chain is pushing its expansion in Switzerland with 30 new stores planned for opening. (Link)
🏦No payday - For the second year in a row, the Swiss National Bank will not distribute profits to the Swiss federal or cantonal governments. Its record losses still weigh heavily. (Link)
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