Pressure Remains High Despite Austerity Package

Switzerland’s Relief Package 27 has faced major changes after intense political debate. Originally aimed at saving 4 to 5 billion francs annually, the final version now stands at around 5.6 billion francs. The Greens and Social Democrats opposed key measures, while centre-right parties pushed for stricter fiscal controls.

The package initially targeted savings of 4 to 5 billion francs per year. But after parliamentary discussions, the figure rose slightly to 5.6 billion francs. The largest cuts came from migration (over 1 billion francs), the building programme (over 500 million), and international cooperation (also over 500 million).

The Council of States then reduced the package by a third to strengthen its chances in a public vote. This move increased pressure on future budget negotiations, setting the stage for tougher debates starting in 2027.

The Greens rejected the proposed VAT cut for restaurants and instead called for a broader VAT reform. They wanted to scrap the increase in the commuter allowance while pushing for other measures, such as raising the employee tax allowance and promoting tax-free employer-provided bikes and e-scooters.

Meanwhile, the Free Democratic Party (FDP) has already begun discussions on a potential next relief package. Centre-right parties, particularly the Swiss People’s Party (SVP), are advocating for fiscal restraint. In contrast, the Social Democrats (SP) and Greens question the need for the package altogether, preferring to ease the debt brake instead.

Without this austerity package, the government would face difficult choices: raising taxes, introducing a second relief plan, or making deeper cuts to discretionary spending.

The revised Relief Package 27 now heads toward a public vote with reduced savings and heightened political tensions. Future budget debates will likely focus on balancing fiscal responsibility with demands for broader tax reforms. The outcome will shape Switzerland’s financial policies for years to come.