The president of the PLR ​​wants to sell Swisscom but there is a problem

Thierry Burkart, president of the PLR, suggests examining the resale of Swisscom.Image: watson

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To save money, the president of the PLR, Thierry Burkart, wants to examine Swisscom’s resale potential. But this proposal raises questions about its impact on state finances, risking further worsening the budget deficit.

Florence Vuichard / ch media

The future prospects are not encouraging. In accordance with financial planning, the Confederation’s structural deficits could increase in the medium term up to four billion francs per year in the absence of significant savings programs. However, savings measures rarely arouse enthusiasm, both among politicians and in the administration.

It is in this context that the Federal Council decided, last March, to commission a group of external experts to carry out an in-depth examination of the tasks and subsidies. Their objective? Present a set of measures by the end of summer to reduce the federal budget deficit at least three billion per year from 2027, and at least four billion from 2030.

Meanwhile, some politicians are coming up with new ideas that, on the contrary, make the budgetary situation even worse – favoring their own voters, the military or Ukraine. On the other hand, few of them seem to be considering cost-saving measures.

Recently, Thierry Burkart, president of the PLR, who firmly affirms that prudent financial management is essential for the prosperity of the country, is struggling to come to terms with it. In an interview given to the NZZhe criticizes the multitude of subsidies, identifies potential savings in federal personnel, and promises that his party will soon present concrete proposals in this direction.

Keystone

Sale of assets

In this interview, Thierry Burkart advances the sale of Swisscom as only concrete saving measure. A proposal which, at first glance, might seem promising, but which would entail significant costs for the Confederation and worsen the problems of Finance Minister Karin Keller-Sutter. Indeed, an asset sale ultimately only generates one-off revenue and not recurring savings.

epa11270724 Swiss Federal Councilor Karin Keller-Sutter speaks during a media conference on the Federal Council's report on the Too-Big-To-Fail (TBTF) regulation, at the Federal Palace Media Cen...

Karin Keller-SutterKeystone

Supporters of the sale could argue that the proceeds from the sale would make it possible to reduce the Confederation’s debt and, consequently, the annual interest which weighs on the accounts each year. However, this argument does not stand up to analysis – here’s why.

The Confederation currently holds almost 51% and therefore the majority of Swisscom. The sale at the current market value would bring in around 13 billion francs into the coffers. If this sum were to be fully invested in debt reduction, the Confederation’s interest expenditure would still fall by around 160 million francs per year, according to calculations by the Federal Finance Administration.

But at the same time, the Confederation would lose revenue of 581 million francs. Indeed, the telecommunications group has paid dividends of this amount into the state coffers every year since 2011, as noted by the Federal Finance Administration. Ultimately, Thierry Burkhart’s proposal will therefore weigh on the State’s accounts to the tune of approximately 420 million additional francs.

Added to this are the costs of basic services

The foreseeable additional expenses linked to the provision of the universal service, which would be the responsibility of the Confederation, are not taken into account in this calculation. Indeed, a fully privatized Swisscom not subject to political control could stop providing its “free” services to the most remote alpine chalets. When asked about this, the finance administration indicates that it is not able to quantify these expenses, because until now Swisscom as concessionaire has not requested compensation for its public services.

Furthermore, so far only Swisscom has responded to the call for tenders for universal service. In the event of privatization, it is possible that no operator will apply, thus leading to the disappearance of the universal service.

The prospect that Swisscom will promise to pay even higher dividends in the future is also not taken into account in the calculation of the deficit of 420 million. With the acquisition of Vodafone Italia, the Swiss telecommunications group anticipates an expansion of its activities abroad. Thus, the dividend per share per year should increase from 22 to 26 francs. If Swisscom’s growth projections are realized from 2026, the Confederation could even receive nearly 686 million francs per year.

The sale of Swisscom may be justified by political considerations. But “the net effect for the federal budget would be negative from a financial point of view”, explains the finance administration. If Thierry Burkhart really wants to make economic proposals, he will have to go back to accounting.

Translated and adapted by Tanja Maeder

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