Switzerland’s federal government must save CHF 2.4 billion in 2027 and CHF 3 billion in both 2028 and 2029. On Friday the Federal Council sent its austerity plan to parliament, reported RTS. The Council of States will debate it in the winter session; the National Council will follow in the spring.
The country’s public finances are a mess. For years spending has risen faster than revenues, which are forecast to hit CHF 98 billion by 2029. Despite earlier belt-tightening in the 2024 and 2025 budgets, structural deficits of more than CHF 2 billion are expected to reappear in 2027, widening to over CHF 4 billion two years later.
The government has therefore decided to reassess its 2027 spending plans. Following consultations, it scaled back its original programme from CHF 2.7 billion in cuts to CHF 2.4 billion, spread across nearly 60 measures. The savings target rises to CHF 3 billion in 2028 and CHF 3.1 billion in 2029.
The plan trims CHF 300 million from federal operating costs by 2028, including about CHF 190 million from staff expenses. At least CHF 100 million of this will come from changes to employment conditions. More than half the measures require changes to existing laws; these will be bundled into a single reform bill. Measures that do not need legislation will be submitted to parliament during the normal budget process.
If parliament rejects or waters down the proposals, the government warns, further cuts will be needed—and sooner. These would fall mainly on spending on education, research, development aid, agriculture and defence. Replacing the savings plan would require cuts of up to 10% across those sectors. If the army were spared, the axe would fall even harder on the others.
Without this budgetary tightening, the government argues, Switzerland would be forced to borrow more to fund its runaway spending.
Switzerland’s federal government owed CHF 141 billion at the end of 2024, roughly 17% of the nation’s GDP. In 1990, debt totalled CHF 40 billion and represented around 10% of GDP – see figures here. In addition to federal debt, Switzerland’s cantons and municipalities owe money. When this debt is included, Switzerland’s public debt pile at the end of 2024 rises to around 37% of GDP – see data here.
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