Swiss lawmakers clash over funding army expansion

Swiss lawmakers broadly agree that the army needs more money, but remain divided over how to finance the planned expansion, SRF reported on Thursday. A new armaments fund could provide up to 24 billion Swiss francs, and the Council of States Security Policy Committee is due to discuss a funding proposal next week.

The proposal from the Council of States Finance Committee would activate the fund next year and allow it to take on up to six billion francs in debt, even if its financing has not been settled. It would also increase value added tax by 0.2 percentage points. The fund would remain in place even if voters rejected the tax increase.

Under the plan, about 500 million francs a year currently used to reduce coronavirus debt would instead flow into the fund.

Franziska Roth, a Social Democratic member of the Council of States and the Security Policy Committee, opposes separating the fund from the value added tax increase. She said voters must approve clear financing if such a large amount is to be spent on armaments.

Roth warned that rejecting the tax increase while allowing the fund to borrow could lead to major spending cuts, particularly in education and international cooperation. She said she would propose reconnecting the fund and the tax increase in the committee.

Werner Salzmann, a Swiss People’s Party member of the Council of States and the same committee, supports separating the two measures. He said Switzerland no longer had time to wait because threats from the air and cyber espionage were real.

Salzmann said that if the tax increase and the fund were linked, the proposal would have to go to a public vote. A rejection would leave the army without the fund needed to finance its commitment appropriations, he said. He added that spending cuts in other areas would be acceptable to him.

Salzmann has also asked for an assessment of another option: a 24 billion franc non-repayable contribution from the Swiss National Bank, funded from existing assets rather than current profits. The federal government and the cantons would pay the money into the fund. He said this would avoid a value added tax increase, exceptional borrowing and a breach of the debt brake.

The assessment has not yet been completed. Roth said she needed to see the report before judging the proposal, but was sceptical, arguing that it could shift money away from the cantons and important projects rather than provide new financing. She called for a clear funding solution approved by voters and said a tax on very large fortunes should be reconsidered.