Swiss President Alain Berset
(Swiss President Alain Berset)

Swiss Parliament’s lower house rejects Credit Suisse bail out plan

Swiss lawmakers rejected on Wednesday the government’s 109 billion Swiss francs ($120.82 billion) aid for Credit Suisse’s merger with UBS. The government invoked Swiss emergency law to sign it off to the ire of the almost 250 lawmakers left without a say.

A shotgun marriage that saw banking giant Credit Suisse taken over by Zurich-based rival UBS for 3 billion Swiss francs last month has shaken Switzerland, a country that is used to frequent referendums on a variety of policy issues.

While the upper house had approved the government’s contribution to the rescue package, parliament’s lower, and larger chamber, pushed back again on Wednesday (April 12). In total, 102 lawmakers in the lower house cast their ballot against the motion, 71 were in favour and two abstained in the vote.

The votes, although largely symbolic- because the state committed the funds and lawmakers cannot overturn that decision- highlight popular and political discontent with the government’s handling of the crisis ahead of legislative elections set to take place this October.

“If a yes means that we will…calm down some kamikaze bankers and give them a guarantee that the paternal state will bear responsibility next time, then I will vote no” Swiss Info quoted left-wing Social Democrat Roberto Zanetti as saying.

Meanwhile, Thomas Matter, of the right-wing Swiss People’s Party voiced “dismay, horror, shock, bewilderment, consternation”, adding: “Even worse than the collapse of Credit Suisse is the loss of confidence in Switzerland around the world.

Swiss President Alain Berset was in parliament to defend the government-backed deal.

“This decision has no impact on the takeover of Credit Suisse decided on March 19,” the Swiss Finance Ministry said after the vote. “On March 19, 2023, the Finance Delegation of the Swiss Parliament had already given its binding approval to the commitment credits on behalf of Parliament due to the urgency of the matter,” it said.

The potential costs of the rescue amount to over 13,000 francs for each of the country’s 8.4 million inhabitants. The merger of the two banks could result in up to 30 thousand layoffs.

With reporting by Reuters, Bloomberg, Swiss Info