Alastair Darling called the situation a 'mood change' and German Finance Minister, Peer Steinbruck, has defended himself against comments that he is 'Nazi stooge' when Swiss Parliamentarian, Thomas Muller, said Steinbruck reminded him of a "generation of Germans who marched through the streets in leather coats, boots and armbands".I have to say the 'Nazi' slur was a bit strong, but you can understand why some in Switzerland are annoyed at the bully-boy tactics aimed at their banking secrecy.
I live in Switzerland and I can tell you that most people here are not happy. Whether they agree or disagree with Switzerland's banking secrecy rules, (many in Switzerland have been campaigning for change for years.. see the vote in the Canton of Zurich to strip tax breaks for the wealthy) the Swiss are unhappy about what amounts to an attack on their sovereignty.
In a case of 'kick them while they are down' Darling and his co-conspirators in Germany and the US have used the fragile world economic environment to get concessions from other countries, such as Switzerland and Monaco, to take down a central pillar of their competitive advantage over the 'world powers'.
Darling even said "I think there are things that are now possible, ironically, in the face of a crisis like this that simply weren't possible even a short time ago".
What else does he believe is 'possible' in this 'crisis'?
Ah regulatory overhaul, excellent! That will deal with the bankers, the public will love that. Increase the tax on the rich, super! Let's get back to the days of 95% tax for the super wealthy (they will have no place to hide it now that we have dealt with Switzerland). Unionisation, perfect! The Yanks are getting rid of the secret ballot... we can do that too!
Oh, it's happy days for the ego maniacs in government now. I can see the Scottish Army of Darling and Brown doing a little Scottish jig at the thought of using the suffering of unemployed people and businesses throughout the world as an excuse to implement their version of the new world order.
The thing is that the UK and others should be aware that when you start down this path you open yourself up for many a retaliatory strike. For example a Swiss Euro2bn order for Euro Fighters made in Germany is 'on hold' and calls for a reduction of German imports is rumoured. One minster said "We have no problem with the German people, but they may have to choose between their current government or jobs". There is also over Euro300 billion in fiduciary accounts throughout European banks, withdrawing that and bringing it back to Switzerland, could cause a few problems.
The Swiss Finance Minister also gave up his German Mercedes for a French Renault. This may sound like grandstanding, with no real value to it but you only have to look at the cars on the road here. I would guestimate that 50% of the cars are German; BMW's, Mercs and VW's. The Swiss are great for the 'people power' aspect of their society, if there was any sort of German backlash we may find such cars a little less popular here.
Couldn't happen? Don't be so sure. Much of this newly found governmental 'power' is because of the underlying social unrest at the current economic environment. It is fueling controversial policies 'that would not have been possible even a short time ago'. Switzerland is no different, actually I lie, Switzerland is different. If pressures that are being put on this Alpine fortress start to cause unemployment and economic discomfort for the masses and this pressure is seen as the route cause, there could be trouble.
A referendum on law changes only requires 50,000 signatures to be put forward to have it voted upon. Darling et al, may talk a good game about democracy etc, but true democracy is practiced here and could be used by the public to make a point.
The UK, in a precarious position with its convoluted tax 'reforms' for fund managers, should be a little careful. A couple of switches in the Swiss regulatory and tax laws (that would be in line with MiFid rules.. how is that for 'ironic') would see an exodus of wealthy fund managers from UK shores to the shores of Lake Geneva, where there is less crime, a better standard of living, better schools, great skiing and... well... good fondue.
You can bet that certain elements in the Swiss government are sitting down, as you read this, talking about how they can make up for the inevitable job losses that will be felt in the banking sector due to this latest attack. Tax and regulatory changes could be implemented quickly and efficiently and before you know it our ski slopes would be teeming with hedge fund managers taking a lunch break twenty minutes away from their lake front offices while dumping their tiny overpriced London homes via their Blackberries.
I don't mean to have a go at the UK, I am English and proud, but I am exasperated at the way that this government especially, brow beats the general public with populist policies aimed at deflecting the blame for their incompetence on countries such as Switzerland. For goodness sake, we only have 7.5mn people, thats just a little more than London!
Remember, Switzerland is not some second world backward country, it is at the heart of Europe with a highly educated, work-efficient, multi-lingual population and the country has a public infrastructure that makes the UK look like a former soviet country, straight after the collapse.
If Switzerland decided it needed to compete with the UK directly for the title as 'financial capital of Europe' in order to boost its economy I am afraid the UK would be the Goliath to Switzerland’s David.
If I was in this fight, I wouldn’t be watching the stumbling giant; I would be watching the little guy, loading up his sling.
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