March 25, 2010 / 12:56 PM / 9 years ago

UPDATE 1-Swiss econ minister says worried over strong franc

* Strength of Swiss franc hurting export industry

* Up to SNB to decide when to act

* Double-taxation agreement with Germany close

(Adds double taxation agreement comments, details)

BERNE, March 25 (Reuters) - The strength of the Swiss franc is a burden for Switzerland’s economy and a reason for concern, the country’s economy minister said on Thursday.

“It worries me when the Swiss franc is too strong,” economy minister Doris Leuthard said, speaking to journalists in Berne. It was clear that this was a “huge” burden for the country’s export industry, she added.

But Leuthard, who went out of her way to press the Swiss National Bank’s role in helping Switzerland pull out of the economic crisis with a better performance than its neighbours, emphasised that it was the SNB’s responsibility to decide when to act on interest rates and the currency.

“It’s up to the Swiss National Bank to find the right moment and have in mind inflation and deflation,” said Leuthard, who also holds the largely ceremonial position as Swiss president this year.

The Swiss franc rose to a record high against the euro on Wednesday around 1.4230 francs per euro as the Greek debt crisis weighs on the common currency.

The SNB intervened in the currency market to fight the franc’s appreciation over the last year as part of its unconventional measures adopted to fight the deep recession.

But the central bank softened its intervention policy in December, aiming now to counter any excessive rise in the franc if it leads to deflation risks.


Leuthard said Switzerland had now signed more than 20 double-taxation agreements with other countries as part of its efforts to restore international confidence in its regime for managing and taxing savings by foreigners invested in Switzerland.

A deal with Germany could be signed as early as Friday, or perhaps next week.

“It’s correct the negotiations with Germany are in a phase of ending,” she said.

A German newspaper reported on Wednesday that the deal, clarifying tax disclosure rules on Switzerland’s multi-trillion-dollar wealth management industry, would be signed on Friday. [ID:nLDE62N1RZ]

Diplomatic relations have been strained between Berne and Berlin over Switzerland’s bank secrecy rules.

Earlier this month, Credit Suisse CSGN.VX restricted its bankers’ travel to Germany after German authorities said they had opened 1,100 tax evasion probes against the bank’s clients and were investigating staff on suspicion of aiding evasion. [ID:nLDE62K089]

The probe is related to a CD with client data offered to the German state of North Rhine-Westphalia by an informant.

Leuthard said Switzerland did not allow tax evasion and wanted to cooperate with other countries, but it could not be expected to police whether other countries’ citizens declared their taxes at home. (Reporting by Jonathan Lynn; Editing by Ron Askew)

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