Swiss government resists pressure to lessen franc shock: Media

Swiss government resists pressure to lessen franc shock: Media

GENEVA - Switzerland's government has shrugged off requests by political parties to lessen the economic impact of the removal of a cap on the value of the Swiss franc, the Swiss national news agency reported on Saturday.

In written answers to questions put by seven political parties before a parliamentary debate next week, the Federal Council, Switzerland's cabinet, said very little action could be taken.

Switzerland's central bank, the Swiss National Bank, set off a surge in the franc in January when it gave up a three-year old policy of holding the value of currency to 1.20 francs per euro.

The currency gained to 0.86 francs per euro before slowly receding. This month, it has been weaker than 1.05 francs per euro. That is expected to do huge damage to Swiss exporters and tourism and prompt many shoppers to go across the border to Germany, France and Italy.

Right-wing parties asked for tax breaks and lighter regulation; left-wing parties wanted capital controls and more protection of workers, the SDA news agency reported.

But the Federal Council said there were "scarcely any rapid and targetted measures" that could constrain the strength of the franc in the short term.

All the government could do was to try to improve the general conditions for companies, it said. It rejected a request from the Green Party for controls on the movement of capital, which it said would damage the economy, as would a tax on financial transactions.

The government said that if the franc weakened to 1.10 or more, the effect on the economy and trade would be noticeable but limited.

A government spokesman could not immediately be reached for comment on the report.

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