Switzerland's tradition of dependable consensus politics has taken a battering after the government used an emergency law to push through a state-backed mega-merger of UBS and Credit Suisse , sidelining the country's parliament.
the government's 109 billion Swiss francs in aid for the deal between the country's two biggest banks, delivering a slap in the face for government.
The Swiss political model is under pressure at the moment, said political scientist Michael Hermann, a director of pollsters Sotomo, adding that the foreign perception of Switzerland as business friendly and as a financial safe haven could be undermined. A recent Sotomo poll showed two thirds of the population was against the UBS takeover of Credit Suisse, while a third of respondents were angry that emergency laws had been used to bypass parliament.
Swiss Finance Minister Karin Keller-Sutter defended the use of the emergency powers, saying Switzerland was not an "emergency dictatorship." Industry experts said the deal was unlikely to be changed by politicians, with UBS being given a free hand to determine how many jobs will go and what will be done with Credit Suisse's valuable domestic retail banking business.that the takeover could result in the combined bank cutting its Swiss workforce by up to 30%, which could cost 11,000 jobs.
The amount is equivalent to around a quarter of Switzerland's entire economic output, and includes emergency liquidity injections and a state pledge to absorb up to 9 billion francs in losses incurred by UBS, based on documents outlining the deal.
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