ISSN 2330-717X

Tax Spat Spares German Trade Relations


By Alexander Kuenzle

While tempers fray on other issues, the exchange of goods and services between Switzerland and its northern neighbour Germany increased in 2011.

Despite the growing friction surrounding the taxing of German fortunes held in Swiss banks and approach rights to Zurich airport, trade volume continued to grow uninterrupted in 2011.

More than a quarter of Switzerland’s total international trade is with Germany: SFr98.6 billion ($107.5 billion) of SFr372 billion. This is up from SFr95 billion in 2010, despite the weak economy.

Imports are triple and exports double those with Italy, Switzerland’s second-largest trade partner.

While the finance minister of German state Baden-Württemberg threatens Swiss banks following the Swiss decision to issue arrest warrants for three German tax inspectors, Baden-Württemberg alone is responsible for a third of German-Swiss trade volume – some SFr33 billion.

And the state of North Rhine-Westphalia, whose finance minister still talks of buying more CDs with data of tax evaders to help plug a financial hole estimated at SFr150 billion, makes up 12 per cent of trade.

Direct Swiss investment in these two states alone amounts to several dozen billion francs, not to mention tens of thousands of jobs in Swiss companies.

“While Swiss exports to Germany increased by 5.7 per cent in 2011, they fell to France and Britain by 4.9 per cent and 9.1 per cent respectively,” said Ralf Bopp, head of the German-Swiss chamber of commerce.

Bapp pointed out that when considering this positive figure one needs to bear in mind the exchange rate with the euro, which in 2007 was worth SFr1.64 and is now SFr1.20.

“Significant pressure”

Eric Sarasin, president of the chamber of commerce, said the good Swiss export results had also been bought with price concessions – “a problem that is not to be underestimated despite not making as many headlines at the moment”.

The chamber of commerce surveyed its members about the exchange rate issue and discovered that 80 per cent of companies said they had felt “significant pressure” on their competitive position.

Nevertheless, 80 per cent of respondents also thought their exports to Germany would not deteriorate in the current year.

The exchange rate issue stood out most with tourism. Whereas in 2011 German tourists generated 10.5 per cent fewer overnight stays in Switzerland (5.2 million), Swiss overnights in Germany rose by 13.8 per cent to 4.8 million.

Direct investment

In 2011, the Swiss not only exported more to Germany and stayed there more often, they also directly invested a lot more, in other words, purchased business-related properties and assets.

At the end of 2011, Swiss investment in Germany was a not inconsiderable €31.7 billion (SFr38 billion), making Switzerland the seventh-largest investor in Germany. In comparison, Italy and the United States each invest €36 billion in Germany.

Swiss firms own 1,552 companies in Germany with 344,000 staff and an annual turnover of €117 billion.

While overall net migration to Switzerland at three per cent had grown slightly again, the net figure with Germany slowed from 5.5 per cent in 2010 to 4.8 per cent. In 2011, only every fourth immigrant was German – in 2008 it was almost every other immigrant.


The number of Germans who crossed the Swiss border to live grew in 2011 by almost ten per cent to 54,500. This growth reflected the healthy economy, according to Daniel Heuer, deputy director of the German-Swiss chamber of commerce.

“In particular unemployment stayed low in Switzerland despite the arrival of foreign labour,” he said.

In 2011, a total of 8,517 Swiss moved abroad. Germany alone is home to 79,000 Swiss, most of whom have dual nationality.

The growth in the number of Swiss emigrating to Germany has for years been above that for Swiss moving to other European countries.

“This also says a lot for the very intensive integration of the two countries, which in addition to goods, services and investment increasingly includes people,” Heuer said.

(Translated from German by Thomas Stephens)

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swissinfo is an enterprise of the Swiss Broadcasting Corporation (SBC). Its role is to inform Swiss living abroad about events in their homeland and to raise awareness of Switzerland in other countries. swissinfo achieves this through its nine-language internet news and information platform.

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