It was only a matter of time before the franc broke through parity and is now worth more than one euro. Good news for Swiss who want to spend their holidays in the euro zone. Since the euro was still CHF 1.10 just a few weeks ago, the Swiss have gained 10% purchasing power. If it weren’t for the inflation hammer.
Because the price increases for petrol and food in the EU are many times higher than in Switzerland. For example, inflation in our western neighbors is only 2.9%; According to a quick estimate by Statistics Austria, the inflation rate in Austria is expected to be 8.7 percent in June. The appreciation of the Swiss franc will therefore not be enough to compensate for these price increases. So far! – Because the slide of the euro is far from over. “We expect a swing around parity in the second half of the year and then a slide below parity,” foreign exchange specialist Thomas Flury is quoted as saying in “Blick”.
What do the Swiss do better than us? The expert attributes the strength of the franc to the bold steps taken by the Swiss National Bank (SNB) to combat inflation. The European Central Bank (ECB), on the other hand, is acting hesitantly. “In addition, the effects of the war in Ukraine are felt more in the EU than here in Switzerland,” Flury continued.
In any case, the currency in the euro area is under a lot of pressure. This is also expressed by the renowned economist Clemens Fuest, who clearly says: “The euro crisis is back!”
The ECB’s answer to the many crises: the key interest rate increase by probably only 0.25 percent – the eXXpress reported. At the same time, the ECB wants to scale back its money flow policy: Up to now, it has given money to national economies by buying up government bonds in the euro zone – and has thus become the lonely major creditor of many member countries.