Friedrich List Weighs in on Swiss Franc-Euro Decoupling

Jan. 15, 2015 (EIRNS) — Briefed on the Swiss decision today to
decouple the national currency from the euro, Friedrich List had
the following to say:
“I would not worry about repercussions on Swiss exports. The
Swiss franc will of course float and can appreciate up to 50%
against the euro, less against the dollar. The Swiss economy is
an export economy; it is probably the strongest export economy in
the world — it exports half of its GDP, whereas other leading
export nations such as Germany export only one-third of their
output — and thus, Swiss producers are legitimately concerned
about losing markets.
“However, the Swiss government can easily manage this and
intervene to maintain current levels of foreign trade.
“The way to do this is to introduce or increase import
tariffs. Through the currency appreciation, imports will tend to
increase, and tariffs, by de facto increasing price imports, can
control the increase or maintaining the same levels as now.
“The government will then use the new income generated by
import-control tariffs to subsidize export prices. The government
can also discriminate and decide which import/export sectors it
is going to protect, and this will be an improvement for the
general economy.
“Of course, there is a quicker solution, and that is to
introduce a Glass-Steagall banking separation. The effect of
Glass-Steagall implemented on the two Swiss TBTF banks, UBS and
Credit Suisse, will be systemic for the international financial
markets and the Eurozone. The euro won’t be a problem anymore,
because it will cease to exist.” [CCC]

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