Jean-Pierre Roth: Switzerland in the midst of the euro area - situation and
outlook
Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the Swiss
National Bank, at the South Tyrolean Industrialists' Association, Bozen, 14 October 2003.
The complete speech can be found in German on the Swiss National Bank's website (www.snb.ch).
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In the past decade, the European currency landscape has undergone fundamental changes. The
European Central Bank today enjoys an excellent reputation as an independent central bank. Within a
very short time, the euro has become most significant as an investment currency, and it continues to
gain ground. Since 2002, from the time it took physical form, it has also been legal tender in twelve EU
countries.
The introduction of the single currency has also had manifold implications for Switzerland. First of all,
the euro has made business for Swiss companies easier. Foreign currency management has been
facilitated, and the danger of currency turbulences, as witnessed under the European Monetary
System EMS, has diminished. The euro is used as a payment instrument in Switzerland approximately
to the same extent as formerly the national currencies of our immediate neighbours. It is possible that
it will yet gain some significance in this respect. There is no risk, however, of it superseding the Swiss
franc as payment instrument. As an investment and issuing currency, the euro represents increased
competition, but the Swiss franc will remain an attractive diversification currency. The greater price
transparency in the European market brought about by the euro's launch also has an influence on
Switzerland's domestic economy, heightening awareness of the need for structural changes.
Finally, initial fears that the exchange rate relation between the Swiss franc and the euro might be
destabilised by the introduction of the euro have not come true. Notwithstanding a few fluctuations, the
relation between the two currencies has remained remarkably stable. Overall, therefore, the
cohabitation between the Swiss franc and the euro is definitely a "success story".