Changes that occurred recently in Switzerland
The most recent change in Switzerland would be the currency fluctuation caused by Swiss National Bank. On January 15, 2015, The Swiss National Bank removed the currency ceiling of 1.2 Swiss francs per euro, not only broke its three-year relationship with the euro, but also left global financial markets and businesses, especially in Switzerland, startled. Immediately after the dissemination of this news, the Swiss franc strengthened 30% against the euro, sending jitters across the country’s manufacturers and exporters. Further, the Swiss stock market which plunged 14% during the day, witnessed its largest fall since 1989. The market closed about 9% lower, the highest fall among all 24 developed markets on that day.Overall, the appreciation of franc will hamper the country’s exports amid an increase in the prices of Swiss-made items in foreign countries. Further, as exports (both goods and services) contribute to more than 50% of the Swiss GDP, the franc–euro decoupling will drastically impact the Swiss economy as evident from the aforementioned points. Moreover, the SNB’s move will also heighten the deflationary situation already plaguing the Swiss economy. The unpegging also had a significant impact on the $/CHF relationship just after SNB’s announcement, the dollar crashed about 30% against the Swiss franc. The CEO from the famous Switzerland company, Swatch, said “Today's SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country.” Which shows how bad the recent removal of the currency ceiling of the Swiss francs is.