ZURICH (Reuters) – The Swiss government said on Friday it was doubling the size of its coronavirus emergency loan scheme to 40 billion Swiss francs ($41 billion) after being flooded with requests for help from businesses.
The government said it would expanded state guarantees after banks extended more than 76,000 loans worth 14.3 billion francs in the first few days of the programme.
The total aid package, which has now reached 62 billion francs, represents a major departure for the normally hands-off Swiss government. Equivalent to nearly 9% of economic output, it is the biggest of its kind in Swiss history.
Small businesses have been particularly hard hit by the virus outbreak and need urgent help, said Finance Minister Ueli Maurer.
“Since last Thursday, every four seconds a loan guarantee has been agreed somewhere in Switzerland,” Maurer told a news conference in Bern.
The government could suffer losses on the loans if the crisis continued for more than three months, Maurer said. If 10% of the loans defaulted that would mean writing off 800 million francs a year for five years, he added.
Health Minister Alain Berset said Switzerand was in a delicate but stable condition as the death toll from the new coronavirus rose to 484 and positive tests topped 19,000.
“Hospitalisations continue to go up but not all beds are taken,” Berset told reporters.
“We have not yet reached the peak for infections or for hospitalisations. Now more than ever we have to continue this marathon.”
Berset said it was still far too early to say if emergency measures – including shutting schools and businesses and banning gatherings of more than five people – needed to be extended beyond April 19.
Businesses have been clamouring for the loans to stay afloat as customers stay away or supply chain problems emerge.
Under the emergency liquidity scheme administered by hundreds of banks including heavyweights UBS and Credit Suisse, loans of up to 500,000 francs are fully secured by the government. Credits of up to 20 million are 85% secured.
Maurer said the focus was on helping small and mid-sized companies rather than big ones such as airline Swiss, a Lufthansa unit, whose situation he called “complicated”.
The government has also adopted powers to force companies to make vital medical supplies such as protective gear and drugs, while easing rules governing unapproved medicines under study against COVID-19 so they can be deployed quickly.
Reporting by John Revill and Silke Koltrowitz, additional reporting by John Miller, editing by Michael Shields and Andrew Heavens