In a discussion with EIR today, a Swiss economist said that the long joint session of Switzerland’s Parliament on the Credit Suisse bailout has been “a slap on the face” for the government. In the end, the upper house Council of States (Ständerat) has approved the CS takeover through the UBS and the government emergency guarantees, but the National Council (Nationalrat) has voted against it. Since a formal ratification needs approval from both chambers, ratification has failed. It does not nullify the government action, protected by the emergency law, but it is a political defeat.
Furthermore, Swiss People’s Party (SVP) founder Christoph Blocher has announced a popular initiative (referendum) to split too big to fail (TBTF)—Glass-Steagall. There might be a convergence with the Socialist Party (SP), but it is too early to judge, since the text is not yet available. So far, Blocher has only announced the initiative in an interview with the Tagesanzeiger. But it goes in that direction.
The attempt to push through a Glass-Steagall legislation failed a few years ago, as the National Council voted in favor, but the Council of States voted against. Has anything changed? No, the balance of power in the Council of States is the same. However, there are elections in autumn. It is quite difficult for the pro-Glass-Steagall bloc to tilt the balance, but Blocher’s initiative aims at creating popular pressure, so that there might be some defections from representatives of the other bloc.
