Does Switzerland Use The Euro Currency?

Somewhere in the middle of Europe, there lies a republican country that has several famous mountains located between Germany, Italy, and France. Switzerland is considered quite small compared to its neighboring countries but it still remains strong today.

The country flourishes with its strong economy and the not-so-dense population making it a more attractive place to visit. Another thing interesting about Switzerland is that it founded the European Free Trade Association(EFTA) but was not part of the European Union nor the European Economic Area.
Another question in mind will be does Switzerland uses the Euro currency? Well on 15 January 2015, Switzerland decided that they will not peg their Swiss Franc against the Euro currency. Doesn't seem like they prefer to use Euro, is it?

As of now, the Swiss franc has soared by 30 percent in terms of value against the Euro which caused a panic event among many investors. This will also give negative outcomes to the middle socioeconomic due to the depreciation of real estate.

The real reason behind this is currently unknown but there have been 3 theories going around to understand this huge surprise. 

  1. Switzerland is not confident with the safety of the EuroZone in terms of its economy
  2. Switzerland wants a disparity between the franc and the euro
  3. American investors are not pleased with the depreciation of the Euro ultimately reducing their investment value

From this, Switzerland actually shows the financial independence that is currently enjoyed by the country. If a country was to accept the use of the Euro in their country, then the local government would not be as free to do what they want economically.
If Switzerland was to use the currency Euro then the country will need to fulfill certain requirements such as controlling the local inflation rate or negotiating with other EuroZone countries.
If we were to look at Greece as an example, then we would know that Switzerland made the right choice as it is very hard to reach an agreement with all the other EuroZone countries. Even the European Union has made it compulsory for countries to practice low fiscal deficit, stable debts as well as low-interest rates. 

So it is not surprising that Switzerland decided what was best for the country and decided not to use the Euro currency. Despite not joining the European Union, Switzerland is a part of the United Nations, the International Monetary Fund, and the World Bank. 

Seems like Switzerland looks at financial independence as a serious issue and the country is definitely moving forward without the Euro currency. 


Post a Comment