Alpine Angst Swiss Defend Their Island of Prosperity

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Part 3: Euro-Zone Commuters Are Better Off


The battle for a share of the pie has become tougher, and the tone coarser, in the Geneva metropolitan area. In 2009, the right-wing Swiss People's Party warned against the "riffraff from Annemasse," who would soon be able to take a commuter train to downtown Geneva. Meanwhile the defenders of Swiss heritage have found yet another mouthpiece: Eric Stauffer, head of the populist party the Geneva Citizens' Movement (MCG), the third-largest political force in the canton. Stauffer recently complained openly that "Geneva has become a lawless zone," where "gangs of thugs from France" are being allowed to commit acts of violence and burglary as they please.

"Don't forget what it says: 'Foreigner's Identification Card'" -- these are the words a Swiss customs agent recently said to him, says Tomy, a Frenchman enjoying a beer after work in Geneva's clockmakers' district. The resentment has become more noticeable recently, but he doesn't take it personally, he says with a smile, noting that he is paid well in return. Tomy, a computer scientist in his mid-30s from Annecy in France's Savoy region, decided that he could make a good living in Geneva, where he polishes the metal that companies like Rolex and Patek Philippe use to make their luxury watches.

Wages have always been high in the watch-making sector: 6,500 francs a month for polishers, and 12,000 francs for sertisseurs, the people who set precious stones. But the more the value of the franc has gone up recently, the better off the commuters from the euro zone have become. "I now have four apartments in France, a boat and a happy family," says Tomy with a chuckle. He pays for his beer and gets ready to drive back across the border.

Foreign Tourists Staying Away

If anyone has a sense of what is going on in these confusing times for the Swiss, it has to be Jean-Marie Fuchs. He runs Europe's highest altitude restaurant, at more than 3,800 meters (12,500 feet) above sea level, just below the summit of the Klein Matterhorn.

Fuchs can see the Matterhorn, Mont Blanc and Monte Rosa from his front door. When he turns around and looks inside his restaurant, most of the people he sees are Asians. They are peaceful, uncomplicated guests who happily eat spaghetti or the Swiss potato pancakes known as rösti from the buffet before heading over to the adjacent souvenir shop to buy plastic cows or Swiss Army knives.

Indians are the fastest-growing group among foreign tourists in Switzerland, followed closely by the Chinese. The number of Indians staying in Swiss hotels has gone up by 33 percent in the last year. This has been particularly important in 2011, considered a "sluggish" year, with the strong franc serving as a deterrent for German and British tourists.

$20,000 for a Week's Vacation

Those tourists who want to have a meal up at Jean-Marie Fuchs' restaurant buy a ticket in Zermatt for 98 francs. Then they take a cable car up the mountain and walk to the restaurant through a concrete-lined gorge that was blasted into the rock just below the summit of the Klein Matterhorn. Swiss tourism officials are considering building a pyramid that would artificially increase the mountain's altitude to 4,000 meters. "It's clear that all the guests want to come here, to the highest point," says Fuchs.

There are days, says the restaurant owner, when he is constantly "walking around with an oxygen bottle to rescue customers." At close to 4,000 meters above sea level, people can suffer from mountain fever. Fuchs isn't someone who complains without good reason. He's more of a prototypical pragmatist, the kind of person author Thomas Küng once described when he wrote: "If the Swiss had built the Alps themselves, they would have been more modest. But now that they're there, you have to make the best of them -- and on them."

For the people down in the resort town of Zermatt, the mountains represent their livelihood, from the "Almrausch" ski school to the restaurateurs who serve up oyster platters in former cowsheds. Tourism is an indispensable source of income for Switzerland, which, with 2.8 percent unemployment and a government debt amounting to only 36 percent of GDP, is one of Europe's model economies.

But what happens when the Asians have left and visitors from the euro zone stop coming? When guests like Teddy Lim, an auto dealer from Jakarta who is now standing beneath the Matterhorn with his wife, three children and his mother, decide to go to Australia on vacation, as they used to, instead of spending $20,000 for a week in Switzerland?

A Little Later

Even the Swiss National Bank has no answers to these questions, not even after last week's move to peg the franc to the euro, which is seen as a monetary adventure whose outcome is uncertain. No one knows whether the newly erected dam will hold up, or whether speculators will now be even more likely to flee into francs. If central bankers are forced to print more and more francs to fend off the assault, inflation will be unavoidable.

An exchange rate of 1.20 francs per euro is already too high for many companies. Businessmen like Jean-Claude Biver, CEO of the watchmaker Hublot, have already stated that their production will only become truly profitable again if the rate goes above 1.30 francs to the euro. But is the fate of the franc even in the hands of the Swiss anymore? Are they still as independent as they once were, both politically and economically?

Only time will tell. If it turns out that the euro zone goes bankrupt after all, while the franc survives, Albert Einstein will have been right. He once said that he knew where he would go if the world was ending: "Switzerland. Because everything happens a little later there."

Translated from the German by Christopher Sultan

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