More control over foreign investment to safeguard the Swiss economy

Professor Edoardo Beretta, a lecturer in International Macroeconomics at Università della Svizzera italiana (USI), was featured on RSI's "Telegiornale." He shared his views on the new law approved by the National Council, now being examined by the States. According to the law, foreign investments in companies considered particularly important for the country must first be approved by the Confederation.

"The need for this law", explains Prof. Beretta ", arises from the fact that an increasing number of nations aspire to become global players. Take China, for example. It no longer wants to be just the 'factory of the world' but is strongly keen to acquire added value in international markets. For instance, the country currently holds foreign exchange reserves, mostly in dollars but also gold, totalling between 3,500 and 4,000 billion dollars."

The Swiss initiative, as Professor Beretta pointed out, is not unique. There are, in fact, many countries that have already introduced measures to limit foreign investments. "The European Union drafted an initial proposal in September 2017 to screen foreign acquisition companies, mainly those from non-EU countries. This screening has been in force since October 2020. Currently, approximately 30 states, including OECD and EU countries, have joined these protocols to screen investments internally." According to a German study, Beretta recalled, foreign investment dropped by approximately 15 per cent following the introduction of these restrictions. However, it is impossible to say whether this was beneficial or not, as the goodwill of the investments is unknown.

Professor Beretta concluded by mentioning that Switzerland is currently slightly more restrictive in accepting foreign investments than the OECD average, but is much less selective than other states, such as the United States of America, Israel, Australia and New Zealand.

Watch the interview with Professor Edoardo Beretta below (Italian only).