Austria’s Position on Swiss Currency

The finance minister of Austria (Hans Jorg Schelling) says that Switzerland should not permit the Swiss franc to remain at its present potent levels versus the EU currency over the long-term. This can be detrimental for the national economy.

Swiss currency loans are popular in some parts of Europe due to reduced interest rates. The franc’s sudden increase has become a problem for borrowers in countries like Croatia and Poland. Austria (member of the EU since 1995) banned numerous FOREX loans in 2008.

It has been least affected by the Swiss currency crisis. However, removal of this ceiling results in expensive debt servicing for roughly 151,000 Austrian households with 29 billion euro worth of denominated loans in Swiss francs.

All these translate to a maximum of 25 percent additional debt for consumers, according to media reports. If the franc remains in this position, the economy will be affected because tourism will decline and exports will become high-priced. The franc closed at 0.987 before the week ended.