Political Flexibility: The Irony of Local Production Facility Closures and Emergency Measures in Switzerland

The closure of local production facilities often causes politicians to abandon their principles. This was evident in an episode this week from the Council of States on the controversy over industrial policy. In Sunday school, noble principles are taught, but on weekdays, people pretend to be “flexible.” This is a common phenomenon in life and politics as well.

The Swiss steel industry has been struggling in recent years due to factors such as sharply increased energy prices, subsidies abroad that distort competition, and import restrictions in the EU. The problems at the Gerlafingen steelworks inspired Solothurn politicians to make proposals in the federal parliament for state aid measures. A motion by Solothurn SP Council of States member Franziska Roth calls for emergency measures to save the Gerlafingen steelworks – “if necessary with emergency powers.” According to Roth, Stahl Gerlafingen is “systemically important for Switzerland.” If it were to close, over 500 jobs would be lost and Switzerland would lose its “only plant that closes the relevant metal cycles, produces structural steel and secures the raw materials domestically.” The motion was co-signed by the other Solothurn resident in the Council of States, Centre Party representative Pirmin Bischof.

Another initiative on the same topic was also on the agenda this week: a motion by Lucerne FDP Council of States member Damian Müller, which called for help for the steel industry – “to secure Switzerland as a production location and preserve the circular economy.” The canton of Lucerne is home to another steelworks in Switzerland (Steeltec in Emmenbrücke).

In May 2023, Switzerland imported around 350,000 tonnes of steel scrap and exported around 800,000 tonnes. However, a paper from May by State Secretariat for Economic Affairs denied that Swiss steelworks have systemic relevance since failure would cause only high costs for affected companies but not necessarily triggering an economic crisis with far-reaching consequences like loss of jobs or businesses closing down. Furthermore, there is global overcapacity in the steel sector and international trade plays a significant role in it.

This week’s motion was sent to its responsible committee for examination by the Council of States. However, an intervention by Vaud FDP Council of States member Pascal Broulis caused a stir when he referred to