Bloomberg News - Swiss Economy Grows Faster Than Euro Area’s on High Exports

Switzerland’s economy outpaced that of the neighboring euro area in the first quarter, with growth in exports and in the construction sector offsetting weaker household consumption.

Swiss gross domestic product rose 0.5 percent in the three months through March from the previous quarter, when it expanded 0.2 percent, the State Secretariat for Economic Affairs in Bern said in a statement today. That compares with a median estimate of 0.6 percent median estimate in a Bloomberg survey of 18 economists.

Shielded by a cap on the franc set up by the Swiss National Bank in September 2011, the Swiss economy has fared better than that of the euro area, its biggest trading partner, in nine of the past 10 quarters.

“You see a very strong contribution from exports, which stands in contrast to the global soft patch we saw in the U.S. and in Europe,” said Maxime Botteron, an economist at Credit Suisse Group AG in Zurich, adding that the unusually warm winter helped the construction sector. “Despite relatively strong growth, there’s no sign of an overheating -- it means for the SNB that they can continue with their policy, including the cap on the franc.”

‘Not Bad’

Today’s data showed that in the first quarter, exports of goods, excluding variables, rose 2 percent, compared with a contraction of 1.7 percent a quarter earlier. Construction increased 2. 7 percent, after 2.5 percent in the fourth. By contrast, household consumption, which has been a major support of the economy, grew just 0.1 percent, compared with 0.7 percent a quarter earlier. From a year earlier, output increased 2 percent in the first quarter.

Switzerland’s quarterly growth rate compares with German expansion of 0.8 percent during the period, while the French economy stagnated. In a sign Swiss economic momentum will probably hold steady, manufacturing output has expanded for nearly a year. Data today also showed private consumption is set to remain “robust,” with the UBS consumption indicator at its second-highest since January 2011 with an April reading of 1.72 points.

“For the coming quarters we’ll see net exports contributing to growth and as well as stable consumption,” said Alessandro Bee, an economist at Bank J Safra Sarasin AG in Zurich, adding that high immigration and low unemployment in Switzerland will keep domestic demand stable. “The situation isn’t bad.”

Franc Cap

According to the International Monetary Fund, the euro area is forecast to grow 1.2 percent this year, while Switzerland’s economy is seen expanding 2.1 percent.

Even so, Ukraine’s political crisis has helped maintain risk aversion among investors even as the euro area’s debt crisis loses in intensity, allowing the franc to climb 0.4 percent against the euro this year.

Citing extreme economic challenges, SNB President Thomas Jordan termed the currency cap his “most important” policy instrument when he addressed the central bank’s annual general meeting in Bern last month.

The SNB is expected to keep the ceiling in place at least until 2015, according to a Bloomberg News survey of economists earlier this month. Should the European Central Bank ease policy further to combat falling prices, the SNB probably will need to take steps to defend the 1.20 limit, the survey showed. The ECB could announce more stimulus as early as June 5 when policy makers meet in Frankfurt.

ECB Action

If the franc rises against the euro on ECB action, “that may prompt another round of intervention by the Swiss National Bank,” said Julien Manceaux, an economist at ING Belgium in Brussels. “It remains to be seen how strong the effects of ECB policy will be on the euro -- if the effects are strong, that could certainly push the SNB to go beyond exchange rate intervention.”

SNB policy makers have repeatedly said they won’t exclude any option to defend the cap, and the International Monetary Fund suggested it could charge commercial banks on their excess reserves to take pressure off the currency.

Switzerland’s economy also faces the fallout of a February vote to introduce quotas for European Union workers. The Swiss government plans to announce more details on immigration reform next month. SNB policy makers have said they can’t quantify the economic impact of lower immigration until details of the government’s plan are public.

“You’re in a small boat,” UBS AG (UBSN) Chairman Axel Weber said last week. “If you shoot holes in your boat, it’s harder to sail troubled waters.”

To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net

BBC News - Russia signs 30-year gas deal with China

Russia's President Vladimir Putin has signed a multi-billion dollar, 30-year gas deal with China.

Gazprom CEO Alexei Miller (centre) and CNPC Chairman Zhou Jiping shake hands as Russian President Putin looks on during the signing ceremony in Shanghai

The deal between Russia's Gazprom and China National Petroleum Corp (CNPC) has been 10 years in the making.

Russia has been keen to find an alternative energy market for its gas as it faces the possibility of European sanctions over the crisis in Ukraine.

No official price has been given but it is estimated to be worth over $400bn.

President Putin said in a statement to the Russian news channel Rossiya: "The price is satisfactory for both sides.

"It is tied, like it is envisaged in all our international contracts with Western partners, specifically our partners in Western Europe, to the market price on oil and oil products. It is an absolutely calibrated, general formula for pricing."

The agreement, signed at a summit in Shanghai, is expected to deliver some 38 billion cubic metres of natural gas a year eastward to China's burgeoning economy, starting around 2018.

The main argument has been over price and China is thought to have been driving a hard bargain.

Over the last 10 years it has found other gas suppliers. Turkmenistan is now China's largest foreign gas supplier, and last year it started importing piped natural gas from Myanmar.

Alexei Miller, Chief Executive of Gazprom said the new deal was "the biggest contract in the entire history of the USSR and Gazprom - over 1 trillion cubic metres of gas will be supplied during a whole contractual period."

Analysis: Jamie Robertson, BBC News

The gas deal between Russia and China was signed at 04:00 China time, which gives some indication of the level of urgency over these talks. Mr Putin appears to have been determined not to leave Shanghai without a deal - and he got one.

But the financial details are a "commercial secret", so we don't know how much he had to give away to get it. Certainly China needs the gas to help it cut its coal-fired smog levels, and it wants to diversify supply. But it had the luxury of time in which to negotiate, something Mr Putin was short of.

The perceived motive for the deal is that Russia needs a second market for its gas, so it can face up to European sanctions. Given that the "Power of Siberia" pipeline won't start pumping gas into Chinese factories until 2018 at the earliest, its economic effect on the European crisis will be limited.

More important may be the investment that China will make into Russia's power and transport infrastructure. Putin may not have managed to sign the most advantageous of gas deals on Wednesday but the opening of economic doors with China could well be the greater achievement.

Rain Newton-Smith, head of emerging markets at Oxford Economics, said: "The whole tenet of the deal has a symbolic value - it says that the two countries are prepared to work with one another. For instance there were other elements such as Chinese participation in Russian transport infrastructure and power generation.

"It is similar in many ways to China's investments in Africa where they drive a hard bargain over the price of raw materials but then provide infrastructure for the economies they are doing business with.

Jonathan Marcus, the BBC's defence and diplomatic correspondent said tensions between Russia and the west were not just over Ukraine: "There are fundamental differences over Syria and about the whole direction in which President Vladimir Putin is taking his country.

"Thus this deal could symbolise an important moment of transition - when both in economic and geo-political terms, Russia's gaze begins to look more towards the East than towards the West."

Siberian power

Another sticking point on the deal has been the construction of pipelines into China.

Currently there is one complete pipeline that runs across Russia's Far East to the Chinese border, called The Power of Siberia. It was started in 2007, three years after Gazprom and CNPC signed their initial agreement in 2004.

But financing the $22-30bn cost of sending it into China has been central to the latest discussions.

China is Russia's largest single trading partner, with bilateral trade flows of $90bn (£53bn) in 2013.

The two neighbours aim to double the volume to $200bn in 10 years.

Reuters News - EU election casts shadow over euro zone as ECB meeting approaches

A man casts his vote for the European Parliament and Belgium's general elections in Deurne near Antwerp May 25, 2014.

CREDIT: REUTERS/FRANCOIS LENOIR

(Reuters) - Investors this week will be watching the results of elections that could deal a blow to political parties that are key to reform efforts in the European Union and could also fan instability in Ukraine.

The bonds of some struggling euro zone governments sold off last week as investorsworried about expected gains for anti-EU parties in European Parliament votes in Greeceand Italy.

In Greece, a strong showing by parties opposed to the terms of its EU-led bailout may hurt the fragile coalition government, potentially paving the way for a new national vote.

In Italy, a poor result for Prime Minister Matteo Renzi's party could undermine his drive for swift reforms, which he promised when he took power in a party coup earlier this year.

The rise of anti-EU parties in northern Europe could make it harder for the European Union to deal quickly with any future resurgence of the euro zone crisis, analysts said.

"It looks like we are going to see the far-right parties making further gains and it is going to make it more difficult for the European authorities to deal with any subsequent euro crisis events," said Victoria Clarke, economist at Investec.

Elections for the European Parliament were held from May 22 to 25.

Ukrainians vote in a presidential election on Sunday and if favorite Petro Poroshenko falls short of an absolute majority, market jitters could grow ahead of a second round of voting on June 15.

Tensions between Ukraine and Russia have escalated in recent months, with Kiev accusing Moscow of sowing deadly disorder in its mostly Russian-speaking east, where pro-Moscow separatists have declared independence and asked to join Russia.

"(If) we head to a second-round vote ... then we might find that we see risk assets suffering in the process until some form of stability has been put in place. So that could be a couple of quite painful weeks and would, if anything, reinforce the case for ECB policy easing on June 5," said Clarke of Investec.

The European Central Bank is widely expected to cut interest rates then, a Reuters poll showed, having clearly flagged that possibility at its last monetary policy meeting.

All this means a three-day ECB forum in Portugal that starts on Sunday and features president Mario Draghi and several ECB board members will be keenly watched by the markets.

Euro zone money supply data on Wednesday and Italian and Spanish inflation numbers on Friday may reinforce the case for more easing if they come in weak.

"The euro area's economic recovery is bedding in, but inflation is well below the ECB's target and there is a risk that deflation could take hold across the region," Standard Chartered said in a research note.

"This could elicit more expansionary policy."

EXIT STRATEGY

But David Mackie, chief European economist at JP Morgan does not expect an ECB rate cut in June to be the start of a sustained campaign to provide more stimulus.

"We have not changed our broad macro story, which is that the region is heading towards a 2 percent growth environment," he said. "So we don't think that what will happen in June would then be followed by more aggressive action later in the year."

In contrast to the ECB, both the Bank of England and the Federal Reserve are considering their way out of their stimulus programs as their economies recover, even though U.S. data is expected to show contraction in output in the first quarter.

But the housing market, which is strengthening in Britain and losing steam in the United States, could yet complicate matters for both central banks, analysts say.

Britain has said it will use mortgage lending controls before resorting to interest rates to cool the sector. BoE Governor Mark Carney is due to speak on Tuesday evening.

But the U.S. housing market may yet require more help from the Fed.

"Both central banks are putting together their strategies for exiting the ultra-loose monetary policy that we've had over recent years but at opposite ends of the scale in terms of their considerations for the housing sectors," Clarke said.

"In the UK, the talk is about whether there is a possible housing bubble and in the States (it) is virtually the opposite ... the Fed has the problem of working out whether its housing sector can withstand a policy tightening probably in the early part of next year."

Housing data from both countries this week could shed further light on this, with British Bankers Association's mortgage lending data due on Tuesday followed by statistics on the Help to Buy mortgage guarantee program on Thursday.

In the United States, the house price index is due on Tuesday and pending home sales on Thursday.

A second estimate of U.S. gross domestic product on Thursday is expected to show the economy contracted 0.4 percent in the first quarter - when much of the country was bit by fierce winter weather - from a previous reading of 0.1 percent growth, according to a Reuters poll.

National Australia Bank said a soft reading in the first quarter would not change the outlook for the Fed which is scaling back its bond-buying.

Japan also releases a slew of data this week, including retail sales, inflation, unemployment, and industrial output.

BBC News - UK looks to boost fracking with new land access rules

The UK government has proposed new rules regarding rights to access land in a bid to speed up the introduction of fracking.

There has been a lot of local opposition to shale gas test wells

It proposes that shale oil and gas companies are granted access to land below 300m from the surface.

It also suggests firms pay £20,000 per well to people living above the land.

The consultation comes as a new report by the British Geological Survey (BGS) estimates there are 4.4bn barrels of oil in shale rocks in southern England.

The BGS estimates there are between 2.2 billion and 8.6 billion barrels of shale oil in the Weald Basin - that covers areas including Sussex, Hampshire, Surrey and Kent - but says there is "no significant gas resource".

These figures represent the total amount of oil in the rocks, only some of which can be accessed.

"It is not known what percentage of the oil present in the shale could be commercially extracted," the survey said.

'Opportunities'

Announcing the government proposals, Energy Minister Michael Fallon said: "Britain needs more home-grown energy.

"Shale development will bring jobs and business opportunities.

"We are keen for shale and geothermal exploration to go ahead while protecting residents through the robust regulation that is in place.

Is it legal to frack beneath your house?

"These proposals allow shale and geothermal development while offering a fair deal for communities in return for underground access at depths so deep they will have no negative impact on landowners."

The new proposals do not affect the existing system for gaining access rights to land on the surface.

The government also proposed a new notification system to ensure local communities are well informed about any shale developments in their area.

Fracking

The BBC's John Moylan said the report's estimates could have implications for the UK's long-term energy security and kick-off a drive to start fracking for oil in the region.

But he said the report suggests the shale rocks may contain less oil than similar formations in the US, where fracking has proved hugely successful in recovering oil and, particularly, gas. They could also be more difficult to frack.

Prof Robert Gatliff of the BGS told a news conference that the Weald could prove to be a "difficult play" for for the fracking industry.

Andrew Aplin, professor of unconventional petroleum at Durham University, also raised questions about how much of the oil could be extracted.

"Since neither the rock nor the oil is of optimal quality in the Weald, we might estimate that 1% of the Weald oil resource might be recoverable.

"This would equate to 0.05 billion barrels, which is about two months' UK consumption."

By way of comparison, the equivalent of around 45 billion barrels of oil has been extracted from the North Sea over the past 40 years.

Last year, a BGS study of the North of England suggested there could be as much as 1,300 trillion cubic feet of gas contained in shale rocks.

The fracking process involves pumping water, sand and chemicals into rock at high pressure, and it has sparked demonstrations by environmentalists. Some governments have banned the process.

Critics argue that fracking contaminates water supplies and can cause earthquakes. There have been strong anti-fracking protests at Balcombe, West Sussex, against test-drilling.

However, a government report published in June 2012 concluded that fracking was safe if adequately monitored.

Politically sensitive

Prime Minister David Cameron has insisted fracking will be "good for our country" and has blamed a "lack of understanding" of the process for some of the opposition.

Continue reading the main story

“Start Quote

There's been a long history of oil and gas exploration in this area. We as a company produce oil and gas from around 20 sites across that area”

Andrew AustinChief executive, IGAS

Fracking is also politically sensitive. Tory peer Lord Howell of Guildford - who apologised last year after saying that fracking should take place in the North East because it was "desolate" - recently spoke about the issue again, and said the Conservative Party could lose votes by pursuing plans to frack.

The counties covered by the BGS survey are considered strong Tory territory.

For many years, there has been more traditional exploration and development of oil and gas in the region.

Andrew Austin, chief executive of the onshore energy company IGAS, said it had long been known that southern England had extensive resources.

He told the BBC: "We've known that there's a big potential for oil and gas explorations across the country but particularly in terms of oil in the Weald Basin.

"There's been a long history of oil and gas exploration in this area. We as a company produce oil and gas from around 20 sites across that area. Around 40 million barrels have been recovered from that area to date."

In the US, fracking for oil and gas has created an energy boom and led to speculation that the country could overtake Saudi Arabia as the world's biggest producer by 2020, or even sooner.

Gas prices in the US have fallen sharply as a result, and other countries are now hoping that shale oil and gas could also lead to lower domestic energy prices.

Reuters News - Fed begins policy exit talks, split on view of U.S. job market

The Federal Reserve building is seen in Washington June 19, 2012.

CREDIT: REUTERS/YURI GRIPAS

(Reuters) - Federal Reserve policymakers last month began laying groundwork for an eventual retreat from easy monetary policy with a discussion of how to best control interest rates as they remove trillions of dollars from the financial system.

No final decisions were taken, and minutes of the session, released on Wednesday, said the Fed was merely engaged in "prudent planning" and not signaling it was ready to "normalize" monetary policy or raise interest rates any time soon.

Still, the discussion at the central bank's April 29-30 policy-setting session, coupled with fresh comments by top officials, show an intensifying discussion over both exit-strategy details and a developing split over basic analysis of the U.S. economy.

The next policy meeting will be in mid-June, when the panel will be joined by Stanley Fischer, the former Bank of Israel governor whose nomination to the Fed's board was confirmed on Wednesday by the U.S. Senate. The Senate has yet to act on his separate nomination to be Fed vice chairman.

Though the economic forecasts reviewed at the April meeting remained upbeat, the minutes indicated general agreement that any sustained uptick in inflation was still perhaps years off.

Minneapolis Fed President Narayana Kocherlakota said on Wednesday he did not think the Fed's preferred measure of inflation would reach 2 percent until 2018, an argument for leaving loose monetary policy in place. He said the economy's struggle to regain steam might even argue for easing policy further by committing to drive inflation above the Fed's 2 percent target to make up for lost ground.

Participants in the meeting undertook an apparently wide-ranging discussion about U.S. labor markets, dissecting research that suggests a falling share of short-term unemployed could prove an inflationary spark even with long-term joblessness running unusually high - a finding a number of officials said they considered suspect.

Indeed, sluggish wage gains were cited as one indication that the labor market could have more slack than the nation's 6.3 percent jobless rate suggests.

Other officials, however, offered warnings. "Some participants reported that labor markets were tight in their districts or that contacts indicated some sectors or occupations were experiencing shortages of workers," the minutes reported.

CRISIS ERA DRAWING TO A CLOSE

The discussion over how to exit the Fed's highly accommodative policy, once the time comes, is the latest sign that the era of near-zero rates and heavy bond buying is drawing to a close. Having pumped trillions of dollars into the financial system, the Fed must now develop tools to siphon them out as part of the eventual decision to raise target rates.

"Participants generally agreed that starting to consider the options for normalization at this meeting was prudent," the Fed said. It added that the discussion "did not imply that normalization would necessarily begin sometime soon."

Investors expect the Fed to raise rates in the middle of next year at the earliest, and expectation that was little changed by the central bank's latest minutes.

(Reporting by Michael Flaherty and Howard Schneider; Additional reporting by Ann Saphirin San Francisco and David Gaffen and Richard Leong in New York; Editing by Tim Ahmann, Paul Simao and Chizu Nomiyama)

Bloomberg News - BOJ Refrains From Easing as Signs Japan Weathering Tax Rise

Photographer: Tomohiro Ohsumi/Bloomberg

Gauges of business spending to consumer sentiment indicate the setback to the world’s third-biggest economy could be short-lived.

Japan’s central bank refrained from boosting stimulus and raised its view of business investment as the economy shows signs of weathering the impact of the first sales-tax increase since 1997.

The Bank of Japan will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($691 billion) per year, it said in a statement today inTokyo, in line with forecasts of all 32 economists in a Bloomberg News survey.

While an economic contraction is projected for this quarter, companies’ plans to boost investment are adding to signs that growth may bounce back. Governor Haruhiko Kuroda is chasing a 2 percent inflation target, with economists forecasting that more monetary loosening will be needed by the end of the year to achieve the goal.

“The BOJ is becoming increasingly confident, and they have no intention to ease right now,” saidMasamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. “We don’t think the BOJ will reach its target in the next year, so when it acknowledges its failure, it will have to ease further.”

The Topix index headed for a fourth decline in five days, as the yen strengthened. The benchmark stock gauge was down 0.6 percent as of 1:54 p.m. in Tokyo, while the Japanese currency rose 0.1 percent to 101.19 per dollar.

Japan’s trade deficit shrank in April as imports rose the least in 16 months after the sales-tax increase, data today showed. Overseas shipments increased 5.1 percent from a year earlier. The BOJ today maintained its view on exports, saying they “have recently leveled off more or less.”

Short-lived setback

The economy is forecast to shrink an annualized 3.4 percent this quarter after 5.9 percent growth in the first three months of the year as the 3 percentage point tax increase depresses spending. Department store sales fell 12 percent in April, less than a 14 percent decline in April 1997 following the previous increase in the levy.

Gauges of business spending to consumer sentiment indicate the setback to the world’s third-biggest economy could be short-lived.

Machinery orders -- a leading indicator of private capital expenditure -- rose at the fastest pace since 1996 in March and companies plan further increases this quarter after corporate spending helped drive growth in the January-March period at the fastest pace since 2011.

Investment “has increased moderately as corporate profits have improved”, the BOJ said in a statement, revising a view in its outlook report on May 1 that “the pick-up in business fixed investment has become increasingly evident as corporate profits have improved.”

Taxi Drivers

A measure of sentiment on Japan’s economic outlook among taxi drivers, restaurant staff and other workers soared by a record in April, according to the Cabinet Office.

“I’ve seen towns swarming with shoppers even after the sales-tax hike,” Hiromasa Yonekura, head of the Keidanren business lobby and chairman of Sumitomo Chemical Co. said on May 7. “The economy will head toward growth during the summer.”

The BOJ’s unprecedented easing helped to weaken the yen 18 percent against the dollar in 2013, boosting import costs and helping to trigger gains in consumer prices from June last year.

Inflation excluding fresh food -- the central bank’s main price measure -- stayed at 1.3 percent in March for a fourth straight month.

Yen Rise

While Kuroda forecasts price gains will accelerate, most economists surveyed by Bloomberg doubt the BOJ will reach its goal in its projection period that runs through the fiscal year ending March 2017. Seventy-five percent forecast the BOJ will boost stimulus by the end of the year, with 38 percent seeing a move in July, according to a Bloomberg poll this month.

Kuroda, who will hold a press conference at 3:30 p.m. in Tokyo, said last week the BOJ has “many options” to ease further if necessary.

The Japanese currency appreciated to a three-month high of 101.10 per dollar this week.

The yen could strengthen to 100 per dollar or higher by the end of this year if the BOJ doesn’t ease further by then, according a Citigroup Inc. report written by analysts including Kiichi Murashima.

“The BOJ won’t be nervous unless the yen goes above 100 yen,” said Hideo Kumano, executive chief economist at Dai-ichi Life Research Institute in Tokyo. “Kuroda will keep on signaling willingness for more easing if needed to sustain expectations in the markets.”

To contact the reporters on this story: Toru Fujioka in Tokyo at tfujioka1@bloomberg.net; Masahiro Hidaka in Tokyo at mhidaka@bloomberg.net

BBC News - Switzerland rejects world's highest minimum wage

Swiss voters have overwhelmingly rejected a proposal to introduce what would have been the highest minimum wage in the world in a referendum.

The proposal "to protect equitable pay" was the most prominent of several referendums

Under the plan, employers would have had to pay workers a minimum 22 Swiss francs (about $25; £15; 18 euros) an hour.

Supporters said the move was necessary for people to live a decent life.

But critics argued that it would raise production costs and increase unemployment.

The minimum wage proposal was rejected by 76% of voters. Supporters had argued it would "protect equitable pay" but the Swiss Business Federation said it would harm low-paid workers in particular.

The issue was the most prominent of several referendums held on Sunday.

A controversial plan to buy 22 Swedish-made Gripen fighter jets for the Swiss Air Force was narrowly rejected by 53% of voters.

Meanwhile, 63% of voters backed a plan to impose a lifelong ban on convicted paedophiles working with children.

But it was the trade union-backed proposal to ensure that an annual salary was not less than £32,000 ($53,600) a year that provoked the most debate.

Analysis: Imogen Foulkes, BBC News, Geneva

This was the third referendum on pay in Switzerland in the last 18 months, reflecting concern that the gap between rich and poor is growing here too.

Last February the Swiss backed restrictions on bosses' bonuses, but in November they rejected even stricter controls which would have limited top salaries to no more than 12 times that of the lowest paid.

The vote is a sign that Switzerland's long tradition of social partnership between business leaders and workers may be eroding: the bankruptcy of national airline Swissair over a decade ago, the disastrous losses suffered by the big Swiss banks in the subprime mortgage scandal, and the huge salaries and bonuses which continue to be paid in the banking and pharmaceutical industries have led many Swiss to lose trust in their business leaders.

Unions argued that the measure was necessary because of the high living costs in big Swiss cities such as Geneva and Zurich.

The unions are angry that Switzerland - one of the richest countries in the world - does not have a minimum pay level while neighbouring France and Germany do.

They argue that surviving on less than 4,000 francs a month is not possible because rents, health insurance and food are all prohibitively expensive.

The minimum wage in Germany will be 8.5 euros an hour from 2017.

A key element of the campaign in favour of a minimum wage was the argument that the Swiss welfare system was being forced to subsidise businesses which refuse to pay a living wage.

But business leaders and the government said low unemployment and high standards of living for the majority showed there was no need for change.

Small businesses, in particular Swiss farmers, were especially worried that being forced to pay their staff 4,000 francs a month would price their products out of the market.

Most of Switzerland's low-paid workers operate in the service industry, in hotels and restaurants, and the majority of them are women.