City of Bern Refuses “Ethically Questionable” Loans from FIFA

Between 2017 and 2022, the city of Bern received around 1.8 billion francs from Fifa. The loans, which became public at the beginning of the year, caused dismay, especially among left-wing city parliamentarians, as the organization came under massive criticism before the World Cup in Qatar at the latest due to the precarious working conditions and human rights violations.

Also the Bern municipal council now considers raising capital via Fifa to be “ethically sensitive”, as he concedes in his response to an interpellation by Sofia Fisch and Nicole Bieri (Juso). The city adhered to the legal requirements for financing and awarded the contract to Fifa when it submitted the “cheapest offer” in the tender (the city publicly advertises its capital procurement).

The municipal council wants to remain true to the “principles of profitability and economy”, as it states, but in future the donors should also be judged “according to ethical criteria”. In this regard, the possibilities would now be explored. But one thing is already clear: Bern will not be taking out any more loans from World Football Association any time soon. In view of the current situation, “a deal with Fifa would not be entered into and, if necessary, the second best offer would be considered,” according to the city government.

However, the desired change in practice is not likely to be a sure-fire success. In a statement from last January, the Finance Directorate pointed out that there are currently no broadly established, uniform ethical and sustainability criteria for investors. “Even with our own catalog of criteria, it cannot currently be ensured that no unwanted funds are placed with the city via a financial intermediary,” it says. When it comes to financing offers, it is often unknown where the funds actually came from.

Why do cities borrow money from Fifa at all? Because of the prolonged phase of negative interest rates, it was worthwhile for banks, insurance companies, pension funds and other large investors to park millions in the short term with municipalities and cantons (instead of at central banks at higher costs). FIFA also jumped on this train in 2017. Municipalities and cantons, in turn, were able to earn money by taking on debt.

The same applies to the highly indebted city of Bern: By borrowing from the controversial world football association, it received around 3.1 million francs. Since January 2023, however, Fifa has not received any more financing offers, the municipal council wrote in its reply to the Juso interpellants. Bern is not the only Swiss city that has received millions in loans from the world association: in the past, Winterthur and other municipalities in the canton of Zurich were among the “Fifa customers”.