Published2 August 2024, 21:17
High-price island: Every fourth price in Switzerland is regulated by the state
Cigarettes, alcohol, electricity: Nowhere in Europe does the state have as much influence on prices as in Switzerland.
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Regulated prices: that’s what it’s all about
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Compared to other European countries, the Swiss state intervenes by far the most in free pricing.
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Among other things, it controls the prices of cigarettes and electricity.
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However, regulated prices can also be an advantage for consumers.
In a free market economy, the price of goods is determined by the interplay of supply and demand. In Switzerland, however, around 25 percent of all prices are not subject to competition and are controlled by the state, for example for electricity, public transport and doctor’s visits. This is another reason why Switzerland is a high-price island, writes the NZZ.
Switzerland has the highest score in Europe
“Nowhere else in Europe does the state have so much influence on prices,” writes the newspaper, which speaks of a “three-quarter market economy.” According to Eurostat’s harmonized consumer price index, almost 29 percent of prices are administered by the state. The Netherlands are in second place with 20 percent; the EU average is only twelve percent.
Here the state intervenes in prices
According to NZZ, the state intervenes in price formation in some form in almost all markets; the authorities dictate prices in the health sector, for example. Swisscom, Post, SBB and Skyguide, which are majority state-owned, also do not have free pricing. The state influences other prices through taxes, subsidies and levies, such as those on agricultural products and cigarettes.
Federal Council does not want a list of all regulated prices
FDP National Councillor Andri Silberschmidt has therefore called on the Federal Council in a postulate to keep an inventory of all directly or indirectly administered prices. However, the Federal Council requested that the postulate be rejected because the administrative effort would be too high.
Regulated prices also have advantages
The national consumer price index shows that regulated prices do not always have to be bad: in recent years, inflation in administered prices has ranged between -1.1 and 3.1 percent, while that of non-administered prices has ranged between -1.9 and 4.3 percent. The administered prices therefore fluctuate less; the price of electricity for Swiss private households, for example, remains fixed for a year.
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