Switzerland's Strong Franc Sparks Call for Exporter Protection Scheme

Felco, a Swiss manufacturer of garden and agricultural shears, is proposing a new insurance-style scheme to protect exporters from the strong Swiss franc. The 'Swiss Export Shield' would be an independent fund that compensates companies if the franc rises beyond an agreed range against major currencies.

The company claims this plan would be cheaper than bank hedging products and potentially benefit from government backing. CEO Nabil Francis says it's like having 'an airbag in a car, cushioning the impact, but in this case of the Swiss franc.'

The strong franc has long been a challenge for exporters, with 60% of Switzerland's GDP coming from goods exports. The currency has appreciated by nearly 3% a year against the euro over the past 20 years and by 2.2% against the dollar.

Francis notes that smaller companies are more exposed to exchange rate fluctuations due to limited options for producing abroad or matching foreign-currency revenues with costs.