Mon, Sep 25, 2006 - Page 12 News List

Swiss referendum on central bank profits likely to fail

AP , GENEVA

Swiss voters appeared to reject a popular initiative yesterday for funneling off billions of Swiss francs from central bank profits in the next years to prop up the country's pension system.

Nearly three in five cast their ballots against the proposal that had neither the support of the government nor the nation's highly influential banking community, according to a projection by the survey group GFS.Bern for Swiss TV networks.

The scheme -- brought to referendum after 115,000 people signed a petition supported by retiree groups, labor unions and some left-wing parties -- aimed to redirect 1.5 billion Swiss francs (US$1.2 billion) annually of Swiss National Bank profits to the national pension system, the AHV.

Gold sales and favorable financial markets in recent years have led to bubbling reserves, even if the central bank profits available for transfer are expected to decrease after 2012.

The Swiss bank's riches also result from voters' rejection four years ago of sharing the windfall of a multibillion-dollar gold sale with the needy as part of a "solidarity fund." That campaign began as the country was reeling from attacks by Jewish organizations alleging that the country, and its banks, had amassed great wealth at the expense of Nazi victims during World War II.

Yesterday's national referendum suggested eliminating the SF830 million annually given to the federal government. Switzerland's 26 cantons would have lost SF670 million of the SF1.67 billion set aside for them in the current arrangement.

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