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UPDATE 1-Swiss take steps to ease franc pain for firms

Published 02/16/2011, 08:10 AM
Updated 02/16/2011, 08:12 AM

* Funding boost funding for tourism, technology

* Export insurance made easier

* Government says monetary steps are responsibility of SNB (Adds details)

ZURICH, Feb 16 (Reuters) - The Swiss government announced measures on Wednesday to help firms to deal with the strong Swiss franc, including increased funding for the tourism industry and support for companies to boost innovation.

Tourism advertising will get an additional 12 million Swiss francs ($12.4 million) this year and next, export insurance should be made easier, and more money will be spent to foster innovation among export-oriented technology companies, the government said.

"(Government policy) generally shuns interventionist or market distortionary measures, for example subsidies," the government said in a statement. "It's fundamentally the responsibility of the firms to deal with the movements of the Swiss franc."

The franc fell after the government announcement, but pared losses as market participants decided the measures would not be enough to stem the currency's strength.

Swiss Economy Minister Johann Schneider-Ammann had flagged that the government was mulling such measures, which in some cases extend steps taken during the recession.

The government said that for structural reasons the franc was likely to remain strong for some time, and that growth could be helped via measures such as free trade agreements with dynamic emerging markets.

It said that any monetary steps were the responsibility of the Swiss National Bank.

The central bank's head, Philipp Hildebrand, said franc strength is dampening rising inflation pressures from higher energy and food prices but warned in an interview published in the Swiss French-language paper L'Agefi on Wednesday that rates cannot stay ultra low forever.

Swiss exporters have squealed as the franc, which investors regard as a safe haven, rallied some 15 percent against the euro last year to touch a record high of 1.2400 per euro in late December. It has since weakened, flirting with the 1.32 mark last week.

(Editing by Ruth Pitchford)

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