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Swiss Voters Reject Proposals on How to Spend Huge Gold Surplus - 2002-09-22

Swiss voters have rejected two proposals on how to use the proceeds from the sale of nearly $14 billion of surplus gold reserves.

The government now has to figure out what it is going to do with hundreds of millions of dollars in interest earned on the gold each year.

Proposals by both the right wing People's Party and by the government on what to do with Switzerland's gold reserves have both been narrowly defeated.

Switzerland has a problem most countries in the world would envy. The government has 1,300 tons of surplus central bank gold and does not know how to spend the proceeds from the sale of the gold. The People's Party proposed that the money be poured into the country's state pension plan.

The government countered with a proposal to divide the excess reserves among the pension fund, Switzerland's 26 cantons and a Solidarity Foundation to support humanitarian projects. The idea for the fund was first suggested in 1997 at the height of international criticism about Switzerland's secret bank accounts of Holocaust victims.

People's Party leader Cristophe Blocher said he is disappointed that his party's pension plan proposal was rejected. But he says his party has come out the winner just the same.

He admits his party's main goal was to prevent the Solidarity Fund from being created. He says he is happy with the outcome of the vote which shows that Swiss citizens do not want to be blackmailed into giving money to humanitarian causes abroad. Supporters of the government's proposal say they are disappointed that the Solidarity Fund now is dead.

They explain their defeat on the uncertain economic situation and say people want to keep the money in the country. So the Swiss government is back to square one.

It is sitting on a pile of gold and has to come up with new ideas on how to use it. Some suggestions include paying off the debt or creating jobs by setting up new industries and devising new products.