The Confederation may support regions of the country that are under economic threat and promote specific economic sectors and professions, if reasonable self-help measures are insufficient to ensure their existence. In exercising its powers under this Article, it may if necessary depart from the principle of economic freedom.
Art. 103 FC authorises the Confederation to conduct structural policy (economic development). It may support economically threatened regions as well as promote certain economic sectors and occupations. This assistance is subsidiary: the Confederation only intervenes when reasonable self-help measures are insufficient. If necessary, it may deviate from the principle of economic freedom.
The provision covers two areas: regional structural policy for economically threatened parts of the country and sectoral structural policy for endangered economic sectors or occupations. A region is considered economically threatened when its existence is endangered – mere locational disadvantages are insufficient. For economic sectors, entire industries are meant (textile industry, watch industry).
The subsidiarity principle is central: private and cantonal solutions must first be exhausted. Only when these are insufficient may the Confederation act. Assistance is provided through various instruments: subsidies, loans, guarantees or tax relief.
Example: The Confederation supports a structurally weak mountain region in developing tourist infrastructure, after it has become clear that the region cannot stop emigration with its own resources and cantonal assistance.
It is disputed in legal doctrine whether Art. 103 FC also contains a general economic development competence without subsidiarity reservation. Federal practice affirms this by reference to the legal situation under the old Federal Constitution, while Oesch/Mayoraz (BSK BV, Art. 103 N. 18) argue that the clear wording precludes such an interpretation.
There is no legal entitlement to structural policy assistance. The Confederation decides at its due discretion. International obligations (WTO law, bilateral agreements) set limits to structural policy.
N. 1 Art. 103 Cst. largely adopted the regulation of Art. 31quater of the old Federal Constitution (old Cst.), which was inserted into the constitution in 1947. The Message concerning a new Federal Constitution of 20 November 1996 (BBl 1997 I 1, 286) emphasised that structural policy should be retained as an economic policy instrument to meet the challenges of economic change. The norm was intended to enable the Confederation to intervene specifically in economic processes when market mechanisms alone were insufficient.
N. 2 The formulation «economically threatened regions of the country» replaced the term «economically threatened areas» of the old Cst. to clarify that not only small-scale areas, but also larger regions could be covered. The constitutional revision of 1999 retained the dual structure: regional structural policy (first alternative) and sectoral structural policy (second alternative).
N. 3 Art. 103 Cst. is found in Title 3 (Confederation, Cantons and Communes), Chapter 2 (Powers), Section 7 (Economic Affairs) of the Federal Constitution. The norm is a special competence provision that allows the Confederation to deviate from the principle of economic freedom (→ Art. 94 Cst.). It is closely related to other economic policy competences of the Confederation, in particular economic policy (→ Art. 100 Cst.), regional policy (→ Art. 135 Cst.) and agriculture (→ Art. 104 Cst.).
N. 4 The relationship to fundamental rights, namely to economic freedom (→ Art. 27 Cst.), is governed by Art. 36 Cst. Structural policy measures must fulfil the general requirements for restrictions on fundamental rights, whereby Art. 103 sentence 2 Cst. creates a special constitutional basis for deviations from the principle of economic freedom (Oesch/Mayoraz, BSK BV, Art. 103 N. 22).
N. 5Regional structural policy (first alternative): The term «economically threatened regions of the country» presupposes an existential economic threat. According to doctrine, mere locational disadvantages or below-average economic development are insufficient (Richli/Sahlfeld, in: Wirtschaftsstrukturrecht, 2005, 41–79). The threat must relate to a coherent region, not merely to individual communes.
N. 6Sectoral structural policy (second alternative): «Economic sectors and occupations» encompasses entire industries (e.g. textile industry, watch industry) as well as specific occupational groups. It is disputed whether only important economic sectors are covered (Oesch/Mayoraz, BSK BV, Art. 103 N. 17) or whether significance plays no role (prevailing opinion, cf. Richli, Strukturpolitik, 2005, 19–40).
N. 7Principle of subsidiarity: The phrase «if reasonable self-help measures for securing their existence do not suffice» enshrines the principle of subsidiarity. The Confederation may only act when private and cantonal measures fail (Oesch/Mayoraz, BSK BV, Art. 103 N. 13). Reasonableness is determined by objective criteria; unreasonable are measures that would endanger the basis of existence.
N. 8General promotional competence: It is controversially discussed whether Art. 103 Cst. contains a general economic promotional competence without a subsidiarity reservation. Practice and part of doctrine affirm this with reference to the legal situation under the old Cst. (Oesch/Mayoraz, BSK BV, Art. 103 N. 18). Oesch/Mayoraz themselves reject this: The wording of Art. 103 «clearly stands in the way» of such a reading; sectoral promotional measures are only permissible if the constituent elements are fulfilled (BSK BV, Art. 103 N. 18).
N. 9 Art. 103 Cst. establishes a discretionary competence of the Confederation. It is not obliged to act in terms of structural policy, but decides according to proper discretion. The competence encompasses both legislation and implementation (→ Art. 164 Cst. for the legislative obligation for important provisions).
N. 10 The instruments of structural policy are diverse: subsidies, tax relief, guarantees, loans, infrastructure investments (Oesch/Mayoraz, BSK BV, Art. 103 N. 14-16, 19-21). The chosen measures must be proportionate and may not impair competition more than necessary.
N. 11Deviation from economic freedom (sentence 2): This power is to be interpreted restrictively. It does not permit arbitrary dirigiste measures, but only such interventions as are necessary to achieve structural policy objectives (Oesch/Mayoraz, BSK BV, Art. 103 N. 22-23). Examples are market access restrictions, quotas or price regulations.
N. 12Scope of promotional competence: The main dispute concerns the question of whether Art. 103 Cst., in addition to conditional structural policy (with subsidiarity reservation), also contains a general economic promotional competence. Federal practice and parts of doctrine (citing historical interpretation) affirm such an implicit competence analogous to the legal situation under Art. 31quater old Cst. Oesch/Mayoraz (BSK BV, Art. 103 N. 18) represent the contrary position: The clear wording («if reasonable self-help measures...do not suffice») applies to both alternatives of the norm.
N. 13Significance of economic sectors: It is disputed whether only «important» economic sectors are worthy of promotion. Richli (Strukturpolitik, 2005, 35) argues that economic significance does not constitute a constituent element. Oesch/Mayoraz (BSK BV, Art. 103 N. 17) see this as disputed and refer to practice, which tends to presuppose a certain relevance.
N. 14Relationship to international economic law: The application of Art. 103 Cst. is limited by international obligations. Oesch (Staatliche Subventionen, ZSR 2012 I 255–284) emphasises the limits imposed by WTO law and bilateral agreements. Richli/Bundi (AJP 2008, 665–683) see more scope for innovation- and SME-specific promotion.
N. 15 In developing structural policy programmes, subsidiarity must be strictly observed. Applicants must demonstrate that their own efforts and cantonal assistance are insufficient. The mere assertion of economic difficulties does not suffice (JAAC 51.19).
N. 16In procedural terms, there is no legal entitlement to structural assistance. Administrative court appeal is generally excluded (Art. 100 para. 1 lit. e FSCA). Nevertheless, authorities must grant the right to be heard and justify rejections.
N. 17International economic law limitations must be examined at an early stage. Subsidies to export-oriented companies may violate WTO subsidy law. For EU/EFTA companies, the prohibition on state aid must be observed. The sector-specific bilateral agreements (aviation, land transport) often contain special state aid rules.
N. 18 The delimitation from other promotional bases must be carefully undertaken: agricultural promotion is governed by Art. 104 Cst., innovation promotion by Art. 64 Cst. (research), labour market measures by Art. 114 Cst. Art. 103 Cst. is subsidiary to more specific competence provisions.
JAAC 69.47 of 20 July 2004
Federal office practice on media promotion clarifies the limits of Art. 103 BV. The Federal Office of Justice's opinion on state support for a foundation to promote the Swiss press emphasizes that economic promotion must be aimed at economically strengthening the supported economic sector. Measures with primarily press policy objectives find no basis in Art. 103 BV, as conflicts of objectives may exist between press diversity and economic strengthening of the newspaper industry.
«Furthermore, economic promotion by the Confederation - whether in the form of sectoral structural policy or in the form of competition-neutral promotion - must be aimed at economically strengthening the supported economic sector. The objective of structural policy or general economic promotion under Art. 103 BV is primarily the economic survival or flourishing of the affected economic sector.»
JAAC 53.32 of 19 December 1986 (Federal Council Decision of 21 December 1988)
The procedure and material requirements for investment aid were clarified. A tourism office does not automatically fall under the IHG; fulfilling all formal requirements is decisive, particularly inclusion in an approved detailed programme before construction begins. The case shows the strict handling of the subsidiarity of state aid.
«If a project is not included in an approved detailed programme and is thus not part of an approved development concept, no investment aid can be granted because a fundamental prerequisite is lacking.»
JAAC 54.18 of 6 March 1989
The determination of the substantive scope of application of the IHG was specified. The purpose of the IHG is to improve living conditions in mountain areas through targeted investment aid for infrastructure facilities. The case clarifies the distinction between projects eligible for promotion and those not eligible.
«With the IHG, the Confederation aims to improve living conditions in mountain areas by granting targeted investment aid for infrastructure.»
JAAC 56.48 of 11 September 1991
The practice regarding medical practice promotion under the IHG shows the limits of federal support. Not all infrastructure in the public interest automatically falls under the IHG. Permanent securing of access for the local population is required.
#Financial Aid for Economically Threatened Regions (FBB)
JAAC 51.19 of 30 April 1986
Fundamental decision on the requirements and conditions for financial aid. The Federal Council confirmed that there is no legal entitlement to financial aid and that administrative court appeals are excluded. Federal aid is provided on a subsidiary and complementary basis; conditions such as the prohibition of profit distribution during interest rate subsidies are permissible.
«First, the legislature has expressly provided that the Confederation can promote private sector projects for creating and maintaining jobs in economically threatened regions through financial aid. In addition, state aid should be provided only on a complementary and subsidiary basis.»
BGE of 11 June 2008 (2A.42/2007)
The tax exemption of a foundation for promoting the Solothurn economy indirectly touched on Art. 103 BV. The Federal Court acknowledged that promoting an economic sector can generally be charitable, but examined the foundation's concrete activities for their actual charitable nature.
«The disputed tax exemption at issue here is a borderline case: it must be assumed with the appellant that the respondent's statutory purpose is formulated relatively broadly.»
The case law on Art. 103 BV shows that the second sentence («It may, if necessary, deviate from the principle of economic freedom») is applied restrictively. A deviation is only permissible if reasonable self-help measures to secure existence are insufficient and the support actually serves to economically strengthen the affected economic sector.