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The decision of the Swiss Bank to withdraw its support for the fixed exchange rate of the Swiss franc against the euro is a shock for more than 65,000 Greeks who have taken out loans in Swiss francs. Until yesterday, the exchange rate was 1 euro = 1.20 Swiss francs, or 1 Swiss franc = 0.805 euro. The value of the franc had immediately increased against the euro by 17% to 0.975 euro, whereas earlier today it had recorded an even greater 30% increase, amounting to over 1.17 euro. Against the US dollar, the Swiss franc reported a 16.6% profit, its value reaching 1.14 US dollars per franc.

This automatically means that the amount remaining to be paid by borrowers has increased by 15%, and from next month onward, they will face a significant increase in their monthly instalments.

Over the past years, thousands of Greeks have obtained loans in Swiss francs and suffered significant damage afterwards. They have even established their own association and are fighting for their rights in court as the monthly payments on their loans, primarily mortgage loans, are rapidly increasing. The total amount of these loans is 8.5 billion euro.

The inability to pay the monthly loan instalments has driven these borrowers to turn against the banks. Last summer the first instance court in Xanthi issued a decision in favour of a retired policeman who in 2007 borrowed 166,680 Swiss francs, considering, on the basis of the exchange rate EUR/CHF that was valid at the time of obtaining the loan, that he would be able to pay the instalments.

The development of this case had raised a lot of fuss. Prime Minister Antonis Samaras had held several meetings with representatives of the Ministry of Finance and Governor of the Central Bank of Greece Yiannis Stournaras to discuss the options for intervention in order for the Greek borrowers not to be irreparably affected. Moreover, in a pre-election period, the opposition could use such turmoil as a weapon.
 
Loans in Swiss francs appeared in 2006 and were intensely advertised in 2007 and 2008 because of the low Libor rate during this period, which was in the range of 2% - 2.5%, while the European interest rate ranged from 3.6% to 5%.

At that time (early 2007), the exchange rate of the Swiss franc was 1.610 per euro and customers borrowing in foreign currency benefited from both the lower interest rate and the weak franc. Fixing the exchange rate of the Swiss franc at 1.20 per euro was damaging to a large number of borrowers.

As reported by Bloomberg, after the surprise announcement of the Swiss National Bank (SNB) that it abandoned the minimum exchange rate of 1.20 Swiss francs per euro, the European stock markets started to recover.

The common European stock index Stoxx Europe 600 Index increased by 3.8% to 352.55 percentage points at the London market, neutralizing previous losses of up to 2%. Conversely, the Swiss Market Index reported losses of 7.1%, the highest rate since 2008.

By abandoning the minimum exchange rate of 1.20 Swiss francs per euro, the Swiss National Bank has put an end to a three-year policy that aimed to protect the economy from the European sovereign debt crisis. The Bank has also reduced the interest rate on deposits and current accounts that exceed a certain amount.