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UPDATE 1-Swiss finance minister rules out tax hikes to pay for COVID-19 relief

* Swiss consider boosting aid for “hardship cases”

* Government is calling up the Swiss army, again

* Minister urges hospitals to delay elective surgeries (Adds comment, background)

ZURICH, Nov 4 (Reuters) - Switzerland’s finance minister pledged not to raise taxes next year to pay for the measures to support the economy during the COVID-19 crisis, adding the country instead must keep a tight grip on spending.

“A tax increase would be certainly the false move, because we need air and room to move,” Finance Minister Ueli Maurer said on Wednesday at a press conference. “We need strong spending discipline.”

Switzerland is expected to post a rare budget deficit this year as a result of lower tax receipts and 18.1 billion Swiss francs ($19.83 billion) in extraordinary spending on measures like short-time working compensation for businesses.

Maurer said the country faced the deepest economic crisis of the last 50 years, with unemployment expected to rise.

“The biggest challenge is, we don’t know how the next months and years will develop,” Maurer said, predicting the next decade will be under the influence of the pandemic.

The government said it was prepared to contribute up to 200 million francs, or half of the funding for assistance from regional, or cantonal, governments to support hard-hit businesses that have lost more than 40% of their sales.

Maurer said the government could even increase funding for so-called “hardship cases”, especially considering the crisis’s impact on the hotel and restaurant sector.

The government is also again drafting in army units, including 2,500 soldiers, and calling on hospitals to end elective surgeries temporarily to prevent facilities being overrun. Five regions have already told the government they have reached hospital personnel and bed capacity as Switzerland reported its highest daily total of new cases on Wednesday.

“We are doing everything we can to avoid becoming overwhelmed,” Health Minister Alain Berset said. “Just a little flattening of the curve is not going to cut it.” ($1 = 0.9127 Swiss francs) (Reporting by John Revill and John Miller, writing by John Revill)

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