The ratings on the Swiss Canton of Solothurn are supported by the canton's previously very strong budgetary performance, its high liquidity reserves, good access to liquidity, and very low contingent liabilities. Further strengths, in Standard&Poor's Ratings Services' view, are Solothurn's relatively high budgetary flexibility and Switzerland's supportive and predictable framework for its local and regional governments. These strengths are offset by our view that the canton's budgetary performance could decline from 2012 onward, which would likely require structural improvements. Other rating constraints are an expected increase in Solothurn's currently low debt position and its relatively high level of unfunded pension liabilities. Although historically robust, Solothurn's budgetary performance will likely come under structural pressure from 2012 onward. This is
