Switzerland's upper house rejects 5 billion Swiss franc aid plan for Ukraine

Summit on Peace in Ukraine in Burgenstock

ZURICH (Reuters) - Switzerland's upper house of parliament on Monday rejected a 5 billion Swiss franc ($5.58 billion) aid contribution for Ukraine contained in a broader financial package on the grounds that the plan breached borrowing restrictions in the neutral country.

With 28 against and 15 in favor, lawmakers voted down the 15 billion franc package, which also included 10.1 billion francs in additional funding for the country's armed forces.

The plan's defeat had been widely anticipated in recent weeks, with legislators from the right particularly opposed to it.

Lawmakers argued the package was in violation of a so-called "debt brake" provision in Switzerland, and rejected it two weeks before the Swiss government is due to host a high-level summit aimed at helping to bring peace to Ukraine.

The package, which a separate parliamentary committee had backed in April, was conceived as an extraordinary contribution towards the security of Switzerland and "peace in Europe" because of the war being waged by Russia against Ukraine.

Switzerland has been under pressure from Western allies to do more to help Ukraine even as right-wing nationalist lawmakers press for the country to remain strictly neutral.

The aid for Ukraine was intended to support the reconstruction and repair of everyday infrastructure in the country.

($1 = 0.8967 Swiss francs)

(Reporting by Dave Graham; Editing by Paul Simao)