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Swiss President Arnold Koller's surprise proposal to set up a $5 billion fund to aid Holocaust victims and others marks a major moral victory.

The fund, should it come to be, cannot erase the tarnishing of Switzerland's reputation following allegations that it still holds the fortunes of murdered Jews.

But the fund would send a message that no country should be allowed to escape its wartime misdeeds unscathed. No one should profit from the deaths of 6 million Jews.

Those who survived, moreover, deserve admissions of guilt from the countries that wronged them; denials are offensive and only compound survivors' anger, frustration and loss.

The financial compensation that the Swiss fund would presumably dispense cannot erase the lingering effects of wartime suffering. But such compensation may, in some small way, help make survivors' lives more comfortable, both financially and emotionally.

Coupled with recent announcements that Swiss banks and private industrial firms would contribute to a separate fund for needy victims, Koller's proposal is the most dramatic gesture of restitution to come from Switzerland.

Though the extent to which Switzerland holds Holocaust victims' assets remains clouded, it is clear that the country is culpable. In 1962, after years of denying they held such assets, Swiss banks admitted they had found the equivalent of $8 million belonging to Holocaust victims.

When the issue resurfaced recently, Swiss officials initially denied there were any more dormant accounts; then, three months later, they came up with $32 million. An international investigative commission will reveal if there is more.

Of course, the fund must still overcome major hurdles if it is to become a reality — Swiss banking laws will need to be revised, for example, and the proposal may need to face a public referendum.

Jews around the world need to keep a close eye on the issue and do whatever may be necessary to spur the fund into existence.