Switzerland is a small, land-locked country with a long tradition of direct democracy and as a politically neutral state. The modern Swiss federal state, which dates back to 1843, has a unique federal political system which emphasizes consensus and includes a strong dimension of direct democracy through referendums.
Switzerland is divided into 26 cantons, six of which are half-cantons. The federal government is responsible for foreign relations, defence, banking and currency, railways and immigration, while the cantons govern in most other areas, including taxation, policing, education, law-making and many areas of welfare spending. Additionally, within each canton there are communes, 2,842 in total. The bicameral Swiss parliament, or Federal Assembly, is elected for a fixed term every four years. The Nationalrat comprises members elected by universal suffrage, and the Ständerat is made up of nominees of the cantons: each canton returns two representatives each, though half-cantons return just one. Following parliamentary elections, the Federal Assembly elects the cabinet, or Federal Council (Bundesrat), for the same, fixed four-year term. The Federal Council is a permanent coalition of seven ministers who tend to be re-elected until they retire.
According to a ‘magic formula’ agreed in 1959, coalitions comprised two ministers from the Social Democratic Party of Switzerland, two from the Radical Free Democratic Party, two from the Christian Democratic Party and one from the Swiss People’s Party (SVP). The coalition also strikes a balance between representatives of linguistic groups (German, French, Italian and Romansch) and religious denominations (Catholic and Protestant). In the Swiss political tradition the permanent coalition processes or administers the demands of conflicting groups, rather than leading public opinion. Since the cabinet is a representative coalition, Switzerland has no tradition of opposition politics in parliament. Moreover, Switzerland has a rotating, non-executive presidency. The head of state is drawn annually from among the seven federal ministers.
The election held on 19 October 2003 led to a readjustment of the stable model of permanent coalitions. The right-wing populist and anti-immigration party, the SVP, won 26.6% of the vote and 55 seats in the 200-seat Nationalrat, thereby becoming the largest party. The SVP’s share of the vote increased by 11% in 2003 compared with 1999, when it was the second largest party. The SVP’s most prominent politician, the industrialist Christoph Blocher, immediately demanded, and obtained, a second seat in the Federal Council at the expense of a cabinet member from the Christian Democratic Party. A controversial party, the SVP’s anti-immigration campaign literature had even attracted strong criticism from the United Nations (UN) High Commissioner for Refugees. Blocher had stated that the SVP would resign from the cabinet and increase opposition if it was not granted an additional seat.
Switzerland has a strong tradition of direct democracy. Since 1866 Swiss voters have had the right to submit parliamentary laws and independent laws to a national vote. (Women were granted the right to vote in 1971.) With 50,000 voters’ signatures, citizens can request a vote on a parliamentary law; with 100,000 votes, a referendum can be called to introduce a new law to parliament. Around one-half of parliamentary laws are accepted, while almost all such new laws (90%) are rejected by the voters. In 1866–1996 some 450 national referendums were held. Referendums are also regularly held at canton and commune level, on issues such as public-spending plans, so that voters were called to cast a vote 10 times a year during the 1990s. Voter turn-out has fallen from 50%–60% in the 1950s to around 40% at present.
A permanently neutral state, Switzerland for long opted to remain outside of international organizations such as the United Nations and the European Union (EU). Following the end of the Cold War, this stance weakened and in the 1990s and early 2000s the Swiss conducted a series of referendums on membership of international organizations. The Swiss agreed in May 1992 to join the World Bank and the International Monetary Fund. In a referendum held in June 2001 voters agreed to allow Swiss troops to carry weapons during peace-keeping missions abroad, and in March 2002 Switzerland’s membership of the UN was approved. However, EU membership remains off the agenda. Though Switzerland is a member of the European Free Trade Association, Swiss citizens decided against joining the new European Economic Area in 1992, opting instead for a series of bilateral agreements with the EU in May 2000. Switzerland decided in 2001 not to open membership negotiations with the EU when 77% of voters rejected the proposal. Opposition to EU membership arises from the concern that it would endanger Switzerland’s neutrality and tradition of direct democracy. With the strengthened presence of the nationalistic SVP in the federal government, the issue of membership is unlikely to be raised again for some time.
A number of controversial issues have been subject to referendums in Switzerland in recent years. The country was criticized in the late 1990s for its neutrality in the Second World War and for its treatment of victims of the Holocaust. One report, commissioned by the Swiss parliament and written by an independent commission of experts (headed by the historian Jean-François Bergier), found that in 1942 Switzerland had refused entry to some 24,000 refugees from Nazi Germany. The Swiss state was also accused of bolstering the Nazi war economy, and banks and art galleries were found to have been negligent in respect of the restoration of property to victims of the Holocaust. A separate report revealed the existence of 54,000 Swiss bank accounts that may have belonged to victims of the Holocaust. The Swiss banks had previously admitted to 800 such accounts. On the day that the Bergier report was published in 2002 the Swiss parliament agreed to establish a fund known as the ‘Solidarity Foundation’ for the world’s poor by selling 450 tons of Switzerland’s gold reserves. The ‘Solidarity Foundation’ proposal was rejected in a referendum held in 2002 by 51.8% of voters.
With the rise of the anti-immigration SVP, the size of the immigrant population in Switzerland became a key issue. In September 2000 voters rejected an initiative to reduce the upper limit applied to the immigrant population from 19% to 18%. In this vote, 63.7% opposed the proposal. In November 2002 a referendum was held on a right-wing proposal to refuse entry to any asylum-seeker who had already passed through a neighbouring safe country. The proposal was narrowly rejected, by 50.1% of the electorate.
Economy: Switzerland is the second richest country in Europe (after Luxembourg) in terms of gross national product (GNP) per caput (at PPP), and its citizens enjoy one of the highest qualities of life in the world. Its economic strength is based on banking and finance (e.g. Credit Suisse, Zürich Financial Services), machinery and electronics, chemicals, watches (e.g. Swatch) as well as food production (e.g. Nestlé).
GNP: US $277,200m. (2001); GNP per caput: $38,330 (2001); GNP at PPP: $224,000m. (2001); GNP per caput at PPP: $30,970 (2001); GDP: $247,091m. (2001); exports: $123,552m. (2001); imports: $109,531m. (2001); currency: Swiss franc; unemployment: 2.9% (2002).
Switzerland’s open, independent economy has sought to benefit from the economic advantages of globalization without the country becoming a member of international organizations. Switzerland was a founder member of the European Free Trade Association, but it refused to join the European Economic Area (EEA) in 1992 as this new arrangement obliged members to accept the past decisions of the European Community (EC). Instead, it signed a series of bilateral agreements with the EC. It did, however, opt to join the International Monetary Fund and the World Bank in 1992. The Swiss government has not ruled out membership of the European Union (EU) and there is strong support for this among multinational companies, large banks and companies. In 2001, in a referendum initiated by pro-European citizens, voters were asked whether membership negotiations with the EU should be initiated. The proposal was rejected by 77% of voters.
Switzerland prospered in the post-Second World War era outside of regional and international organizations. In the early 1990s it was argued that Switzerland’s decision not to join the EEA would be detrimental to the economy since two-thirds of Swiss exports are to the EU; it was estimated that the decision might cut 4%–6% from the country’s gross domestic product. Indeed, the Swiss economy barely grew at all in 1991–98 and the rate of unemployment rose to 5% (1997). However, by 2000 the economy was growing again at a rate of 3% and the rate of unemployment had fallen to 2.9% by 2002. Switzerland also enjoys a current account surplus of US $30,000m. annually, one of the highest among the western industrialized economies.
Within a corporatist economy, Swiss firms tend to be controlled on a consensus basis by networks of Swiss managers with colleagues sitting on the executive and supervisory boards of each others’ companies, the boards being balanced to accurately represent each linguistic and religious group. There are few instances of hostile takeovers and shareholders do not enjoy a great deal of influence. A series of corporate crises in the early 2000s led to the resignation of a number of chief executives and to an opening-up of the Swiss corporate landscape.
Despite Switzerland’s wealth, the country has not developed a particularly generous welfare state. It is traditionally classified at federal level as a corporatist welfare state, but has strong liberal tendencies. There also exists a strong degree of regional variation in the aspects of the welfare state delivered at cantonal level—social assistance, family policy, social services and education.
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