Switzerland: A special case

Date: 14/02/04

Switzerland has always prided itself on its exceptionalism, but there are signs that it is becoming more like other countries. Barbara Beck examines the current state of Swissness

“WE CAN re-grind your skates,” says a sign at a key-cutting stall in the main railway station in Bern, Switzerland's capital. How very Swiss, the visitor thinks. It conjures up visions of traditional winter fun in a pristine white landscape. But it also suggests good sense, a certain frugality and concern for the environment: don't throw out something that is still perfectly serviceable.

“Swissness” covers a range of attributes that Switzerland has been using to good effect to sell itself to other countries - and perhaps even to itself. It stands for democracy, fairness, stability, quality, meticulousness, punctuality, thrift, efficiency, openness and all sorts of other desirable things. For the buyer of a Swiss watch, it means clockwork reliability. The rich man will confidently entrust his money to a Swiss bank. The holidaymaker is sure to have a comfortable night, courtesy of Swiss hotel-school training. And Swiss chocolate will be dependably delicious.

In those and all kinds of other ways, Switzerland is special. It is the oldest democracy in the world, with a political system that many foreigners envy. It remains fiercely independent, having stayed out of two world wars by being deadly serious about its armed neutrality. For much of the 20th century, its people were richer, on average, than those of any other country, and it remains close to the top of the wealth league.

It has four official languages (not to mention English, which is understood by at least half the population) and a kaleidoscope of ethnic and religious groups, which makes outsiders wonder how it managed to stick together for so long. It may be a long way from the sea, but last year (with the help of a few New Zealanders) it even won the America's Cup, an international yacht race usually dominated by rich Americans. For a small, landlocked country of 7m people with a difficult geography and no natural resources to speak of, Switzerland has done remarkably well.

Anni horribiles

However, this survey will argue that the Swiss island of calm is becoming a little more like other countries. In recent years it has found itself battered by a few storms. A fair amount of damage was caused by the revelation that neutral Switzerland had behaved rather less well in the second world war than everybody had wanted to believe. It turned away too many Jewish would-be refugees at its borders; indeed, it has only just got around to pardoning those Swiss citizens who illegally helped Jews to enter the country during the Nazi period. Switzerland also bought great quantities of gold that Nazi Germany had looted from the occupied countries. And, after the war, anxious to preserve its banking secrecy in the face of money-laundering charges, it did not look hard enough for money deposited in Swiss banks by Jews who died during the Holocaust.

In defence of their wartime behaviour the Swiss pointed out, not unreasonably, that if they had antagonised the Nazis too much they might have been invaded too, which would have been worse for everyone. But their squeaky-clean image suffered, particularly in America.

On the business front, too, Switzerland has recently shown itself to be fallible, most spectacularly with the grounding in 2001 of Swissair, the national airline that had been marketing itself as the very essence of Swiss reliability. No sooner had Swissair fallen by the wayside than a new airline, Swiss, was launched to take its place. Outside observers felt that the government, the big banks and other large companies were perhaps a little too ready to help. A few other big Swiss companies also went through a sticky patch, but mostly seem to have recovered now.

What has yet to recover is Swiss economic growth. For a variety of reasons (of which more later), since the early 1990s Switzerland's income per head has been almost static. Many other rich countries have done better in the growth stakes, and several have now overtaken the erstwhile champion. The Swiss economy depends heavily on exports, so it suffered badly when the dotcom bubble burst, stockmarkets collapsed and other economies turned down. And although most Swiss companies that trade internationally are world-class, the domestic sector is much less competitive, and is heavily protected or subsidised.

Switzerland has also faced a huge rise in public expenditure in recent years, much of it because spending on health care and disability pensions has got out of hand. With an ageing population, the next big worry is retirement pensions. The country has always prided itself on small government, but the share of GDP taken up by taxes and deductions is now moving closer to the share elsewhere in Europe, and government borrowing has shot up.

Unemployment is around 4% and shows no sign of coming down. Many other European countries would be delighted with that figure, but by Swiss standards it is worryingly high. People remember that not so long ago Switzerland was importing lots of foreign workers to relieve its labour shortages. A quarter of its labour force are now foreigners, with jobless rates higher than those of the natives.

The Swiss used to be proud of their education system, which appeared to turn out large numbers of skilled and highly employable people. But in 2000 they got a rude shock when an OECD study comparing children's educational attainments in a range of industrial countries revealed that although Swiss kids did well at maths, they were only middling at reading and science. The official explanation was that teaching children several languages from an early age may have caused an overload, but Swiss pride suffered.

Confidence was also dented by a collision in 2001 between two lorries in the St Gotthard tunnel under the Alps that left 11 dead and closed the tunnel for two months, and by a mid-air crash in Swiss-controlled air space in 2002 that killed 71 people. Of course accidents will happen, but the safety-conscious Swiss felt especially troubled.

A paler shade of neutral

However, the news has not been all bad. The end of the cold war made it much less likely that Switzerland will face any external threat, and this has caused the country to re-examine its policy of armed neutrality. It still refuses to join any alliance that will oblige it to take military action in the event of war (which rules out NATO membership), and will still not send soldiers into battle unless the country itself is threatened. But it is now prepared to back UN action against rogue countries. During the war in Bosnia it allowed its airspace to be used to supervise the no-fly zone, and some of its troops even took part in the multinational peacekeeping operation in Kosovo. In a referendum in 2002, after decades of soul-searching, the Swiss people at last agreed to join the UN.

Now that it is surrounded by EU countries on all sides, Switzerland feels less need to be armed to the teeth to repel potential invaders. Since the mid-1990s, it has been reorganising and drastically cutting down the size of its militia army. In future, most men will need to keep their rifles under their beds only up to their late 20s instead of well into middle age.

This will save money and manpower, but in some people's minds it will also make Switzerland a little less special. Traditionally the army was one of the things that helped to define Swiss identity, and enjoyed widespread popular support. It was seen not only as a way of serving the country but also as a social leveller (which it probably wasn't) and a splendid networking opportunity (which it used to be but probably no longer is in the same way).

The relentless spread of the EU all around has not pleased everyone in Switzerland. The country has strong linguistic and cultural ties with the three biggest EU members, Germany, France and Italy, as well as friendly relations with all the other member countries, and most of its foreign trade is done with Europe. But the bigger and more powerful the European club becomes, the more it seems to worry the Swiss. With their decentralised political system and strong direct democracy, they distrust the EU's centralising tendencies, and they dislike the idea of laws made in Brussels rather than in Bern.

In 1992, almost to their own surprise, they narrowly voted against joining the European Economic Area, which was widely seen as a “training camp” for the EU. That may have been because around the same time the federal government of the day, probably unwisely, put in an application to join the EU itself, without much prospect of popular Swiss support. The application has been gathering dust in Brussels ever since. Official government policy still aims for eventual entry, but even enthusiasts acknowledge that this is unlikely to happen for a decade or two. Meanwhile, Switzerland has found a way of living with the EU by negotiating a series of bilateral agreements.

All this helps to explain the large gains made in last October's federal election by the far-right Swiss People's Party (SVP), led by the charismatic Christoph Blocher, who is now minister of justice in the seven-strong Swiss cabinet. The party caused a splash with its rather xenophobic-sounding campaign against illegal asylum-seekers and its attempts to link law-and-order concerns with foreigners. But its biggest attraction to Swiss voters may well have been its policy on the EU, which can be summed up in two words: keep out. At least in that sense, it seems, the Swiss would rather stay special for now.

18 page survey consisting of seven articles: 1. The Blocher factor; 2. Voting as a way of life; 3. Split personality; 4. Trouble in the air; 5. The world's piggybank; 6. Splendid isolation; 7. Something to be proud of

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