The Swiss Confederation (15,940 sq. mi., population 7,676,500, gross domestic product $301 billion in 2007) is a quadrilingual, landlocked, alpine country in western Europe, long known for its neutrality in international conflicts, its banking, and as home to the Red Cross and the World Trade Organization. The four national languages of the country reflect its history, location, and ethnic makeup: German, French, Italian, and Romansh, a Romance language spoken by some 60,000 people and, like the Occitan of southern France, descended from the Latin used by the Roman settlers in the region. Romansh is spoken by so few speakers that spelling was not standardized until 1982; half of its speakers are bilingual.
Switzerland has been inhabited since the Paleolithic period, and had been settled by Celtic tribes long before the arrival of Germanic peoples in the aftermath of the fall of Rome. The Swiss Confederacy was formed in 1291 by cantons (regions) forming a union in opposition to the Habsburg dynasty. The conflicts with the Habsburgs and the Holy Roman Empire contributed to the reputation of Swiss soldiers, and thus to Pope Julius II hiring the Swiss Guard as the personal army of the papacy in 1506—a tradition that continues to the present day. The present Swiss government dates to the adoption of a federal constitution in 1848, in the aftermath of a civil war between the Catholics and Protestants of the country. Significantly, that war remains the most recent armed conflict on Swiss land. Even in World War II, Germany never acted on the invasion plans it had prepared for an attack on Switzerland, and the country had already become famous for its neutrality during the previous world war.
Most powers in the Swiss government are left to the cantons, while the federal government is responsible for trade, defense, and legal matters. The Federal Assembly is a bicameral parliament, consisting of the Council of States with 46 representatives elected from the 26 cantons (each canton decides how to elect its representatives) and the National Council with 200 members elected according to proportional representation. The Federal Court oversees judicial matters. The Federal Council is the executive branch of the federal government, made up of seven members who jointly act as the head of state; traditionally the seven members rotate through one-year terms as president of the Confederation, a practical role that carries no additional powers or authority.
The Swiss constitution calls for a system of “half direct” democracy. Although the people turn over much of their power to their representatives, that power is borrowed and may be reclaimed: any group of citizens can challenge a federal law by presenting 50,000 signatures (less than one percent of the population) within 100 days, at which point a national vote on the law is held and a simple majority wins. Constitutional amendments can also be made through popular vote, an unusual feature in systems of constitutional law.
Because of its neutrality, Switzerland and its capital city of Berne are home to many international organizations, most notably the Red Cross and the International Olympic Committee. Interestingly, it is not a member of the European Union (EU), the Swiss citizenry having rejected a referendum on the matter by popular vote. Only in 2002, amid considerable debate among citizens, did Switzerland join the United Nations, concerned—as with the EU—that membership in such an organization would compromise the more than 150year tradition of international neutrality. It is also a member of the Council of Europe, a UN-like organization of 47 European member-states that works toward economic growth and human rights.
One of the stablest economies in the world, with the longest history of policies protecting monetary and bank security, Switzerland is integral to the global economy and increasingly a target of foreign investment funds. Industrialized since the 19th century, the country’s main industries are machinery, chemicals, timepieces, and precision instruments. Switzerland is more protective of its agricultural sector than some industrialized countries are, and works to promote domestic production of farm goods like dairy products, pork, beef, and produce. If the alpine pasturelands are included, about two-fifths of the country’s land is used for agriculture, providing some two thirds of the nation’s food. The cost of living is high, but so is the average income.
Switzerland is, of course, famous for its banking. Zurich, the largest city, is the cultural and economic center of the country, its bankers sometimes derisively called the “gnomes of Zurich” by foreigners. The Swiss government treats the right to privacy as a fundamental human right necessary to protect all democracies, and the confidentiality between a banker and customer is like that between a lawyer and client or doctor and patient—sacrosanct, but occasionally broken by court order during a criminal investigation. Because federal law distinguishes between tax evasion and tax fraud, it can be difficult for foreign powers to get the cooperation of Swiss banks to provide financial data necessary to prove that a foreigner has been using a Swiss bank account to avoid paying taxes on assets. Swiss bank accounts remain popular among foreign customers for that reason, among others.
- Clive H. Church, The Politics and Government of Switzerland (Palgrave Macmillan, 2004);
- Christian H. Kalin, Switzerland Business and Investment Handbook: Economy, Law, Taxation, Real Estate, Residence, Facts and Figures, Key Addresses (Wiley, 2006);
- James Murray Luck, A History of Switzerland: The First 100,000 Years: Before the Beginnings to the Days of the Present (SPOSS, 1985);
- Daniel K. Tarullo, Banking on Basel: The Future of International Financial Regulation (Peterson Institute, 2008).
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