'The EU? It's political suicide to mention it in Switzerland' (v. interesting)

Last week, the European Trade Commissioner had a grim warning for Britain: if we vote against the EU constitution in the forthcoming referendum, we could end up like... Switzerland. Graham Turner asked the Swiss exactly what this would mean

Lack a day! Lack a day! News that the British might actually be allowed a say on the EU constitution has brought predictable auguries of doom and woe from the Euro-federalist brigade. Should Britain vote No, it would become no more than an impotent shadow on the margins of Europe - relegated to the "rearguard" of its nations, according to Pascal Lamy, the Brussels Small Trade Commissioner.

Others of the same ilk hinted darkly that Britain might even be forced to leave the EU. At the very least, declared Mr Lamy last week, we would end up like Switzerland.

All of this, not surprisingly, provoked a certain amount of discreet mirth in both Switzerland and Norway, which happen to be the richest countries in Europe. Both have only an arm's-length relationship with the EU. Both have prospered exceedingly; Norway, for instance, has grown twice as fast as Britain over the past 30 years. Neither looks likely to join the EU for some considerable time.

In Switzerland, the EU is definitely on the backburner. "You should know," said Professor Franz Jaeger, who was a member of the Swiss National Council (their equivalent of our House of Commons) for 24 years, "that for the next 15 years at least, you will not be able to convince the Swiss to enter the EU. We just don't need it."

Nor is the professor's timescale by any means the longest on offer. "I was asked to speak at the 350th anniversary of the Treaty of Westphalia, which created Swiss neutrality," recalled Dr Hugo Butler, chief editor of the prestigious Neue Zuricher Zeitung, a paper that is broadly in favour of membership, "and I said that, if the EU develops well and is able to guarantee the sort of freedoms we have, then in 50 years' time, maybe the Swiss will join."

Others are thinking in the same sort of timeframe, though they wonder whether the EU will still be there to join. Michel Dérobert, general secretary of the Swiss Private Bankers Federation, felt that the Swiss probably would become members in 50 years' time - "just before the EU finally disappears."

Klaus Wellershoff, chief economist of the Union Bank of Switzerland - the largest wealth managers in the world, with £800 billion of client assets under their wings - also thinks Swiss membership extremely unlikely in the foreseeable future. "It's way out there," he declared, "if at all."

The issue is so dead that the prudent prefer not to speak its name. "It is now political suicide to mention the EU," said Jean-Jacques Roth, chief editor of Le Temps in Geneva. "No one would dare to take the issue out of the box."

Even the so-called Euroturbos, who two years ago launched a campaign for negotiations with Brussels to begin immediately, confess to having been struck dumb since 75 per cent of the Swiss turned them down in a referendum. "We were completely wiped out," admitted Professor Peter Tschopp, professor of economics at Geneva University and himself a leading Euroturbo. "We don't dare to say anything any more."

Many Swiss are convinced that the EU is more likely to change than they are. "Within 15 years," declared Beat Kappeler, a distinguished columnist, "the EU will have become a free trade area, and then there will be no problem for us to enter."

"I know the people in Brussels," said Robert Nef, president of the Liberal Institute in Zurich, "and they are already afraid of the high degree of complexity they have. They admit privately that even more complexity - now that the 10 East European countries have joined - could result in a disaster."

Even Europhiles believe that if the extension into Eastern Europe is not handled well, the EU could collapse altogether. "If I am honest with myself," said Peter Tschopp, "I think there is a 50-50 chance of the whole thing imploding. I may be considered a Euroturbo, but I was not in favour of this extension. The Marshall Plan will be nothing compared with the job of rebuilding these countries. The Czech Republic, for example, may look nice but, inside, it is just painted ruins. Somebody will have to pay for all that."

"The whole thing is getting too big," agreed Theo Phyl, a mountain farmer in central Switzerland. "It was like that in Russia. They became too big and then collapsed. I think it'll be the same with the EU."

So, the Swiss have settled for the kind of semi-detached relationship that many people in Britain would prefer: a series of bilateral deals with the EU - easily their largest trading partner - which ensures the free movement of goods, capital and labour as well as common security arrangements. So far, they have made no financial contribution whatsoever to the EU. They have retained their own political system, currency, tax regime and labour market laws.

The only downside, so far as the majority are concerned, is having to accept many EU regulations which they have had no part in shaping. It is, they think, a small price to pay. "When you are organising a free market," said Franz Steinegger, a leading Christian Democrat MP, "you have to accept the regulations of the bigger one."

The fact that Cristoph Blocher's Swiss People's Party made the greatest gains in last year's elections on a platform of total opposition to EU membership has only confirmed the prevailing mood.

So how, and why, have the Swiss arrived at such definite conclusions? They are, after all, notoriously slow in coming to judgment - and joined the United Nations, for example, only after decades of hesitation. (The Swiss themselves tell the story of the man from Zurich who took a walk with a friend from Berne. The man from Berne trod on a snail. "Why on earth did you do that?," asked the Zuricher. "I couldn't help it," his friend replied; "he was overtaking me on the inside").

To begin with, the Swiss want to keep the EU at arm's length because, in many ways, their political system is the exact opposite of the Union's. While the EU has a massive democratic deficit, Switzerland has an equally massive democratic surplus. Whereas we in Britain have what Lord Hailsham called "elective dictatorship," the Swiss have direct democracy. They vote about anything and everything, at national and local level. And their ardour for the polling booth leaves foreigners utterly bewildered. "They are voting all the time," murmured a German pastor who works in Winterthur. "I just can't keep up with it all."

There have been no fewer than 46 national referendums in the past four years. The Swiss voted on whether to cut working hours, and turned the idea down. They voted on whether to have minimum national holidays of four weeks - and turned that down, too, because they could not see why such things needed to be set in stone. In a fortnight's time, they will even vote on their finance minister's tax proposals. It is as if Gordon Brown's Budget had to be ratified by the people.

All it takes to call a national referendum is 50,000 signatures gathered within 100 days of a new law being proposed.

Much the same applies in each of Switzerland's 26 cantons. "When a new law is proposed here," explained Josias Clavadetscher, editor of the biggest local paper in the canton of Schwyz, "people are given two months in which to collect 2,000 signatures - we only have a population of 130,000. And if people vote in the referendum against the law, it is thrown into the rubbish bin. The number of signatures required depends on the population of the canton.

"In 2002, for example, the cantonal administration said they wanted to build a new, very modern prison at a cost of 35 million Swiss francs (£15.5 million). The previous estimate had been 25 million francs. So people launched a referendum and decided that they didn't want such a luxurious prison for criminals in our canton. Now, the government has to come up with new proposals."

At communal level, similar rules apply. "In my community," said David Syz, Switzerland's secretary of state for economic affairs, "we have 4,000 people, and they decide what the local tax rate for the next year will be. There is usually a meeting of about 200 citizens in the town hall. They look at the budget which the administration has put up and then they say: 'We don't want either the new school or the 10 new roundabouts you're proposing, so forget them."

What would happen in Switzerland, I wondered, if they had been members of the EU and had been told - as Tony Blair told Britain until his recent U-turn - that they would not be allowed to vote on the new EU constitution? "It could not possibly happen in this country," said Theo Phyl, the mountain farmer. "If it did, the Swiss would demonstrate en masse and the prime minister would be fired. Poodle [Tony Blair's nickname in much of Switzerland] would simply have had to go."

For most Swiss, the idea of giving up this profoundly democratic system in exchange for a stream of mandatory directives from Brussels is simply unthinkable. "I see no chance that Swiss people will accept less power," said Michel Dérobert, "because they do not want to lose the right to have the final say. There is not going to be less democracy in this country; in fact, we are going to have more because the Swiss like it."

"We want to preserve our very democratic system," agreed Jean Bouregois, director of the Swiss Farmers Union. "Much more decisive than anything which might happen to farming if we joined the EU is a general belief that we have a political system which is sacred to us - and that it would not be possible to keep that system in the EU as it stands today."

"Just take VAT," said Lutzi Stamm, a Swiss People's Party MP. "The second we joined the EU, we would have to increase it from our present 7.6 per cent to at least 15 per cent. You could collect a million votes, never mind 50,000, and you still would not be able to bring it down even to 14.9. That is the opposite of direct democracy."

Indeed, the Swiss have no intention of sacrificing any part of their unique political system, whose aim is to disperse power rather than concentrating it in any one individual or party. They have no prime minister. Their president holds office only for a year. Very few can even tell you who he is. As for their "cabinet", the Federal Council is made up of seven representatives from the four main parties. And their job is to come up with an all-party compromise on every issue.

The Swiss have what Robert Nef calls "a strong anti-leadership instinct". They do not like big figures. Big figures, they feel, can make big mistakes - so a Margaret Thatcher or Tony Blair would be inconceivable in Switzerland. I asked Hansrudolf Kamer, the deputy chief editor of the Neue Zuricher Zeitung, whether the Swiss wanted leadership. "No," he replied flatly.

"Even the president is not the leader of the government," said David Syz. "The members of the Federal Council are widely respected, but they ought not to appear on the media too often because people would not like it. We have a culture that does not want prima donnas.''

"The seven have to argue as a collective" agreed Robert Nef. "If an individual politician, such as Tony Blair, were to say, 'Trust me!', people here would feel there was something very wrong. That would be altogether too personal."

In Switzerland, the citizen really is king. "We elect our parliamentarians," Nef went on, "not to have a policy, not to have a programme, but to frame laws which we, the people, can then challenge and, if necessary, repeal through a referendum. The citizen rules the state and not vice-versa." In Switzerland, remarked Hugo Butler, it was the people who were Her Majesty's Opposition.

This belief in the primacy of the people is one reason why the EU's sometimes high-handed behaviour has gone down so badly. "The first thing we didn't like," said Edouard Brunner, a former secretary of state for foreign affairs and ambassador in both Washington and Paris, "was the way Chirac treated the Haider question in Austria, trying to put him in quarantine and making a pariah of the whole country. We are not particularly fond of Haider, but he had been elected by the people.

"The second was Chirac's remark to the Poles after they had signed a letter, along with others, supporting the US and Britain in the Iraq war. Chirac told them that if they wanted to join the EU, that was not a particularly clever thing to do. Well, we don't want to be dictated to in that way."

The Swiss put an almost equally high value on their economic freedoms. Their taxes are lower than the EU's, and money is much cheaper. "Our interest rates," said Beat Kappeler, "are about half theirs and our mortgage rate is only three per cent compared with six per cent or more in the EU. In many cantons, there are no inheritance taxes."

When the Swiss held a referendum on bank secrecy, no less than 80 per cent of the public voted in favour. It is not only foreign investors who like their privacy.

The country is also blessedly free of Brussels's red tape. There is little support for a 35-hour week here. "The Swiss," Kappeler went on, "work an average of 41.5 hours a week, and there are more of them still working at the age of 64 than in any other country. They actually like work.

"If you're an entrepreneur, what's more, you don't ask if you want to make a change - you just do it. You pay the wages you want, according to people's performance. You can hire and fire at very short notice for economic reasons, without judges intervening as they would in France or Germany. There's also very little in the way of worker participation. So we have all the advantages of being in a common market, without any of the disadvantages."

Taxes, both local and corporate, are held down by fierce competition between cantons. "If you take the average tax level as 100," said Hugo Butler, "it is around 50 in the canton of Zug and 144 in Graubunden. So businesses and individuals can always threaten to move. Without that competition, taxes would undoubtedly rise - and there's no doubt that, if we were in the EU, Brussels would be pressing for them to be the same everywhere." The result is that, while France and Germany wallow in recession, Switzerland has survived remarkably well.

For the past 15 years," said Klaus Wellershoff, "our growth rate has been rather dismal; and unemployment is rising somewhat, though, at four per cent, it is still fabulously low compared with places like Germany. We've also kept a remarkable stability in prices - they've only gone up between zero and one per cent a year for the last decade.

"As for income per head, it is still among the highest in the world. Just look at the cars in this city: BMWs, Mercs, Jaguars. Their average age is very low and a lot of them are brand new. We are still doing excellently and the bank is rather optimistic about the future."

"Everywhere in Switzerland is flourishing," agreed Hugo Butler. "You will find wealthy people wherever you go. There are no suburbs with only the poor living in them. We have difficulties - prices are far higher than in France or Germany - but they are the problems of a country with a very high standard of living." This is what Jean-Jacques Roth of Le Matin, describes as "une crise de luxe." Had Switzerland been in the EU, said Butler's deputy, Hansrudolf Kamer, who is in favour of membership, "we would definitely be worse off - far more regulations, higher taxes, higher interest rates."

For the moment, then, the Swiss are very happy to keep the EU at a distance. If the Union asks them to stump up to help meet its expenses in Eastern Europe, they will say that they are willing to contribute - but only directly to the country concerned. They will not put a single franc into the EU's common pot. "We never know what happens to that common pot," said Edouard Brunner.

"We do not," declared Ueli Maurer, "want to be a colony of a government somewhere in Brussels which decides what happens here in Switzerland." Perhaps the Swiss, slow though they are, are the ones who have got it right.

The whole thing with the EU seems like it's just Europe in a holding pattern, waiting to be taken over. Originally, I only heard about a common currency (which is difficult enough to handle), but now it seems like there is a lot more that a country has to do, while there is no clear delineation between what a country can do, and what the EU is really in charge of.

With currency concerns, the issue of how it is spent and lent, seems like there would have to be some kind of tax collected by the EU, which is fine until someone doesn't want to pay, so then who enforces it? You need an EU military, and then some legislative body to make sure that the military is kept in line, and a commander in chief of the military, and maybe elections of the representatives... Then you have a Federal Government. They may as well start having presidential election scandals

Somehow I don't think the nations of Europe really want to be states of a European Union. Can you imagine the olympic games, or any sport that had national pride after such a change? This article seems to support that claim.

I have lived and worked in Switzerland since 1997 and can attest to this from first hand experience!! The ONLY groups truely supporting membership are the socialist elites (fits thier world view) and major corporations (potential for greater profits).

"When you are organising a free market," said Franz Steinegger, a leading Christian Democrat MP, "you have to accept the regulations of the bigger one."

The regulations of a "free" market. Love the irony.

The last time the Socialists conquered Europe they needed an army of NAZIs. This time they're doing it with paper.

"Old Europe" is not worthy. Perhaps it never was.

They are a few hold outs who haven't succombed to the wave of stupidity engulfing "Old Europe". Prayers going out to our allies. They are the few reasons for hope.

Switzerland has a system that has worked for 700 years. 700 years! How does that compare with the socialists' five year plans? The EU ought to learn from Switzerland, and make Europe into a decentralized group of populations that provide for their common defense but otherwise most decisions are made locally and democratically. Instead, the powers that be want the EU to be a humanitarian version of the Soviet Union, with everything centralized and decided by bureaucrats and unelected leaders.

Switzerland would never share its massive money laundering gains with the EU. I'll bet bin Laden has put 200 billion into that 800 billion fund.

fascinating article ... forwarding to my Swiss banker uncle for comment. =)

=== in 50 years' time - "just before the EU finally disappears."

Interesting ... I wonder how he's clocking the 50 years and what, exactly, he thinks will dismantle the EU. A world state? Chaos? The return of national sovereignty?

was in Interlakken and Wengen for a few days last month. Talked to a few folks about thisincluding two shop owners. They would accept being on the Euro (these are tourist area) but not the other rules imposed by the EU. They strongly defended maintaing Swiss ethnicity against immigrants.

I think you have to be in Sw 10 years to aplly for citizenship and then may get it 11 years later. The government tracks your employment and arrest and family before you get citizenship. Anyone correct me on the numbers?

I disagree on the cause of collapse, but it's still a noteworthy comparison.

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