The Swiss Miracle?

Beyond Chocolate, Cheese, and Banking

Swiss Social Democrats delegates cast votes during at a party meeting in Solothurn March 2, 2013. (Pascal Lauener / Courtesy Reuters)

From Ireland to Cyprus, the whole of Europe seems to be locked in economic and political crisis. But there is a small area of calm at the continent’s core: Switzerland.

Switzerland’s secret is that it is part of Europe -- and it isn’t. On the one hand, it is a signatory to the Schengen treaty, and thus delegates the protection of its borders to the European Union. It has had a free trade agreement with EU nations since 1972. Accordingly, it sends 60 percent of its exports to the EU and gets 80 percent of its imports from the EU. The country is a member of the Single Euro Payments Area (SEPA), which integrates the European financial industry, and its currency has been bound stably to the euro since 2011. At the same time, though, Switzerland is not part of the continent: it belongs neither to the European Union nor to the eurozone, so it makes its own fiscal policy and remains economically and politically independent.

Switzerland’s middle path is likely the reason why the country is doing so well. Between 2007 and the first quarter of 2012, its economy grew at a steady two to three percent per year, with a modest contraction of 1.9 percent at the peak of the financial crisis in 2009. GDP also shrank slightly in the second quarter of 2012, but is predicted to increase again by over one percent in 2013. In addition, the government is incredibly stable. The basic balance of parties in the executive branch has remained constant for the last 50 years.

Switzerland’s success stands in contrast to the struggles of many of its neighbors, which are still deep in recession, face deep social splits, and have governments that are fighting to hold on to power. That fact alone should make the Swiss case an object of international study. But, to date, it has not. The world only occasionally talks about this landlocked “island of the blessed” in the middle of Europe. And even then, the tales are mostly of morally problematic banking secrets or the imposition of the world’s strictest legal regulations for companies quoted on the stock exchange. But there is more to Switzerland than that. Underneath the country’s relative success is a unique political system, some elements of which Europe might do well to adopt.

At their root, Europe’s economic and political problems result from a crisis of legitimacy. In Europe, the common economic zone and currency were created without an accompanying federal government. And the union itself controls less than two percent of the combined national GDPs of the 27 EU member states and is thus largely inoperative. National governments have retained their legitimacy but are bound to a hapless and unpopular union. As the recent Italian elections showed, Europeans feel stymied by both an overly complex bureaucracy and a power vacuum. That, in turn, has led to a loss of confidence in the traditional parties and in institutional politics.

None of this is true in Switzerland, though, which has a brand of direct democracy that keeps politics, the capital, and the public in constant discourse. In a nutshell, the executive branch of Switzerland’s government consists not of a president and prime minister but of something called the Federal Council, which is elected by the Swiss parliament. The council is composed of seven members and all five major parties, and the German and French languages must be represented. The distinction between the governing party and the opposition is thus blurred, since everyone participates in the executive branch of government.

Another difference is that Switzerland’s barely eight million citizens are called to the polls as many as four times a year for national elections alone. The frequency of voting relates to two facts: constitutional amendments can be brought to government through popular initiative (100,000 signatures in 18 months) and all constitutional changes are subject to mandatory public referendums. In addition, Swiss citizens can initiate a referendum on any piece of legislation by gathering 50,000 signatures within 100 days. In the last few years, Swiss citizens have voted on constitutional changes relating to protection from gun violence, the introduction of managed care, protection from secondhand smoke, the requirement to put treaties with other countries to a public vote, and a rule that no one in a company can earn less in a year than the highest-ranking manager earns in a month.

Continuous political deliberation has created a rare balance between citizens and government. Government commissions are driven to develop legislation that will pass the immediate scrutiny of parliament and the people. And the government spends a considerable amount of time communicating its policy decisions to the public. Not surprisingly, policymakers’ information efforts are repeatedly scrutinized: a vocal segment of the public has demanded that government representatives abstain from campaigning and let the people decide on certain issues without any influence from the government. Similarly, campaign spending, particularly by trade associations, has come under scrutiny, and media sponsored by public foundations and the broader public have raised awareness for the increasing spending inequalities. In addition, Swiss laws ban political advertising on television and radio. Of course, that still does not mean that public is perfectly informed: the introduction of free newspapers, the pressures on print media, and the turn toward news as entertainment on television have all threatened the quality and diversity of information.

As a result of the Swiss political system, the constitution is subject to constant amendment by its citizen-authors. Admittedly, the emphasis on the Swiss public’s right to revise the constitution according to its beliefs of the moment occasionally leads to inconsistencies in the highest law and, sometimes, tension with international human rights laws. Popular initiatives from the right, for example, led to a ban on minarets in Switzerland (which goes against the Swiss constitution’s guarantee of freedom of religion) and to new rules for the deportation of foreigners who have been convicted of crimes (which are thought to counter international human rights treaties). The constitutional court, tasked with adjudicating such discrepancies, shows considerable restraint in ruling against direct democracy and for human rights. In 1990, it overruled male citizens in one canton (state) who repeatedly voted down women’s suffrage. Since then, it has rarely stepped in, famously avoiding interfering in the 2009 Mosque minarets decision. On the other side, the public-is-king mentality has, at times, led to a weakening sense of the rule of law.

Still, the tension between direct democracy and the constitutional state aside, Switzerland’s brand of government has brought with it a strong sense of identification with the political system. Unlike in other countries, polls are rarely used as a protest against Bern.

So should the rest of Europe adopt the Swiss model? For government to work, it needs legitimacy. This is attained through the including as many voices as possible, and political efficacy, which is achieved when that public opinion actually informs legislation. Switzerland gets a good rating on the efficacy scale. It also does fairly well on the legitimacy scale. The recent transformation of the media landscape with the introduction of free political newspapers for commuters (a large segment of the population) and other populist media has certainly taken its toll, but the country suffers far less from lack of legitimacy than do other European countries.

Some elements of the Swiss model could not translate to the rest of Europe. Switzerland is comparably small and consists of an ethnically and culturally homogenous population. (In fact, it has been growing more homogenous over the past 150 years, as various confessions and French, German, and Italian Swiss cultures have merged.) The country further profits from its highly profitable niches in the world economy, such as the pharmaceutical industry, metals, watches, and agricultural products. Thanks to these industries, the country’s welfare state and education system are well funded. The European Union enjoys none of these benefits. But Switzerland does have four official languages and an urban-rural divide on many political issues, especially those relating to immigration, integration, and cultural diversity.

The Swiss system offers four lessons for the European project. First, small is beautiful. Switzerland’s emphasis on small-scale administration autonomy for the different cantons could serve as a model for a Europe of regions. The way Switzerland handles its four languages and their respective ethnicities is an example of the unity in diversity that Europe seeks. Second, direct and frequent appeals to the public make government more palatable. Europe has to dramatically improve government-people relationships if it wants to avoid further loss of the public’s confidence. Third, not only do direct appeals make government more palatable but they also make citizens feel more responsible for government business and more likely to participate in it. Fourth, success in an interconnected world depends on blending integration with autonomy. Switzerland is successful because it has integrated with Europe but has preserved its autonomy. Europe-wide, this would mean giving up on full integration and being more lenient about half-measures, as Switzerland is -- if not as a definitive solution, then certainly as a viable pathway in times of crisis and transition.

In other words, Switzerland could be a model for a potential United States of Europe, which several commentators, such as the political theorists Jürgen Habermas and Umberto Eco and the politicians François Hollande, Mario Monti, and Angela Merkel, believe is needed to overcome the European crisis. At the super-national level, the Swiss model would create a political union without a homogenization of cultures, identities, and laws. The EU could be headed by a council like Switzerland’s, with no single leader. Instead of governing from above -- light years away from European citizens -- governments could bring as many issues as possible to a joint vote of all European citizens of all 27 member states. Such polling would foster feelings of community, shared destiny, and common identity. It would also help create a more concrete joint historical memory. If Switzerland’s stability, peace, and prosperity is the goal, it is time for Europe to take the country’s model to heart.

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