Britain’s media and Parliament mostly have it back to front. Britain agreed the type of blanket arrangement with the EU that the Swiss cleverly avoided. Switzerland remains a conservative and cautious country. Women could not vote in a federal election before 1971 and did not have full voting rights in every canton until 1990. Swiss GDP per capita for 2022 will touch double Germany’s.
Spring 1974 and the Oil Crisis
Because of the bottom upwards political structure, officials at each level were few though highly competent. The cream were the brilliant young brains of the Federal Economic Department.
Despite the oil crisis which slowed down construction, the locomotive of the Swiss economy, and nasty surprises – when the Italian building workers were laid off and went home they took their wives who made the watches for export – the Swiss were in a pretty strong position compared to the Common Market when those multiple deals were drawn up. Two out of every three Swiss franks were backed by 3000 tons of gold bars in vaults under the Bundesplatz, a large city square. Germany bought 27% of Swiss global exports and supplied 30% of Swiss imports. France and Italy together had a larger share of Swiss trade. Rates of exchange were vastly different – 7.35 Swiss francs for a pound.
To this day the EU have failed to ensnare the Swiss. That’s thanks largely to one remarkable man who built their negotiating team. In spring 1974 State-Secretary Paul Jolles took a lot of time and trouble to explain to me why he would follow the trade agreement with the EU by adding separate agreements rather than a single treaty.
The Common Market preferred single all encompassing agreements covering trade and manufacturing standards though were less obsessive about services. They also wanted the Swiss plugged into their vision of European integration. Such an arrangement would have left Switzerland as both a political and economic rule-taker from its three much larger neighbours. Consequently the Federal Council of the day politely declined the chance to participate in the integration of Europe. Splitting up the economic relationship into separate treaties avoided much of the risk for the economy. No sector or relationship could be used as leverage against another. That avoided six million Swiss taking orders from sixty million Germans and another hundred plus million French and Italians.
Jolles’s team were very aware that all future treaties would have to be accepted by the voters in a single referendum or series of popular votes. Later on the Swiss did join the European Economic Area which required accepting freedom of movement, not to mention sending regular money parcels to Brussels. For the full list of treaties from 1972 until the present day click this link – https://www.eda.admin.ch/europa/en/home/europapolitik/ueberblick.html
Are we talking about the same problem today?
We have the reverse situation to Switzerland’s. Today the EU call their replacement offer to Switzerland a ‘ framework ‘ agreement – like a picture frame – and want the Swiss to swap their 120 separate deals, which keep them in control, for a new agreement like ours, which gives the EU control. Today’s rate of exchange is just over a single Swiss franc for one pound. Swiss banks and asset managers have 13 trillion Swiss francs worth under management world wide. The Swiss franc makes an obvious buffer when the Euro lands in trouble.
Things haven’t worked out how the EU Commission planned. On the 7 December 2018 the Federal Council decided neither to accept nor reject the EU offer but instead opt for public consultation. So it’s a stand off at present but the price for the Swiss is freedom of movement. A quarter of the ten million Swiss population are immigrants. Roughly 1.4 million EU citizens are resident in Switzerland, of which half a million are Germans. Germany’s economy has also been on a diet of gobbling Swiss businesses of all sizes but mostly small niche manufacturers. Ultimately the EU needs the Swiss for their trains and roads across and under the Alps.
May 2021 The Run-up
By early May 2021 Swiss Info – the Federal Government’s information service – was reporting that most Swiss voters were supportive of an agreement with the EU. At that stage voters had not seen the latest terms on offer. Once voters had an idea of what was offered and what was not, opinion rapidly swung the other way. Opinion polls suggested that 51% of Swiss voters would reject the EU terms offered in their draft framework agreement and only 35% accept them. A similar picture emerged when it came to the question of whether it was right to break off the negotiations.
Will the Swiss eventually let themselves be framed?
All sorts of statements have been made by politicians and parties but it’s the people who vote in this ancient direct democracy. No doubt the EU provides support for its promoters but this won’t be done directly through political parties. Pressure groups and institutions are the route just as in Britain. Some supporters like a marvellous friend who was the chief editor of a highly respected newspaper would sign up to join the EU without hesitation. So would many politicians. The government are playing a crafty hand of cards.
For a press briefing by Switzerland’s chief negotiator, Livia Leu, click this link – https://www.swissinfo.ch/eng/politics/eu-and-switzerland-aim-for-third-set-of-bilateral-deals/48051990
One of the most successful businessmen in Switzerland, Alfred Gantner, co-founder of Partners Group, became so concerned about this trend that he set up a think tank called Kompass Europa. He puts his approach as follows…..Switzerland is significantly more successful economically than the EU because we shape our framework conditions ourselves and make them better. With an automatic takeover of rights, we will lose our lead. Scores of people have added their own concerns on the Kompass Europa website. Many are well known public figures, others a healthy sample from Swiss society. If you would like to read their words the link below leads to a version in French. https://kompasseuropa.ch/fr/mitglieder-fr-2/
Swiss are citizens of their commune, their local authority. All these local communes elect their own local parliaments (we would say local councils ) and approve or disapprove of policies through direct democracy. The same goes for government at canton level and national level. Switzerland is a confederation. Power over obviously national matters has been devolved by the cantons to the confederation. https://www.swissinfo.ch/eng/cantons-and-municipalities/29289028
The Swiss enjoy a very effective way of reaching decisions and making choices, one we should look at seriously after the last three years of musical prime ministers and cabinets. Anyone who gathers enough supporters’ signatures can launch a popular vote on any matter at commune, canton and national levels. Swiss don’t worry if politicians disappoint – the people hold ultimate power over decisions. One sleeps better, believe me!
A framework agreement would make the Swiss accept decisions reached through majority votes of EU member states. Rulings of the European Court of Justice might clash with choices made through direct democracy in Switzerland. Their nation began from direct democracy on the Ruetli meadow over looking the Lake of Lucerne. Eight-hundred years later they still enjoy the most modern democracy anywhere on the planet.