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Role Of Switzerland In The World Economy

By Sandy Trentor

Saint Nicholas is Switzerland’s famous icon who advised the Swiss people to avoid involving themselves in the affairs of foreigners. This advice is the foundation stone on which the Swiss policy is built and it has weathered many oppositions and challenges for the last 500 years. Switzerland had had self proclaimed neutrality since the year 1515 a status that was later recognized by her neighbors in 1815 soon after the Napoleonic wars. In 1920 Switzerland most of the major nations formally confirmed their intent to respect the Switzerland’s neutrality status as it was drawn in 1815 on the Vienna Conference. In the same year Switzerland officially joined the Geneva based League of Nations, on a pre-condition that it would be exempted from all military requirements (Angelus, & Michel, 2003).
The neutrality status that disallows Switzerland from military participation in wars among other states, has in effect kept Switzerland from external military attacks, especially from the powerful neighbors like Italy, Germany, France and Austria. This has contributed largely in maintaining cohesion among its own ethnic groups that are sometime tempted to support different belligerent states whenever there is conflict. However in the past Switzerland had internal strife especially between the religious groups that resulted to conflicts within the neutral state (Daniel, 2001).
Switzerland retained its neutrality through out the World War 1, keeping away from any military help to France or Germany. However other governments failed to consistently respect its airspace and boarders. Heavy criticism was however raised during the World War II over the Switzerland’s neutrality policies concerning its economic relationship with the Nazi Germany. The Nazi officers were said to wire looted money and other valuables to secret bank accounts in Switzerland while the Swiss diplomats ensured safe escape routes for victims. This portrayed an image to many that the Swiss government appeared politically allied to Germany, a situation that some blamed for prolonging the war (McElrath, 2002).
The Switzerland’s signing of the NATO’s 1996 partnership agreement for peace underlined its commitment to participate proactively in promoting world’s security and peace. It however reserved the right to withdraw at anytime if it felt that its support was compromising its neutrality. In 1999 the Swiss government sent unarmed peace keeping volunteers to Kosovo. This has sparked up debates on the combination of neutrality with participation in international roles. A highly divisive referendum in 2001 approved changes in the military role allowing Swiss peace keepers to be armed during their missions. The referendum also allowed the military to participate in training exercises organized together with other countries (Nicholas, 1982).
The aim of this paper is to examine and analyze the modern role that the neutral Switzerland plays in the economical domain of the globalizing World, its role as a military power house on the international arena and its role in regional, political and geographical integration (Gresch, & Smith, 1985).
Switzerland’s Political and Geographical integration
Lack of interest in politics is one of the major ways in which the European Union sees as if Switzerland is always in opposition. But since Switzerland is not a member of the European Union and also not a member of the European economic area it has nothing to mind about being in the opposition. The neutral status of Switzerland and its strategic geographical position in Europe has contributed much to the long political stability that has earned it consistent economic growth to be among the world’s wealthiest states. This has especially been contributed by its fast growing banking sector. Despite its central position in Europe, Switzerland is not a member of European Union (Gregory, 2005).
Under its direct democracy system, applications to join the Union just like any other important social and constitutional issue, must go through a national referendum where voters’ decision is final. A referendum held on March, 4th, 2001 resulted to the Swiss people voting against the membership with an overwhelming victory of 77.3%. That set the facts clear that Switzerland entry to the European Union was not anywhere in its agenda. A similar referendum in 1992 had seen Switzerland’s joining of the European Economic Area rejected. This has therefore left the relationship between the Swiss government and the European Union to continue on the basis of the existing bilateral agreements (Sieglinde, 2002).
The ties with the European Union came nearer in 2005 following a referendum victory to approve membership of the European Union Dublin and Schengen agreements. This effectively brought Switzerland within Europe’s passport free zone with an increased mutual cooperation on questions of asylum seekers and crime reduction. Later in 2005 another referendum opened up job market for citizens from the 10 new European Union members (Bruce, 2002).
Questions have been life on the reason why the Swiss people remain opposed to joining the European Union. For a long time the Union has been perceived as failing in its democracy. Switzerland has set a high degree of democracy in the world and finds the Union’s situation far from what can be acceptable. With its powerful economy Switzerland would contribute heavily in the Union’s common pool. This has raised eyebrows among the Swiss people who doubt on whether such expenses for the country would be justified. The issue of Swiss neutrality has also been a point of contention and many see that it may not be compatible with the European Union membership. Swiss trade and industry in the other hand is not certain that joining EU would be beneficial in any way (Alfred, 1969).

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MLA Style Citation:
Trentor, Sandy "Role Of Switzerland In The World Economy." Role Of Switzerland In The World Economy. 26 Jun. 2010. 19 Sep 2015 <>.

APA Style Citation:
Trentor, S (2010, June 26). Role Of Switzerland In The World Economy. Retrieved September 19, 2015, from

Chicago Style Citation:
Trentor, Sandy "Role Of Switzerland In The World Economy"

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